[Tokyo = E-Daily Marketin Soyoung Park Reporter] "Japan has capital; Korea has technology and capabilities"

This is the reason cited by stakeholders in the Korea-Japan impact ecosystem for why cooperation between the two countries is crucial. Based on these key points, they predicted that the ties between Korean and Japanese impact investments would grow stronger. In particular, there was a consensus that joint investments and market expansion would increase, focusing on social issues common to both nations, such as an aging population, climate change, and the decline of regional communities. Stakeholders from both countries expressed hope for a combination of Japan’s abundant impact capital and network of major corporations with South Korea’s capabilities in entrepreneurship and digital commercialization.

As the global impact investment market expands, Japan is also positioning the impact economy as a key investment priority. The Japanese government is strongly pushing to foster startups and generate social impact. Since the Kishida administration explicitly included “promoting impact investment” in its 2022 “New Capitalism” action plan, the outstanding balance of impact investments in Japan has grown rapidly.

Officials interviewed by Edaily in Japan unanimously agreed that, given the significant overlap in the social issues faced by both countries, a collaborative approach to solving them is the most efficient. Masaki Kawai, CEO of Impact Shift and UNERI, proposed joint investments—where Korean and Japanese impact investors invest together in a single startup—as a practical model for cooperation. For example, if the two countries jointly address the issue of an aging population, related industries could form a larger market, and opportunities for startups to enter that market would increase. There is also significant potential to expand related businesses into third countries by leveraging data verified and accumulated in both nations.

Yuriko Kibo, Chair of the Finance Track of the Regional and Implementation Subcommittee of the Impact Consortium, also stated, “The greatest opportunity for cooperation between the two countries lies not merely in simple cross-border investment or corporate collaboration,” adding, “It lies in establishing a cross-border system that organically connects the entire process—from research and development (R&D) and proof of concept (PoC) to investment, market entry, and business growth.”

Chair Kibo further pointed out that efforts should not stop at merely announcing a large-scale Korea-Japan cooperation plan. “If we can steadily build up concrete success stories,” she said, “we can foster trust and accumulate practical experience among universities, investors, companies, and local governments,” adding, “This can serve as the foundation for a long-term Korea-Japan impact investment ecosystem.”

Areas of cooperation where the two countries can generate synergy, as identified by Japanese officials, include △climate tech and energy △healthcare and aging △infrastructure △food and agriculture △and core technologies. Korean officials also saw significant potential for cooperation in services that integrate digital transformation (DX) and artificial intelligence transformation (AX) with common social issues such as an aging population and regional depopulation.

South Korean officials believe that opportunities for cooperation between the two countries will continue to arise due to their shared environmental characteristics. The CEO of a South Korean venture capital firm specializing in impact investing noted that Japan possesses strengths such as abundant capital, policy continuity, and active participation by large corporations. However, he pointed out that there is a relative shortage of startups and entrepreneurs to invest in.

Conversely, he assessed that while South Korea has relatively strong entrepreneurial talent and digital commercialization capabilities, its foundation of impact capital and long-term policy support is weak. He saw significant potential for combining Japan’s capital and market with South Korea’s entrepreneurial talent and DX capabilities.

“While Korean impact startups have long focused their businesses on domestic issues and the domestic market, Japanese startups are relatively more likely to target the global market from the very beginning,” he said. “Furthermore, Japan is a market that stands out not only for the overall size of its investment market but also for the diversity of investment stages and funding sources.” He went on to say, “Since the South Korean and Japanese impact ecosystems face diametrically opposed bottlenecks, I believe this is an opportune time for cooperation.”