East Asian tech ecosystems are beginning to embrace ‘meaningful’ failure as foreign educated millennials build tomorrow’s high-stakes companies. As the stigma and fear of failure erodes, net valuations of startups could increase, fueling greater innovation in the region.
Why Failure Has Been So Costly
For a long time, the safest path for talented graduates in much of East Asia ran through large, established employers: the big conglomerates in South Korea, the major corporations in Japan, and state-linked or long-standing firms elsewhere. Those jobs offered security and status, and leaving one to start a company could look reckless to family and peers.
When failure carries that kind of social cost, fewer people take the risk, and those who do may hang on to a struggling company too long rather than admit it isn’t working.
Get the TechPortfolio briefing
The month’s fintech and funding news, plus new tools for founders, in one short email.
That’s why the shift the original article described mattered. A generation that studied or worked abroad brought home a different view of failure: a startup that doesn’t work is a lesson, not a disgrace. The more people who see it that way, the more founders there are, and the more good companies get built.
China’s Hubs Keep Climbing
China remains the region’s heavyweight, and its cities are rising in global rankings. Startup Genome’s 2025 report found that all five Chinese ecosystems in its global top 40 improved their positions. Beijing re-entered the top five, Shanghai rose to 10th, Shenzhen jumped 11 places to 17th, and Hangzhou climbed 13 places to 23rd.
Hong Kong made the biggest leap of any ecosystem, moving from Startup Genome’s emerging-ecosystems list straight into the global top 40 at 27th. The firm credited its maturing startup infrastructure and strong fintech activity.
Startup Genome tied China’s broad gains to its strength in e-commerce, AI and advanced manufacturing, along with startups that are increasingly aiming at global markets rather than only at China’s huge domestic one. That outward push is itself a cultural change: building for the world means competing, and sometimes failing, in front of a global audience.
Korea and Japan Make Startups a Policy Goal
South Korea and Japan have both made startups a national priority, backing them with public money and policy changes meant to make founding a company a more normal career choice. Startup Genome, which works with governments on ecosystem strategy, says Seoul’s ecosystem value grew from $40 billion to $237 billion in four years, “fueled by bold investment and policymaking,” and describes Tokyo as a $66 billion ecosystem.
Korea also produced one of the biggest tech listings of recent years. E-commerce company Coupang, founded in 2010, raised nearly $4.6 billion in its New York IPO in March 2021, and a first-day jump gave it a market value of $84.5 billion, according to CNN. CNN also said it was one of the biggest listings ever by an Asian company on a U.S. exchange, according to Dealogic. The deal showed Korean founders that a homegrown company could win over global investors at enormous scale.
Japan’s newer AI companies show the change in attitude too. Tokyo-based Sakana AI, whose co-founders include Llion Jones, a co-author of Google’s influential 2017 “Attention Is All You Need” paper,reached a $1.5 billion valuation in 2024 as Japanese corporations piled in, according to Bloomberg.
What It Means for Founders
The fear of failure hasn’t disappeared in East Asia, but it’s weaker than it was in 2016. Governments now actively encourage startups, global investors pay close attention to the region, and a growing number of successful founders serve as proof that leaving a stable job can pay off.
For founders, the region offers deep engineering talent, strong manufacturing and hardware supply chains, and some of the world’s most sophisticated consumers. The challenges are different in each country, from shifting regulation in China to a home market in South Korea that’s small enough to push startups to think globally early. What they share is a culture that is slowly learning to treat a failed attempt as part of the path rather than the end of it.
North America | Latin America | European Union | Middle East and North Africa | Sub-Saharan Africa | India and Pakistan | Southeast Asia | Australia and New Zealand
Frequently Asked Questions
Why has failure been so costly for founders in East Asia?
The safest path for talented graduates long ran through large, established employers, so leaving to start a company could look reckless to family and peers, and that social cost discouraged risk-taking.
How are attitudes to failure changing in East Asia?
Foreign-educated founders are bringing home a view of failure as a lesson rather than a disgrace, which the article says could boost startup valuations and innovation.
How did Chinese cities perform in Startup Genome's 2025 rankings?
All five Chinese ecosystems in the global top 40 improved. Beijing re-entered the top five, Shanghai rose to 10th, Shenzhen jumped to 17th and Hangzhou climbed to 23rd, while Hong Kong entered the top 40 at 27th.
How much has Seoul's startup ecosystem grown?
Startup Genome says Seoul's ecosystem value grew from $40 billion to $237 billion in four years, and it describes Tokyo as a $66 billion ecosystem.
How big was Coupang's IPO?
Korean e-commerce company Coupang raised nearly $4.6 billion in its New York IPO in March 2021, and a first-day jump gave it a market value of $84.5 billion, according to CNN.