Miyakodayori 34

The Return of Entrepreneurship to Japan

Entrepreneurship is again a hot topic in Japan. It is certain that the post-war years were an entrepreneurial phase for Japan. Japan's defeat erased existing ways of thinking and systems, with people starting over, from scratch. Individual entrepreneurs provided the underpinning for Japan's economic reconstruction. What they lacked in ability, they made up for in energy and a dogged spirit. As they scraped by to make a living, they looked on with envy at America's affluence. The power of their dreams gave them the powerful motivation that enabled Japan to achieve an astonishing degree of economic success.

In time, economic prosperity fueled a desire for stability, however, and dreams became more modest. Talented individuals now preferred to work for established companies rather than face the risks of entrepreneurship. As the economy grew, the government and corporations looked for human resources that could fuel corporate expansion, and the decision-makers chose to stick to orthodoxy. This conformity is one of Japan's major problems today.

Throughout Japan's history, innovation, which accompanied periods of political unrest, has alternated with orthodoxy, which accompanied periods of stability. Japan's break from orthodoxy is epitomized by the kabuki plays of the late Heian and Sengoku periods. More recent periods include the Meiji Restoration and the immediate post-war years. Japan's periods of unorthodoxy demonstrate true brilliance.

Japan's entrepreneurs will change Japan. One entrepreneur alone can alter little, but collectively, a momentum is building. Japan will undoubtedly change, from the bottom up. I intend to play my part in engineering an era of change. I cannot do it alone, but if change does not begin at the level of the individual, if individuals do not pick up the gauntlet, we will see no progress at all. Seen from the outside, Japan probably seems caught in a rut. On the inside, however, a community of young businesspeople is emerging. We are about to witness the end of the postwar economy and the start of a new system altogether.

For me, launching a company has been no easy job. The pace of change is extraordinary. Continually changing to keep up with change is enormously difficult, but there is little point in complaining. Success hinges on challenging expectations. Japan is in a period of economic transformation. The window of opportunity is now, although tomorrow will offer different opportunities again.

My company has faced many problems: problems with people, goods, and money. Despite the recession and a relatively high unemployment rate, it is difficult to find the right personnel, the right people with the right skills. Japan is short of talented young people, to the extent that I am tempted to pin the blame for the current recession on a dearth of human resources.

The transfer of production facilities abroad, paralleled by the growing cost of domestic production and a lack of parts, are also problematic. In terms of money, the instability of financial institutions is having a subtle effect. Uncertainty makes it difficult to plan for the future, especially when the only constant is change.

These problems are not simply the trials and tribulations of running a venture business. Indeed these issues have to do with the very structure of the economy. Business leaders must take the initiative to change their behavior and expectations, in order to address the problems facing Japan's economy. What faces businesspeople is a Herculean task that will require boundless energy. I, for one, accept this challenge.

Author, Tadao Ohnaka
Langate Co., Ltd.

Editor-in-Chief, Ichiro Araki
Director of Research
Research Institute of Economy, Trade and Industry (RIETI)
e-mail: araki-ichiro@rieti.go.jp
tel: 03-3501-1362 fax: 03-3501-8391

This article is reprinted with permission from IIST Mail Magazine, a newsletter of the Institute of International Studies and Training. Mr. Ohnaka's company, Langate, has developed a cost-effective technology to establish a LAN network over a TV distribution system.

RIETI invites you to visit its English website

The opinions expressed or implied in this paper are solely those of the author, and do not necessarily represent the views of the Ministry of Economy, Trade and Industry (METI), or of the Research Institute of Economy, Trade and Industry (RIETI).

April 19, 2002