From Bangalore to Tel Aviv, Cambridge to Shenzhen, cities around the world are battling to become hotbeds of IT innovation—the potential birthplace of the next Apple or Google.

Ron Conway, a legendary American venture capitalist famous for early-stage investments in big hitters like Google, Facebook and Twitter, fancies New York’s chances. Why? Because the city’s ecosystem of mentors, venture capitalists and entrepreneurs is reaching Silicon Valley-like “critical mass,” he says.

My response to that is, what about Tokyo?

Tokyo’s got the necessary critical mass, too. And listen, I know the stereotypes about the Japanese and business: that we prefer the safety of lifetime employment at a big, reputable firm to the hurly-burly of running a start-up; that we’re unforgiving of failure; that we can’t innovate.

But the stereotypes are flat wrong.

Don’t believe me? Try this mini-quiz.

Q1. Who is the world’s youngest self-made billionaire outside the “Facebook Four” (Zuckerberg, Moskovitz, Saverin, and Parker)?

The answer is Yoshikazu Tanaka, the founder of Tokyo-based mobile social gaming company Gree. This March, Forbes magazine estimated Tanaka’s worth at $1.6 billion—and he’s only 36! Contrary to the stereotypes about “risk-averse” Japanese, Tanaka quit a “safe” job at a prestigious firm to set up Gree at the age of 27.

Next question.

Q2. Who is the world’s most successful IT female entrepreneur?

I bet most of you came up with well-known names like Sheryl Sandberg (Facebook COO), Marissa Mayer (Yahoo CEO), or Meg Whitman (former eBay CEO). If you did, I’m afraid you’re wrong. All three are great leaders, but none of them founded the firms they work for.

That makes Tomoko Namba the world’s No. 1 female IT entrepreneur. A partner at McKinsey & Co., Namba founded Web services company DeNA (again, in Tokyo) in 1999 in her late thirties. By adding new growth engines to the company portfolio—from mobile auctions to social gaming—she built DeNA into a ten-country, $3.5 billion giant. The firm attributes its success to the “formative experience” of failure.

There goes another myth about the Japanese!

Successful entrepreneurs like Tanaka and Namba are not the only Silicon Valley-like strength Tokyo has going for it. There are at least five more: a network of mentors and investors; more Fortune 500 HQs than any other city in the world; a GDP almost double that of Los Angeles; a huge population (37 million versus New York’s 20 million); and fixed-line and mobile broadband connectivity second only to Korea.

As the dean of a business school and a venture capitalist, I’m up close with what’s going on in the Japanese economy—and it’s all good news. In “Old Japan,” the best and brightest young people went from top universities straight into government or big firms. Now they’re setting up their own ventures.

Out of five IPOs my firm has done in the last five years or so, three founders were from Tokyo University, and one from Kyoto University. The CEO of a company we’re hoping to take public later this year is also Japanese, based in Singapore. In my seventeen years as a venture capitalist, I’ve never seen so many quality, globally minded young managers.

So my message to the world’s young entrepreneurs, engineers and tech investors is this: Forget that old “Japan passing” story. If you want to make it big, don’t head off to China and India. Come and be part of “New Japan.” Come and build the next Silicon Valley right here in Tokyo.

Photo: ASKA Conference 2013 with GLOBIS University’s MBA students and alumni, Japan’s young visionary leaders who create and innovate societies.