Du Zixun's Perspective: Japan's Anxiety and Taiwan's Hidden Worries – Who Will Pay When the Stock Market Frenzy Fades?

Japan recently released two data points that reveal a striking structural contradiction: the government plans to invest over 370 trillion yen through public and private sectors to enhance national competitiveness over the next 15 years; yet, the number of corporate IPOs in the first half of this year has hit a 15-year low. In the same economy, future-oriented investments are being made aggressively, while the soil for new ventures appears barren. This reflects a common challenge faced by many mature economies: how to break free from the obsession with short-term performance and plant the seeds of long-term competitiveness for the next generation of enterprises.

When discussing capital markets, most people focus on stock prices, trading volumes, and indices. However, what truly determines national competitiveness is not the market's vibrancy, but whether a robust enterprise growth system exists—one that supports startups at every stage, from inception and R&D to expansion and IPO, with appropriate capital. The stock market is merely a barometer of the current economy, while the enterprise growth system is the nation's long-term mechanism for generating vitality.

The reason the United States can continuously nurture world-class companies is not due to its massive stock market, but because it has established a complete growth ecosystem. From angel investment, venture capital, growth funds, and private equity to IPOs and mergers and acquisitions, capital flows in a relay-like manner across stages, allowing companies to undergo decades of refinement and development before gradually becoming global leaders.

Japan's anxiety does not stem from a lack of funds. Despite household financial assets exceeding 2,000 trillion yen and corporations holding vast cash reserves, there is a shortage of 'patient capital' willing to take on the risks of innovation. This reveals a significant gap between financial abundance and capital health.

This situation holds high警示 value for Taiwan, where the stock market has repeatedly hit record highs but underlying concerns persist. Market enthusiasm should not serve as a sweet coating to mask the absence of a growth ecosystem. Today's market stars are mostly the results of decades of development; what will truly determine competitiveness over the next two decades are the young startups in labs, incubators, and innovation parks that urgently need patient capital to survive the perilous early stages. The key is not market appearances, but whether sufficient institutional support exists to guide enterprises through their most difficult phases.

Looking back at Taiwan's proud semiconductor industry, it was not a naturally formed market outcome, but the result of 50 years of cultivation by government, research institutions, and enterprises. Without long-term talent development, continuous technological R&D, and policy support, Taiwan would not enjoy its current global standing. This experience offers valuable lessons. Future sectors such as artificial intelligence, biotech and healthcare, robotics, space technology, precision machinery, and smart services all require long-term investment to become new industrial pillars.

The real reform needed in the next phase is not the stock market, but the institutional environment that supports enterprise growth. Governments should work to improve venture capital, M&A, and listing systems, guide long-term capital such as pension funds and insurance money into innovation, and reduce startup costs through tax incentives, regulatory reforms, and R&D support. Enterprises, meanwhile, should actively pursue second growth curves, establish corporate venture capital arms, and build long-term competitiveness through strategic investments, technology partnerships, and global expansion.

Additionally, governments can strengthen the enterprise growth ecosystem in five key areas: first, emulate Japan by improving mechanisms for entrepreneurial re-entry, reducing bankruptcy debt and social stigma after failure to boost societal willingness to take risks; second, learn from the U.S. by establishing early market validation mechanisms, converting part of government procurement into initial orders for small startups; third, relax cross-sector regulations to promote talent mobility between industry, academia, and research, accelerating the commercialization of research outcomes; fourth, precisely connect innovation corridors to consolidate industrial cluster advantages and avoid resource fragmentation; fifth, integrate state-owned enterprise resources to establish a next-generation sovereign fund that transcends political cycles and makes long-term investments in deep tech and hard tech.

Current policy debates across party lines are often constrained by short-term performance metrics, and financial evaluation systems habitually use trading volume and market cap as success indicators. Yet, a nation's true competitiveness has never been about adding flowers to already dominant firms, but about whether it can continuously incubate the next generation of global benchmarks. Without capital relay and institutional collaboration, today's prosperity will become rootless driftwood, unsustainable in the long run.

'Plant trees for ten years, nurture people for a hundred.' Cultivating a successful enterprise often takes even longer. Visionary governments should focus on building environments conducive to enterprise growth; forward-thinking enterprises should continuously invest in the future. Only by planting trees today can we enjoy shade tomorrow; only by continuously nurturing startups can Taiwan cultivate the next economic force that changes the world.

*The author is an adjunct professor at the College of Management,东海 University.