What Politicians and Bureaucrats “Actually Feel” about Startups

Written by Ko Kawaragi, edited by the Universe Editorial Team

My name is Ko Kawaragi. I am responsible for supporting the portfolio startups in their Government Relations (GR) activities at Global Brain (GB), capitalizing on my experience of supporting startups and helping small and medium enterprises expand their businesses overseas at the Ministry of Economy, Trade and Industry.

In the past articles, I wrote about GR’s purpose and benefits and the basic steps of startup GR.

While GR activities require communication with government agencies, municipalities, politicians, etc., many people seem to feel anxious because it is difficult to consult them or they do not know how to communicate with them. On the other hand, when I talk with politicians and government officials as part of the GR activities, they too are often facing difficulties in communicating with startups.

So, in this article, I will write about what politicians and bureaucrats are actually thinking about startups.

Some startups may have the following impressions of politicians and bureaucrats.

• Somewhat reluctant to change existing laws and regulations

• More focused on the opinions of large corporations than those of startups

With such impressions, some may not even think of consulting the government about their business and may feel that it is “inevitable to do business under the given rules.” However, this is a big misunderstanding.

Many bureaucrats and politicians are willing to listen to startups

From my experience of working for a government ministry, I can say that there are many bureaucrats and politicians who are willing to listen to startups. The reasons why the government wants to have contact with startups include the following.

1. To gather information for policy making

Government ministries and agencies lay the groundwork for the next fiscal year by the beginning of summer every year. This is the phase where they explore and consider what to include in the next revision of laws, budgets, and tax systems by holding study groups and conducting interviews.

When I was working on startup policy at the Ministry of Economy, Trade and Industry, I often requested startups to conduct interviews, and I also received startups’ requests for consultation and listened to their issues and needs. Their specific issues, needs, and proposals are often welcomed as valuable input. I highly recommend that startups actively communicate with ministries and agencies during the preparation period for the next fiscal year.

2. To source and grow promising startups

Ministries and agencies that have set up subsidies for startups may listen to their concerns before they apply (website in Japanese only). Since they support companies financially with taxpayers’ money, they want to avoid ending up in the following situations.

• Even though billions of yen was secured for the budget, the program did not attract startups and eventually received only a few applications, resulting in a budget surplus. (The following year’s budget will be reduced).

• The selected project could not achieve its goal of the subsidy (e.g., development of an innovative decarbonization technology or SMB’s digital transformation) because the project was less mature and was abandoned halfway.

To avoid the above, what the government subsidy staff truly wishes to do is to receive good proposals from as many companies as possible. They will listen to relatively specific concerns such as whether your company’s initiative is eligible for application or how you can improve your application details to increase your chances of being selected.

As the government also benefits from receiving information, there are more opportunities than you might think to have your say. Through communication with politicians and bureaucrats, you may be able to create an environment that is favorable to your company. However, you should pay attention to the following pitfalls when communicating with them.

Pitfalls of startup-government communications

Unfortunately, not all government agencies will always listen to startups. If you try to communicate with them, only to fail, these might be the reasons.

1. Not the right department/contact person

For example, a department working on policies for large corporations will not be so interested in startups as they do not have many interactions with startups. Some departments regulating and giving guidance to companies intentionally take distance from private companies. As different government departments and personnel may have different “ mindsets toward reforms,” some may be reluctant in communicating with startups.

2. Not the right timing

Government organizations follow a one-year cycle starting in April. The budget and tax proposals for the following fiscal year are finalized in August every year, so even if a startup brings a new proposal after that, their response will be “we will consider it next year.” In many cases, their opinions will eventually be forgotten. Laws are often revised based on a predetermined interval such as once every three or five years. As a result, depending on whether it is the revision timing or not, the government’s response to the proposal will differ greatly.

3. Too busy

Bureaucrats are extremely busy depending on the time of year, unable to secure enough time to conduct interviews with startups to gather information. This may hamper information and requests from reaching them.

It is vital for startups to avoid such pitfalls to effectively communicate with the government. In order to be heard by busy people, startups need to consider “providing beneficial information” at the “right timing” to “the right department and contact person.”

To check whether the department or person you are trying to reach out to is the right fit for you, you can start by doing in-depth research on what they do. Their stance differs depending on whether it is a department with a mission to support startups or a department that provides support both to large corporations and startups. Depending on whether the department works on laws and regulations or subsidies, they may have completely different interests.

To check whether it is the “right timing,” you need to keep in mind the budget formulation and other schedules explained in the previous article

For example, the following approaches are effective to “have busy government personnel listen to your beneficial information.”

• Not only introducing the current situation such as how good your initiatives are or how difficult your situation is but also make as specific a proposal as possible.

• Make a point based on data in addition to telling stories to objectively show the significance of the issue.

• Keep in mind that public interest is a critical factor for the government to take action, and talk about the impact on not only your company but also “the overall industry” and “overall society.”

Startups do not have to do all of this on their own. Instead, they can ask outside organizations providing GR support or VCs like us for assistance.

Wrap up

In this article, I introduced what politicians and bureaucrats are really thinking about startups. As I mentioned earlier, they are surprisingly willing to connect with startups, and they have reasons to do so. Startups can create an environment that is favorable to themselves by avoiding typical pitfalls and effectively communicating with the government.

Recently, more politicians are actively working on startup policies, and more business persons who worked in the startup and VC industry are becoming bureaucrats. These stakeholders who are driving startup policies with proactive mindsets to reform the current status are a huge tailwind for the startup industry.

It is crucial for startups to consider GR activities as a measure for growth instead of just accepting the government rules and systems as a given. Global Brain will continue to support startups in every way in pursuing GR activities.

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