Japanese entrepreneurs

Solution Preview

What are some distinctive characteristics of entrepreneurs in Japan? What distinctive challenges do they face?

Although we tend to think of an "entrepreneurial firm" as a company managed by young executives, this is not the case in Japan. Top executives at Japanese entrepreneurial firms tend to be older than usually supposed.

As for the educational background of Japanese entrepreneurs, the founder CEOs tend to have less education than other CEOs. It suggests that high-level education is not critical for entrepreneurial activities in Japan. Instead of education, hands-on experience in business practice is more important for entrepreneurial activities in Japan.

We have two categories of the founder CEOs in Japan: technical or non-technical people with ample work experience but without advanced degrees, "the artisan entrepreneurs", and experienced engineers with advanced degrees and substantial work experience in big corporations, "the elite entrepreneurs". The former has been a traditional majority in Japan, whereas the latter is now emerging. We expect that in longer term "the elite entrepreneurs" become to play an important role to vitalize Japanese economy.

Challenges for Japanese Entrepreneurs:

1) The first step for entrepreneurs after gathering a core ofpeople to start a company is incorporation. Due to legalfactors stemming from societal factors and entrenched business practices, incorporation is extremely easy in the UnitedStates while in Japan, significant effort is required by the entrepreneur.

2) Although the Japanese economic system is steadily aligning incentives for potential entrepreneurs, failure of an enterprise still constitutes one of the strongest disincentives.
Bankruptcy laws, originally formulated in 1922, have only been reformed once, in 1952. However, with highly skilled labor markets becoming more liquid with the breakdown of lifetime employment, difficulty in finding employment after failure is becoming less of a disincentive.

3) Most people who have studied or are involved with the Japanese entrepreneurial scene recognize that since venture ...