Kishida calls for IPO rethink in new capitalism drive

bloomberg.com -- Nov 09
Prime Minister Fumio Kishida called for a shakeup of the initial public offering process to better serve startups as Japan’s new capitalism panel released its recommendations ahead of a stimulus package.

In a 21-page document that came out Monday, the panel pointed to some of the themes likely to feature in the package of economic measures promised by the premier later this month.

The panel diverged from the tone of similar committees set up by Kishida’s predecessors by seemingly criticizing short-termism, and attacking a system that favors IPO investors over startup founders’ ability to secure funding.

“By putting the most critical issues in the upcoming economic package and putting them into action, I hope to kick start a new form of capitalism,” said Kishida in remarks at the end of the panel session.

The panel’s recommendations and the coming stimulus will indicate the direction of Kishida’s administration and show how aggressively he wants to spend to achieve those goals.

After another likely contraction of the economy over the summer, Kishida needs to deliver measures that can effectively shore up the recovery and support for his government ahead of further elections next summer.

While stimulus measures will need to support the recovery in the short-term, the report made clear that support for startups is a key area where the premier believes the economy can be revitalized over the longer-term.

“The Japanese listing system is not one that is kind to entrepreneurs who are tackling new challenges,” said the report. “Some point out that the current system is set up so that the customers of security firms make money, rather than the startups themselves.”

Among other key points the panel called for renewed investment in digital, green and chip technology, and greater efforts to improve wealth distribution. The report lacked specific details.

While the tone varied from previous reports, the recommendations still kept a lot of policies intact from former Prime Minister Yoshihide Suga. The panel called for support for a switch to green energy including help for the car industry.

Building battery supplies for electric vehicles and production facilities for semiconductors also warrant close attention from the perspective of economic security, the report said.