This has been a hot topic recently here in Japan. Very happy to see more attention being paid to the entrepreneurial environment in Japan.<p>However, it's important to point out that the web/high-tech entrepreneurial industry is still fairly young and seems to be in its infancy compared to areas referenced in another comment regarding government subsidies and whatnot.<p>For the past four years, I worked as a head-hunter recruiting Japanese talent for companies in the web space. I've met and spoken with over 3,000 industry professionals ranging from company owners, entrepreneurs, engineers and designers. Here's what I've learned:<p>1. Those most considered risk-takers, confident and willing to forgo the security and stability for more entrepreneur-driven opportunities are normally educated outside of Japan, or have spent a significant amount of time outside of Japan.<p>2. Start-ups created in Japan, in the web space or high-tech space are considered too risky. Even foreign companies that have been successful in other markets have a stigma attached to them and are not considered as attractive options.<p>In my experience, most Japanese like to see either a track record of success in Japan as well as a partnership with or backing from a major Japanese company in order for the start-up stigma to be removed.<p>3. Tokyo is beginning to have a great start-up and entrepreneur community in the high-tech space however, there is a language barrier that, in my opinion contributes to the slow growth of the community. For example, there was recently a conference title New Context Conference 2010, in which several companies from a new YC Clone seed accelerator (Open NetworkLab) were able to demo their start-ups. A part of the program is that companies receive mentoring from international and Japanese investors, founders and the like to help improve their start-ups. Watching the presentations, it's clear that the Japanese start-up founders for the most part were struggling most with presentation skills.<p>My point is, when your language ability is limited and you can only access resources in Japanese, it's tough to really push and challenge yourself, especially when a lot of the most exciting things happening in this space are in English. It's unfortunate, but Japanese is not the language of business outside of Japan.<p>4. Have you tried starting a company here? With the long set-up time at least 1 month, expensive office space, taxes, banking fees, not to mention the difficulty in closing a company down-- they don't make it easy to take a risk.<p>5. If you're a former founder of a failed start-up here, unless you have a great network it's highly likely that the only companies that will find your failed start-up experience highly attractive are foreign owned. Most domestic companies would be too blinded by your failure and/or the fact the founder is used to being independent and most senior in their company, and may not be able to adjust to a team environment again.<p>I could go on, but overall there's a lot that contributes to the current state of Japan's lagging entrepreneur state.