Dark Days Could Lead to Dawn of Japanese Entrepreneurship

The Global Entrepreneurship Monitor, or GEM has pointed out that in “2000–2009, Japan recorded one of the lowest rates of entrepreneurial activity amongst the world’s leading nations.” The GEM report from 2009 said that “Japan’s citizens exhibit the greatest fear of failure among the 20 innovation-driven economies the GEM analyzed, and ranked dead last in the number of citizens who perceive opportunities for entrepreneurship.”

Another perhaps unsurprising result, according to the American Chamber of Commerce in Japan’s Growth Strategy White Paper, is that Japan has the lowest proportion of people who consider becoming an entrepreneur a good move.

Some have surmised that Japan has a long-standing cultural bias against entrepreneurship, instead focusing on big business and a regulatory environment that discourages rather than encourages start-ups. However, with the long-term economic doldrums and the recent disaster trifecta of the earthquake, tsunami and nuclear reactor meltdowns, developing an environment conducive to entrepreneuring — however unacceptable or distasteful — may be one of the best ways to help fuel economic growth.

There are several macro trends in place that could bring entrepreneurship to life in the near future. One is the economic insecurity that normal Japanese citizens feel these days. It is palpable, based on high joblessness and a growing lack of trust and confidence in government and even private sector companies. This, coupled with dramatically changed attitudes and self-images among the Japanese populace, provides fertile ground indeed.

As research by Japan Market Resource Network discovered, Japanese people were beginning to exhibit more self-responsibility, more individuality and more independence as early as 2004, based largely on their having lived through nearly 15 years of economic stagnation. Still reeling from the Lehman shock and now dealing with the cascading disasters from March, Japanese once again seem poised to take charge of the lives in new and different ways.

Women, representing approximately half of all employable adults in Japan, could play an important role in reviving the country — if they are given a chance. Government policies to promote women in the workplace are now in place, and corporations, both foreign and domestic, have instituted policies to help with work-life balance and promote diversity. Yet Japan still has a very low percentage of “women in the boardroom,” and a high percentage of women still “retire” from their careers once they have their first child.

According to Kathy Mitsui, chief Japan equity strategist at Goldman Sachs Japan Co., employment of women is a critical chess piece in rekindling economic growth in Japan against a backdrop of an aging and dwindling population with a low birthrate; high and unsustainable fiscal debt; domestic deflation; and less maneuvering room for fiscal and monetary policy.

In addition to the general impact that an increase in women’s employment could have on Japan’s economy, an increase in female entrepreneurship could help to turbocharge economic growth still further.

Entrepreneuring offers both women and men the opportunity to create new horizons for themselves, while at the same time benefitting society by creating jobs and economic growth. While Japanese is considering ways to revitalize itself, it is certainly worthwhile to take a deep look at entrepreneurship and how to foster the entrepreneurial spirit among both genders.

Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.

Originally Published in Nikkei Weekly, 12th September 2011

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