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Located in Kitakyushu, Fukuoka Prefecture, the coworking space "COMPASS" functions not only as a workspace but as an incubation facility nurturing the next generation of startups. We spoke with Mr. Fukuoka, the operations manager who is striving to create a new wave of innovation in Kitakyushu, a city known for manufacturing, about the reality of startup support and the potential for regional business creation.
I was born and raised in Kitakyushu, Fukuoka Prefecture. After graduating from Fukuoka University, I joined the Takada Corporation, a listed company in Kitakyushu that constructs and maintains factories. Soon after joining, I was transferred from Kitakyushu to Yokkaichi in Mie Prefecture. Like Kokura, it's a factory district, and I was responsible for managing people, materials, and finances in the administrative department for factory maintenance and construction in Yokkaichi and surrounding areas like Aichi Prefecture.
After working there for about five years, I was transferred to Tokyo within the same company. In Tokyo, I worked in sales, mainly handling major chemical manufacturers. I would visit their Tokyo headquarters while also traveling around to their factories in various regions to secure orders for factory construction and regular maintenance.
Around the summer of 2017, after about two years in Tokyo, my brother was running an IT venture company called "Hoketsu Inc." He had previously been involved in DX (what was then called system implementation and consulting) for government agencies and had established his own company.
As the company was entering its fourth year, he asked me, "I want to grow the company, so would you join us?" I was around 30 at the time, a period when I was considering my career path. Although I loved my previous job and had a vision for my future there, I was driven by the impulse to challenge myself in the unfamiliar field of IT ventures and decided to change jobs.
Almost simultaneously with my joining, our company "Hoketsu Inc." undertook the renewal of "COMPASS" in 2018. The project to operate this facility was awarded by Kitakyushu City to a team led by Apaman Shop, known for real estate, and our local venture company. I was assigned to manage the local operations and launch everything from scratch. Although it was an existing facility, it was a fresh start with a new operational structure, marking a significant turning point that brought me back to Kitakyushu after about eight years in Tokyo.
This facility was established in 2000 with the aim of aggregating IT companies. Its official name is "Kitakyushu Telework Center," which cannot be changed due to municipal ordinances, but we named it "COMPASS KOKURA" as a nickname in 2018.
Originally designed for IT companies, the facility has opened its doors to startups and unique small businesses rooted in the local community since its 2018 renewal, becoming a place where diverse business operators gather. Currently, around 190 companies and individuals are active as members, with 140 being corporations and the rest being self-employed individuals. About 21 startups are tenants.
Reflecting Kitakyushu's industrial characteristics, many of our startups are in robot and hardware development related to manufacturing. Additionally, due to the city's history of overcoming pollution problems, businesses related to green transformation and decarbonization are also thriving.
Furthermore, companies providing DX solutions utilizing AI are also tenants. We're nurturing enterprises active in various fields, such as supporting the digitalization of manufacturing, transforming the wedding industry, and innovating in the care industry.
In 2020, we were selected as a promotion base by the Cabinet Office and have developed around three themes: "environment, robotics, and DX." As a result, not only locally-born startups but also companies relocating from outside the prefecture are increasing.
As a coworking space, we emphasize providing value to our tenants and members, not just offering space.
As part of our startup support, we particularly focus on sales support. The startups growing here have excellent products, but they face the challenge of advancing to the next growth phase if these products don't sell. Therefore, we host matching events with potential clients.
At the end of last month, we held an event in Tokyo gathering representatives from major manufacturing companies headquartered in Tokyo and tenant companies from our facility with manufacturing DX-related solutions. It was a closed event specifically focused on business matching, without inviting VCs or accelerators.
However, to avoid a sterile atmosphere that can develop in pure business meetings, we structured the event with a talk session in the first half where startups and established companies exchanged information about the current state and challenges of manufacturing DX from their respective perspectives, followed by one-on-one business discussions in the latter half. Such innovations help create more fruitful encounters.
For the startup side, since they are the startups we support as tenants, we talked with them in advance and listed and surveyed which types of companies they wanted to meet. On the other hand, while we couldn't fulfill all of their wishes, not only us but Kitakyushu City itself has networks with various companies, so we arranged meetings through such connections and acquaintances.
Yes, indeed. This is actually a common concern for many. Tenants need benefits beyond just paying rent for space.
When we first renewed in 2018, there weren't many startups to begin with, so there was a movement among entrepreneurs to join the coworking space COMPASS to share various information. Now, as we're entering our seventh year, when thinking about how to contribute to the growth of startups that have emerged, we arrived at these initiatives. It's the result of our search for our own way to provide support.
We value creating "comfortable situations" as much as possible. Of course, we hold seminars focused on business aspects like improving financial literacy and events inviting VCs, but we also believe that connections among tenants are important. Therefore, I personally host a "Kakuchi" style networking event once a month at the bar counter.
While also discussing business, I stand on the counter side with beer in hand, incorporating Kitakyushu's "Kakuchi" culture. I thoroughly enjoy communication through food and drink, and I believe that in such settings, conversations flow more naturally even amongst young people.
Also, having a place to relax after work is important, so we've created an environment where people can easily gather within this space. We start in a casual atmosphere, but typically I begin getting restless around 6 PM, though officially we start at 7 PM. Many of our tenants are business owners, so they often can barely make it by 7 PM due to meetings. So I start drinking alone from around 6 PM, and gradually everyone gathers.
I don't think I have any special abilities at all. I simply believe what's important is how close I can be to entrepreneurs, creating relationships where they feel they can tell me or our staff things they can't tell others. I think this approach depends completely on human relationships rather than systematization.
With AI being rapidly implemented in society, I believe community formation is ultimately what humans should be doing. The role of connecting people to people is an important function that cannot be substituted by AI. I think if more such talent increased nationwide, more interesting developments would emerge.
I personally feel that the profession of community manager will become necessary in various places in the future. What was previously a specialized role will become a regular presence, and I think it's a field whose importance is increasing so much now that academic disciplines like "Community Manager Studies" might emerge in the future.
We operate COMPASS with a total of about 10 staff members. About 5 people are regularly stationed at the facility, including myself, the secretary general, an incubation manager (in charge of startup consultations), a community manager, and two staff members supporting the floor. Each has their own role, and together we run the entire facility.
I believe Kitakyushu is a city where the challenges facing regional cities are manifesting earliest. It developed early during Japan's post-war high economic growth period and also experienced decline early. When the rise is rapid, the descent tends to be rapid as well.
As a result, the economy has been contracting for the past 30-40 years, and the city has faced various challenges such as population decline. Kitakyushu has the characteristic that challenges facing regional cities nationwide appear here first. Labor shortage is one such issue.
Given this situation, the need for digital transformation and robot implementation has increased, leading to growth in startups and motivated businesses in these fields.
Additionally, in the last 1-3 years, especially since the COVID-19 pandemic, "social impact" type startups have increased. There are more players addressing social issues that traditional administration alone cannot solve, using new formats and organizational structures.
For example, services for people with disabilities are generally difficult to monetize. However, not only people with disabilities but also elderly people with declining physical functions face similar challenges. Startups are emerging that provide services such as walking assistance and visual support that are widely needed in society but difficult to establish solely on economic rationality.
The administration side also recognizes that there are issues they cannot solve alone and is strengthening efforts to solve them in cooperation with startups, venture companies, or academic institutions. From next fiscal year, a platform will be fully operational to solve regional social issues in collaboration with various sectors. I feel these movements are arising precisely from the demands of the times.
We have diverse age groups, but the volume zone is mainly in their 30s. Especially in the last 5-6 years, there's a noticeable pattern of people starting businesses after having experience as company employees.
The local Kyushu Institute of Technology produces many science and engineering talents and innovation personnel, and there are many cases where graduates establish startups after gaining experience in companies.
Yes, we see patterns of "U-turns" or more accurately "J-turns." For example, someone from Ube City in Yamaguchi Prefecture comes to Kitakyushu for university, works at a major manufacturer after graduation, then returns to Kitakyushu to start a business. We see cases of people returning to the place where they spent their student days to start a business.
We provide support from the pre-startup stage. Especially for startups, we work together from the stage of considering ideas and business models that don't yet exist in the world. Also, establishing a company requires various administrative procedures, so we've set up a "Business One-Stop Center" within COMPASS and provide hands-on support for all administrative procedures.
I myself have been actively involved, helping to create business plans, attending financing consultations with banks, and providing quite in-depth support. Recently, the need for such involvement has decreased slightly, but I think that's because entrepreneurs' own literacy has improved.
When we first started providing startup support, we didn't know what exactly we needed to do or to what extent, so we just supported with all our might. Looking back, "going all out" might be the most fitting expression.
Yes. Also, since we can't handle everything ourselves, we collaborate with specialists from other regions like Tokyo and arrange one-on-one consulting as needed.
That's right. There is definitely an advantage in standing out because the denominator is smaller. However, for the next step, whether they can get on a high-growth trajectory like startups in Tokyo, there are still handicaps in terms of people, materials, money, and information in regional areas.
The most common issue I hear from the entrepreneurs I work with is the "human resources" problem. To grow a company organization, it's essential to secure talent with the necessary abilities and passion for each growth phase.
However, Kitakyushu lacks people with the mindset to "join a startup team" and those with the ability and experience to lead a team to growth. As a result, many entrepreneurs are seeking temporary solutions, such as having Tokyo-based talent commit for just one-third of a month.
To solve this problem, we are working on "human resource development." We believe it's important to change the mindset (height of perspective and breadth of vision) from a young age, so we're first preparing a program to cultivate "0-to-1 human resources" targeted towards university students.
We're planning something like an academy to nurture talent who get excited about creating business from 0 to 1 and have the courage to implement it. Kitakyushu doesn't have a comprehensive university, but it has more than ten universities, each with students who have the ambition to make an impact on society. We're starting an initiative to bring them together and have them experience common educational content and fieldwork.
Yes. By having them experience internships at startups in the city or new business development departments of established companies, we want to create a circulation of talent within the region, not just securing talent from outside. There are various missing pieces for creating innovation from Kitakyushu, but we're trying to fill the parts we can in our domain.
At COMPASS, we've also established a one-stop window for foreigners to set up corporations in Kitakyushu. Many have never been to Japan before, so we make contact through websites or LinkedIn, provide online support, and when they come to Japan, we assist them with opening bank accounts and obtaining corporate visas in collaboration with administrative bodies and financial institutions.
We plan to continue actively welcoming foreign entrepreneurs and will strengthen this initiative in collaboration with the administration.
Rather than innovative startups, we see more import trading companies for camping cars and distribution companies dealing with used markets for forklifts and similar equipment. Also, Taiwanese medical IT companies are seeking bases in Kitakyushu. In the case of Taiwan, there might also be an aspect of geopolitical risk diversification.
The industries vary, but Kitakyushu has a history of steel mills, many large hospitals, a strong manufacturing sector, and geographical advantages with well-developed land, sea, and air transportation infrastructure, so there's a tendency for businesses related to these aspects to come here.
Looking at the bright side of Kitakyushu, just in the last few years, there have been many positive developments such as the construction of new factories by major manufacturers, the establishment of logistics centers, the basing of semiconductor-related companies, and the creation of facilities for inbound tourism. This signifies an increase in people and needs, showing a growth trend that is rare for a regional economy.
Markets grow with population increases. Kitakyushu's market is likely to grow in the future, presenting an opportunity to develop businesses necessary for the next era with this trend in mind.
Also, there are many people in Kitakyushu, including the city office and local financial institutions, who seriously support entrepreneurs. There's an environment where people enthusiastically support you, almost to the point of being "meddlesome," so I hope you'll join us as partners in making this city better.
Yes, while Japan as a whole tends to be contracting, Kyushu seems rather energized. The growth of Fukuoka City is remarkable, and beyond that, the entire Kyushu region is moving in various ways. With increasing inbound tourists, Kyushu, which is attractive both as a place to work and relax, might become a driving force to change Japan in the future.
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