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Entrepreneurship in Japan 16





This chapter will highlight the introduction to the research bycovering an overview of the various guides for the exploration oftopic. It shall present the background of the study and offer someinformation about the objectives of the study. The chapter will coverthe research questions and the hypothesis that will guide the study.The chapter will highlight the scope of the study and the potentiallimitations and therefore, it would play an important role ininforming the possibility of the success of the study. The chapterwill cover the significance of the study that is the basis of theproposal.

    1. Background of the Study

Japan is a developed country that has major establishment of industryand has a strong economy. In Japan, the economic opportunities arelimited affecting the economic growth of the country. Even with thedevelopment of the technological skills in the country, the situationof entrepreneurship has suffered greatly. The development ofentrepreneurship in Japan has suffered from the lack of capital toventure, restrictive government regulations, and stiff competitionfrom then existing large companies (Shepherd et al. 2016, p209). Theculture of the Japanese remains restrictive to entrepreneurship. Thegovernment of Japan has, however, implemented some strategies thatcould facilitate the start-up of businesses. The government hasworked to ensure that it offers incentives to the people who areinterested in establishing businesses in the country (Haghirian 2016,p.54).

The government initiatives have born little results because manypeople have not ventured in the entrepreneurship. The culture of theJapanese has been one of the contributors of low participations ofpeople in entrepreneurship. The general perception of many Japanesehas been that entrepreneurship is a risky venture that is not worthytrying. Many educated youths have opted to pursue employment inalready established companies rather than establishing their own. Thesituation of entrepreneurship growth has been on its lowest in Japansince the asset price bubble burst of 1991. The situation affectedthe choice for investment for many people and therefore, many havesought employment perceiving entrepreneurship as a bad risk. Thestate of Japanese entrepreneurship is below its full capacity andthat has manifested in many ways in the operation (Aoyama 2009).

    1. Statement of the Problem

The Japanese culture has had a significant influence on theestablishment of entrepreneurship in the country. The culture of theJapanese has affected the willingness to venture in entrepreneurship,the funding, and the general behaviour of the people. Scholars havedetermined that the culture of the Japanese tends to focus on therules, norms, and traditions. Many Japanese adopt a way of life thatemphasise on conventionality, risk aversion, consistency, andcommunity. In such a way, it becomes difficult to determine theaggressiveness in creating opportunities in the market. In an attemptto advance their lives, many Japanese have chosen to explore theexisting ventures for their economic growth. In a way, the culturehas introduced the fear in the Japanese, and therefore, it has beendifficult to facilitate establishment of entrepreneurship in thecountry.

The culture of the Japanese had affected the establishment ofentrepreneurship in Japan. Although the government has attempted tofocus on creation of favourable conditions for entrepreneurshipthrough provision of entrepreneurship incentives, little has changedin boosting the rate of venturing in it. The culture of the Japanesehas been problematic because it affects funding of those who want toventure in entrepreneurship (Honig, Lampel, and Drori 2014, p.137).The situation of Japan in entrepreneurial undertaking haddeteriorated as compared to the situation of other developedeconomies in the world. The culture of the Japanese has indicatedentrepreneurship as a major risk that could embarrass those whoattempt it and therefore, venturing in entrepreneurial activities inJapan remains as low as possible in the country.

    1. Objectives of the Study

The following objectives will guide the study

  1. To investigate the social factors affecting entrepreneurial ventures in Japan

  2. To determine the contribution of entrepreneurship programmes common in Japan

  3. To investigate the role of the government incentives in shaping the culture of Japanese that affect entrepreneurship

  4. To examine the legal factors that affect the development of entrepreneurship in Japan

    1. Research Questions

The following research questions will guide the exploration of theissue of entrepreneurship in Japan

  1. What has been the effect of culture in the determining the growth of entrepreneurship in Japan?

  2. Has the government of Japan provided incentives for entrepreneurship that overcome the challenges posed by culture in development?

    1. Research Hypotheses

The hypothesis of the research that will form the basis forestablishment of the study will be

  1. Culture of the Japanese has little effects on the development of entrepreneurship in Japan

  2. The culture of the Japanese is the main impediment to the development of entrepreneurship in Japan

    1. Significance of the Study

The findings of the study will be important to the institutions thatcould have an influence to the development of entrepreneurship inJapan. The following entities might benefit from the findings of theresearch

  1. The government of Japan might have the clarity of the situation that affects development of entrepreneurship.

  2. The study will be significant to the body of knowledge because it will offer insight into understanding the situation of the development of entrepreneurship in Japan

  3. The study will be valuable to other researchers as it would form basis for future research

    1. Scope and Limitations of the Study

      1. Scope of the study- Entrepreneurship in Japan is a venture that has given various employment opportunities to many people. The sector of the economy has been the centre for economic growth because it has continually absorbed many employees. The government of Japan has implemented various policies and programmes for enhancing the development of the entrepreneurship in the country and a few ventures have risen in the midst of the fear of failure that is in many people in the country.

      2. Limitation of the study- The research findings will vary according to the exposure of the participants and the accuracy of their account in understanding the culture of the Japanese. Another challenge will be getting a representative sample for the population of the Japanese under study. The tools for collection and analysis of data could contribute to some limitations in the study. The research findings of the study could suffer from the prevailing social perception of the people in the time of the study.



The development of entrepreneurship in Japan has endured turbulencebecause many people are unwilling to take the risk because of fear offailure. The progress of entrepreneurship in Japan has a longhistory. The consideration of the history, the effects of Japaneseculture, the government initiatives, and the contribution ofentrepreneurship in the Japanese economy will be the focus of thethis chapter

    1. The History of Entrepreneurship in Japan

The entrepreneurship in Japan has a long history since thedevelopment of the private companies in the country. Many people haveventured in the venture and the development has taken place invarious sectors of the economy.

      1. Development of entrepreneurship in Japan prior and post war-The development of the entrepreneurship in Japan has its traces in the prior and post war times. Prior to the World War II, Japanese were less involved in entrepreneurship. Following the destruction of infrastructure and industries of Japan in the World War II, the citizens found the motivation to work and establish their business to re-establish the economy. The situation continued for some time before the educated group in the society refocused their effort to providing their services in the big corporations in the country. The situation led to decreased development of entrepreneurship. In 1960s the government regulations prevented the involvement of some academic professions in entrepreneurship. The situation led to low participation of the Japanese in entrepreneurship. The education systems of Japan empowered the people to secure long-term jobs in existing companies and that further reduced the growth entrepreneurship by denying learners opportunities to develop business-related skills (Kaneko 2013).

      2. Entrepreneurship in Japan in the modern era- The development of entrepreneurship in Japan has suffered from the political influences that have played important roles in reducing the rate of development. Some spells of political unrest affected the involvement of people in the development of entrepreneurship after the post-war era. The government tried to develop strategies to enhance the development of entrepreneurial ventures but rarely did they manage it. The government of Japan enhanced the enactment of laws that targeted to establish the development of entrepreneurial ventures in the country but they have had low contribution. The introduction of government incentives for the development of entrepreneurial activities has played a slight role in the establishment. The asset price bubble burst of 1991 in Japan left many people with fear to take risks (Endo, Delbridge, and Morris 2015, p.104-105).

      3. Current trends in the development of entrepreneurship in Japan- Although there are prospects of many Japanese venturing in entrepreneurial activities, research indicate that the economy realises very few start-ups every year. The situation has worsened considering the Japanese fear of failure. In Japan, technological advancement has contributed little to the establishment of the business the government has to determine the ways to activate it. The shift of preference for employment has changed from the local companies to the international corporations in Japan. However, a few women are undertaking entrepreneurship in the country (Dirks, Huchet, and Ribault, 2012, p.213).

    1. The Effect of Japanese Culture to the Development of Entrepreneurship

The culture of the Japanese has been one of the major impediments tothe development of entrepreneurship in Japan. The culture of theJapanese has had direct influence on the behaviours of the people.Many Japanese fear failure and the psychological alienation thatcould happen to them in an event that they fail in a business. Manypeople have had serious problems in establishing entrepreneurialventures because they perceive it as a risk that may affect theirsocial status in the case of failure. The situation would add to thesocial perception of many Japanese that entrepreneurs are of lowerstatus than employed people. The psychological implications offailure would place a person who fails in business at a very lowsocial status (Kushida 2001, p.87).

The culture of the Japanese emphasises on adherence to the rules andconventionality. The situation has led to the involvement of manypeople in activities that others have established and has failed tocreate urge for the development of new businesses. With the regardfor great conventionality and consistency, the culture has embracedthe development of a situation that lead to conformity to theexistent traditions. The technological advancement has not producedany significant benefit to entrepreneurship in Japan. Many ofpotential entrepreneurs have opted to go for employment instead ofstarting their businesses. The education system of Japan has nothelped in changing the situation because it has emphasised onpropagating the development of the existent businesses at the expenseof establishing others (Dubina and Carayannis 2016).

The Japanese culture has played a significant role in determining thedevelopment of entrepreneurship. The culture emphasises on theaversion of risks. The culture does not encourage risk-taking or thepursuit of unexploited areas of development. The Japanese havetherefore adopted the culture and ended up working in the existingcompanies. The Japanese establish their development according to theknowledge they have about their culture to advance their provision ofservices. Although the culture is cognisant of detail-orientedlifestyles, it has failed to influence the development of the peoplein such a way that they could explore other opportunities unfamiliarto them (Usui 2011). The situation has risked the saturation of theavailable opportunities and slowing down of growth of the economy ofthe country. The culture of the Japanese may be very unfriendly tothe development of the economy because it insists on exploitation ofthe only available opportunities even without establishment of othersthat could facilitate diversification of provision of goods andservices (Wennberg, Pathak, &amp Autio 2013).

    1. Government Incentives in the Development of Entrepreneurship in Japan

The Japanese government has complicated the development of domesticentrepreneurship in Japan. The legal specifications have scared manypotential entrepreneurs. For example, the bankruptcy law of Japan hasspecified that the founder of a business is liable for any debts thata company has incurred and has not paid in a situation of failure(Haghirian 2016, p.54). Many people perceive the law as unfriendly topotential entrepreneurs because it risks the confiscation of thefounders’ property or their families in payment of debts. Muchstigma comes to the people who fail in their business and therefore,it makes the recovery of the affected almost impossible (Kushida2001, p.87).

However, the Japanese government has established incubators forentrepreneurs to advance their goals of establishing new ventures. Inthe incubators, the entrepreneurs have the opportunity to innovateunder the umbrella of the already established enterprises (Jacksonand Debroux 2009, p.42-46). Such undertakings have promoted thedevelopment of entrepreneurship in Japan. Additionally, the Japanesegovernment has removed many disincentives to undertakeentrepreneurship in Japan and that has improved the perception of thepeople about it. Many universities in Japan host several lecturesabout entrepreneurship and that has promoted the development of apositive culture. The implementation of University TechnologyAssistance Transfer Law of 1998 promoted the undertaking of manyuniversity professors in entrepreneurial activities. With the futureif entrepreneurship in Japan hanging on women, the government isproviding programs and information about entrepreneurship to as manywomen as are in entrepreneurial ventures (Billore et al. 2010,p.168-169).

    1. Contributions of Entrepreneurship in Japan

The development of entrepreneurship in Japan has prompted theadvancement of the social status of many people. In Japan,entrepreneurs have increased their basic income and therefore haveadvanced their social status. Although some Japanese perceiveentrepreneurship as a lows status occupation, it offers betterreturns than employment in large corporations in the country(Ibata-Arens 2008). The entrepreneurs have no limitations of theearning they can make from their investment in the business. Thebusinesses that individuals have established have contributed toprovision of employment to many more Japanese citizens. The situationhas improved the economic status of many people because those whowould not have any opportunity secure well-paying jobs (Futagami andHelms 2009). Additionally, the establishment of entrepreneurialventures in Japan has led to competitiveness in the economy of thecountry. The situation has led to massive growth of sources ofconsumer goods and services and in a variety. The innovation promotesthe innovation of the people.

    1. Summary of the Literature Review

In the development of entrepreneurship in Japan, numerous impedimentshave arisen to limit its progress. Although entrepreneurship hasnumerous benefits, it has endured several problems in Japan. Theperception of the Japanese is that entrepreneurship is for failuresand cannot support the economic development. The value system of thecompany has been difficult to change and the people are stronglyopposed to the establishment of new activities that could help inenhancing their economic statuses. In some ways, the fear thatJapanese have in establishing new ventures is justifiable consideringthe governmental restriction affirmed by the bankruptcy law. The fearfor failure is evident in many Japanese because it has majorimplications on the founders and their families. Much as thegovernment supports the entrepreneurship for economiccompetitiveness, it has posed major challenges in the developmentthrough the legal systems. The establishment of the womenentrepreneurs is giving a certain advantage to the entrepreneurshipin Japan. Additionally, many incubators have been important avenuesfor establishment of entrepreneurship in Japan. The incubators remainimportant avenues for the development of entrepreneurship becausethey cover the founders against the risk of failure. Theestablishment of incubators has led to increased opportunity forexploration of opportunities for potential entrepreneurs.



The research methods will focus on validating the procedures that theresearch will use in conducting the study. The method will justifythe criteria for sampling and the choice of data collection andanalysis tools used in the collection of data and obtaininginformation about the issue of entrepreneurship in Japan. The chapterwill cover the methods that will be used to guarantee reliability andvalidity of the data. The coverage of the procedures used in theresearch will also include the determination of the considerationsthat the research will have before undertaking the process ofcollection of data.

    1. Research Design

An appropriate research design for exploration of the phenomenon ofthe entrepreneurship in Japan will be applicable in the study. Theresearch will depend on the primary research that will include theapplication of structured in-depth interviews and administration ofquestionnaires. The methods will be important to ensure highestpercentage participation of respondents. The analysis of the datawill follow the qualitative methods to ensure the assessment of theextent of development of entrepreneurship in Japan.

      1. Variables- Two variables in the research will relate to each other in informing the reason for the situation of entrepreneurship in Japan. The entrepreneurship in Japan will be the dependent variable while the culture of the Japanese will be the independent variables. The responses of the participants of the research will offer the data for analysis and the target respondents are to be from Japan.

      2. Research methodology- The qualitative research method will be key strategy in collection and analysis of the findings. The methods will be important in measuring the perception of the respondents and determine the extent of their conviction about the situation of the development of entrepreneurship in Japan. In the consideration, the method will be important because it will help in observing the behaviours of the respondents and relate it to the questions to which they are responding. The qualitative method also facilitate search for clarification in case of an ambiguous response.

    1. Location of the Study

The research will take place in Tokyo, Japan. The city is a place ofmassive technological innovation and is home to many largecorporations that have offered employment to numerous Japanese. Theemployees and the residents of the city will be the target populationof the research to answer the questions about the situations ofentrepreneurship in Japan. The place is also ideal for the researchbecause of the existence of institutions of higher learning in theplace whose students could offer some information about the situationof entrepreneurship in Japan and their opinion about it.

    1. Target Population

The research will target the employees of large corporations,entrepreneurs, and students in the city of Tokyo. The population hasmany people who have certain opinions about undertakingentrepreneurial activities in the country. The idea of the peoplewill be important to the understanding of the phenomena ofentrepreneurship in Japan.

    1. Sampling and Sampling Techniques

      1. Sampling Techniques- Considering the many institutions, corporations, and the size of the population that could participate in the research, the research will use the multistage sampling in which it will start with listing the various entities of one kind and randomly selecting the ones that will provide the participants. After the selection of the representative organisations and institutions, another random sampling will take place to get the employees who will take part in the research. The process will be in such a way that every person in the target region will have equal opportunity to participate in the research.

      2. Sample size-The research will study 100 respondents from different levels of social life that are living in the city of Tokyo. The number of participants will be considerable considering the sampling techniques used to select them. The population of Tokyo is large and therefore, it would be difficult to have a census method for selection of participants. Selection of a certain percentage of the population to participate in the research will be irrational because it would have to use a very small proportion of the population.

    2. Research Instrument

Research questionnaires and structured interviews that address thevarious aspects appearing in the research objectives will be used tocollect the data. The research will also depend on observation of thebehaviour of the participants since the administration of the toolswill be on face-to-face basis. Such consideration will ensure theclarity of the information that one may deduce from the respondents.

    1. Piloting Study

The piloting study will be important to test the value of the datacollection instrument in assessment of the phenomenon ofentrepreneurship in Japan. The research will conduct a pilot study ona few members of the public to assess the responses.

      1. Validity- To ensure the validity of the information contained in the research, the research will combine the open-ended and closed-ended questions. The research instruments will be in such a way that it will be administered to participants each at their time to minimise discussions and consultations.

      2. Reliability- The research questionnaires will contain similar questions in various formats to ensure that the answers that respondents give for a particular question represent the intended answer. The questionnaires will be administered to willing participants to ensure that they will not act under pressure in responding to the questions.

    1. Data Analysis

The data analysis that will be fit the data contained will be used toanalyse the data. The regression analysis will be conducted on thedata about the Japanese situation of entrepreneurship.

    1. Logistical and Ethical Considerations

      1. Logistical consideration-The research will require obtaining permission to collect data from the governmental administration at the city of Tokyo, institutions, and organizations from which the respondents will come. The organization of the research project will be in such a way that it will be in stages in which time will be allocated for collection and analysis of the data.

      2. Ethical consideration-The researcher will administer research questionnaires and interviews on the willing participants. The research will inform the respondents that the research will maintain the autonomy of his or her name and will not be used for business. The respondents will fill a copy of informed consent before they respond to the study questions.

Reference List

Aoyama, Y., 2009, `Entrepreneurship and Regional Culture: The Case ofHamamatsu and Kyoto, Japan`, Regional Studies, 43, 3, pp.495-512.

Billore, S., Zainuddin, A.H., Al-Haj, N.H.Y.Y. and Halkias, D., 2010.Female Immigrant Entrepreneurship: A Developing Sector in Japan`sEntrepreneurial Economy. Journal of DevelopmentalEntrepreneurship, 15(02), pp.165-186.

Dirks, D., Huchet, J.-F., &amp Ribault, T., 2012. JapaneseManagement in the Low Growth Era: Between External Shocks andInternal Evolution. Berlin: Springer.

Dubina, I. N., &amp Carayannis, E. G., 2016. Creativity,Innovation, and Entrepreneurship Across Cultures: Theory andPractices. New York: Springer.

Endo, T., Delbridge, R. and Morris, J., 2015. Does Japan StillMatter? Past Tendencies and Future Opportunities in the Study ofJapanese Firms. International Journal of Management Reviews,17(1), pp.101-123.

Futagami, S, &amp Helms, M 2009, `Emerging Female Entrepreneurshipin Japan: A Case Study of Digimom Workers`, ThunderbirdInternational Business Review, 51(1), pp. 71-85.

Haghirian, P., 2016. Routledge Handbook of Japanese Business andManagement. Basingstoke: Taylor &amp Francis Ltd.

Honig, B., Lampel, J., &amp Drori, I., 2014. Handbook ofOrganizational and Entrepreneurial Ingenuity. Cheltenham: EdwardElgar Publishing.

Ibata-Arens, K 2008, `The Kyoto Model of Innovation andEntrepreneurship: Regional Innovation Systems and Cluster Culture`,Prometheus, 26, 1, pp. 89-109.

Jackson, K., &amp Debroux, P., 2009. Innovation in Japan:Emerging Patterns, Enduring Myths. London: Routledge.

Kaneko, I., 2013. Social Entrepreneurship in Japan: A HistoricalPerspective on Current Trends. Journal of Social Entrepreneurship,4(3), pp.256-276.

Kushida, K., 2001. Japanese Entrepreneurship: Changing Incentives inthe Context of Developing a New Economic Model. Stanford Journalof East Asian Affairs, 1(1), pp.86-95.

Shepherd, D. A., Williams, T., Wolfe, M., &amp Patzelt, H. (2016).Learning from Entrepreneurial Failure: Emotions, Cognitions, andActions. Cambridge: Cambridge University Press.

Usui, A. P. C., 2011. Comparative Entrepreneurship Initiatives:Studies in China, Japan and the USA. Basingstoke: PalgraveMacmillan.

Wennberg, K, Pathak, S, &amp Autio, E 2013, `How Culture Moulds theEffects of Self-Efficacy and Fear of Failure on Entrepreneurship`,Entrepreneurship &amp Regional Development, 25, 9/10, pp.756-780.