How Can Japan Grow Through Tourism and Startups?

TL;DR

Japan can generate more growth by attracting affluent repeat visitors, developing distinctive hospitality rooted in Japanese culture, and welcoming foreign startups alongside tourists. Its large companies should move beyond relying entirely on internal development, invest in or acquire innovative businesses, and support young founders working in defensible fields such as deep technology, robotics, manufacturing, and defense technology.

Transcript

The innovation in Japan is within the hands of Oiguio. The future is with the young generation, not with the ojisan. Technologies lifespan is very very short. There is no time for shai kaihatu. You must go and invest in startups or buy other companies. Google, Meta, Samsung, they keep investing and buying companies. Japanese conglomerates a bit shy... Read More

Key Insights

• Japan's prolonged stagnation is an investment opportunity because economic disadvantages can reveal undervalued assets and unmet demand. Chartered Group applies this view through two strategies: acquiring distressed assets and pursuing blue-ocean opportunities that could become major growth markets before they attract widespread attention.
• Premium tourism is a promising source of Japanese growth because the country combines established culture, distinctive food, seasonal variety, and destinations that encourage repeat visits. Agmoni's strategy emphasizes high-end hospitality and culturally rooted experiences rather than relying mainly on larger volumes of budget travelers.
• Japanese culture can become an export-oriented commercial asset through carefully developed hospitality and traditional products. The investments discussed include luxury accommodation, a traditional tea-ceremony facility developed with Urasenke, and a sake brewery intended to carry Japanese cultural value into international markets.
• Overtourism is partly an adjustment problem because communities were not prepared for the rapid expansion of inbound demand. Agmoni expects conditions to rebalance gradually, with premium visitors becoming more important as Japan develops services and destinations suited to travelers seeking high-quality experiences.
• Japan's traditional innovation system is dominated by major conglomerates that once had the capital and workforce to drive corporate research. That structure is less suited to a technology environment in which startups increasingly create innovation and artificial intelligence is changing industries across the world.
• Young founders are essential to Japan's future because too few graduates currently choose entrepreneurship over conventional employment at established companies. A stronger ecosystem requires social acceptance, accessible funding, government support, and credible paths that allow young people to build companies around their own ideas.
• Deep technology is difficult to copy because it depends on intellectual property, patents, specialist knowledge, sustained research, and substantial development capital. Japan is well positioned in this area because of its established strengths in robotics and manufacturing and the international reputation associated with products made in Japan.
• Corporate investment and acquisitions are necessary because technology cycles are too short for companies to create every capability internally. Agmoni points to major global technology companies that continually invest in and acquire businesses, arguing that Japanese conglomerates remain comparatively hesitant to adopt this approach.

Questions & Answers

Q: Why does Eyal Agmoni view Japan as an investment opportunity?

Eyal Agmoni views Japan's disadvantages as sources of opportunity rather than reasons to withdraw. The country's economic stagnation and reduced leadership in innovation have left assets, markets, and capabilities that investors may be undervaluing. He also believes Japan retains durable advantages in culture, food, hospitality, manufacturing, and technical expertise that cannot be erased by a difficult economic period.

Q: How can Japan earn more from inbound tourism?

Japan can earn more from inbound tourism by emphasizing premium hospitality, culturally distinctive experiences, and destinations that motivate visitors to return. Agmoni argues that the country should showcase its strongest offerings, including traditional design, food, tea culture, sake, seasonal experiences, and high-quality service. This approach seeks greater value from tourism while gradually reducing dependence on budget-oriented visitor volume.

Q: Why is Japan attractive to repeat international visitors?

Japan is attractive to repeat visitors because it offers different experiences across regions and seasons, supported by distinctive food, culture, and traditions. Agmoni contrasts this with destinations that travelers may regard as a one-time experience. He says many people now place Japan high on their travel wish lists and want to return regularly rather than visit only once.

Q: How should Japan respond to overtourism?

Japan should treat overtourism as a challenge requiring adjustment by communities, destinations, and tourism businesses. Agmoni believes the surge in demand was visible internationally, but the domestic population was not fully prepared for it. He expects the market to adapt gradually and argues that a stronger emphasis on premium tourism can help shape a more valuable visitor economy.

Q: Why must Japanese corporations move beyond internal development?

Japanese corporations must move beyond internal development because technology now changes too quickly for every important capability to be created inside one organization. Agmoni recommends investing in startups and acquiring outside companies, as major global technology businesses routinely do. He argues that Japanese conglomerates remain too hesitant about external innovation, which can slow their response to rapidly changing markets.

Q: How can Japan build a stronger startup ecosystem?

Japan can strengthen its startup ecosystem by making entrepreneurship a credible option for graduates and young professionals. Founders need access to venture funding, government support, and a business environment where large corporations do not dominate every opportunity. Agmoni also argues that Japan should attract foreign startups, treating inbound business formation as another source of talent, innovation, and economic activity.

Q: What kinds of startups could help Japan compete globally?

Deep-technology startups could help Japan compete globally because they align with the country's established capabilities in robotics and manufacturing. Agmoni defines deep technology as innovation supported by patents, intellectual property, specialist research, and significant development work. These characteristics make it harder to copy than a service that competitors can reproduce mainly by supplying enough capital.

Q: What role should young people play in Japan's economic future?

Young people should become central participants in Japan's innovation economy by founding companies, developing original ideas, and challenging a system dominated by established corporations. Agmoni argues that the future belongs to younger talent rather than older corporate leadership alone. Achieving that shift requires funding, institutional support, and greater social comfort with choosing entrepreneurship over conventional corporate employment.

Summary & Key Takeaways

• Eyal Agmoni sees Japan's long period of economic and innovation weakness as an investment opportunity rather than evidence of permanent decline. His firm focuses on distressed assets and overlooked growth areas, particularly premium hospitality, culturally distinctive properties, and businesses capable of turning Japanese traditions into internationally valuable experiences and products.

• Japan has strong tourism potential because visitors value its food, culture, seasons, and variety of destinations, and many want to return rather than treat it as a one-time trip. Agmoni expects the market to shift gradually toward higher-end tourism as communities and infrastructure adjust to growing visitor demand.

• Japan's innovation model must shift from large companies developing everything internally toward a stronger startup ecosystem. Agmoni argues that corporations should invest in and acquire outside businesses, while universities, investors, and government should make entrepreneurship more viable for young people. Deep technology offers particular promise because it builds on Japan's research and manufacturing strengths.