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How AI Is Helping Solve Japan's Succession Crisis

Hundreds of thousands of Japanese companies have a problem – their founders are aging without a successor in sight.

Robot helping elderly Japanese with tea ceremony
AI robots assisting an elderly Japanese couple, as rendered by Midjourney

Hundreds of thousands of Japanese companies have a problem – their founders are aging without a successor in sight.

The Japanese government estimates that as many as 6.5 million workers could lose their jobs if profitable small businesses with elderly founders and no succession plans don’t find new owners.

It’s a significant economic problem caused by Japan’s demographic challenge: a shrinking population that’s aging rapidly, a trend that is even more intense in rural areas where many small businesses with elderly founders are located.

Robots assisting in a Japanese retirement home
AI robots accompany humans in a Japanese retirement home, as rendered by Midjourney

One Japanese banker – who watched up close as his grandfather couldn’t find a buyer for his successful real estate business –  has built a business, and a $1.3 billion fortune, on the promise that M&A is the way forward.

That’s the topic of this week’s The Closer Weekly.

Hundreds of thousands of Japanese companies have a problem – their founders are aging without a successor in sight. One entrepreneur has built his $1.3 billion fortune on a solution.

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Traditionally, small Japanese companies have been passed to the next generation or a trusted deputy of the founder. Shunsaku Sagami, who founded M&A Research Institute Holdings, has a huge database of companies whose founders are about to retire and uses various tactics – including AI – to match sellers and buyers.

M&A Research Institute Holdings went public last June and the stock has more than tripled since. It’s closed 62 deals in the first six months of this year and says it has over 500 deals in its pipeline.

The company’s success is a testament to how sometimes the most innovative thing you can do is run a very normal kind of business where that kind of business isn’t normal.

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