Over 680,000 New Businesses Established in Japan During the 'Reiwa' Era's First 5 Years... 'Assist' and 'Link' Among Most Popular Company Names

Since the start of the new era name "Reiwa" in 2019, 682,325 new companies have been established in Japan over the past five years. This is based on data compiled by Tokyo Shoko Research, and the most frequently used company names among those established during this period were "Assist" (235 companies) and "Link" (231 companies).

In terms of industry, the service sector accounted for the largest share with 286,874 companies (42.0% of the total). Breaking it down further, academic/research and professional/technical services, which provide specialized services based on the management's skills and know-how, were the most numerous at 98,828 companies. This suggests that industries with low barriers to entry are dominant, indicating a shift in the corporate ecosystem from a manufacturing-centric to a service-centric model.

Geographically, Tokyo had the highest number of new companies with 206,591 (30.2%), followed by Osaka Prefecture (67,249) and Kanagawa Prefecture (44,061). Over 10,000 companies were established in 14 prefectures, mostly concentrated in major metropolitan areas. In contrast, Tottori Prefecture only saw 1,551 new companies, highlighting significant regional disparities.

Meanwhile, during the same period, 1,316 companies went bankrupt, accounting for 0.19% of all "Reiwa" era companies. Notably, 2022 saw the highest number of bankruptcies at 691, representing a year-on-year increase and 7.6% of all corporate bankruptcies that year. The reasons behind these failures are analyzed as stemming from difficulties in managing funds, particularly in industries sensitive to economic fluctuations like the service sector, along with initial strategy failures among newly established businesses.

Among the cumulative number of bankruptcies up to March 2023, the service sector and related industries accounted for the largest share with 626 cases (47.6%), which is believed to be due to low barriers to entry leading to poor management. Overall, a significant number of these failures appear to be related to companies that struggled from the initial stages of establishment amidst the economic downturn caused by the COVID-19 pandemic.