As we have seen in the Asian markets, particularly in Japan and Korea, in the last decade, software has systematically been taking over areas that traditionally have been controlled by hardware manufacturers and developers. Software, in fact, has started to take over many other markets, from finance to entertainment, it is all about new software, hard-software integration, and content. Today, more venture capitalists are looking for start-ups with innovative software opportunities, especially when the software they provide helps to eat into the profits or market of another industry that has already been established.
Even though software has started to take the place of other technologies and workers in other industries, this trend may also help Japan and regions such as the United States and Western Europe return to the top as manufacturing leaders. While manufacturing has shifted to other markets due to their lower labor costs and direct access to energy, software helps keep labor costs down, which will have an important effect on these regions’ future manufacturing efforts.
How the rise of software affects venture capitalism and new tech businesses
While, traditionally, venture capitalists focus on the people in a company or on their ideas and market share, today it is all about innovation. This is because, today, the rise of software has caused the tech sector to evolve at a very rapid pace. Breakthroughs are measured in days and hours and an innovative idea has the potential to break through into a completely untapped market. This is a good guideline for entrepreneurs in today’s tech industry, is it an innovative idea? Has it been done before? Software development today gives entrepreneurs many opportunities to use software for purposes that had never been thought of before!
Today, the tech industry is basically becoming the software industry, due to almost everything moving from hardware to software. From cloud storage to numerous devices becoming software services, and the increase use of innovative mobile apps, there is a clear trend where software is systematically taking over other tech industries. In fact, this is not limited to technology; from entertainment to finance, software is becoming an important, systemic component of almost all major human endeavors. Simply integrating online functionality into industries that are traditionally handled offline has now given entrepreneurs almost endless room for innovation, meaning also more investment opportunities for savvy venture capitalists.
The evolving state of technology and how Japan paved the way
From network virtualization to mobile apps and innovative uses for social media, there is no question that the Asian market has been paving the way in technological breakthroughs. In particular, Japan’s technological infrastructure has made it an ideal playground for entrepreneurs looking to bring new ideas and breakthroughs to the market. However, there are several difficulties that are specific of the Japanese market that may make it more difficult than normal for start-up companies:
- Tech start-ups in Japan may be surprised by the lack of venture capital, especially in comparison with environments like Silicon Valley, where venture capital is relatively plentiful for entrepreneurs with an innovative idea.
- The lack of a mentorship culture means that many start-ups may struggle initially to find ways to gain support from other companies in the field.
However, entrepreneurs with the capacity to overcome these two problems will find that Japan is an ideal market for new software ideas and applications of software in other fields. It is important to note that some economists are predicting that the accelerated growth that has been a stable of several Asian markets is decreasing, which may say something about the future dynamics of this important tech market.
Fortunately for Japan, their tech market has much more in common with Europe and the United States than with the other Asian manufacturers such as China and Taiwan. The key to future technological growth in the Japanese market will be software innovation and the successful harnessing of renewable, cheaper energy sources. One possible breakthrough that may predict a rise in the Japanese tech industry is the application of 3-D printing breakthroughs to manufacturing. The application of this innovative technology, which is already beginning in certain parts of Japan, combined with the new software developments that have been the industry norm for the last few years, may result in a dramatic resurgence of the Japanese tech and manufacturing market in the next decade.
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About the Guest Author:
Nida Rasheed is a freelance writer and owner of an outsourcing company, Nida often finds herself wanting to write about the subjects that are closest to her heart. She lives in Islamabad, Pakistan and can be found on Twitter @nidarasheed.