Japan Plays Catch-up on Climate Tech as Kishida Pushes Startup Innovation

May 31, 2023|Climate Tech

(This is Part 1 of a two-part series about Japan’s climate-tech/ clean-tech sector)

Japan isn’t known for its own Silicon Valley or high-profile private backers of technologies to tackle climate change such as Elon Musk. But there are signs from the government and big business in Japan that it’s willing to support a new startup-focused ecosystem to accelerate R&D in clean energy and emission-cutting tech.

Pursuing engineering and technological breakthroughs with new ventures has come to be known as ‘climate tech.’ In Japan, research in this and other fields has traditionally taken place within the walls of top universities or major companies. The approach has served the country well to date, but with rapid change in technologies across the energy and climate sector, that big institutional approach is no longer enough. And Prime Minister Kishida’s vocal support for more startups is starting to translate into interest in “climate tech” within the country, both from those keen to create new ventures around the theme and those keen to invest in them.

The mobilization of a new Japanese ecosystem in climate tech augurs more than just progress in engineering. It should stimulate greater investment by funds and corporations into the energy transition. That’s vital if the issue of climate change is to be addressed, according to the International Energy Agency, which estimates that an average annual investment of $2 or more trillion is required globally.

One major beacon for Japan’s burgeoning climate tech sector is the arrival of top trading house Mitsubishi Corp, which counts Warren Buffett among shareholders. A new Mitsubishi fund to support climate tech startups may be late compared to the scene in the U.S., but it should unlock a greater interest and money for Japanese ventures and may spark a new wave of innovation.

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