Takaaki Umada's blog (English, machine translation)

The Shifting Meaning of "Social Impact" and the Thought Behind Business

Takaaki Umada — Wed, 14 Oct 2026 15:10:54 GMT

This article was machine-translated from Japanese by AI (Claude). It may contain errors. Read the original Japanese article.

National defense and security are regarded as public goods. Because markets alone struggle to supply them sufficiently and their benefits are hard to limit to particular people, the state supports them through taxes. From the perspective that defense businesses produce benefits that underpin all kinds of activity, namely people's lives and safety (and fill a domain that markets alone struggle to supply), they can be considered to create positive social impact by raising people's safety.

At the same time, I think quite a few people feel reluctant to call defense "impact." They feel it is wrong to describe technology that could be used in war as being "for society." I believe this feeling has its reasons. When one country strengthens its defense capabilities, other countries may perceive it as a threat, and when a conflict actually breaks out, the technologies and businesses developed there can hurt people. From the standpoint of "making the world sustainable," it is better for conflicts not to occur, and if defense businesses raise the probability of conflict, it is no surprise that some feel they have a negative social impact.

I think which position one takes depends on one's thought. By thought here, I draw on Mullins' definition of ideology and take it to be a concept that integrates (1) a perception of the world, (2) evaluative guidelines (norms), and (3) guidelines for action.

For example, whether one sees deterrence as effective or as inviting a chain of arms buildups is a difference in perception of the world. Whose safety to protect and how far to count something as good can be understood as differences in the evaluative guidelines (norms) one adopts. And on the basis of such a perception of the world and such norms, guidelines for action emerge: for which uses and under what conditions to allow investment, and what to exclude.

(※That said, it is not enough to treat perceptions of the world about deterrence and arms buildups merely as differences in thought; they also need to be verified against concrete conditions and evidence.)

I have written before about the closeness of business and thought, and I think that in practice, this issue may be raised first in Japan's impact investing and impact startup industry.

Efforts to quantify impact have existed for some time, but what is now becoming a subject of debate is the qualitative side of impact. In terms of a ruler, if quantification is about deciding the graduations on the ruler, the qualitative debate is about which direction the ruler points. Defense, mentioned at the start, is one example.

If people differ on whether to include defense and security, which are now becoming familiar topics, in "impact," then I think the word "impact" needs further discussion and clarification once again.

Shared Thought and Changes in Thought

Over the past few decades, there was a somewhat common understanding of what social impact meant.

There were goals to aim for, starting with the SDGs, and I think there was a tacit agreement that social issues are things like poverty, climate change, educational disparities, gender equality, inclusion, and maximizing individual freedom. Behind this was an agreement that globalization and liberalism are good things, and so the content the word impact referred to was probably easy to share.

However, critics of liberalism point out that this was precisely the problem. Looking at the arguments of Patrick Deneen, who advocates common good conservatism, and Yoram Hazony, who advocates national conservatism, I think there is a recognition that behind this agreement, liberalism was being imposed as a tacit premise while posing as neutral.

Backlash against such liberalism and globalization is also gradually growing in countries around the world.

For example, in the United States, the state of Florida in 2023 stipulated that, in managing state public funds, only financial factors affecting risk and returns should be considered. The Net-Zero Banking Alliance, a coalition of banks for decarbonization, also ended its activities in October 2025. These can be seen as phenomena in which the perception of whether climate change is a problem, and norms about who should solve it, are wavering. (However, these are just matters concerning one region, Florida, and one industry, banking.)

That is not all. There are also moves to replace the content of what is good. Deneen, mentioned above, has expressed a position called common good conservatism, which values social stability through families, local communities, and religious communities. Under norms based on this position, businesses that encourage the formation of conservative families would be evaluated as having impact.

By the same logic, for those who advocate excluding immigrants, the position that businesses excluding immigrants create social impact is also logically possible. Of course, what the parties concerned call impact and whether those around them accept that evaluation as valid are separate matters, but if more people come to agree with such views, exclusionary businesses may gradually come to be called businesses with impact.

In other words, if the norms adopted differ, the evaluation of impact differs as well. And because the thought underlying it is wavering, the scope that impact refers to can be said to be wavering too.

The Choice of Entrusting One's Thought to Others

Of course, one can also take the position that solving social issues that markets struggle to solve is impact. However, there are countless phenomena that markets struggle to resolve, and at the point of deciding which of them to certify as a "problem to be solved," a particular norm has already entered in. A non-political stance that is unaware of that choice can also be said to end up endorsing the judgment of the majority of the time.

Another way of choosing is to regard what contributes to the government's problem-solving as impact. In Japan, there seems to be a tendency to equate "the public" with "the government," so I think this view is easily accepted. However, governments also make mistakes in judgment, and supporting the government when it is heading in the wrong direction could not be said to have a positive social impact.

There is also a way of choosing that entrusts norms to someone overseas. In a previous article, I wrote about the structure in which ideas coming in from the United States are accepted without much friction. In the case of defense, the UK and the EU re-clarified in 2025 that they would not uniformly obstruct financing for weapons and arms-related businesses, which had been treated cautiously in sustainable finance, and Japan may end up accepting that answer as it is.

Adopting the standards of the government or of other countries is in itself a choice. But if we cannot explain for ourselves why we adopt those standards, we cannot say we have thought about impact. Indeed, in the discussion on sustainable finance as well, the conclusion at present is that while decisions to forgo investment are not obstructed, investors are to think through the final answer on their own.

Practice and Thought

As the ruler for measuring social impact wavers, how we understand "social issues" will waver as well. And precisely because, over the past decade or so, many organizations have put forward "solving social issues," I think many companies are being asked anew what thought lies behind the way they try to grasp social issues.

Conversely, if a company or organization avoids sorting out that perception and those norms, the sense of resistance mentioned at the start, that is, the discomfort with the words "social issues" and "impact," will continue to remain.

But that discomfort should also become an opportunity to think again about what we regard as desirable change, and about whose disadvantage we take into account and to what extent.

I have written several articles so far on the closeness of business and thought. My feeling is that, especially in domains that are not pure markets, domains that bear the word "social," the closeness of thought and business becomes a practical issue as well, and what I have been saying is that the impact domain would be at the forefront of this. I also think that precisely because more companies now carry the labels of social issues and social impact, discussion and clarification of thought are needed anew in business.

Unbundling the University

Takaaki Umada — Thu, 24 Sep 2026 01:40:59 GMT

This article was machine-translated from Japanese by AI (Claude). It may contain errors. Read the original Japanese article.

The university is an institution with a longer history than the modern state or most companies. Over that long history, the university, as a vessel for nurturing knowledge and people, has endured across centuries. That is why I think the time horizon for considering the significance of the university should not stop at a few years of reform or a ten-year plan, but should be measured in decades, or even in generations.

For example, much of the current system for science and technology research began in 1945, with the end of World War II. However, as I looked back at the prewar and postwar periods in an earlier article, about 80 years passed from the Meiji Restoration (1868) to the end of the war, and about 80 years have now passed from the end of the war to the present. It may be worth reconsidering whether maintaining the 1945 system is the right thing to do.

In fact, the international order is now on the verge of major change, and I see various moves related to science and technology in other countries.

Signs of change in the postwar science system

The greatest influence on the current shape of the university came from the Bush report of July 1945.

Vannevar Bush, director of the U.S. Office of Scientific Research and Development (OSRD), submitted the report "Science, the Endless Frontier" to President Truman. It was a plan to carry over into peacetime the wartime experience of mobilizing university researchers to develop radar and the atomic bomb.

Its content was a strongly public-investment philosophy, and a social contract: the government funds basic research at universities but does not interfere with its substance, and the results are eventually returned to society as new industries, public health, and national defense capability. This idea became an institution with the founding of the National Science Foundation (NSF) in 1950, and the postwar American research university became a model for other countries.

Change is now occurring in the United States. In May 2026, the NSF announced the creation of "NSF X-Labs." Over the next ten years, it will invest $1.5 billion to set up independent research organizations outside academic institutions, giving dedicated teams autonomy in operations and funding tied to milestones.

There is also debate that questions the very role of the university. In his 2025 essay "Unbundle the University," Ben Reinhardt argued that the university is a "bundle" that holds together education, research, credentialing, technology development, policy advocacy, sports entertainment, and even asset management, and that specialized institutions taking on parts of it should be increased outside the university.

The view of bundling and unbundling (binding together and separating) is one that tech blogger Ben Thompson and analyst Benedict Evans have used to read the structural transformation of the newspaper, television, and software industries. Drawing on Ben Reinhardt's essay, this article applies the unbundling view to the university and is an essay-style attempt to think about the future of universities in Japan along a long-term axis.

First, let us look back at what the university has bundled.

Part I: What does the university bundle?

First, I will organize what the university bundles into one.

The university is not an institution only for education and research

The university has a variety of functions and services, and sells them to students as a single set (a bundled product). But today's university also has various stakeholders other than students.

In 1958, Clark Kerr, president of the University of California, said jokingly that the three major problems of a campus are "sex for the students, athletics for the alumni, and parking for the faculty." Neither education nor research is included. Organizing the functions the university has carried gives the following.

Function	Examples of content
Education	Lectures, seminars, liberal arts education, transmission of specialized knowledge and skills
Selection and certification	Admissions selection, conferral of degrees, signaling to companies
Research	Exploring and verifying new knowledge, training the next generation of researchers
Custody of knowledge	Libraries, museums, accumulation of specimens and research data
Transition of young people and communal living	Dormitories, clubs and circles, meeting friends and partners
Network formation	Alumni associations, job placement, mutual support after graduation
Sports	Competitions and entertainment under the university's name
Medicine	Advanced clinical care at affiliated hospitals
Asset management	Managing donations and endowments
Social implementation and policy support	Industry-academia collaboration, technology transfer, policy advice, regional revitalization

Functions other than education and research are not small. In the fiscal 2023 financial results for Japan's national university corporations as a whole, about 40% of the roughly 3.4266 trillion yen in ordinary revenue is revenue from affiliated hospitals. In the United States, the endowments of 657 universities total $944.3 billion.

Even among some people in industry, one often sees them talk proudly about having "not gone to class," seeing a considerable part of a degree's value as lying outside the lectures.

Why it has been bundled, and why it is being unbundled

Why have such diverse functions been bundled into a single institution? I think there are at least four reasons: the technological constraint that people had to gather in one place to deliver knowledge; the credibility the university provides; finances that pool diverse revenue into one; and expectations from the state, companies, and others.

The technological constraint becomes easier to understand by comparison with newspapers. In "The Great Unbundling" (2017), Thompson explained that newspapers could combine news, advertising, classifieds, and weather forecasts because they controlled expensive distribution infrastructure: printing facilities and delivery networks. In the university too, the transmission of knowledge once required teachers and students to gather in the same place, and the campus and the faculty were scarce distribution channels, like a newspaper's printing plant and delivery network. Facilities with large fixed costs, such as libraries and laboratories, are also cheaper when shared across many departments. When research in the 20th century came to require enormous facilities, being a large organization able to maintain them became a strength in itself (we will see this in Part IV).

The university's brand has worked as credibility that guarantees, together, the quality of education and the abilities of graduates. This credibility is also supported by institutions. In Japan, the only bodies that can confer degrees under the law are universities and the National Institution for Academic Degrees and Quality Enhancement of Higher Education. In the United States, federal student aid can be used only when studying at an accredited institution. Because the place of study, the proof of what was learned, and even the funding of tuition are tied to the same institution, it is hard for students to choose separate providers for each function.

On the financial side, what has supported the bundle is that tuition, state grants, research funding, and donations flow into a single purse. Under this arrangement, cross-subsidization works, supporting fields that struggle to generate profit with other revenue. Indirect costs added on top of research grants also support shared foundations such as libraries and administrative organizations. Being a bundle has also served as a mechanism that protects disciplines that could hardly stand on their own.

The state and companies have also concentrated functions in the university. The state entrusted research and the training of specialized personnel to universities in order to prepare for international competition. The Imperial University set as its purpose to "meet the needs of the state", and the postwar United States poured federal research funding into universities in line with the 1945 Bush report. Today, international university rankings encourage consolidation and scale. Companies have left recruitment screening to university entrance examinations, and have also placed expectations on universities as partners for joint research. Households expect their children to find jobs, and regions expect young people to stay and talent to be trained. Each time a new issue arose, it was faster, and easier to explain in the budget, to load it onto an existing university than to create a dedicated organization, I think.

The universities, for their part, took in these expectations as opportunities for growth. They obtained research funding and expanded graduate schools and institutes, took on businesses such as affiliated hospitals, athletic teams, and asset management, and with each added function increased their scale and influence. This is the picture Clark Kerr, then president of the University of California, described in 1963 when he called the giant university with its diverse functions and stakeholders the "multiversity." On the other hand, the more funders there were, the more deeply universities came to depend on the state and companies (we will see this in Parts IV and V).

These four reasons reinforce one another. When funding from the state and companies gathers, research and facilities are enriched, which raises the brand and attracts excellent students and the next round of funding. For that reason, the bundle does not come apart immediately even if any one of them weakens.

What the internet weakened was mainly the technological constraint among the four reasons. As distribution costs fell, newspapers and cable television were taken apart by use, and Evans argued that internet services repeatedly cycle between bundling and unbundling. When MOOCs drew attention in 2012, Clay Shirky also wrote "MOOCs are our MP3, and Udacity is our Napster," and saw the same change coming to universities.

But the collapse of the university did not happen. The credibility of the degree, the flows of tuition and research funding, and corporate hiring practices remained tied to the university, and the personal connections and rites of passage that the investor Staton counted as part of a degree's value could not be replaced by online courses. I think unbundling advances when a better provider for a specific function appears outside, and the flows of funding and credibility also head toward that provider.

If so, the question to ask is not what becomes cheaper, but what reason there still is to keep things bundled. Functions for which being a bundle is a strength also persist: expensive facilities that can only be maintained jointly, the cross-subsidization that supports disciplines that struggle to generate profit, and the community of researchers who take a long time to verify knowledge together.

On the other hand, there must also be functions that remain only because the paths of funding and credibility run solely through the university, even though the reason to keep them bundled has faded. Now that AI is lowering the cost of individual tutoring and feedback on assignments, and governments and foundations have begun to fund research organizations outside universities directly, telling these two apart has become a more pressing issue than before. To move the latter outside the university, I think it is necessary first to create paths through which funding and credibility reach the outside providers.

Part II: The way science is done is beginning to change around the world

For about the past ten years, a movement has been spreading around the world to question how science is conducted and to try out new ways of doing research.

(1) Metascience, which studies and experiments on the way science is done, is spreading

Metascience is the field that tests how science is conducted, such as how research funding is allocated, the validity of peer review, and the design of research organizations, using data and experiments. In the 2010s, the "replication crisis," in which many papers could not be reproduced in follow-up studies, and the concern that breakthroughs were becoming harder to produce even as funding and researchers increased, gave it momentum. In 2019, the Research on Research Institute (RoRI) was established in the United Kingdom.

Governments are moving too. In 2024, the United Kingdom set up the Metascience Unit, a joint body of the Department for Science, Innovation and Technology and UK Research and Innovation (UKRI), and began comparative experiments on how research grants are reviewed. It reported that distributed peer review, in which applicants evaluate one another, could shorten the review period by up to 65%. A characteristic of this trend is that it does not stop at ideals but actually launches prototypes of new organizations and funding allocation mechanisms and tests them.

(I also wrote a little about metascience in another article before.)

(2) New research organizations are emerging outside universities

New forms of research organization have also begun to be explored. A representative example is the FRO (Focused Research Organization). It is a format promoted by the nonprofit Convergent Research, which develops research infrastructure tools and large-scale datasets that do not fit well with either papers or product development, using dedicated teams with deadlines and quantitative targets. Ten have already been launched in the United States, and two more started up in the United Kingdom in 2026. As Reinhardt points out, the main workforce in a university laboratory is graduate students who turn over every few years, and evaluation is biased toward highly novel papers. The FRO is an organization designed to avoid those constraints.

There are also independent institutes that guarantee long-term funding to individual researchers. The Arc Institute, established in 2021, works with Stanford University and the University of California and gives its core investigators eight-year terms (renewable) and funding with no restrictions on use. In the public sector too, DARPA-style institutions, in which program managers (PMs) with wide discretion lead high-risk research, have spread to ARPA-E, ARPA-H, Germany's SPRIND, and the UK's ARIA (launched in 2023). The NSF X-Labs introduced at the beginning is an extension of these. In 2023, Reinhardt himself also founded Speculative Technologies, a nonprofit that advances research and development in materials and manufacturing technologies that fit neither universities nor venture capital.

(3) Funding for research is beginning to come from nonprofits such as foundations

What supported the postwar research university was competitive funding from the government, such as the NSF and the National Institutes of Health (NIH). According to the Science Philanthropy Alliance's estimates (2024 data), the share of research at U.S. universities and nonprofit research institutions funded by the federal government fell from over 70% in the 1960s to 50% ($63.6 billion) in 2024. Philanthropy, which combines funding from nonprofits such as foundations and spending from endowments built on past gifts, was $27 billion, accounting for 21% of the total.

Foundations are no longer merely entities that donate to universities. HHMI opened its own research site, the Janelia Research Campus, in 2006, and the Simons Foundation opened the Flatiron Institute in 2016, while the Chan Zuckerberg Initiative established the nonprofit research organization Biohub. The Arc Institute too was established with a gift of more than $650 million from Patrick Collison and others.

Nonprofit funding has the characteristic that it can be continued for specific researchers or organizations over a longer period than government funding, which is bound by single-year budgets. On the other hand, where it goes tends to be swayed by the funders' interests, and according to the Alliance's 2023 report, 72% of nonprofit funding going to research in the sciences at universities appears to have been devoted to biology, medicine, and health sciences (fiscal 2021). Even so, it can be said that the paths for obtaining funding are steadily widening.

(4) AI is beginning to change who carries out research

In 2026, Nature published papers on AI systems aiming to proceed autonomously from forming hypotheses through experimental design to analysis, such as Google DeepMind's "Co-Scientist," FutureHouse's "Robin," and "AI Scientist" from Sakana AI and others. Companies that provide foundation models are also beginning to do things close to research, such as Anthropic creating a biology lab and OpenAI taking on unsolved problems in mathematics. (However, even in the Robin paper, for example, humans were involved in confirming candidates, drafting experimental procedures, and directing analysis, so the practical work of research has not already been replaced end to end.)

The AI systems listed above are also developed mainly not at universities but at companies and nonprofit research organizations. Developing cutting-edge AI requires computing resources and data on a scale universities find hard to hold, so AI may further increase the capital needed for research, and its center may move outside universities (we will see this in Part IV).

Autonomous laboratories, in which robots repeat synthesis and measurement around the clock, are also being implemented. If a considerable part of experiments and literature surveys is automated, the way laboratories are run, which has presupposed the labor of graduate students and postdocs, will have to change. At the same time, I think the more hypotheses and results AI produces in large quantities, the heavier becomes the role of critically verifying what is reliable and valuable. I will look at this point again in Part VI.

(5) Change is also beginning to occur in education

AI is about to change not only research but also the way education is done. For example, universities are now struggling with student reports written using this AI, and conventional teaching methods are about to be rethought.

As wages rise in occupations such as blue-collar work and conventional white-collar workers become oversupplied, it seems that going to university is no longer necessarily a worthwhile investment.

In addition, on September 22, 2026, the Horowitz Andreessen Academy (HAA), a full-time academy for high school graduates backed by the venture capital firm a16z, was announced. There are no degrees or credit recognition, and it appears to begin with a one-year program admitting about 50 students tuition-free in fall 2027, but it also appears to plan to convert later into a fee-charging university. Its pillars are co-op education involving year-round work in industry, direct instruction from practitioners, and student-led projects. A precedent is the Thiel Fellowship (2011), which gives young people aged 22 or under who leave university to take on challenges $250,000 over two years.

What these are carving out of the university does not seem to be the transmission of knowledge. Knowledge is already cheap to obtain through AI and the internet. What is being carved out is fellow travelers who share an aspiration, a professional network, field experience, and the credibility of having passed a rigorous selection. It can be said that the functions supporting selection and the transition into society, more than education itself, have begun to move outside the university first.

Movements around the world are unbundling the university's functions from the outside

Overlaying these on the structure of the bundle, FROs and NSF X-Labs move technology development with clear goals, and ARPA-type organizations move the discernment of challenging themes and the authority to allocate funding, outside the university or to dedicated PMs. Foundations supply funding through paths separate from the government, and metascience has made reproducibility and the grant-making system objects of verification. AI has begun to replace the practical work of laboratories, and new schools are separating selection from practical training.

It should be noted, however, that most of these are not trying to destroy the university. Many FRO researchers are people trained in graduate school, and the funding of ARPA-type institutions also flows to universities. The unbundling taking place here can be understood as increasing the options outside the university so that a suitable provider can be chosen for each function.

How to rearrange research functions is being debated around the world

In response to these movements, the focus of the debate over the past few years has been shifting from a binary of "the university or outside the university" to which research functions should be carried by which forms of funding, employment, and evaluation.

The very people who have built research organizations outside universities position their efforts as complementing, not replacing, the university. Adam Marblestone and others who run FROs stated explicitly in a 2025 retrospective that FROs are not a replacement for university research in general. Most research institutes outside universities have not built, on their own, everything from undergraduate education to doctoral training.

At the same time, a design conflict has also emerged over whether to support individual researchers or dedicated organizations. Whereas the U.S. 2026 science policy vision set out a direction of emphasizing individual researchers over the university as an organization, the League of European Research Universities (LERU) countered that even excellent individuals need universities that support long-term research, training, facilities, and academic freedom.

The shape of evaluation and infrastructure is also being reconsidered. James Wilsdon and others at RoRI raised the concern that in an era when AI writes applications and AI reviews them, the persuasiveness of the writing will no longer serve as a clue to the quality of research. How to carry work that is hard to credit in an individual's papers, such as shared data and research software, is also an issue. Even so, going outside the university does not necessarily free researchers. For example, there is a report that politically sensitive topics decreased in economics papers at U.S. universities heavily dependent on federal research funding, and if they remain reliant on government funding, free research may not be possible.

Furthermore, there are also calls for review of the Bayh-Dole Act, which underpins the technology transfer system, and of universities' management of inventions. The 1980 Bayh-Dole Act is a law that allows nonprofit organizations such as universities, and small businesses, to elect to retain rights to inventions made with federal funding, under certain conditions. In recent years, in addition to technology transfer centered on patenting and licensing, a method of disseminating technology through access to university facilities and specialized personnel has also been proposed. Reinhardt too argues that the drug discovery model of patenting discoveries and commercializing them with venture capital funding has limits when generalized as is to other fields that require long-term engineering development or the integration of multiple technologies.

In Japan, the Science Council of Japan, in its November 2025 recommendation, stated that competitive funding alone cannot support research time, stable employment, and facilities, and, along with restoring basic operating funds, is also considering employing researchers through corporate entities other than universities.

Since Japan has come up, let us now look at what situation Japan's universities are in.

Part III: Japan's universities and Japan's social challenges

While around the world it is mainly "how research is conducted" that is being redesigned, I believe Japan's universities are facing structural challenges right at their feet.

The functions and expectations Japan's universities carry

I think the function that carried the greatest weight in Japanese universities was selection and certification of ability. As we will see in Part V, Japanese companies have long used, as their hiring criterion, the difficulty level of the university a person entered rather than what they studied there.

The parties placing expectations also fall broadly into four. The state expects cutting-edge research and specialized personnel; companies expect selection signals and joint research; households expect their children to get good jobs; and regions expect young people to stay, teachers and medical personnel to be trained, and industry to be maintained. All are legitimate, but the directions they point in and what they want differ. For example, a regional national university is asked by the national government for publication metrics and external funding, and by local governments for a stable supply of teachers and nurses. These differing expectations are competing for the same limited time of the faculty.

Moreover, this bundle has grown without subtraction. Even in just the past decade or so, regional revitalization, reskilling, university-originated startups, and economic security have been imposed on universities, but there have been almost no decisions to reduce existing duties in exchange.

The people who carry out research are thinning

Japanese university research is said to have relied on graduate students for much of the practical work. According to a survey by the Ministry of Education, Culture, Sports, Science and Technology, the share of working time devoted to research in fiscal 2023 was 32.2% for university faculty, against 84.6% for doctoral students. These are how each group uses its time, not shares of contribution to research as a whole, but with the share of faculty research time continuing to fall from 46.5% in fiscal 2002, the structure in which graduate students carry much of the practical work of research comes into view. I think it is closer to reality to say that, with the boundary between education and labor left ambiguous, graduate students' motivation and out-of-pocket burden have supported research.

That environment is changing. Since fiscal 2021, support that provides doctoral students with an amount equivalent to living expenses has spread through programs such as the Japan Science and Technology Agency's (JST) Support for Pioneering Research Initiated by the Next Generation (SPRING). Once the idea of regarding doctoral students as researchers who should be compensated takes hold, there will be a need to pay students who carry the practical work of the laboratory, or to hire dedicated staff. In other words, universities and laboratories will bear increased costs for what had been covered by unpaid labor.

At the same time, the number of people carrying research is also declining: doctoral program enrollment peaked at 18,232 in fiscal 2003 and was about 16,000 in fiscal 2024, and the rate of progression from master's to doctoral programs fell from around 14% to 10.4%. The weak yen has also reduced the purchasing power of research funding.

Students and funding are declining

According to the MEXT's projections, the roughly 630,000 students entering university are expected to fall to about 460,000 in 2040. The share of private universities under enrollment capacity reached 59.2% in fiscal 2024 according to a survey by the Promotion and Mutual Aid Corporation for Private Schools of Japan, and in fiscal 2026 it is still 46.2%.

For private universities that depend on tuition, a decline in students directly becomes a financial crisis. The operating grants for national universities fell from 1.2415 trillion yen in fiscal 2004 to 1.0945 trillion yen in fiscal 2015. Costs are swelling with rising prices and the weak yen, while pay raises and the like lag behind, and households have little room for large tuition increases.

Research capacity and regional roles are also wavering

In Science and Technology Indicators 2026, Japan ranks 13th in the world in the number of Top 10% adjusted papers, which indicates the number of highly cited papers. Cutting-edge science increasingly proceeds with large-scale facilities and dedicated interdisciplinary teams, and there is a growing number of problems that a chair-system laboratory of one professor and a few graduate students cannot handle.

Regional universities are being asked whether they can survive even as they send teachers and medical personnel out into their communities. The spread of job-based employment and re-learning has begun to relativize the university's greatest function, selection by deviation score, and voices questioning the university's social benefit have repeatedly arisen, such as the so-called "humanities are unnecessary" argument of 2015. There are measures such as the Program for Creating Emerging Research, which provides individual researchers with funding for up to ten years, but most of the funds flow to existing universities and national research and development agencies, and it has not been an occasion for creating new research organizations outside universities.

Japan, where the problems come first and the options outside fail to keep up

I think the greatest difference between the United States and Japan lies in the order in which unbundling proceeds. In the United States, options such as new research organizations, philanthropists' funding, practice-oriented schools, and degree-agnostic hiring have been set up outside universities first, and as a result the university's functions are beginning to be carved out.

In Japan the order is reversed: the decline in the number of people carrying research, the sharp drop in the college-age population, and fiscal strain are hitting universities first, while the receiving structures outside are limited. There are public research institutions such as RIKEN and the National Institute of Advanced Industrial Science and Technology (AIST), and inter-university research institutes, but routes for launching new research organizations, employment that lets researchers move back and forth between universities, and use of facilities regardless of affiliation remain scarce. If functions are detached without sufficient receiving structures, that would be not a transfer but a loss of the functions of scholarship and education.

Moreover, there is a risk that unbundling in Japan will proceed from both ends. At the top, concentration in a small number of research universities will advance, and at the bottom, withdrawals and mergers of regional private universities will continue. In regions from which universities have withdrawn, both the foundations for training teachers and medical personnel and the region's hubs of knowledge may be lost.

Japan's universities stand at a fork: will they head toward "designed unbundling," or be swallowed by "unbundling as collapse"? To avoid collapse, we need to envision the outside of the university before dismantling advances, and agree on which functions will move where. As a clue, I will first search the history of the world's universities.

Part IV: The world's universities have repeatedly bundled and unbundled

I will trace, through the history of each country, which functions were built into the university, when and why, and what was placed outside it.

The countries from which Japan has adopted university systems

Modern Japan did not take a single country as its model. In the early Meiji period it learned engineering from Britain (especially Scotland), law and educational administration from France, agriculture from the United States, and medicine from Germany, and the Imperial University of 1886 integrated these and set the German research university ideal and the chair system at its base. After the war, the new-system universities began with the United States as the model, and from the end of the 1990s onward, American and British systems continued to be adopted one after another.

Period	Main events in Japan	Country taken as the model
1871-1877	Establishment of the Kogakuryo and Imperial College of Engineering	Britain (Scotland)
1872	Promulgation of the Education System Order; establishment of the Ministry of Justice Law School	France
1876	Opening of Sapporo Agricultural College	United States
1886-1893	Imperial University Ordinance, Degree Ordinance, introduction of the chair system	Germany
1949	Launch of new-system universities; reorganization of the graduate school system	United States
1998-1999	TLO Act; introduction of the Japanese version of the Bayh-Dole system	United States
2004	Incorporation of national universities	Britain
2004	Creation of professional graduate schools (law schools, etc.)	United States
2022-	International Top Research University system; university fund	United States

Below, after an overview of medieval and early modern Europe, I will look at what division of labor each country built between the inside and the outside of the university.

The medieval university began as a guild responsible for training and certifying the professions

The university was born in Western Europe around the 12th century as a guild (universitas). In Bologna the students formed the guild, and in Paris the teachers did. Above the faculty of arts for liberal education, it placed the higher faculties of theology, law, and medicine, and trained clergy, lawyers, and physicians. The "license to teach," granted to those who had completed their apprenticeship and oral examinations, also served as proof of qualification, and in the 13th century residential colleges for communal living, such as the Sorbonne and Merton College, were also born. There was not yet research in the modern sense, and the medieval university can be said to have been a bundle of professional training, certification of qualifications, and character formation through communal living.

The early modern university served the state and denominations, and the new science grew outside it

Through the Reformation and the formation of sovereign states, universities split by denomination and became state institutions that trained clergy and officials. The modern science of the 17th century grew mainly outside universities, at the Royal Society of London in 1660 and the Académie royale des sciences in Paris in 1666. As Reinhardt cites, fewer than a quarter of the Royal Society's founding members are said to have held a primary appointment at a university. As an exception, Leiden University established clinical medical education in the first half of the 18th century, and that current extended to Japan's Dutch learning.

France abolished the university and created separate institutions for each function

In 1793, during the French Revolution, the university was abolished as a privileged guild of the old regime. In its place, groups of specialized schools for each function the state required (the grandes écoles) were created, such as the École Polytechnique and the École normale supérieure. The legal revival of the comprehensive university came in 1896, and cutting-edge research was carried by the National Center for Scientific Research (CNRS), founded in 1939. It is a three-part system in which separate institutions handle elite training, research, and higher education for the general public.

The separated institutions were not isolated, and today "joint research units" (UMR), in which CNRS researchers and university faculty work in the same lab, are common. On the other hand, since the 2010s France has steered toward consolidation, and in 2020, aiming for presence in international rankings, Paris-Saclay University, which merged several grandes écoles and universities, was launched.

What Japan took from France was the nationally uniform school district system of the Education System Order and the French law education of the Ministry of Justice Law School. It did not adopt the three-part structure of grandes écoles, research centers, and mass universities.

Britain has lined up the colleges, practical learning, and examining bodies

Britain has lined up organizations with different origins. The college systems of Oxford and Cambridge are education through communal living and small-group tutorials. Scotland had a tradition of practical learning, and Henry Dyer, who came to Japan on the recommendation of Rankine of the University of Glasgow, designed the curriculum of the Kogakuryo, the predecessor of the Imperial College of Engineering. The "external degree" begun by the University of London in 1858 granted degrees by examination regardless of where one had studied, and was a pioneering example of separating education from certification.

In 1919, the University Grants Committee (UGC) was established, with the government providing funds and a committee of scholars deciding the allocation, and it functioned for about 70 years as a buffer body to keep the government from interfering in the substance of scholarship. Policy knowledge also grew outside universities, as in Chatham House (the Royal Institute of International Affairs), founded in 1920. After the polytechnics were unified into universities in 1992, research assessment (now the REF) and the introduction of tuition fees advanced.

What Japan took from Britain was the engineering education of the Imperial College of Engineering, research assessment modeled on the REF, and the idea of incorporation. It did not adopt the foundations of communal living in the college system or the buffer bodies.

Germany created the research university and at the same time placed research outside the university

The University of Berlin, founded in 1810, produced and spread to the world, from the ideal of the "unity of research and teaching" based on Humboldt's conception, the seminar, the laboratory, the chair system in which a full professor presides over a chair, and the modern doctorate. At the same time, Germany also built up institutions layered outside the university. The technical colleges became technical universities able to award doctorates in 1899; research was placed in the Kaiser Wilhelm Society (1911) and the Max Planck Society in its lineage, and applied research in the Fraunhofer Society (1949) and others; and around 1970, universities of applied sciences for vocational and professional education were also established.

At the Fraunhofer Society, basic funding from the federal and state governments is about one third of the budget, and the rest is contract research income. Because basic funding increases in line with the funds earned from contracts, an incentive to keep doing research useful to industry is built into the organization. It is an example of establishing, outside, an organization dedicated to industry collaboration, rather than asking the university to commercialize.

Almost all German universities are state-run, and tuition is in principle free. Their finances depend on public funds, but their autonomy has been supported by the academic freedom guaranteed by the Basic Law (the constitution) and by self-governing organizations such as the German Research Foundation (DFG), in which researchers themselves handle review and allocation. It shows that even when funding is public, autonomy can be preserved if there is a mechanism that places allocation decisions on the academic side.

What Japan took from Germany was the ideal of the research university, the chair system, German medicine, and the doctoral system. It did not adopt the groups of research institutes outside the university or the differentiation of institution types.

America grafted together British and German parts to create the multiversity

American higher education began with residential colleges modeled on British colleges, like Harvard College, founded in 1636. Their main purpose was to train clergy for the church.

In the 19th century two elements were added. One was the land-grant universities, created with proceeds from the sale of federal public lands under the Morrill Act of 1862, which rooted the idea that universities should serve regional industry and the public. The other was Johns Hopkins University, opened in 1876, which put German-style research and graduate education at the center. The American research university is a hybrid combining British-style liberal education, German-style research, and America's own regional service. Outside the university too, there grew up the Carnegie and Rockefeller foundations, corporate laboratories such as Bell Labs, two-year junior colleges (now community colleges), and independent think tanks such as the Brookings Institution and the RAND Corporation.

After World War II, the Bush report and the founding of the NSF made federal research support permanent, and the GI Bill made the university a mass institution. Indirect costs were added on top of federal funding, and as contract administration concentrated in university headquarters, the administrative organization grew huge. In 1963, Kerr named the giant university with its diverse functions and stakeholders the "multiversity," and in the same lectures called research universities that depend on federal funding "federal grant universities," also voicing concern that funders direct the substance of the university. Bush's design tried to restrain government intervention through peer review and multiple funding agencies, but the more state funding grew, the more deeply the university came to depend on the state.

The California Master Plan that Kerr led in 1960 divided research and doctoral education to the University of California, undergraduate education and practical master's degrees to the California State University, and broad open access to the community colleges. While functions were bundled in a single university, the state system separated the types of institutions. Only some private universities have a degree of financial independence through huge endowments, and most students attend state universities that rely on state budgets and tuition.

What Japan took from America was the philosophy of Sapporo Agricultural College, the new-system universities, the course-based doctorate system, TLOs and the Japanese version of the Bayh-Dole system, law schools, the university fund, and so on. What it did not adopt was the three-tier differentiation of functions, the depth of private foundations and independent think tanks, and a labor market in which researchers move among universities, companies, and institutes.

Research became a capital-intensive undertaking in the 20th century, requiring enormous facilities

What 19th-century research needed was mainly libraries and small laboratories, on a scale that universities and philanthropists could finance. The big change came in the 20th century. In the 1930s Ernest Lawrence enlarged the cyclotron at the University of California, and after the Manhattan Project of World War II, facilities that no single university could hold, such as accelerators, nuclear reactors, and research computers, became a premise of research. In 1961, the physicist Alvin Weinberg called this kind of research "Big Science." The United States created national laboratories run by consortia of universities, Europe created the internationally cooperative CERN, and Japan also built shared-use facilities such as the High Energy Accelerator Research Organization (now KEK) and SPring-8.

This change affected both the bundle of the university and its autonomy. Being able to own expensive facilities, hire the technical staff to maintain them, and handle safety management became a strength of large organizations, and worked as a force binding the university together. At the same time, dependence on the states and companies able to cover those costs also grew stronger.

AI may further increase the capital that research requires. Developing cutting-edge AI models requires computing resources on a scale universities cannot hold, and Stanford University's "AI Index" reports that most notable AI models in recent years have come from companies. The autonomous laboratories seen in Part II and the building of large-scale data also require large investments. On the other hand, AI also makes some computation and analysis cheaper, and in that respect lifts the capability of small laboratories. Which way it swings will depend on institutional design: who holds computing resources and data, and to whom they are opened.

The academies of the Soviet Union and China, which completely unbundled research

At the opposite pole is a system that institutionally separated research from the university. The Soviet Union concentrated research in the institutes of the Academy of Sciences and made universities mainly institutions of education. The Chinese Academy of Sciences (1949) followed this, and modern China has maintained the academy system while concentrating funding in top universities. In Science and Technology Indicators 2026, China ranks first in the world in total papers, Top 10% adjusted papers, and Top 1% adjusted papers alike. Japan did not take this system as a model, but it becomes a point of comparison when we consider international competitiveness in Part VI.

Four perspectives from world history

Four perspectives can be drawn from the history of universities around the world.

First, bundling and unbundling have repeated like a pendulum. It has swung from the medieval bundle, to the externalization of research in the Scientific Revolution, the French division, the German reintegration, and the American multiversity, and now reintegration is advancing in Europe and the externalization of cutting-edge functions in the United States.

Second, the greatest incentive in the modern era for pulling universities into large bundles is the international university rankings, which tend to reward institutional scale. It could be said to be one factor driving universities into an international race to expand.

Third, countries where scholarship and industry prospered all, without exception, had a thick ecosystem of knowledge outside the university. Examples are France's grandes écoles and CNRS, Britain's external degrees and UGC, Germany's research societies and universities of applied sciences, and America's foundations, corporate laboratories, think tanks, and community colleges.

Finally, the discussion of unbundling is not a passing fad but is positioned within a lineage of institutional thought that connects to the external degree of 1858 and the multiversity argument of 1963.

Part V: Japan's universities started from an unbundled state and have been bundled by policy

So far we have looked at the history of bundling and unbundling around the world. Next we look at Japan. Japanese higher education started from a state in which the carriers were dispersed, and functions have been bundled into a single institution by policy.

Edo-period learning was divided among domain schools, private academies, and Dutch learning

The education of the samurai was handled by domain schools and the Shoheizaka Gakumonjo, practical and intellectual education by private academies such as Tekijuku and Kaitokudo, and the introduction of Western knowledge by the grassroots networks of Dutch learning, symbolized by Kaitai Shinsho. I think this division of labor, in which character formation, training in specialized skills, and the exploration of new learning were entrusted to separate carriers, will be a historical reference point when we envision carriers outside the university.

Early Meiji Japan was in an unbundled state, with each ministry having its own schools

The ministries of the Meiji government created their own schools to train the personnel they needed. The Ministry of Public Works' Imperial College of Engineering took Scottish engineering education as its model, the Ministry of Justice Law School took French law, the Hokkaido Development Commission's Sapporo Agricultural College took American agricultural colleges, and the Tokyo Medical School took German medical chairs.

The picture of each ministry directly managing schools for each function is close to France's grandes écoles, and it can be said that modern Japanese higher education started from an unbundled state.

The Imperial University bundled the ministries' schools and added the German-style chair system

What bundled these together again was the Imperial University Ordinance of 1886. It merged the University of Tokyo, the Imperial College of Engineering, and others, and defined its purpose as teaching and research in the arts and sciences "to meet the needs of the state." For a time, graduates of the law and literature faculties were exempted from examinations and appointed as junior officials, and the diploma also served as a qualification for appointment to the bureaucracy. In 1893 the German-style chair system was introduced, and engineering, which in Germany had been excluded from comprehensive universities, was also taken in as a faculty. I think this point, at which the training of bureaucrats, state qualifications, basic research, and engineering education were bundled into one organization, was the starting point of the composite bundle of Japanese universities.

University autonomy was also shaped within this Imperial University. After the Sawayanagi Incident of 1913-14, the practice arose that faculty appointments required the consent of the faculty council, and this became the prototype of Japanese university autonomy. However, it was autonomy that protected personnel decisions inside a university established and funded by the state, and it differed from the autonomy of foreign "universities," which have lasted longer than states or governments and maintained a degree of financial autonomy. In the Takikawa Incident of 1933, the Ministry of Education placed a Kyoto Imperial University professor on suspension, which showed its limits.

The University Ordinance made private schools universities and made universities a source of corporate personnel

The University Ordinance of 1918 recognized public and private universities, and Keio Gijuku, Waseda, and others became universities. The practice of companies recruiting university graduates in bulk took hold, and universities also became a source of white-collar workers for companies. Even so, liberal education was carried by the old-system higher schools, teacher training by normal schools, and vocational education by technical colleges, and in 1917 the Institute of Physical and Chemical Research (RIKEN) was created outside universities. At the same time, affiliated research institutes placed inside universities also began, and the movement to place things outside and the movement to bundle them inside ran in parallel.

Wartime science mobilization demanded research results themselves from universities

In 1939, the Science Research Grant, the predecessor of today's KAKENHI, was created, and affiliated research institutes and enrollment quotas in science and engineering were expanded. The state came to demand from universities not only personnel but the results of technology development themselves.

In the student mobilization of 1943, the conscription deferment of humanities students was suspended, while students in science and engineering and teacher training were deferred. The asymmetry of expectations toward the humanities and sciences carved in at that time, and the division into science and humanities tracks, appear to connect to the present.

The new-system universities of 1949 converged the types of institutions into one

In 1949, after the war, new-system universities were launched with the United States as the model, and the old-system higher schools, normal schools, and technical colleges were all absorbed into universities. Under the principle of one national university per prefecture, functions that had been dispersed outside the university before the war, namely liberal education, teacher training, practical education, and regional development, were bundled into a single organization. While France, Germany, and the United States all continued to maintain multiple types of institutions, only Japan converged the form of higher education almost entirely on the four-year university.

On autonomy, Article 23 of the Constitution guaranteed academic freedom, and the 1949 Special Act on Educational Public Service Personnel gave the faculty council authority over faculty appointments. While the prewar practice was written into law, finances remained dependent on the national budget.

In the era of high growth, the university's real function became selection

In the era of high growth, enrollment quotas in science and engineering were expanded, and the enrollment rate reached nearly 40% by the mid-1970s, from about 10% in 1960. Companies moved from a premise of training people through on-the-job training after joining to using which deviation-score level of university someone had passed as the hiring criterion, rather than what they learned at university, and the university's real function narrowed to a signal of selection at the entrance. Applied research for industry was carried by companies' central laboratories, and universities were not much asked to drive economic growth. Among the few educational institutions created outside universities at this time were the colleges of technology (1962) and the specialized training colleges (1976).

In the 1990s, Japan began demanding of universities both long-term research and rapid commercialization

In 1991 the liberal arts divisions were dismantled in the deregulation of university standards, the graduate school emphasis advanced, and in 1995 the Science and Technology Basic Act began the rollout of science and technology policy through basic plans. Almost simultaneously, the demand to industrialize research results quickly was layered on, with the TLO Act of 1998, the Japanese version of the Bayh-Dole system in 1999, and the "1,000 university-originated ventures plan" of 2001. Japan introduced, all at once and at almost the same time as the expansion of research support under the basic plans, the framework of industry-academia collaboration that the United States had taken time to establish, and came to count the number of patent applications and university-originated ventures as university results. Behind this, I think, was the decline of companies' central laboratories after the collapse of the bubble, which shifted onto universities the burden of long-term development that companies had carried.

Since incorporation, functions have kept being added to universities

In 2004, national universities moved to national university corporations, adopting Britain's NPM (New Public Management), but operating grants were cut by roughly 1% every year, and the structure changed to one supplemented by competitive funding. After that too, functions kept being added: professional graduate schools, the explicit mention of "social contribution" in the Basic Act on Education (2006), the three-category priority support framework for national universities (2016), international top research universities and the university fund, regional revitalization, reskilling, entrepreneur training, economic security, and compliance with the requirements of the new tuition support system. Subtraction, abolishing duties that are no longer needed, has effectively not been carried out.

The form of autonomy also changed. Incorporation gave national universities legal personality, but the Minister of Education, Culture, Sports, Science and Technology sets the medium-term goals, and with the cuts to grants and the shift to competitive funding, the state's involvement grew stronger through evaluation and funding. In the 2014 amendment of the School Education Act, the faculty council was positioned as a body that gives opinions when the president decides, and the 2023 amendment of the National University Corporation Act placed a management policy council including outside members at large national universities.

Schools and institutes created outside universities have been absorbed or placed at the periphery

Most institutions born outside universities have been absorbed by universities or placed at the periphery. The Imperial College of Engineering was absorbed into the Imperial University, and the old-system higher schools and normal schools into the new-system universities. RIKEN succeeded in commercialization before the war as the "RIKEN Konzern," but lost its industrial base with the postwar dissolution of the zaibatsu. The colleges of technology, the University of the Air, and inter-university research institutes also fulfilled their roles but did not become alternatives to the four-year university.

Policy knowledge likewise did not grow much in independent research institutions outside universities. In Japan, the main route was for university faculty to serve as individual members of ministry advisory councils and expert panels. There are corporate-affiliated think tanks and the National Institute for Research Advancement (NIRA, 1974), but there is not the depth of independent nonprofit think tanks found in the United States and Britain. The distance between universities and industry has also swung between two extremes by policy, from the era of campus unrest when "opposition to the industry-academia cooperation line" was shouted, to the present, when startup creation draws attention.

Japan's university types are divided by the era in which they were born

Type	Main historical background of formation
Research universities (former imperial universities, etc.)	Imperial University Ordinance of 1886 and the building of the imperial university network
Regional national universities	New-system universities of 1949 (principle of one national university per prefecture)
Large private universities	University Ordinance of 1918 and mass higher education in the high-growth era
Small and medium-sized private universities	New establishments following the deregulation of establishment standards from the 1990s onward
Public universities	Postwar establishment by local governments, and recent conversions of private universities to public

The problem is that these types have been fixed not as differences in role but as a ranking along the same yardsticks of number of papers and entrance-exam deviation score. The 2005 report of the Central Council for Education organized the university's functions into seven and tried to have each university choose, and the three priority support categories of 2016 were also an attempt to have them choose roles, but differentiation did not advance. One reason is probably that, as long as types are received as a ranking, there is no incentive to choose a function that looks lower. It could also be said that a few easy-to-understand yardsticks, such as the number of papers and deviation scores, erase diversity in ways of being.

The cost of multifunctionality was divergent evaluation and a lack of options

I think the cost of having bundled every role can be summarized mainly in two. One is the divergence between expectations and evaluation. Universities are expected to do long-term basic research, yet are also evaluated on short-term results such as the number of patents and university-originated startups, and the same laboratories and faculty take on demands with different time horizons and risks under a single evaluation system. The other is the lack of options. The type of institution is skewed to the four-year university, the funder to the state, evaluation to papers and external funding, and careers to a single path toward university professorship, so once someone stumbles, there is nowhere to escape.

The loss of room for long-term research is often cited as the main cause of the decline in research capacity. But I wonder whether the shortness of time horizons is a result rather than a cause. The job security of the chair system nurtured long-term research but also produced closedness, and even in the United States, most research funding is competitive funding on a three-to-five-year cycle.

The hypothesis of this article is that the deeper factor lies in an inescapable bundle structure that forces expectations of differing natures into a single evaluation framework, with few options outside.

Challenge faced	Structural factor that makes the blow severe in Japan
Shrinking college-age population and under-enrollment	The type of institution is unified into the university, so a university's withdrawal directly means the loss of regional higher education
Research system dependent on graduate students and young researchers	The chair system is the basic unit of research, making it difficult to create new research organizations with dedicated teams
Decline in faculty research time	Research, commercialization, management, entrance exams, and student guidance pile up on the same faculty
Labor market mobility and re-learning	University functions are skewed toward entrance selection, and proof of ability at graduation and for working adults is underdeveloped
Fiscal constraints and inflation	Funding sources are skewed toward the national treasury and households, with a thin layer of private foundations and donations

Japan imported the university but did not import the outside of the university

Looking back on the history of Japanese universities, a force that bundles functions into a single organization, as with the Imperial University and the new-system universities, has consistently been at work. Organizations born outside universities were absorbed or pushed to the periphery, and functions kept swelling by addition without subtraction. There is also the history that each time the parties expecting things of the university changed, among the state, companies, households, and regions, demands accumulated without past expectations being settled. Furthermore, there is a tendency for the timing at which Japan adopts foreign systems to coincide with the time at which their limits become visible and reviews begin in the home country.

And as a similar weakness, there is the aspect that Japan imported the institution called the university but did not import the outside of the university. As seen at the end of each country's section in Part IV, most of what Japan did not adopt were institutions and mechanisms placed alongside the university, outside it: France's grandes écoles and CNRS, Britain's buffer bodies, Germany's groups of research institutes and universities of applied sciences, and America's foundations, think tanks, and community colleges.

Japan too has outside institutions such as RIKEN, AIST, and inter-university research institutes. But most of them remained a small number of types established by the state, and the entry of new organizations, the granting of budget and personnel discretion to leaders, the carrying over of personnel and results after a term ends, the shared use of facilities regardless of affiliation, and movement between universities and the outside remained difficult. What Japan did not import was the diversity and openness of the outside. As a result, the university has taken on even functions that should properly have been placed outside. Now that carriers and resources have begun to thin, I think the scarcity of this outside is a major reason Japanese universities cannot move.

Part VI: Toward the next 80 years, sort the university's roles and build the outside of the university

The proposals from here converge on unbundling the university, that is, sorting the work to be entrusted to the university from the work to be left to outside organizations, and creating diverse receiving structures outside the university.

Because the final form 80 years ahead cannot be drawn, make choices that are right in any future

At the beginning of this article, I spoke of looking at spans of 80 years: the 80 years from the Meiji Restoration to the war, the 80 postwar years, and the coming 80 years.

Looking ahead 80 years, there are highly reliable forecasts for population. According to the estimates of the National Institute of Population and Social Security Research, Japan's total population will be about 87 million in 2070 and about 50 million in 2120. In 80 years, an era awaits in which research and universities must be supported by less than half of today's population.

On the other hand, how autonomously AI will come to advance research remains hard to predict. On funding too, the science and technology budget has grown to about 1.5 times its fiscal 2000 level, but international indicators of papers have not improved. Because the comparison is not one with matched conditions, we cannot say the increase was ineffective, but neither can we say flatly that increasing the amount alone will solve the problem.

Under such uncertainty, I think it is wiser, rather than drawing a finished picture for 80 years from now, to put effort into choices that do not lose value in any future, remove unnecessary regulations and affiliation requirements, and accumulate small, diverse experiments.

The four core businesses that remain with the university in any future

I think the core that remains with the university in any future consists of the following four elements: exploration, facing long-term questions without seeking immediate results; verification, in which the community of experts scrutinizes how well-founded claims and experimental results are; succession, protecting knowledge, literature, specimens, and data from dispersal and handing them to the next generation; and the development of people who pose questions, nurturing, through dialogue with predecessors and peers and through communal living, the ability to pose one's own questions in areas with no answers.

As seen in Part II, in a world where AI outputs large quantities of hypotheses and draft papers, I think the role of the community that judges and guarantees what counts as trustworthy knowledge, and especially the responsibility of verification, becomes heavier.

Separate the work entrusted to the university from the work entrusted to outside organizations

If we take the hypothesis presented in Part V, the root of the dysfunction lies in having carried, in one organization and under one evaluation framework, both uncertain long-term exploration and industrial implementation that demands deadlines and results. So technology development and the building of infrastructure tools that are responsible for specifications and deadlines are entrusted to outside organizations such as FROs, and evaluated on whether they delivered the agreed deliverables.

The same sorting applies beyond research. In education, this means valuing proof of ability at graduation rather than the difficulty of entrance exams; in regional contribution, it means taking on the training of teachers and medical personnel as a commissioned contract with local governments that sets the term, budget, and achievement criteria; and so on.

Sort work by its nature

One criterion for sorting is the distinction between exploration and integration. The university's strength is that individual researchers can pursue a single question for decades, and its weakness is gathering large numbers of specialists from multiple fields and steering them toward a single engineering goal. Reinhardt points out that academia, which bases its incentives on individual credit, cannot maintain a large engineering team for long.

The other is the distinction between research that generates ideas and research that delivers results, which can be told apart with the following three questions.

Is there a need to bear strict responsibility for the specifications and deadlines of the deliverable? -- If yes, it is carried by a structure and evaluation separate from the laboratory.
Is there a need to integrate dedicated experts from multiple fields over the long term? -- If yes, it is the work of a dedicated team outside the laboratory.
Is there genuine educational value in graduate students taking part in the practical work of the research? -- If yes, it is the work of a university laboratory.

However, separating evaluation or structure is a different decision from making it a separate legal entity. Ways of placing something outside the laboratory include at least three: creating a department within the university with dedicated staff and separate evaluation; jointly operating it among multiple institutions, like inter-university research institutes and technology research associations; and making it a separate legal entity, like FROs and independent institutes.

For work in which the value of graduate students learning how to build it and the need for maintenance by dedicated engineers coexist and the answers to the questions conflict, such as research data infrastructure, one could consider placing it in an in-house department or a jointly operated organization, with graduate students taking part in research there. It is reasonable to separate legal entities only when the necessary discretion and employment cannot be secured within the university or a jointly operated body. It should also be noted that in a subsidiary wholly funded and controlled by the university, pay scales and personnel matters tend to follow the university's rules, and the point of separating the entity fades.

In education too, systematic lectures could be consolidated into credit transfer among universities and digital lectures, leaving on campus small-group seminars where students pose questions and read primary sources critically and discuss them. The sorting up to this point has mainly had science and engineering in mind, and I will consider the humanities and social sciences in the next three sections.

If the humanities and social sciences are to go outside, first build self-sustaining funding and governance

What can go outside in the humanities and social sciences is work for which there is outside demand from governments, local governments, companies, and citizens, such as policy analysis and evaluation, data infrastructure for social surveys, the preservation and public release of historical materials, citizens' learning, and translation and publishing. On the other hand, there is also work that would vanish if left to the market, such as theoretical research, critical research, long-term fieldwork, and the reading of classical languages and old documents. So perhaps work with demand could go outside with the foundations for self-sustainability put in place, while work that struggles to survive in the market could remain at the university and be protected by the budget as a public good. This is so that the organizations placed outside do not rely on the same cross-subsidization as the university, in which income from work with demand supports research without demand.

One could consider building the funding of outside organizations in four layers that do not depend on a single funder: a foundation of multi-year operating funds through buffer bodies and endowments; shared contributions through membership fees from university libraries, local governments, and others; business through commissioned work and publishing priced at full cost; and donations with funding sources disclosed and no donor involvement in conclusions. This is because financial independence and autonomy mean not receiving funding from nowhere, but being able to continue activities even if one loses any one funder, or goes against its wishes.

Open social science policy knowledge beyond the advisory councils and spin it out as think tanks

As seen in Part V, in Japan the main route by which social science knowledge reached policy was for faculty to serve as individual members of advisory councils. Much of the analysis was prepared by the ministry acting as secretariat, and the organizations specializing in analysis had neither stable funding nor independence.

The first piece of work to spin out is policy analysis and evaluation. In 2011 the United Kingdom created the Education Endowment Foundation (EEF) with funding from the Department for Education, and had it independently verify the effects of education policies. In Japan too, perhaps a portion of the budget for policy projects above a certain scale could be devoted to independent evaluation, with the commissioning entrusted not to the responsible ministry but to a buffer body. This is to eliminate the conflict of interest in which the ministry being evaluated chooses the evaluator, and to create stable demand for outside evaluation bodies. A division of labor is also possible in which advisory councils remain a place for coordinating interests and building consensus, while the analysis that serves as evidence is left to outside organizations.

The second is the data infrastructure for social surveys: long-term surveys that have depended on KAKENHI grants each time would become permanent infrastructure, and the provision of data would be funded by membership fees from user institutions, like the University of Michigan's ICPSR. The third is the independent think tank itself, for which, as a condition of receiving public funds, diversification of funding, disclosure of funding sources and analytical methods, and securing the right to publish without the commissioner being able to intervene in conclusions would be required.

On the other hand, theoretical research and critical sociology that do not match policy demand might be better left at the university and supported as a public good. As seen in Part II, pressure from funders can change how research topics are chosen.

Reposition the humanities at the center of the core that remains at the university, and connect them with outside carriers

The central work of the humanities, reading and interpreting texts and historical materials, confirming the meaning of words and concepts, and handing them to the next generation, is the very verification and succession among the four cores that remain at the university. Skills that take many years to acquire, such as reading old documents and classical languages, will die out unless the university guarantees positions. In an era when AI generates large amounts of text, the weight of the skill of critically examining the origin, context, and meaning of text will, if anything, increase.

However, humanities research has been in part supported by the surplus of cross-subsidization, and if the accounts were made transparent, it might be the first to be cut. The humanities inside the university need to be supported by an explicit budget, and the organization of historical materials, critical editions, translations, and works read over long periods need to be evaluated through expert peer review.

On that basis, the venues and funding for humanities activity can be extended beyond the university. As with the private academies and Dutch learning of the Edo period, libraries, archives, museums, publishers, academic societies, and independent researchers still support humanistic knowledge today. Possibilities include placing research positions in local museums and archives, making academic journals freely available through membership fees from university libraries as the UK's Open Library of Humanities does, and establishing regional humanities funds that accept bequests and the like. It should also be possible to build a fund from donations and ensure continuity with the returns on its investment.

The university remains the core that trains experts, guarantees positions, and judges quality, while outside carriers widen the venues and funding for humanities activity. I think we need to treat protecting the humanities themselves and protecting the humanities within the university as separate problems.

Sketching the ecosystem outside the university

As receiving structures for the work sorted so far, we can sketch the following division of labor.

Carrier	Main mission
Research universities	Long-term exploration, verification, training of the next generation of researchers
Regional university consortia	Regional talent development; joint ownership of infrastructure and administration
Education-focused universities	Liberal arts education; re-learning for working adults
External specialized research organizations	Technology development and tool building with set goals and deadlines
Independent policy think tanks	Policy analysis and evaluation; data infrastructure for social surveys
Industry-led educational institutions	Training in practical skills and certification of ability
Archives of humanistic knowledge and citizens' learning	Preservation and public release of historical materials; lifelong liberal education
Shared research infrastructure	Providing large facilities, computing resources, and data regardless of affiliation
Autonomous buffer bodies	Allocation and evaluation of research funding free of political interference
Foundational systems for talent mobility	An employment environment in which researchers can move between universities and outside organizations

In the short term, I think what to build is external specialized research organizations (such as FROs) that set goals and advance cutting-edge development. Still, in Japan, where a culture of philanthropy has not matured, a Japanese version of the FRO, funded by industry consortia and government money through matching funds, is realistic. However, we should avoid producing its funding by cutting the university's basic operating funds.

Different ways of unbundling for each type of university

Even so, uniform unbundling cannot be applied. For each of the types seen in Part V, I give examples of directions that can be chosen.

Research universities move technology development with settled direction to a Japanese version of the FRO and the like, and concentrate on exploration, verification, and training young researchers.
Regional national universities keep regional talent development while jointly owning facilities, administration, and basic lectures through a university consortium with neighboring universities.
Large private universities move large lectures to a shared online platform and direct resources to small seminars, co-op education, and re-learning for working adults.
Small and medium-sized private universities try partnerships and changes of field, and, if they withdraw, sketch out in advance a path to guarantee current students' learning and convert the campus.
Public universities can choose a path of taking on the function of analyzing regional policy issues, making use of their closeness to the founding local government.

These are not prescriptions allocated from above by the state, but examples of options for each university to choose a direction from its own history and strengths.

Re-measure international competitiveness by the power to connect the world's research, not by rank

Given the large gaps in population and R&D investment, competing with the United States and China on the volume of papers is, one has to say, a war of attrition Japan has little chance of winning. So one option is to re-measure international competitiveness, shifting from rank in paper rankings to how deeply and irreplaceably a country ties together the world's knowledge network (the strength of a node). Indicators would include international co-authorship, the circulation of research talent, shared facilities such as SPring-8, and international use of long-term records. By this yardstick, the long observations, cohort tracking, and preservation of historical materials and specimens that Japan has cultivated turn into strengths that other countries find hard to imitate. However, the yardstick of competitiveness and the yardstick of public purpose, raising citizens and inheriting regional knowledge, should be treated as separate axes of evaluation.

Unbundling creates new dilemmas

Unbundling does not eliminate contradictions; it can be said to replace contradictions that were inside an organization with problems of coordination between organizations. The greatest dilemma is that if long-term exploratory research is purified into the university, it may drift away from the needs of industry and lose its base of support. There are also the following dilemmas.

Institutional dilemma	The two values in conflict	Direction for overcoming it
Slack or accountability	Granting slack unconditionally leads to idleness, while overly strict accountability prevents long-term bets	Give slack to individuals, not chairs, and evaluate through ex-post peer review at milestones
Openness or economic security	Open research collides with demands to prevent technology leakage	Gather sensitive research in controlled institutions outside the university, and protect the university as a place that is open in principle
Globalization or knowledge in the mother tongue	If everything is conducted in English, Japanese-language thought and education for citizens will wither	Make graduate schools and cutting-edge research bilingual, and base undergraduate liberal education and education for working adults on Japanese
Structural reform or transition costs	Rushing reform creates great friction, such as vested interests, failures, and blows to regional economies	Apply new rules in stages starting with new hires, and prepare transitional measures

How cross-subsidization is handled is also a condition of the transition. This article calls for replacing cross-subsidization with direct budgets for explicit public goods, but it does not dismantle cross-subsidization until that funding is secured. The concern that separating research from the university does not necessarily produce results is also natural. Reinhardt himself assesses that the Institute for Advanced Study at Princeton and similar bodies, apart from their early years, have not continued to produce results as expected.

Designing re-unbundling in anticipation of renewed bundling

As history shows, even if functions can be separated now, it is certain that new demands will cling to them over time and they will be bundled again. What we should aim for is not a one-time perfect unbundling but building into the institution in advance a mechanism that allows re-separation when the bundle swells again.

Ingenuity is possible: imposing sunset clauses of about 10 to 15 years on newly established institutions and deciding, when the term comes, through evaluation whether to extend, dissolve, or hand over to another organization. Other measures one could consider include placing institutions that preserve data and historical materials separately as permanent organizations, building periodic review clauses into policies that impose new functions on the university itself, and adopting as a principle "one function given up for each function added," deciding at the same time which existing obligation to abolish whenever a new role is requested.

The HAA seen in Part II, announced as a nimble school that grants no degrees, also plans to begin from 2028 a two-year program with tuition comparable to a traditional private university. If its reputation rises, it may be asked for completion certificates, dormitories, and research functions, and there is ample possibility that it will walk the path of re-bundling. Those who build the outside also need a design that allows them to re-separate themselves.

Proceed through the next 80 years in three periods

The next 80 years cannot be designed all at once, and will proceed incrementally. How to proceed then? I think there could be, for example, the following way.

Phase 1 (2026-2040): a period of organizing and experimentation
In the period when the decline of the 18-year-old population is steepest, relax regulations and affiliation requirements and experiment. Priorities are the creation of a Japanese version of the FRO, trials of a policy evaluation framework and regional humanities funds, building models for the withdrawal and conversion of small and medium-sized private universities, and developing shared computing resources and data infrastructure. Record not only results but also total costs and a comparison with the case in which the same amount was invested in reform inside the university, and use them as material for the next decision.

Phase 2 (2040-2070): a period of restructuring and establishment
Verify the experiments, make successful models permanent, and withdraw attempts that did not work. The aim is a state in which outside receiving structures, such as independent research organizations, think tanks, practice-oriented schools, and archives of humanistic knowledge, have gained depth and trust in society.

Phase 3 (2070-early 2100s): a period of steady state
The aim is a state in which, as population decline settles, the division of labor between universities and outside institutions is stable, and fixed terms and periodic reviews have become ordinary procedure.

The principles to be kept through the three periods include prioritizing connection as nodes of knowledge over the size and number of universities, preparing outside receiving structures before separating functions, giving long-term slack to people rather than organizations, and building periodic re-unbundling in from the start. However, this is a proposal as of now, and there is ample possibility that my own thinking will change in the future.

Epilogue: Through unbundling, the university becomes for the first time an institution with an autonomous purpose

Repositioning the meaning of the university

Ever since the Imperial University Ordinance of 1886 set the university's purpose as "meeting the needs of the state," the purpose of Japanese universities has continued to be given from outside: the needs of the state, corporate selection, households' upward aspirations, and the demands of regional revitalization and innovation. The value of an organization whose purpose is given from outside is determined by how well it meets the goals imposed on it, and the more evaluation indicators increase, the further the university's daily life drifts from inquiry.

If miscellaneous functions come to be shared with specialized outside institutions, room to choose its own purpose will return to the university. That purpose, though provisional, is, I think, to develop people who pose questions, to explore new knowledge, to verify that knowledge critically, and to preserve it over the long term across generations.

The university as a place of education will become a harbor of knowledge to which one can return many times in life, not a place passed through just once at 18. The university as an organization will also become a hub connecting diverse outside carriers of knowledge, collaborating with independent research organizations, think tanks, local governments, libraries and museums, and places of citizens' learning. The founding spirit of private schools that tried to build bases of scholarship apart from the demands of the state, such as Keio Gijuku's "independence and self-respect" and Waseda University's "independence of learning," may become a signpost for Japanese higher education as a whole.

Summary

The claim of this article is that unbundling the university means building the outside of the university.

In the 80 years since the Bush report, science and technology policy has proceeded on the premise that if funds are invested in universities' basic research, the results will eventually return to society. Around the world now, options are emerging outside the university: FROs, ARPA-type organizations, foundation funding, research by AI, and new schools. Japan, meanwhile, faces a thinning of its carriers, a sharp decline in the college-age population, and fiscal strain, and its existing bundle is on the verge of collapse with few receiving structures outside. Universities in every country, in every era, have lined up an ecosystem of knowledge outside the university, but Japan imported only the institution of the university and made it take on even the expectations that should have been carried outside.

What should be done toward the next 80 years is to sort the work entrusted to the university from the work left to outside organizations, to open up the facilities, funding, status, and organizational structures that the university has monopolized and build the outside, and to build in a mechanism that allows re-separation when things swell again. University autonomy should be re-supported through diversified funding, buffer bodies, and a limited set of roles. I believe that doing so will widen the conditions under which Japan's universities can pursue their own purposes.

The next 80 years are the era in which the young generation now studying on campus and working at lecterns and in laboratories will spend most of their lives. I hope this article can be an occasion for people inside the university and challengers outside to work through, in dialogue, an institutional design that asks what role the university plays in society, which work to leave with the university, which to entrust to the outside, and what kind of outside ecosystem to build.

Organizing Company Creation into 12 Cells (Excluding Drug Discovery and Software)

Takaaki Umada — Thu, 17 Sep 2026 06:55:00 GMT

This article was machine-translated from Japanese by AI (Claude). It may contain errors. Read the original Japanese article.

I have been writing articles about company creation.

In an earlier article, I divided company creation, in which a party other than the entrepreneur (such as an investor) is involved before the company is founded and launches it, into four kinds of "starting point": technology-driven, demand-driven, outcome-driven, and mission-driven. At the end of "Thinking About Company Creation Along a Timeline," which I wrote afterward, I noted that combining the classification by starting point with the timeline framework might make it somewhat clearer where a project under consideration stands and what it should compete on. More recently, I wrote an article titled "Fighting Innovation Battles and Timelines with 12 Cells."

Building up several articles in this way, I used the framework from that last article, the 12 cells, as my main tool and worked with ChatGPT and others to map examples of company creation onto it. This article summarizes the results of that exercise.

I have organized the material from the viewpoint that company creation is not a single method but a collection of multiple models that differ in "who contributes which resources, and how they take on the burden."

Operators (Investors) That Practice Company Creation

First, let me introduce representative organizations that practice company creation.

I had ChatGPT research company creation and spinoffs since 2020 in particular, and it found 20 organizations and 104 cases of creation or commercialization. I corrected obvious errors, but I have not checked every case, so please take the figures as indicating a tendency. In addition to VCs and PE firms, I included venture builders, in-house studios, and commercialization programs at universities and research institutions.

Drug discovery is probably the field with the most cases of company creation, but I excluded cases of drug discovery, pharmaceuticals, and biomedical devices from this study, because commercialization proceeds differently in those fields. I also excluded studios that handle only software, so Sutter Hill and similar firms are not included.

As a result, the cases counted below are mainly in climate, materials, defense, AI and IT infrastructure, space, and energy. I also included non-medical agricultural biotech. Rather than excluding an entire organization that also works on drug discovery, I separated cases individually.

I divided cases broadly into two groups by the style of leadership in company creation. Where the organization had its own exploration themes or internal projects and built the company by running dedicated personnel and the initial setup, I call it "organization-led." Where the organization and the founder shared the work of conception, intellectual property, team, and initial operations before the company was formed, I call it "jointly led by organization and founder." In reality there is probably a gradient, but I have divided them into two for convenience.

Organization	Main founding function / program	Listed cases (excerpt)	Organization-led	Jointly led	Cases listed
Eclipse	Eclipse Venture Equity	Mytra, Peak Energy	0	4	4
8VC	8VC Build Program	Saronic	0	1	1
Lux Capital	Lux Labs (announced in 2024; earlier cases came from its predecessor founding function)	Thematic, Osmo	0	2	2
Xora Innovation	Company-creation team	Amperesand	0	1	1
Red Cell Partners	National Security Practice / Cyber Practice	DEFCON AI, Claros	0	7	7
Flagship Pioneering	Flagship Labs	Terrana Biosciences	1	0	1
Deep Science Ventures	In-house company-creation team	Mission Zero Technologies, Parallel Carbon	19	0	19
Technofounders	In-house venture building	Bliss Ecospray, ION-X	0	3	3
Cambridge Future Tech	In-house venture building	Mimicrete, Literal Labs	0	10	10
Marble	Climate-tech venture studio	Aerleum, Vema Hydrogen	0	13	13
Wavemaker Impact / 100x100	Climate-tech venture building	WasteX, Rize	1	13	14
Vargas	In-house company-creation function	Stegra, Aira, Syre	4	0	4
Actis	Energy Infrastructure	BluPine Energy, Nozomi Energy	4	0	4
EnCap Investments	Energy Transition	Linea Energy, Bildmore	1	1	2
Prosemino	Prosemino Venture Builder / Prosemino Labs	Sention Technologies, Super6	0	2	2
MIT	MIT Proto Ventures	Hyperion Transport Systems, Vertical Horizons	4	0	4
TandemLaunch	TandemLaunch Startup Foundry	LATYS, Waveshaper AI	6	0	6
Atomic	Co-found with Atomic	Butter Payments, Exowatt	0	3	3
TNO	TNO Ventures / Tech Transfer Programme	LionVolt, TORWASH	0	3	3
Founders Fund	Partner-led incubation	General Matter	1	0	1
Total	20 organizations		41	63	104

The result was 41 organization-led cases and 63 jointly led cases.

Among the organization-led cases, the breakdown is Deep Science Ventures with 19, TandemLaunch with 6, Vargas with 4, Actis with 4, MIT Proto Ventures with 4, and so on. In every case, the organization first hires founding candidates, executives, and venture builders on its own payroll, gives them a project, and then turns it into a company. The 63 jointly led cases are closer to a form in which outside executives and researchers share the work of execution with the organization before the company is formed.

Where Company Creation Stands on the 12 Cells

In the earlier 12-cell article, I divided the supply side into four types according to "what most strongly impedes the move to the next state," and the demand side into three levels according to "how well a tradable demand has been identified."

The table below shows this.

Dominant supply-side risk \ Demand risk	Low	Medium	High
Deployment and operations risk	(1) Rollout race	(2) Deal-structuring implementation	(3) Paid use-case exploration
Scale-up risk	(4) Capacity race	(5) Staged scale-up	(6) Simultaneous exploration of mass production and applications
Engineering risk	(7) Target-spec development	(8) Roadmap-first development	(9) Simultaneous exploration of product and applications
Science risk	(10) Mission-type validation	(11) Option-forming research	(12) Frontier exploration

I had AI classify the current position of the 102 companies, which is the 104 cases minus the 2 that ceased operations, on these 12 cells. The result was as follows.

Dominant supply-side risk \ Demand risk	Low	Medium	High
Deployment and operations risk	(1) 1 company	(2) 26 companies	(3) 0 companies
Scale-up risk	(4) 3 companies	(5) 16 companies	(6) 0 companies
Engineering risk	(7) 4 companies	(8) 42 companies	(9) 5 companies
Science risk	(10) 0 companies	(11) 5 companies	(12) 0 companies

Several things can be read from this distribution.

(1) Concentration in (8), with Medium Demand Risk

Of the 102 companies, 89 are in the medium demand-risk column (the center column). The low demand-risk column (the left column) has 8 companies, and the high demand-risk column (the right column) has 5.

Within the medium demand-risk column, (8) Roadmap-first development alone accounts for 42 companies, 40 percent of the total. These are projects where applications and prospective customers are visible, a base technology exists to some extent, and what remains is the process of turning that technology into a product that meets customer specifications. The next largest is (2) Deal-structuring implementation, with 26 companies; there the technology is existing technology, and the substance of the business is designing the combination of suppliers, customers, funding, and contracts. All 5 companies in the science row are in (11), and there are no cases in (10) or (12).

However, 84 of the 104 cases have an adoption year of 2022 to 2025, so apart from the 2 that ceased operations and the 1 restructuring, most of the companies have only just started. In other words, this distribution shows the number each organization has been able to start repeatedly, not the positions where returns have emerged. Please read the distribution as telling us not "the cells where things work" but "the cells that are easy to start in."

(2) The Low and High Demand-Risk Columns Are Carried by a Narrow Set of Players

The 8 companies in the low demand-risk column are Eclipse's 3 (Mytra, Peak Energy, Gambit), 8VC Build (Saronic), Red Cell (DEFCON AI, Claros), Vargas (Aira), and MIT Proto Ventures (American Fusion Instruments).

Except for Aira and American Fusion Instruments, the 6 companies were co-founded by US VCs using an "executive plus market hypothesis" approach, and they are in defense, power supply for AI data centers, stationary energy storage, and logistics robotics. In this approach, an executive with a track record is paired up front with an area where demand has become concrete.

The 5 companies in the high demand-risk column are all in (9): Deep Science Ventures' Dunia, Marble's AtmoCooling, and TandemLaunch's three (Waveshaper AI, Recho AI, Wisemotion). TandemLaunch selects university technologies first and then assembles a founding team, and projects that look for an application to adopt while turning the technology into a product end up in the high demand-risk column. There are no cases in (3), (6), or (12).

(3) Each Organization's Projects Cluster in One or Two Cells

All 4 of Actis's companies and both of EnCap's are in (2); 11 of Wavemaker Impact's 14 are in (2); 9 of Cambridge Future Tech's 10 are in (8); and 13 of Deep Science Ventures' 19 are in (8). TandemLaunch's 6 are split 3 and 3 between (8) and (9), and Flagship's 1 is in (11).

Vargas's 4 are spread across (1), (2), and (5), but they all share the approach of first assembling demand contracts and industrial partners and then creating the company. Marble is centered on (8) but extends to (2), (5), (9), and (11); organizations that start from people see their projects spread across cells.

Cases of Cessation and Restructuring

The survey table identified 2 cessations. Red Cell's Eyris was closed in December 2024, and Marble's Centeon is shown as inactive on its official website. The causes of both have not been disclosed, so it is impossible to determine whether it was a technology failure or a failure of demand to materialize. These two companies are excluded from the distribution above.

There is 1 major restructuring, in (5). Stegra completed an additional 1.4 billion euros of financing in June 2026 and announced a review of its construction schedule. This is not a cessation or a bankruptcy, but it corresponds to the point discussed below: even when the demand outlook is there, the cost and schedule risk of the first large-scale facility remains.

I believe that the concentration in the medium demand-risk column, and the clustering of each organization in particular cells, reflect that the work remaining before founding differs from cell to cell, and that few organizations can take on that work repeatedly.

Columns: Demand Risk Determines the Work That Remains Before Founding

The demand-risk column represents what remains as an "unresolved element" before founding. People and capital are needed in every column. On top of that, the rationale for an investor to lead a founding arises when the operator can provide resources that an entrepreneur would find hard to assemble through ordinary investment or partnerships, such as purchase commitments, facilities, intellectual property, customer access, or the ability to structure deals. The investor-led model works precisely because using such resources can greatly reduce the cost and time of the work needed before founding.

The differences among the columns can be summarized as follows.

Column	Work remaining before founding	Conditions under which investor leadership is advantageous	Who actually moves the column	Examples from the survey table
Low demand-risk column (left)	Confirm that the demand conditions are real, and assemble the technology, people, facilities, and funding to supply under those conditions. Speed of launch is at a premium	When the operator can provide resources that take an entrepreneur alone a long time to secure, such as purchase commitments, management to run manufacturing, facilities, and funding to carry the development period	Buyers (participating through offtake contracts or as industrial partners)	Vargas (Syre has a seven-year offtake contract with H&M worth a total of 600 million US dollars; Aira offers existing heat-pump technology on a monthly fee with direct sales and maintenance bundled), the "executive plus market hypothesis" of Eclipse, 8VC, and Red Cell (Peak Energy, Saronic, DEFCON AI)
Medium demand-risk column (center)	Divide the unresolved matters into what can be learned through customer validation (required performance, adoption burden, benefits) and what requires the judgment or agreement of others (budget approval, permits, financing, purchase contracts), and structure the decision-makers and the order of agreements for the latter	When the operator has the expertise, credibility, and access to stakeholders needed to structure the deal, and can move multiple decisions at once. If customer validation is the main task, leave it to the founding team and have the operator confine itself to providing funding and access	Demand-side decision-makers and policy. If the payer, budget, period, and specifications become concrete through public procurement, contracts for difference (price-gap support), large-company offtake, and the like, the column moves toward "low"	Deep Science Ventures (13 of 19 companies in (8)), Wavemaker Impact (11 of 14 companies in (2); Rize was conceived by four parties, who appointed the CEO), Actis and EnCap (secure the executive first, then structure assets, contracts, and funding)
High demand-risk column (right)	Explore the combination of application, customer, and reason to pay. Design in advance the discretion to change the hypothesis and who bears the cost of exploration	When experimental facilities, intellectual property, data, customer access, and the like can be used as shared resources across multiple projects. For projects that can be handled with a small team and low-cost experiments, a structure that frequently requires investor approval becomes more of a burden	The exploration team itself (moving from (12) to (11) is the work of narrowing the demand hypothesis, and moving from (10) to (7) is the work of establishing the science; both lie with public research funding and the university side)	Flagship (the organization bears exploration costs and recovers the cost of rejected hypotheses through equity in the companies that succeed; Terrana was made public after about four years of non-public development), TandemLaunch (3 of the 5 companies in (9); it fixes the combination of technology and people first)

Firm demand does not mean that a large capital investment is justified all at once. If performance in a real environment and mass-production yield have not been confirmed, a process of judging the next investment in stages while watching the results of that validation is indispensable. Northvolt, which I mentioned in an earlier article, ran into trouble because, despite holding huge offtake contracts, it took on the execution risk of technology development and mass production at the same time. Stegra, mentioned in the previous section, also remains in (5) despite having firm demand contracts and has been forced to rework the schedule and financing plan for its first plant.

In the low demand-risk column and in (5), the real protagonist moving the column is the buyer (the customer). At Syre, H&M takes on demand through a long-term contract; at Mission Zero Technologies, Anglo American participates as a co-founder; and at Arctial, Rio Tinto and Mitsubishi Corporation have joined as industrial partners. The fact that US VCs establish projects in this column with the "executive plus market hypothesis" model is also limited to areas where the market hypothesis is backed by institutions or firm demand, such as defense procurement and power supply for data centers.

The same applies to demand created by policy, which is what I called "mission-driven" in the earlier article. The cells in the column move only once it is decided "who will pay for that company's product, and under what conditions." Because a change of payer or the end of a budget can send the column back to the right (the high demand-risk side), the work of carefully assessing the binding force and duration of the contract remains before founding.

Among the 20 organizations surveyed this time, there was not a single case in (10) or (12). The three cells in the science row are alike in that science is the greatest constraint, and they differ in the demand-side outlook. (10), where "demand is clear but the science is not yet established," seems to be common in drug discovery, but outside that field it is territory carried by government mission-type research and the R&D of large companies. Once the science is established, it moves to (7).

(12), where both demand and science are undetermined, is the realm of basic research, and investors can handle it only after the hypotheses about applications and prospective customers have been narrowed and it arrives at (11), or after the science has been established and it arrives at (9). What investor-led creation handles in the science row is concentrated in (11), where the science is not yet established but there is a demand hypothesis and an option can be structured to test multiple hypotheses in parallel. The fact that there are no cases in (3) and only 5 in (9) is probably because, unless there are shared resources such as intellectual property and platforms that can be shared, it is hard for an investor-led rationale to hold.

Rows: Supply Risk Determines the Operator's Capabilities

While the column determines the character of the work before founding, the row determines what the operator must validate and what organizational capabilities it must be able to provide repeatedly. I have left out of the table what must be confirmed in common at the point of company formation in every cell (the rationale for proceeding as a company, rights to use resources, the team, funding for the next validation, and authority over decisions and termination), and list only the conditions specific to each row. Of the examples, Versant, Third Rock, and The Production Board focus on drug discovery and so fall outside the survey table, but I cite them as examples of creation functions.

Starting-point row	What the operator assembles before founding	Founding conditions specific to the row	Main risks remaining at company formation	Required founding function and examples that adopt it
Science row	Experiments that can refute the hypothesis, confirmation of reproducibility, and study of applications and routes to commercialization	The rationale for continuing the research as a company, and the design of the next set of experiments	Scaling up effect size and reproducibility, narrowing the demand side	In-house research and experimental facilities (Versant), interim management (Third Rock), a permanent-capital holding company (The Production Board), an iterative process for hypotheses (Flagship), in-house research and validation budgets (Marble)
Engineering row	Candidate applications, customers' required specifications and prices, and prototypes. In parallel, selection of the business lead	Terms of use for intellectual property, the target application, and the technical and business leads	Integration and certification in real environments, aligning with customers	Selection of university technologies and assembly of founding teams (TandemLaunch), business and funding plans inside the research institution with adjustment of external executives, licenses, and equity (TNO), founding teams with divided roles (Cambridge Future Tech), provision of in-house labs (Prosemino Labs)
Scale-up row	The supply technology, a techno-economic analysis of cost and manufacturing method, a management and manufacturing team, and negotiation of purchase terms	Concrete commitments from customers, feasibility of supply, and an outlook on facility financing	Yield and unit cost, execution of the first plant	Structuring demand contracts and industrial consortia (Vargas), combining executives and market hypotheses (Eclipse), structuring factory financing
Deployment and operations row	The first deployment sites, the sales, installation, and maintenance setup, winning initial projects and bidding, and financing contracts	The customer's economic benefit, an outlook for operations in which the company itself profits, and workable financing contracts	Learning the differences between sites, repeating operations, fluctuations in volume and timing	Hiring executives with a track record and structuring deals (Actis, EnCap), deployment design combined with finance and distribution (Wavemaker Impact), integrated operation of direct sales, installation, and maintenance (Aira)

The nature of the exploration period and cost changes from row to row. The same operator can handle multiple rows, but because a different creation function is needed for each row, I believe this is the background to why each organization's projects cluster in one or two cells.

What is easy to overlook when crossing rows is the time that lies outside the operator's own exploration period. According to NTU's account, Amperesand's research began in 2016, and after prototyping and validation it was spun out in 2023. By the time Xora became involved, the science risk had already been cleared, so as a Xora project it starts from the engineering row, but the seven years of R&D leading up to that had been carried out ahead of time on the university side. When evaluating a project in the engineering row, one needs to check who bore the time and cost of this earlier stage. (In drug discovery, the flow from science to deployment and operations is easy to see and tends to be fast. However, since the sources of demand and price are insurance premiums and social security spending, one cannot say flatly that there is no demand risk.)

Rows and columns also determine the kind of capital required. Deep Science Ventures, Cambridge Future Tech, Marble, and TandemLaunch, which handle (8), are a model in which the whole organization bears the exploration cost and turns the project into a company in a short time. As institutional guidelines, TandemLaunch takes 12 to 18 months, Marble 12 months, and Prosemino 12 to 24 months, and TNO's preparation for company formation takes 6 months. Vargas, Actis, and EnCap, which handle (2) and (5), are a model in which PE or infrastructure capital holds a majority stake and structures assets, contracts, and borrowing project by project, and both the scale of capital and the form of recovery are different. (11) differs in duration, as with Terrana's roughly four years and Amperesand's seven years of earlier stage. What an ordinary VC fund with a ten-year term can do comfortably among these is the (8) model. In other words, it is the capital constraint, not the nature of the project, that determines the territory one can work in. Removing that constraint may require cooperation with government-affiliated bodies and the like.

Treat the Entry Point of Exploration Separately from the Cells

When we consider the "entry point of exploration" separately from a project's cell, there are broadly three kinds of entry point.

Starting from people: First secure candidates who have expertise in a particular field and the ability to execute, and then look for problems and customers that suit them. Marble's recruitment does not require a team, intellectual property, or a concrete idea, and emphasizes expertise and the potential to lead a company. An EIR (entrepreneur in residence) scheme could be said to be a similar mechanism.
Starting from problems: First set out the outcome to be achieved and a hypothesis about who will pay, and then look for the means of solving it and for people. Deep Science Ventures and MIT Proto Ventures are examples.
Starting from assets: First secure resources such as science and technology that already work, existing customers, installation and operations capabilities, or funding, and then look for projects that can make use of them. TandemLaunch, TNO, and Vargas use this entry point.

According to a World Nuclear News report (April 2025), General Matter is a project that a Founders Fund partner founded himself after looking for a US uranium enrichment company to invest in and not finding one. It was incubated inside Founders Fund for about a year. The entry point was people, but in the survey table I placed it in (8) as a stage where development of enrichment technology and facilities remains, and it would move to the low demand-risk column once the terms of the government contract are confirmed. This form is not a mechanism the organization repeats, but an individual case that arose from a partner's personal judgment.

The entry point of starting from people can be used only by an organization that has a channel for continuously securing candidates and has the resources and discretion to offer them. An organization with a weak channel starts from problems or assets, and welcomes people only after making concrete the business conditions it can present to founding candidates (the position of the cell and the work completed before founding). Because the operating side takes on the validation and coordination for that, the entry point should be chosen with the capabilities and costs of the shared team in mind.

From the Entrepreneur's Side

The same framework gives an entrepreneur material for deciding whether to take part in an investor-led project. For example, it would be good to ask about items such as the following.

The resources the operator provides (customer commitments, intellectual property, facilities, funding, management talent)
The work I will be responsible for (the validation shown by the row, and the demand-side work shown by the column)
The equity at founding
Which side holds the authority to change the hypothesis, hire, add budget, and terminate

The organization of columns and rows tells you "the work I will be responsible for." In the low demand-risk column, the main work is executing supply; in the medium column, it is customer validation and structuring agreements; in the high column, it is exploring applications and customers. The row shows the kind of risk you take on: for the science row, experimental results; for the engineering row, integration and certification; for the scale-up row, yield and cost; and for the deployment and operations row, repetition at the site. Whether your own experience fits that work is the first condition for deciding whether to join.

As for equity and discretion, there is a tension: the greater the investor's contribution before founding, the larger its equity at founding, and this weakens the pull on outstanding entrepreneurs. The range runs from structures in which the investor holds a majority, as at Flagship, to structures in which it remains only the first investor, as at Marble, so it would be good to look at how much work is completed before founding and how much is handed to the entrepreneur at founding. However, the size of equity and day-to-day discretion are separate matters, so I recommend judging only after confirming how authority is allocated.

From the Side of Those Starting in Japan

When the same framework is applied to those who are about to start company creation, namely VCs, companies, universities and research institutions, and government-affiliated bodies, it becomes clear that what each has and what each lacks differ. In table form, it looks like the following. The examples are limited to organizations covered in the survey table and the main text.

Actor	What they have	What they lack	Suited cells	Suited entry point	Corresponding precedents
VC	Capital, a network of management talent, discipline in decisions and termination	Experimental facilities, earlier-stage research funding, access to the demand side, pre-founding personnel costs	(4) (7) (8)	People (executive plus market hypothesis)	Eclipse, 8VC, Red Cell
Company	Demand (its own purchasing), facilities, employment, credibility for structuring deals	A mechanism for handing authority over hypothesis changes and termination to the front line, a practice of releasing equity to outsiders	(1) (2) (5)	Assets, problems	H&M (Syre), Anglo American (Mission Zero), Rio Tinto and Mitsubishi Corporation (Arctial)
University or research institution	Technology, earlier-stage research funding and time, experimental facilities	A business lead, selection of applications, a mechanism to settle intellectual property terms early	(8) (11)	Assets (technology)	TandemLaunch, TNO, MIT Proto Ventures, Cambridge Future Tech
Government-affiliated body	Earlier-stage research funding, procurement, loans and guarantees for first-plant facilities, capital of government-affiliated investment companies	Selecting projects and judging termination, management talent	Movement from (10) to (7), from (12) to (11) or (9), column movement, first-plant facilities in (5)	No entry point	Tesi (Arctial), Temasek and GenZero (Rize), DOE contract (General Matter), tax-credit finance (Bildmore)

For VCs, it is as described in the previous section: what an ordinary fund can repeat is the (8) model. To do (2) or (5), it needs to team up with trading companies or infrastructure capital, and to do (11), it needs to team up with a party that holds earlier-stage research funding. What a VC can bring on its own is capital, a network of management talent, and discipline in decisions and termination.

The role in which companies can be most effective is that of the first buyer. I said earlier that it is the demand-side parties that move the columns, and in this framework, issuing an offtake, lending a demonstration facility for the first project, or making the company's own purchasing the first deployment site has more power to move a project's cell than taking part as an investor.

On the other hand, a company's weakness is authority. If an in-house studio, despite having demand, facilities, and people, fails to reach the joint leadership discussed in this article and remains an internal new business, it is because the company has not been able to hand decisions on changing hypotheses, adding budget, and termination to the front line. If a company uses its demand and facilities for company creation, one possible division of labor is to entrust only the design of authority and equity to outside parties.

What universities and research institutions have is technology, and earlier-stage research funding and time. NTU bore Amperesand's seven years, and TNO builds business and funding plans in internal projects before forming a company. What they lack are business leads and selection of applications, and TandemLaunch and Cambridge Future Tech take that on as organizations. Because investor-led company creation in the science row starts only from (11), what universities should prepare is probably the earlier stage that carries research that far, a mechanism for settling intellectual property terms early, and the readiness to accept business leads who come from outside.

What government-affiliated bodies have is earlier-stage research funding, demand, funding for first plants, and the capital of government-affiliated investment companies. The work of raising the TRL of research in (10) and (12) and moving it to a higher row is not part of investor-led company creation and would fall to public research funding. Public procurement and price-gap support are policies for moving the column (demand), but they can be counted as real resources only after the binding force and duration of the contract have been confirmed, and General Matter's government contract is an example. Loans and guarantees from government-affiliated banks come into play in (5), after demand contracts and technical validation are in place.

Conversely, what government-affiliated bodies lack is the judgment to select and terminate projects, and management talent. Note also that subsidies look like demand, which makes it easy to misjudge a subsidized project as being in the medium demand-risk column.

And what each lacks is held by someone else. If so, a hypothesis suggests itself: what Japan lacks is not capital, demand, or technology, but the organizer, producer, or arranger who assembles them into a single project. Vargas assembling power, hydrogen, customers, capital, and management into a single business, and Wavemaker Impact turning farmers, finance, and buyers into a single business, is exactly this kind of structuring work, and it may be fair to say that the question is how to carry out such efforts.

Company Creation and Industry Creation

So far I have written in units of how a single operator turns a single project into a company.

On the other hand, there is an implicit premise that the conditions for repeating company creation include having in place things that lie outside the company: earlier-stage research funding, shared resources, and counterparties in the value chain. I also think that if one envisions company creation in Japan, then unless one designs who will take on this outside layer at the same time as designing the operator, it will in the end not get off the ground.

For example, as I wrote in "Startups and 'Industry Creation' with Regions," even if one manages to produce a candidate for a high-growth solar panel startup, its growth will also stop if the surrounding group of companies that handle its components, equipment, installation, and maintenance becomes the rate-limiting factor. Unless those companies are created as well, large companies like high-growth startups will be hard to produce.

In this sense, I think there are two models of what is called company creation. One is the model of creating fast-growing startups that go after large demand and large risk. The other is the peripheral companies that are missing when one looks at the industry as a whole. Peripheral companies do not presuppose rapid growth, but they are necessary as a condition for anchor companies to grow.

Once the scope is widened this far, company creation comes to be a question closer to the creation of an industry (industry creation), which includes the division of labor among multiple operators, how shared resources are held, and the simultaneous structuring of suppliers, customers, and funding, rather than an activity of building companies one at a time.

Seen in the distribution on the 12 cells, these two models are in charge of different cells. Organizations that repeat (8) and (11) with VC-type capital can be read as doing activity closer to the former, and organizations that structure (2) and (5) project by project with PE or infrastructure capital as doing activity closer to the latter.

And unlike the US and China, Japan does not have so many startups that are born by responding nimbly to new demand, so it may be necessary to consider whether to create such peripheral businesses at the same time, or whether startups themselves should extend their value chains considerably and make them their own business. On the other hand, compared with the EU and others, manufacturing remains, so there is also a chance that cooperation among large companies and small and medium-sized enterprises could manage it.

I would like to address the organization of and thinking about these matters from the industry side in a separate article.

Summary

I have organized company creation as an activity that expresses the state of a project through 12 cells formed by the types of supply risk and the stages of demand risk, and selects the leadership model according to who can take on the work remaining before founding. I think the columns in the table lay out the character of the work remaining on the demand side, and the rows lay out the validation and creation functions the operator must provide repeatedly, so that together they tell us what functions are needed. People and capital are needed in every cell, and whether to start from people, from problems, or from assets is a choice separate from these 12 cells.

Organizing Postwar Japan in 25-Year Increments, and the Questions of the 2020s

Takaaki Umada — Mon, 14 Sep 2026 15:40:46 GMT

This article was machine-translated from Japanese by AI (Claude). It may contain errors. Read the original Japanese article.

As the 2020s enter their second half, I have been thinking a lot lately about what we should be asking now.

One of those questions is "thought," which I have been writing about often in recent articles. I believe the direction of thought becomes the foundation of business and will greatly influence the future of business and startups (see another article on this).

Suppose we understand thought through three elements:

A map of cognition
A yardstick of evaluation
A course as a guide for practice

(I am drawing on Mullins's definition of ideology.) The first of these, the "map of cognition," is said to include an "understanding of the past, present, and future." In other words, to think about the thought of the years ahead, we cannot do without the work of reexamining history so far, alongside thinking about the future.

Recently, a growing number of books looking back on the postwar period have been published, and it seems to me that efforts to draw an overview of this history are underway in many places. I am not a specialist, so I am somewhat hesitant to take a broad look at history myself. But in thinking about the future thought concerning capital and business, I have come to feel that there may also be room for the work of sketching a rough overview of the past several decades in a form that is useful for business.

So, as one experiment, here I would like to divide the postwar period into 25-year blocks, 1945–1970, 1970–1995, 1995–2020, and 2020–2045, and organize the changes of each quarter century. The intention behind this is that doing so may make the outline of the coming 2020–2045 easier to see.

I will go into detail below, but if we look back on the challenges each era faced, the questions that arose from them, and who mainly took them on, the flow seems to have been roughly as follows.

After the war ended in 1945, the question of what kind of state and society to rebuild was taken on mainly by the state and companies.
From around 1970, the question of what kind of life to build in an affluent society was taken on by close-knit groups such as families, communities, and unions.
From 1995 onward, as the security provided by the organizations people belonged to wavered, the question of how to live, work, and support one another came to be taken on mainly by individuals. At the same time, individuals also gained greater freedom to start their own businesses and activities and to build organizations. However, the power to decide employment and the allocation of capital gathered not with individuals but with companies and with capital that crosses borders.

And from the 2020s onward, I feel that "questions on a scale that individuals or individual organizations cannot take on alone," such as infectious diseases, security, decarbonization, and population decline, have come to the forefront once again.

Facing such questions requires collective will and power. But as I describe later, over these several decades the bearer of questions seems to have gradually shifted to the individual. If we tried to pull power back all at once into a collective such as the state, it could provoke strong backlash, and carelessly concentrating power also carries the undeniable danger of tilting toward state-centered totalitarian control. Particularly these days, technological progress has made it easier than before for actors with strong authority, such as the state, to exercise control, and that risk is growing.

On the other hand, with the rise of private platform companies that wield influence across borders, concentrating authority in the state does not necessarily solve the problem either. In that sense too, I feel we must think about how things should be from now on in a way that differs from going back to the past.

In that sense, I believe the challenge we face now is how to build a mechanism for jointly taking on big questions while preserving individual freedom.

Comparing Questions and Their Bearers by Drawing Auxiliary Lines in 25-Year Units

From here, taking 1945, the year the war ended, as the starting point, I will look back on the eras while drawing auxiliary lines at every quarter century (25 years).

The 25-year division is only one auxiliary line, but there are several reasons I chose this unit.

When reexamining a hundred years from the viewpoint of thought, 10-year units are too fine and 50-year units too coarse, so looking at intervals of about 20 to 25 years makes it easier to gain a view toward the present.
There is the symbolic turning point of "1970," when the Osaka Expo was held (in my earlier "Thought and Capital" series, I also treated 1970 as one dividing point).
There is the major turning point of "1995," when the Great Hanshin-Awaji Earthquake and the Tokyo subway sarin attack occurred (Masanori Tsujita also treats the 1990s as a dividing line and argues in particular for 1995).
There is the clear break of "2020," when the spread of the novel coronavirus (COVID-19) began.
The next, "2045," falls exactly on the 100th anniversary of the end of the war.

Of course, one could also divide the periods by other events such as the oil crises, but I have adopted this quarter-century division to make the overall structure easier to grasp. With that, the "question this article focuses on" and "its main bearer" in each period correspond as follows.

Period	Question this article focuses on	Main bearer
1945–1970	How to rebuild postwar Japan as a country and society	State and companies
1970–1995	What kind of life to build in an affluent society	Families, communities, and unions
1995–2020	How to live, work, and support one another	Individuals
2020–2045 (conjecture)	With whom, and what, and how, to take on jointly while preserving individual freedom	The "we" that is being questioned anew (collaborating joint actors)

From here, I would like to look at the eras along three paths. First, we move through Japan from 1945 to the present; next, we go back from 1945 to 1870 to put the length of the postwar period in perspective; and finally, we move forward from 1870 to the present on the world's side.

1945–1970: The State and Companies Led Reconstruction and Growth

Japan reached the end of the war in August 1945. The challenge Japan faced immediately after the war went beyond restoring livelihoods and industry; it was to reassemble the very institutions of the state. Under the occupation by the Allied forces, the drafting of the Constitution of Japan and the revision of the Civil Code advanced, and the structures of governance and the institutions concerning the family were greatly renewed. The challenge of "how to rebuild the country and society from here" lay before people's eyes as an urgent question.

The government put institutions in order while negotiating with the occupation authorities, companies hurried to restore production and employment, and, with special procurement demand from the Korean War as one trigger, Japan entrusted much of its security to the United States while concentrating resources on economic development, and companies too achieved rapid growth.

In the course of that growth, labor unions and social movements became active, and there were also strong movements demanding the establishment of rights and the fair distribution of the gains. Even so, the real center of the power that moved society was, it seems, still the state and companies. The two functioned as the leading actors, aligning policies and directions while mobilizing the funds and organizations needed to carry them out.

Companies in particular were both places where people worked and earned income and the central suppliers of the goods needed for an affluent life. During the period of high economic growth, home appliances and automobiles spread rapidly, transforming daily lifestyles, and it can be said to have been an era in which, through the activity of companies driving the expansion of production and employment, the economic growth of the whole country was directly tied to how each person worked and to the life of each household.

At the same time, the net of social security supporting livelihoods also expanded. In 1961, universal health insurance and universal pensions were realized, and a system was put in place in which not only employees but also the self-employed and agricultural workers enrolled in public health insurance and pensions. A structure in which the state designed mechanisms to prepare for the risks of illness and old age, and citizens supported one another by contributing premiums, became a firm pillar for stabilizing life. With earned income from companies and the public social security system as two wheels, this was the era in which the foundation supporting family life was established.

Nevertheless, not a few people were left behind by the benefits of that growth and distribution. Regions suffering from serious pollution arose, and there were groups placed outside the framework of stable regular employment. Within the household, women carried much, without pay, of the care work such as housework, child-rearing, and elder care, and their participation in economic activity outside the home was constrained. There were also regions and people structurally placed outside the framework of "we" of this period, such as Okinawa, which remained under U.S. administration until 1972.

Of these, the gendered division of labor within the household was, I think, treated in this period less as a problem to be solved than as a premise of the growth model, in which companies grew on the assumption of long working hours for men and households supported those men. The burden was imposed, but it was not counted as a burden, and it was placed outside the question the state and companies had taken on, "how to rebuild the country and society."

This first quarter century was one in which incomes rose and material affluence was achieved, while distortions such as pollution problems and the uneven burden of care accumulated. As a result, society's interest gradually shifted to a question in close-knit groups such as families and communities: "what kind of life should the affluence we have obtained be turned into?"

1970–1995: The Demands and Choices of Daily Life Expanded

In the quarter century from around 1970, on the premise of a life supported by corporate employment and national social security, the emphasis shifted greatly toward what people wanted and how they sought to raise the quality of their lives.

This was also the period when a marked change appeared in people's consciousness of affluence. Looking back at the Cabinet Office public opinion survey cited in the Health, Labour and Welfare White Paper, in the 1970s answers valuing "material affluence" and answers emphasizing "spiritual affluence and leisure" began to be evenly matched, and in the late 1970s the latter overtook the former. Behind the movement to seek qualitative fulfillment in life, there seems to have been a shift in the values themselves about what counts as affluence.

And the basic unit of life in this era was the "family." The family was at the center of facing choices of housing, the use of household budgets, children's education, and planning for life in old age. Within it, the family tried to give concrete form to a desirable life while allocating and adjusting who would work and who would take on child-rearing and elder care. It was precisely this unit, the family, and in particular the nuclear family that had increased sharply in the 1960s, that routinely took on the questions of diverse life choices and responsibility for care.

However, problems such as health damage and deteriorating living environments caused by pollution, wages, working hours, and food safety could not be solved by the efforts of individual families alone. In response to these shared problems of daily life, diverse intermediate groups such as residents' organizations, local communities, labor unions, and consumer cooperatives were formed and demanded environmental improvement and the expansion of institutions from government and companies.

What characterized this era was that, rather than the solitary individual, there was first the intimate sphere of the family, and further, intermediate groups mediating between that family and the state functioned actively.

That said, while such families and groups served as safety nets that protected people, a different kind of problem from the previous era appeared in their internal division of roles. The household model of lifetime employment for men and unpaid care work for women, which had taken hold as a premise of the growth model in the previous quarter century, now became the initial condition under which families took on the questions of life. The more families took on questions such as housing, education, and the care of aging parents, the more the burden concentrated on the women within the household. Moreover, the power to decide what to choose and who would bear it was not equal within the household, and I think a structure in which those who bore the burden found it hard to take part in decisions was reproduced inside the unit of the family.

At the same time, in this period the division of roles itself became a point of contention. Movements demanding women's participation in society and gender equality spread, and equality in employment became an institutional issue, while tax and pension systems premised on households with full-time homemakers were also put in place. The family was both a subject that took on questions and a place where its internal allocation was being questioned anew.

Also, not a few individuals felt stifled by the pressure to conform and the burdens of local communities, and the insufficient inclusion of people who fell outside corporate regular employment and the standard family framework also remained a major problem.

Through the trial and error of social movements and institutional reforms seeking to resolve such oppression and inequality, the unit that takes on questions gradually shifted from groups to individuals.

1995–2020: Individual Choice and Burden Were Called into Question

In the 1990s, after the collapse of the bubble economy, as globalization and liberalism spread, the unit that takes on various challenges and questions moved in earnest from organizations and groups to individuals.

The trend of valuing individual autonomous choice and self-responsibility is clearly shown in the policy directions of the time. In 1999, the Economic Planning Agency's "Basic Direction for the Ideal Economy and Society and Economic Revival Policy" placed individual freedom and self-responsibility as the basic principle of action and advocated building an environment that supports diverse career choices and challenges. Each person was encouraged to open up their own path by their own will, and it can be said that an institutional foundation to support that free choice was being sought.

At the same time, the tools and environments for individuals to start activities as principals also expanded greatly. With the spread of the internet, individuals could communicate directly to the world, find collaborators and customers who shared their aims, and start businesses without belonging to a large organization. In the nonprofit sphere too, triggered by the surge of extensive volunteer activity after the 1995 Great Hanshin-Awaji Earthquake, the Act on Promotion of Specified Nonprofit Activities (the NPO Act) was enacted and put into effect in 1998, opening a new channel for citizens to voluntarily take on the resolution of social issues.

In this quarter century, individuals were freed from the constraints of existing communities such as family, community, and company, and became beings required to take on choices about livelihood and employment themselves. On the other hand, one could also say they gained the freedom to act as autonomous agents who create new work and new mechanisms of mutual support. This is a way of taking on questions: raising questions oneself, recruiting companions, and, as needed, building one's own organization. For those who could not fit into the conventional fixed roles, too, the technology and institutional foundations to open up their own possibilities were being put in place.

In the latter part of this era, especially the 2010s, I think phenomena such as the surge of startups and entrepreneurship, and individual influencers who stood out on social media and elsewhere, also functioned as representative devices for taking on questions starting from the individual.

However, even though the bearer of questions had moved to individuals, there were many respects in which the location of power had not moved to individuals. What actually determined the forms of employment and the allocation of capital in this quarter century was not individuals but companies and capital that crosses borders.

With the 1999 revision of the Worker Dispatch Act, the businesses eligible for dispatch were in principle liberalized, and in 2004 dispatch to manufacturing was lifted as well. The share of non-regular employment rose from about 20 percent in 1990 to nearly 40 percent in 2019, and the risk of employment fluctuations was shifted to individuals. Over the same period, corporate retained earnings accumulated, and after the 2015 Corporate Governance Code, returns to shareholders, rather than to workers, came to be emphasized. It seems to me that the norm of individual self-responsibility was also a norm demanded to increase the mobility of capital and labor.

Meanwhile, Japanese companies themselves stepped down from the role of bearer they had played in 1945–1970. While cleaning up after the bubble, they lost their international standing in electronics and semiconductors at the same time, and as they scaled back lifetime employment and in-house welfare, companies ceased to be entities that took on employment and livelihood security and, in return, held social legitimacy. The vacuum was filled by capital that crosses borders, such as overseas investors and rating agencies, and by individuals themselves.

The tools that supported individual empowerment were also, for the most part, overseas platforms. It was on Google and Facebook that individuals could communicate to the world; startups came to rest on venture capital, and individual commerce on markets that platforms provided. It was companies that cross borders that supplied the foundation of individual freedom, and it was they who set the terms of use of that foundation.

And individuals such as the entrepreneurs and VCs who own those platforms came to hold power, gathering wealth, fame, and power.

Overall, the quarter century up to 2020 was an era in which Japanese companies withdrew from having been the substantive providers of social security through long-term employment and the like, and in which individual empowerment advanced greatly. At the same time, it can also be called an era in which structural inequality and gaps in the safety net were shifted onto individuals as a lack of effort in the name of "self-responsibility," harsh competition among individuals arose, and individuals internalized the norms of self-responsibility and meritocracy.

The 2020s: Challenges of Supply and Coordination Overlap

Entering the 2020s, the nature of the challenges and questions society faces has changed greatly.

In the global spread of the novel coronavirus that began in 2020, both the supply capacity of medical services itself and the coordination capacity to allocate strained resources were severely tested. The geopolitical confrontation between the United States and China, which had sharpened from the latter half of the 2010s, also demands responses on a national scale, far beyond what the efforts of individual companies can handle. Furthermore, since Russia's invasion of Ukraine in 2022, securing supply chains for critical goods, including energy, food, and semiconductors, has been newly recognized as a matter of life and death directly tied to national security.

In addition, the transition to a decarbonized society requires a fundamental rebuilding of the entire social infrastructure and huge long-term investment over several decades. And the demand side of that is the global market, so it cannot be settled by domestic decisions alone. Looking at the domestic scene, too, amid rapid population decline and a declining birthrate with an aging population, we face various structural challenges. For example: how to sustain the workforce for medical care and elder care; how to scale down and reorganize social infrastructure and residential areas in a planned way; and who will share the excessive burdens that arise in the process.

Of course, problems such as the threat of infectious diseases, war, the crisis of the global environment, demographics, and aging infrastructure did not suddenly arise with 2020 as the dividing line. But as these difficulties overlap in a compounded way, it can be seen that the question "who on earth will maintain and keep supporting the supply foundations, social institutions, and the very order that are supposed to underpin individuals' free activity?" has once again surfaced to the forefront of society.

History has no strict 25-year cycle, but looking back in this way over the course of quarter centuries, I feel that where we stand now is precisely a transitional period in which the very dimension of the questions is fundamentally shifting.

And if we think about business only on the basis of what has been said so far, one might conclude that "building businesses and startups that are identified with the state may be the shortcut to making money from now on." Before jumping to such a conclusion, I would like to step back a little further and look at history.

Going Back from 1945 to 1870 to Put the Postwar Period in Perspective

So far I have looked at the course from 1945 to the 2020s as a process in which the bearer of questions shifted from the state and companies to families and communities, and then to individuals. In this section, I would like to switch perspective once and turn the clock back from 1945 in 25-year steps to 1870. The purpose is to put the 75 years of the postwar period in perspective by setting it alongside the 75 years of equal length that precede it. In going back, I use the same viewpoint of who was taking on the questions of each era.

First, at the starting point of 1945, production, funds, labor, and speech were all incorporated into the war effort under the National Mobilization Law (1938). It was the state that took on the questions, and the people were in a state of bearing only the burdens, as mobilized participants.

The period one step before that, 1920–1945, was a quarter century in which, just after the people had nearly joined the side of the bearers, the bearer became fixed on the state again. The 1925 universal male suffrage law abolished the tax requirement, and the number of voters rose sharply to about four times. But in the same year, 1925, the Peace Preservation Law was enacted, and debate on the very nature of the state was pushed outside the bounds of permitted speech. Women also remained without suffrage. Furthermore, the May 15 Incident of 1932 destroyed the conventions of party politics, and the center of gravity of decision-making moved to the military and the bureaucracy. In little more than ten years after the realization of universal suffrage, the people were returned from being bearers of questions to objects of mobilization for the questions the state had taken on.

One step further back, 1895–1920, was a quarter century in which the people who bore the burdens rose up demanding to become bearers themselves. The war costs and troops that supported the Sino-Japanese War, which ended in 1895, the Russo-Japanese War, which began in 1904, and the First World War in 1914, were imposed broadly on the people as tax increases and conscription. In that sense, the 1905 Hibiya Incendiary Incident was a protest by people who had endured the burdens of war and were not satisfied with the peace treaty, and the 1918 Rice Riots were an objection to the hardship of livelihood caused by wartime inflation. One can see that, triggered by the Rice Riots, a full-fledged party cabinet was born, and the movement demanding universal suffrage rose nationwide, leading to the realization of universal suffrage in 1925.

And one more step back, 1870–1895, is the quarter century in which the framework of the modern state was built right after the Meiji Restoration (1868). The bearer of the question "how to build a modern state" was the Meiji government, and what the government prioritized above all was the institutional channel for collecting burdens from the people. Through the education system of 1872 and the conscription order and land tax reform of 1873, the duties of education, military service, and taxation came to be imposed directly on each individual, without the mediation of the old domains and villages. Meanwhile, the building of channels for the people to join the side of the bearers lagged greatly, and the state and the nobility drove things alone. The Imperial Diet was finally opened in 1890, but the electorate was limited to men aged 25 or older who paid 15 yen or more in direct national taxes, and their number was only a little over 1 percent of the total population. The Freedom and People's Rights Movement can be said to have been a movement that demanded this channel from the side that bore the burdens.

Going back to 1870 in this way, we can see that the prewar 75 years were an era in which the bearer of questions was consistently fixed on the state. The people and companies were bearers of burdens, but joining the side of the bearers remained limited to the end. By contrast, the postwar 75 years can also be called an era in which the bearer itself came down from the state to companies, to families and communities, and then to individuals.

On top of that, I would also like to turn to the length of time itself. By 2020, postwar Japan had already walked the same amount of time as the 75 years from 1870 to defeat, and its present position lies beyond that.

戦前 75年   1870 ---- 1895 ---- 1920 ---- 1945
                                          |
戦後 75年                                 1945 ---- 1970 ---- 1995 ---- 2020 -- 現在

In the prewar 75 years, Japan built the foundations of a modern state, climbed to become one of the great powers, and eventually arrived at total mobilization. In the postwar 75 years, over the same length of time, the location of the bearer moved greatly at each stage. The postwar 75 years can be considered a period of rapid change, and it means that large changes would not be surprising from 2020 onward either.

However, this retrospective follows only events within Japan. Both the nation-building of 1870 and the course of the following 75 years were in fact carried out in the form of answering questions directed at Japan from the world. So in the next section, I would like to turn around while standing at 1870 and this time move time forward from the world's side.

Who Did the World's Questions Reach? 1870–2020s

The changes of each quarter century in Japan have always unfolded within the international environment of the time. Postwar Japan in particular built its prosperity by entrusting much of its security and the maintenance of the international market order to the United States. I believe that unless we understand what was entrusted and how it has changed, we will misjudge the questions we should be asking from the 2020s onward.

So in this section, I will look from the world's side instead. What did the world ask of Japan, whom in Japan did those questions reach, and what did Japan take on and what did it, conversely, entrust to others? I would like to trace this chronologically from 1870, using the same quarter-century auxiliary lines as in the domestic part. If the section following the domestic course viewed the shift of the bearer of questions from the "inside," this section is an attempt to recapture the same movement from the "outside," the international environment.

Period	Question the world directed at Japan	Addressee of the question	Japan's answer (what it took on / what it entrusted)
1870–1895	Open the country	The state	Hurriedly build a modern state
1895–1920	Act as one of the great powers	The state	Became one of Asia's great powers. Built a state able to endure total war and spread the burden to the people. Turned into a creditor nation
1920–1945	Maintain international cooperation even amid depression and confrontation	The state	As cooperation among the major powers weakened, Japan too pursued external expansion. Announced withdrawal from the League of Nations (1933) and eventually headed toward total war
1945–1970	Rebuild as a member of the West. Entrust security to others	The state. Begins to reach companies as the bearers of exports and employment	Entrusted much of its security to the United States; the state and companies led reconstruction and growth
1970–1995	As an economic power, open markets and adjust trade imbalances	Companies and the state	Companies and the state handled trade friction and the strong yen, while families, communities, and unions supported domestic life
1995–2020	Conform to global standards	Companies and individuals	Used overseas capital and platforms to expand individual freedom, while also demanding that individuals bear responsibility for responding
2020s	Share the costs of order + ?	?	The answer is not settled. At the least, payment for what had been entrusted, and a reexamination of what had been postponed, are beginning

In the three quarter centuries from 1870 to 1945, the addressee of the world's questions was consistently the state. The first question was "open the country." Afterward, Japan entered the competition among the great powers through the Sino-Japanese War, joined their ranks via the Anglo-Japanese Alliance (1902), and by the time it turned into a creditor nation through the First World War, the world's question had changed to "act as one of the great powers."

From 1920 onward, the world's question changed to "maintain cooperation even amid depression and confrontation, and remain within the international order." But after the Great Depression of 1929, the major countries withdrew into blocs based on their own currency areas, and the United States, which then had the greatest economic power, did not actively take on maintaining the international order either. Even on the world's side, which demanded that countries remain within the order, there was no bearer to support that order.

Japan eventually withdrew from the League of Nations after the Manchurian Incident and, as an extension of that, rushed toward total war. The Bretton Woods system and the founding of the United Nations, conceived toward the end of the Second World War, were designed precisely on the basis of this reflection.

The question that the world, in practice the United States, directed at Japan in 1945–1970 was "rebuild as a member of the West, and entrust security to others." Through the gold-dollar standard, the Marshall Plan, GATT, NATO, and the like, the United States provided allies in the liberal camp with a defense system and open markets, and in return led decision-making in the international order.

Under the Japan-U.S. Security Treaty, Japan entrusted much of its defense and concentrated resources on economic growth. The addressee of the question at this time was the state, but the ones who substantively carried out the answer were companies that drove exports and employment, and the destination of the question began to widen from the state to companies. The reconstruction and growth model of the state and companies touched on in the previous section can be said to have been a mechanism that worked only after the external environment of defense and the international market was entrusted to the outside.

In the following 1970–1995, after the Nixon Shock, the two oil crises, and the move to floating exchange rates, the United States steered toward a neoliberal market economy model. In this period Japan became the largest economic challenger within the order the United States maintained, and the world's question changed to "recycle your trade surplus and open your domestic market." U.S.-Japan trade friction and the 1985 Plaza Accord are symbols of this. It was export companies that stood on the front line of the friction, and since external responses too were demanded as the autonomous actions of companies, the addressee of the world's question shifted to companies at this stage.

What I want to note here is the "gap" that questions from outside and questions from inside each reached different parties. From the outside, questions about opening markets reached companies, while on the inside, the questions of daily life were taken on by intermediate groups such as families, communities, and unions. In this quarter century, when the bearer of questions in the world was shifting toward markets and companies, the intimate sphere and local society in Japan were still functioning relatively well. The unit of questions in Japan shifted in earnest toward markets and individuals only after 1995, and I think this time lag may have forced rapid change in a short period in later eras and led to harsh arguments about self-responsibility.

In 1995–2020, with the launch of the WTO (World Trade Organization) and China's accession, globalization advanced, with people, goods, money, and information crossing borders actively. The world's question changed to "conform to global standards," and its addressee skipped over companies and came down directly to each individual living their life. The fact that the 1999 policy direction placed individual freedom and self-responsibility as the principle of action, and that the risk of employment fluctuations was shifted to workers through the expansion of non-regular employment, may also be understood as having had such external demands in the background. If the norm of self-responsibility was demanded to increase the mobility of capital and labor, then it can also be thought of as a question thrown directly from the international community at individuals, with the international community and individuals directly connected.

And during this quarter century Japan entrusted the basic rules of its economy, its digital foundations, and its raising of capital to overseas actors, especially the United States, and expanded individuals' freedom of activity on that premise. It was on huge overseas platforms that individuals could communicate information to the world, and it was the huge tech companies that cross borders that set the terms of use.

As a result, the presence of the state within the country receded relatively. Around the same time, after the 2008 global financial crisis, China overtook Japan in GDP, and discontent erupted within American society as well, asking "why must our country keep paying enormous costs to support the world's order?", leading to President Obama's 2013 statement that "America is not the world's policeman." One could say that payment for what the world had entrusted to the United States had already begun to be prepared in this period.

And entering the 2020s, through the intensification of U.S.-China confrontation and Russia's invasion of Ukraine, the world's question turned into the harsh demand to "share the costs of the international order." Through tariff measures and export controls on advanced technology, the United States has come to press even its allies strongly for a fair share of the burden. The great power that once supplied order has turned into one that strictly demands payment for the burden.

Furthermore, the "world" I have described so far was mainly a Western-centered "world," but over the past twenty years various countries, including the Global South, have entered the circle of this world. And these countries are precisely the ones bearing a large share of the costs of climate change and the like now, and the question of how to share that cost around the world has still not been resolved.

At the same time, as globalization destabilized employment and other conditions within countries, industrial policy returned politically, and as the crisis of economic security was raised, the addressee of the question returned once again to the state. However, the candidates for bearer are not limited to the state. As bilateral and multilateral alliances, regional blocs, and furthermore American mega-platform companies with enormous influence across borders flaunt their power in a way unlike before, middle powers such as Japan and the EU have no counterproposal. With the balance of power lopsided, who should take on this order, and the framework for it, remains undetermined.

Moreover, even if the addressee of the question has returned to the state, it is not necessarily the case that the means needed to answer it are in the state's hands. It is individual companies that decide the shape of employment, capital held by investors who cross borders that decides the allocation of capital, and private businesses that actually move the supply chains.

In other words, the bearer of questions came down to individuals after 1995, the power and capacity to decide gathered in global capital, and the bill for maintaining the order is arriving addressed to the state, companies, and citizens. I believe the structural reality that such a twist arises all at once lies at the root of the difficulties of the 2020s.

Amid this, in Japan we increasingly see discourse that tries to return to a former image of the state, such as the political system of the early Meiji era or the high-growth period after the war. But given that the international environment surrounding Japan has fundamentally changed and that it cannot sever its ties with the world, a simple return to past frameworks does not seem to be a realistic solution.

The 2020s as a Confluence

Tracing the two paths, the domestic course and the view from the world, we can see that both reflected, from inside and outside, the same structural movement.

On the inside, the bearer of questions moved from the state and companies to families and communities, and then to individuals. On the outside, the addressee of the world's questions moved from the state to companies, and then to individuals. The three postwar quarter centuries of Japan took the U.S.-supported international order as a given and, within its safe interior, sought "who in Japan should take on the challenges," but this inside and outside were in fact progressing in parallel, intertwined.

What is happening in the 2020s can also be described as these two paths merging. Domestically, structural challenges such as the declining birthrate with an aging population and aging infrastructure have reached their limits, and questions on a scale that individuals or individual organizations alone can no longer hold have burst to the forefront. At the same time, from the world, the external actors who had supplied the international order are pressing us to share the cost of maintaining it. Foundations such as national defense, fair market rules, and the stable supply of energy, food, and critical goods are no longer premises given unconditionally; they have become things that Japan itself must actively take on and support in cooperation with other countries.

Such big questions have been put forward, and while who will take them on remains undecided, the bill demanding payment of the cost has arrived in our hands. That, I think, is where we stand now.

The Impact of These Changes on Business

And the addressees of the bill include not only the state but also business. Postwar Japanese companies rode on U.S. security, open markets, and overseas digital foundations, and enjoyed the benefits of the order. Now that this order is crumbling, payments that someone else once bore, in the form of tariffs, rising procurement costs, and the tax burden to fund defense spending, are now beginning to reach business as well.

There may thus be a path in which the state and business become one again. But the postwar integration worked because three conditions were in place: a course provided from outside, allocation within the country, and the United States bearing the costs. The current state is unsure of its course and has no effective means compared with the United States and China, so even if the Japanese state and business were integrated, the economic prosperity of the Meiji era or the postwar period would not return. The side of business that holds employment and supply networks would end up on the side supporting the state, and would be forced to ask itself what it is carrying that burden for.

Moreover, the partner of integration is not necessarily only one's own state. In capital-intensive fields such as AI and semiconductors, the United States and China stand out, and integration by Japan alone is no match. With alliances, regional blocs, and giant platforms also candidates for bearers, business has to reconsider for itself whom to trust, what to hold in-house, and what to carry jointly with whom.

Furthermore, as long as one keeps fighting on norms and rules set by someone else, it will be hard to beat the house.

And if the state misjudges its course, business cannot function either. Therefore, if business is to become integrated with the state, all the more, I believe the need is growing for business to think through, on its own initiative, the course of the state and how it is decided. Getting that wrong could mean continuing to pay even larger bills.

Five Things to Keep Asking Toward 2045

Building on the historical overview so far, what should we keep asking in the coming quarter century from 2020 to 2045?

As we saw in the previous section, this question is not far from business. As I wrote in an earlier article, thought changes the very conditions of business by passing through policy regimes, individual policies, and markets. As is already the case with policies on security and decarbonization, tracing which questions will come to the forefront in the coming quarter century and by what kind of thought they will be bound together is also work for anticipating the business conditions that will form next and for deciding what to protect before a crisis arrives.

In the three quarter centuries of postwar Japan, both the challenges of each era and the actors who took them on were, to a certain degree, shared across society as a whole. But I also think the difficulty of the 2020s lies in the fact that, before dealing with individual challenges, we need to redesign the very premise of "within what framework should the questions be posed anew in the first place."

I myself have not yet been able to produce the answer, but I would like to present the points we should keep asking toward the future, organized into five. On that basis, I would like to position these 25 years from 2020 to 2045 as "a period of building a new foundation" to support life in society after 2045.

Just as the quarter century from 1870 built the foundations of modern industry and the state from 1895 onward, and the 25 years from 1945 laid the base for the affluent life from 1970 onward, rebuilding the foundations of society seems to require about a quarter century. The question is how to build, within the world and within Japan, a foundation of sustainable life and governance, so that people's lives can continue peacefully even as population decline and aging advance irreversibly, and so that Japan can keep an autonomous position amid a dramatically changing international order.

(1) Who Is "We"?

Challenges such as the crisis of infectious disease, the drastic change in the security environment, the transition to decarbonization, and population decline cannot be held by a single individual or a single organization alone; there is no choice but to form some joint actor, a "we," and take them on together. But the question first arises of who on earth should be included within the circle of that "we."

Even looking only at the voters living in the country today, conflicts over "we" can be seen between generations. In addition, there is the question of whether it stops at the working generation, whether it includes future generations who will bear heavy burdens, or whether it embraces even the foreign workers who support the front lines of medical care, elder care, logistics, and production, and residents from outside the area.

Who is made a member depends greatly on the principle by which "we" is bound together. The default course of modern Japan was the "nation-state," that is, integration by nationality. But neither consideration for future generations nor the handling of people who move across borders can be fully addressed by the single criterion of nationality.

As options for the foundation of integration, the following paths, for example, can be considered. (They are only options.)

Being joined by agreement to the constitution and constitutional procedures
Being joined by the fact of living in the same regional area and sharing living infrastructure such as roads and medical care
Building on solidarity, facing common life risks and sharing mutual aid and social insurance
Sharing the "common good" as a desirable image of society
Being joined by agreeing with the business purpose of solving a particular social issue together

Depending on which principle is chosen, the boundary line between who is inside and who is placed outside should change greatly. Nationality makes it hard to include future generations and residents of foreign nationality; regional living areas make it hard to capture modern people who move often; and sharing a common good, while hard to reach consensus on, produces strong cohesion. A conception may be required of whether to depend on a single foundation or to layer multiple foundations on top of one another.

In addition, if we are to jointly maintain the international order itself, as with security and climate change, then the circle of "we" cannot be closed within national borders, and closing it would not be effective either. The shape of external solidarity, with which countries and regions we take on which challenges jointly, is also part of this question. Conceiving "we" as the bearer of challenges is itself the work of deciding what will bind us together and whom to place outside that framework.

(2) What Do We Take On Jointly, and Who Does It, and How?

I think this question needs to be considered in two stages: "the drawing of the line on how far to carry things jointly," and "the assignment of who specifically carries them."

First, the "line-drawing" on how far to carry things jointly. For about 75 years after the war, the main concern was largely "how to fairly distribute" the fruits produced by economic growth.

But what we face in Japan in the 2020s is a question one step earlier, about the limits of production and supply: "can we even go on supplying the foundations necessary for life in a stable way in the first place?" Alongside the shortage of workers in medical care, elder care, energy, food, and logistics, the challenge of how the whole of society copes with soaring resource prices is also, in every case, a matter of sustaining supply.

Furthermore, as mentioned above, even the maintenance of the international order, such as defense, market rules, and the procurement of essential goods, which until now was taken for granted and entrusted to outside parties, has now become a challenge that Japanese society must actively take on.

Among these challenges, we are asked how far society should take them on as one, and from where they should be left to individual self-responsibility. If the scope of joint responsibility is widened too far, it could invite the totalitarian risk of state control over individuals; conversely, if too much is left in the individual domain, it would further accelerate the harsh arguments about self-responsibility since 1995, and might lead to a situation like that of present-day America.

Moreover, under rapid population decline, I think we need to shift from institutional design premised on past expansion to a "design of contraction" premised on right-sizing. This is the judgment of what to fold up, what to protect, and which functions of life to consolidate in which areas. If the hubs that receive consolidation lack enough medical and transport workers, the consolidation will rebound on residents as a heavy burden of long travel and waiting. The question of how to maintain the housing and infrastructure left behind on the side being withdrawn from also remains unresolved.

The institutions created in the high-growth period assumed only decisions in a phase of expansion, and fair procedures for deciding contraction and withdrawal, and the location of responsibility, have hardly been established. In addition, we need to sort out the order of priority between setting the policy goal as "correcting inequality" or as "securing a minimum stability of life." This is because even if statistical inequality has not widened, it is quite possible for the felt reality of life to become increasingly hard through inflation and service contraction.

Another aspect is the issue of "assignment": who specifically carries out that supply. The state and companies from 1945 left the supply foundation of public services, the families and communities from 1970 left the channels of coordination that support life, and the independent individuals from 1995 left the freedom to pose questions themselves, each as a legacy to the next era.

But the compounded crises of the present cannot be solved by simply returning to any one of the past models. A redesign of the division of roles is required: what the state should run directly, how far private companies should bear public responsibilities, what fills the holes left by dysfunctional communities and families, and how far entrepreneurial innovation can solve public challenges.

This assignment is asked not only domestically but also in international relations. As touched on in the section from the world's side, in the 2020s alliances, regional blocs, and platform companies that cross borders are also lined up as candidates for bearers, and what to carry domestically and what to carry jointly with other countries and foreign companies is also part of this assignment.

These line-drawing and assignment are in fact decided as an inseparable whole. For example, deciding that society as a whole will take on elder care and child-rearing is synonymous with deciding to free those who carry them from the unpaid labor of the family and to treat them properly as public professionals. Opinions may well differ greatly on whether public support for elder care and child-rearing is to be seen as infrastructure for increasing the number of people who work, or as work that families and individuals should handle.

(3) How Do We Distribute Gains and Losses?

However much we may proclaim the ideal of jointly taking on social challenges, unless the rules of distribution, on to whom the gains and losses arising from those efforts belong, are clear, neither the people on the ground, nor private investment funds, nor the residents who bear the burdens will gather.

I believe the biggest reason the development regime of the state and companies after 1945 was widely accepted by the people was that the gains produced by high growth were returned to every corner of society as continuously rising wages and lifetime employment. The distribution to be discussed here is not an after-the-fact distribution simply to share a surplus, but a distribution design that serves as motivation for people to willingly take on difficult roles.

First, there is the question of to whom the gains produced belong. It is a matter of whether they are returned to workers' wages or concentrated on the side of capital as dividends. As the conventional channels that adjusted distribution, such as labor unions and industry-wide labor-management negotiations, thin out, we are asked what can serve in their place.

At the same time, what we should look at is who bears the losses accompanying structural change and how. The jobs lost and the blows to local communities due to technological innovation, changes in trade structure, and industrial contraction tend to concentrate on particular groups, and their effects tend to be prolonged. The people hit are not necessarily able to move easily into new growth fields where gains are created.

There is also the issue of who enjoys the fruits of the "upside" resulting from taking risks. When the development of jointly borne supply foundations or public investment produces great results, the fairness of the distribution of results is questioned: do the returns belong to the entrepreneurs who took on the challenge, to the public that invested, or should they be returned broadly to users?

And what I would like to add as a viewpoint of the time axis is the problem of distribution across generations. Those who have already accumulated assets and the young generation that will form them from now on are placed in fundamentally different conditions. Postponing burdens onto future generations is also an unfair distribution along the time axis. Who will contribute the funds for long-term investments that bear fruit in the 2040s and beyond, and how can distribution models such as social security, which were built on the premise of economic growth, be redesigned for low growth and population decline? These are included in this question as well.

Furthermore, as explained so far, in the 2020s a new issue has entered: how to distribute domestically the burdens demanded from outside the country. As we saw in the section on the confluence, the cost of order is no longer something given unconditionally from outside, and Japan itself has begun to be asked to share it. The increase in defense spending, the price rises that accompany procuring energy and critical goods domestically or within allied countries in the name of economic security, and the blows to export industries from tariffs are all burdens that someone in the country will bear.

Whether this cost will be borne broadly and thinly as taxes, borne by consumers as prices, or borne by particular industries or regions as employment has not yet been decided. Conversely, when industrial policy and public investment advanced in the name of economic security produce gains, who they belong to is subject to the same question.

If there is a pathology to be wary of in the modern age, it is the gravity pulling toward a configuration in which gains are narrowly concentrated in particular wealthy people and large companies, the losses and burdens accompanying structural reform pile onto the same socially vulnerable people, and the power to decide policy tilts toward the voices of those who enjoy the gains. And with this happening on a global scale, and perhaps skewing toward the United States and China in technologies such as AI and the cloud, how Japan creates wealth and how it distributes it will become a big question anew.

(4) How Do We Decide, and How Do We Keep Correcting?

First is the difficult problem of how we can carry out in parallel decisions with different time axes: swift responses to sudden events such as the rapid spread of infectious disease or geopolitical emergencies, preparation for such events, and long-term infrastructure development and investment in research and development looking toward the 2040s.

Also, for grave decisions that cannot be reversed once made, such as withdrawing infrastructure due to population decline, we need to consider whether it is acceptable to apply as is the ordinary majority-vote procedures that are easily swept along by immediate interests. The same goes for climate measures, and we cannot ignore the challenge of how to institutionally build the long-term interests and burdens of future generations, who do not currently hold the right to vote, into present decision-making. Furthermore, when policies or businesses taken on jointly end in failure, we are also asked whether society has a mechanism to examine that failure objectively and, at times, flexibly correct course.

Moreover, in the 2020s there have appeared situations in which, before even asking how to decide, the venue of decision itself is not in Japan, making influence hard to exert. Tariffs and export controls on advanced technology are decided by the United States, burden-sharing within alliances is decided at the table of diplomatic negotiations, and the terms of use of the platforms on which individuals and companies base their activity are set by the companies that operate them.

However fair the procedures we establish domestically, if some of the important decisions that affect burdens are made outside, then how to be involved in those decisions, or how to keep an autonomous distance from them, also connects to questions of how to decide and of governance. In that sense, I believe that taking on what had been entrusted means moving from a position of merely following policies and rules decided outside to the side that participates in the venue of decision, and bearing the costs of participating and of speaking up and making proposals.

Also to be watched closely is the political-economy question, "why are systems with obvious flaws never corrected?" Even though it is widely recognized that labor law, the tax system, and the social security system have structural distortions, their fundamental reform progresses only slowly. Between vested interests with assets and strong organizational power, those in non-regular employment or precarious working conditions, and those proposing new ways, there are marked differences in the resources to access political and policy-making arenas continuously and make their voices heard.

The vicious circle in which economic advantage creates advantage in policy decisions, and the favorable policies further entrench and reproduce existing economic disparities, can be called a structural risk to guard against strongly. I believe that questioning how decisions are made and the process of reviewing them is directly connected to the question of education and guarantees of opportunity: how society as a whole should now nurture and support the young generation who should be the protagonists of society from 2020 to 2045.

(5) How Do We Preserve Individual Freedom Within This?

I believe the freedom, established in the quarter century since 1995, for individuals to choose autonomously how to live, how to work, and whom to collaborate with is a premise to be protected, and that it should be extended as far as possible to those who do not yet enjoy it. At the same time, there is the dilemma that without collective will and power we cannot tackle big challenges such as infectious disease, climate change, and security, and that mutual cooperation and foundations are also needed as the premise that guarantees individual freedom.

And to actually exercise freedom, I think it risks becoming a mere shell unless, beyond a formal abundance of options, the substantive conditions to exercise it are in place. For example: being able to refuse unreasonably poor jobs, being able to move in search of a better environment or opportunities, and being able to endure even if income is temporarily cut off by unexpected hardship. Without these conditions, even if the freedom of choice formally exists, one ends up unable to use it.

And realizing these requires an institutional foundation. To refuse labor under poor conditions, one needs assets to support life for the time being and reliable public benefits; to move to another job or region, one needs opportunities for vocational relearning, and time and financial support to reduce care burdens such as elder care and child-rearing. To endure unforeseen circumstances, a universal safety net that does not break even when forms of employment or work situations change becomes the support.

In the social design of postwar Japan, these livelihood guarantees were mainly provided in a form strongly tied to regular corporate employment and dependent relationships within households. What happened after 1995, I think, was a situation in which, while individual freedom was proclaimed, this old tie was rapidly dismantled, and with the foundations of livelihood guarantees removed, only harsh self-responsibility was left on individuals' shoulders.

That is why, even while watching the various changes in the world's circumstances, we must not forget how society as a whole will guarantee the preconditions for exercising freedom. In doing so, a major issue will be who will take on, and how, the function of coordinating livelihoods that companies and families once performed. There too, the way of being a community will come to be questioned.

In addition, much of the foundation on which individuals communicate, do business, and recruit companions now lies on platforms that cross borders, and the fact that individuals cannot decide the terms of their use also affects the substance of "being able to refuse" and "being able to move." The freedom not to be subordinate to a particular employer should also be the freedom not to be subordinate to a particular platform. How far to guarantee this admits of various methods, such as whether the country should have its own social media and the like, or whether it should have the power to sanction overseas platform operators.

Also, how to prevent the risk that jointly providing generous social security would instead strengthen restraint and surveillance through excessive eligibility requirements and damage individual dignity and privacy is a point to be examined carefully. I think what is required is a design of society that does not burden families with excessive care and overcomes the fragility of being unable to live without being subordinate to a particular employer. I believe this is a shift in thought: not giving guarantees as compensation for sacrificing freedom, but "preparing guarantees as the foundation for truly exercising freedom."

I believe that determining the answers to these five questions, that is, who takes on what and how, becomes in itself the norms and course that are elements of thought.

And the five points are deeply interlinked, and there are relationships in which a choice on one question fundamentally defines the premises of all the others. If the scope of what is jointly taken on is broad, the boundary of "we" expands. If decision-making power is given to those who bear the burdens, the speed of consolidation may slow as they try to avoid those burdens. To move forward with the answers consistent with one another, we cannot avoid choosing a norm (yardstick) of what counts as a desirable society.

And if we cannot design such norms ourselves, norms imported from overseas will enter that vacuum. As I argued in the article 'The Vacuum of Thought in Startups', we have grown used to importing ways of thinking and products, and these days, through digital platforms, AI, and the like, such norms seem to enter more easily.

Conversely, it may be said that this is the time to ask anew about Japan's identity and thought in the postwar international community, which we long entrusted to others and put off.

So although no definite conclusion has been reached at present, taking as clues the new economics and overseas policy agendas introduced so far, the following directions can be considered as candidates for the yardstick.

The axis I used for the organization is the difference in what each conception assumes "we" is bound together by. As I noted in question (1), the principles that bind "we" included the sharing of living areas, the sharing of life risks, agreement with a business purpose, and the sharing of a common good. Once the way of binding is decided, both whom to include in "we" within the country and with whom to jointly carry what beyond the country follow from the same principle. What follows is not a summary of each discussion but my own overview, drawn toward this article's questions, and I leave the detailed examination of each to the linked articles.

A way of thinking that defines "we" by livelihood. The Foundational Economy, which places the supply of essential goods and services at the center of economic policy; the Affordability Agenda, which asks whether they can be used at prices people can actually pay; the Good Life Agenda, which deals with time available for care and community activity alongside living costs and income; and the public option as a means of making guarantees concrete. This is the idea of jointly guaranteeing the core foundations of life.
A way of thinking that defines "we" by employment. Examples include productivism, which places "good jobs" at the center, and predistribution, which works on institutions that affect wages, asset ownership, and workers' bargaining power, in addition to after-the-fact redistribution through taxes and benefits.
A way of thinking that defines "we" by industry. The New Washington Consensus, which links industrial policy to supply chain resilience and economic security, reindustrialization, and place-based industrial policy, among others.
A way of thinking that defines "we" by governance. Abundance, which removes supply constraints; state capacity, which turns policy goals into results; and permitting reform as its practice. It sets as the standard for evaluating politics whether what is needed arrives at an affordable cost. Related discussions also include Public Upside Sharing, which returns the gains of success to the public for the risks it has borne, and the Captured Economy, which questions the structure by which policy is captured by vested interests
A way of thinking that defines "we" by sense of belonging. Progressive patriotism, which connects national belonging with equality, inclusion, and public investment. Common-good conservatism, which emphasizes family, community, and the dignity of work, is also a comparison point, but the two diverge on how far to accept individuals' differing ways of life.

Every one of these organizations has weaknesses. If one tries to form a group by livelihood, the treatment of people and countries outside the area becomes ambiguous, and if by sense of belonging, those who do not fit in are excluded. Still, these candidates are not mutually exclusive, and the actual "we" can surely be formed by layering multiple methods, and layering them can cover one another's blind spots. On that basis, which map, norms, and course to choose is the work of "choosing a thought," and the appropriate business will differ depending on the thought chosen.

2045 falls on the 100th anniversary of the end of the war for Japan. I believe we are now entering the fourth postwar quarter century, that is, the period in which we shape the nature of the actors who will take on the questions of the next era. At the same time, we are in a situation where, unless we form some kind of group or community, we cannot answer the present questions either. Amid this, thinking about thought probably also means choosing what kind of "we" to be and what way of being to choose within it, and I believe that this is the question laid upon us.

Thought and Capital 5 | Who Will Envision Japan's Future?

Takaaki Umada — Tue, 08 Sep 2026 03:26:22 GMT

This article was machine-translated from Japanese by AI (Claude). It may contain errors. Read the original Japanese article.

In March 1973, Sakyo Komatsu's Japan Sinks was published. It is a novel that depicts a future in which the Japanese archipelago sinks into the sea through crustal movement and people must leave their homeland. Within that same year it sold more than 3.8 million copies across its two volumes, which suggests that the future and the shape of Japan as a nation were being widely read about through fiction.

Komatsu was also involved in shaping the philosophy behind the Osaka Expo discussed in Part 1. And Japan Sinks was published three years after the Expo.

What I want to point out here is that, in those days, it was possible to put a vision of the future before the public.

However, I believe that from the 1990s onward, as the role of those who had spoken about society's future in Japan weakened, the channels through which written visions were debated and connected to investment and policy also thinned out. Meanwhile, people from Silicon Valley startups, backed by their enormous capital, have been gaining presence as the new narrators of ideas. In other words, the structure is one in which, just as the capacity to nurture counter-proposals domestically has weakened, ideas from abroad accompanied by capital are flowing in. I have considered this in earlier installments and in another article as well.

This is Part 5 of the series "Thought and Capital." In the articles so far, I have traced the mechanisms by which ideas about the future turn into "promises" such as investments, contracts, and policies. This time, I will look back on Japan since the 1990s and consider how the activity of speaking about society's long-term future, and the mechanisms for receiving it, have changed. On that basis, I will consider what kind of bearers are needed now.

The Established Narrators Who Found It Harder to Speak of a Vision for Society

From the 1990s onward, after the end of the Cold War, the questions and tasks taken on by bureaucrats, business leaders, and intellectuals changed significantly. Against that background, it seems to me that in Japanese society, speaking about the future shape of society gradually became less common, and the channels for doing so weakened further.

Let us look at each of them from its own angle.

(1) Government: Its Role Shrank

As we have seen in the series so far, in Japan it was mainly the government that presented visions of the future. But after the Cold War ended with the failure of the Soviet Union, a consensus formed on the irrationality of socialist policies, and as the inclination toward small government strengthened worldwide, that role began to shift its power to private companies and citizens.

In Japan during the same period, the government was also losing authority: trust in public administration fell amid the recession that followed the bursting of the bubble in the 1990s, and bureaucratic corruption, scandals, and the system of amakudari (post-retirement placement of officials in private-sector posts) came to light.

The change in the government's role in Japan, from the standpoint of vision, also shows in the 1999 Policy Direction for the Ideal Economy and Society and the Revitalization of the Economy. This document explains that it deliberately avoided the word "plan" in order to signal a shift from government-led direction to a free economy based on independent individuals. It offers a glimpse of a period in which the government itself was reexamining the relationship between setting a course and respecting the choices of individuals and companies.

Furthermore, the 2001 reform of the central government ministries and agencies also changed how the government managed the economy. In a retrospective on economic planning by Mamoru Maekawa, a former Deputy Director-General of the Cabinet Office, he summarizes that the roles of the market and the private sector grew stronger, and the recognition spread that conventional economic planning had served its purpose.

This was when the scope and effectiveness of the visions the government could present became limited. In that case, other bearers, such as private companies and citizens, should have begun to draw up visions themselves and take on their realization.

(2) The Business World: It Prioritized Restoring Management

However, the private companies and banks that were candidates for those bearers were, in the same period, busy dealing with the aftermath of the burst bubble. It is said that handling nonperforming loans took more than ten years, meaning that the private sector, which had been a candidate to take on visions of the future and their realization together with the government, was occupied cleaning up after past investments.

In Japan, banks, the main bearers of capital, had the role of understanding companies' long-term business visions, providing funds, and supporting them in times of emergency. But I think that the banks themselves becoming parties to this crisis made it difficult not only to devise medium- to long-term visions but also to back them with long-term funds.

The progress of globalization in the same period was also likely one of the factors that drew private companies away from Japanese ideas and visions. When companies emphasized overseas markets for their own growth and most of their sales came from abroad, the need for private companies to formulate visions for Japanese society relatively diminished. When national growth and corporate growth become harder to align, companies find it harder to commit to the nation.

Against this background, while restoring management and strengthening competitiveness remained long-standing challenges, there was a structure in which the question of what kind of Japanese society to build once companies had grown was hard for the business world to take on as well.

(3) The Public Intellectual Sphere: Its Foundation, the Publishing Market, Shrank

After the war, it was intellectuals and critics who, from a standpoint different from that of the government and the business world, discussed what a desirable society should look like and informed citizens of it.

But the publishing industry that supported their activity also faced a harsh environment from the 1990s onward. The print publishing market peaked in 1996 and then shrank, and magazine circulation also gradually declined.

In particular, what the editorial departments of general-interest magazines did was bring discussions from different fields to the same readers. There was a place where issues could be reread not only from the economic side but also from the sides of politics, culture, and daily life. As such magazines decreased, even if individual voices continued, opportunities to compare visions of society from different standpoints would decrease.

Meanwhile, a major current in society in the same period was the entrusting of responsibility to the individual, typified by phrases such as "personal responsibility" (jiko sekinin). As living as an individual apart from the group came to be emphasized, the language of the public intellectual sphere also gradually turned toward the individual, and "self-improvement" and the like flourished.

Of course, dealing with individual worries and ways of living can be an entry point to thinking about society. However, when readers have, as paths to improving their own lives, both a path to making society as a collective better and a path to merely surviving, oneself and those around one, it seems to me that in Japan in those days the language of the latter often increased. As a result, "society" gradually faded from awareness, and consequently the language of the public intellectual sphere was also optimized for individuals.

And as capital began to gain great presence, if the visions of intellectuals and critics did not connect to investment or policy, citizens could no longer feel that the ideas in the public intellectual sphere had real effect, and those ideas ceased to be used. I think that, in addition to the decline of the practice of depicting society's future, the weakening of this cycle also overlapped with this period.

Startups Took On the Role of Speaking About the Future

Under these circumstances, from the 2010s onward, people whose work is to depict the future became prominent: startup founders and the investors who fund their businesses.

Their narrative uses "cutting-edge technology" to describe visions of the future, such as ways of life and industries that do not yet exist, and raises funds through that story. Then, by actually building products with those funds, they were able to show the vision of the future and the work that can be started now as connected.

For example, Elon Musk's Master Plan for Tesla, published in 2006, laid out a business path that began with a high-priced sports car and used that money to build more affordable cars. Beyond that, it described a transition from an economy dependent on fossil fuels to one using solar-generated electricity. Here, in addition to a plan for how many cars to sell, there is also a vision of how to change the way society uses energy. For buyers, purchasing a car becomes a way of participating in a desirable future, and for workers, developing the product comes to look like work that changes society.

Moreover, when the person who speaks of a vision also takes responsibility for carrying it out, it gives their words concreteness and persuasiveness. If there is a finished product or a usable service, one can verify part of its feasibility, and by carrying it out while bearing risk, one shows how serious one is. Such risk-taking would also have given those efforts a persuasiveness different from that of discourse.

And if the attempt succeeds, ideas connect to capital. Once capital is obtained, one gains the momentum to realize the ideas, and that cycle begins to turn. Then, in a society where money is the dominant yardstick, ideas backed by capital begin to look like the right answer, and still more capital gathers. Such a relationship between ideas and capital comes to be established. Indeed, the emergence of big successes such as Google and Facebook expanded that cycle greatly.

Furthermore, the government began to take note of such efforts as fuel for the next stage of economic growth, and gradually began to support them. In fact, in Japan too, the government stepped up its support from the mid-2010s. Riding that wave, large companies and others also began to advance collaboration with startups, advocating open innovation and the like.

Here we can see a change in the relationship between the traditional narrators and the new ones. It is the change that the government and large companies that once drew visions of the future had become the side supporting the realization of the visions of the future presented by entrepreneurs and investors. It can also be said that expectations toward startups grew in envisioning and realizing the future.

Startups Could Also Offer Opportunities to Take Part in Building the Future

Individuals moved as well.

From the mid-2010s, a certain number of people began to consider founding startups or changing jobs to join them, probably because they saw a future there. Startups could also show economic returns for doing so.

Moreover, even short of founding a company, I wrote earlier that buying a Tesla is a way of taking part in the future and that working there is another form of participation. Startups were precisely what could offer this kind of opportunity to be involved in the future as an individual. There was an atmosphere in which simply using a startup's product was cool.

In other words, startups not only spoke of a desirable future but also offered various ways for individuals to take part in it. I believe that one reason the government, the business world, and individuals came to entrust the future to startups is that such a circuit for building relationships existed.

Establishing a Pathway to Silicon Valley and the Inflow of Ideas

One of the pathways by which Japanese startups themselves learned about visions of the future was Silicon Valley. To learn how to start new businesses, raise funds, and grow them, people watched what Silicon Valley put out, sometimes treating it like an oracle, and phrases and methodologies such as the "Silicon Valley way" were imported. This continues today. The Lean Startup and Zero to One are representative examples.

Through such pathways, what is coming in now is not only methodologies but capital and ideas as a set, and, as I wrote in another article, some of those ideas can become a risk if accepted as they are.

However, if counter-proposals in the form of ideas and visions of the future are not sufficiently nurtured domestically, we may end up importing both the business and the ideas together, uncritically. And given the current situation, I think we are in a state where it has become easy to leave our judgment to visions coming from overseas.

If so, I believe that what is needed now is both people who write ideas that serve as alternatives to those from overseas and the strengthening of the pathways to make them effective as live ammunition.

New Ideas and Their Narrators: Startups of Thought

So who should write those ideas? To answer that, let us once again look back at history.

In the series so far, Parts 1 and 2 looked at how ideas and capital drifted apart in Japan, Part 3 at how ideas and capital fused in the United States, and Part 4 at why ideas and capital did not intersect in Japanese startups.

And I touched on, in Part 1, how the Meirokusha was founded in the sixth year of Meiji and began publishing Meiroku Zasshi in 1874.

What I want to point out here is that, at the time, they were not writing those ideas because someone had commissioned them, nor were they an advisory body to the government or representatives of the people. They began as a small association that posed its own questions.

Similarly, the starting point of the Osaka Expo seen in Part 1 was a private study group launched in 1963 by Tadao Umesao and others. Seven years later, the group's vision became an actual complex of buildings, through public budgets and the decisions of companies to exhibit. The 1971 book Venture Business, discussed in Part 4, was likewise a single book written by three scholars.

All of them began writing their ideas without being asked by anyone, put them before the world, had them tested, and the good ones remained and spread. Just like startups.

If so, it is right now that "startups of thought" are needed, in order to generate new ideas and create a cycle that nurtures them, isn't it?

This does not mean that startups speak of ideas. It means that someone begins to write ideas (perceptions, norms, courses of action, and so on) anew as a startup-like project. It should be possible even without capital, and I feel that, precisely because the world order is changing greatly, it is beginning to be called for again.

In fact, looking at the United States, money is flowing into think tanks from foundations and others that act differently from capital markets, and new ideas are being built (for example, those introduced in this article). And those ideas are now competing with one another, within the United States and across the world, toward building the next order.

Even if the ideas someone drew do not spread widely, if there are many such efforts and the written visions reach places of debate and execution, then the ideas that came from Silicon Valley too become not the only course but one vision among others that can be compared and revised. The meaning of having alternatives lies in being able to choose and in being able to compare and debate.

Conversely, I believe that the choice not to nurture our own ideas and visions now is by no means neutral. Without them, it becomes easy to leave judgment to others' ideas and yardsticks. Or else, only "money," which is easy to use as a common measure, will be emphasized. In that case Japan would probably be put in a weak position.

That is exactly why I think it is important for more people to take up the challenge of writing ideas and drawing visions, and to support such people more.

In Japan too, I believe that people who write such ideas and craft visions for realizing them need much more support. In addition to attaching capital, both for-profit and nonprofit, to written visions, don't we need to support them all the way to discussing the results of execution and linking that to rewriting the visions?

I believe that building such mechanisms is precisely what would let Japan make its presence felt in the current competition of ideas and contribute to building the next world order.

In the United States, as in the Meiji era, ideas, capital, and politics are becoming one. The government has not stopped at supporting the realization of the visions of the future presented by entrepreneurs and investors; rather, entrepreneurs and investors have begun to wield influence to the point of swallowing the government and setting its direction.

If we do not think that this form of monopoly over wealth and power is at all good, then in a sense the only way to counter it is to increase the number of people who draw different ideas and visions, to strengthen the connections among those ideas, capital, politics, citizens, and various other stakeholders, and to explore alternative forms.

It may be a small attempt compared with the United States. Yet the Meirokusha's Meiroku Zasshi was like a startup that lasted only two years, and still the words and influence that the journal left behind were great and remain today. Considering that, the role of speaking about visions can be taken up again, both by the traditional narrators and by individuals from now on.

For multiple people to create ideas about the future of Japan and the world and to connect them. It seems to me that such efforts are exactly what is called for now.