Frontiers of Entrepreneurship Research
1996 Edition

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Tomoyo Kazumi
Yoshio Sato
Akira Nishikiori
Nobuhiro Kurose
Yoshiyuki Sato

Japan Small Business Research Institute
8F-Sanbancho KS-Building
2 Sanbancho, chiyodaku
Tokyo, Japan 102



Principal Topics

Japan is facing a serious economic recession. This change represents the beginning of a major shift in the industrial structure and economic framework of Japan. In the past, large corporations were the leaders in major industrial changes. But in the current shifts, small businesses and entrepreneurs are expected to be as active as "creative destroyers". There has been, however, little systematic research on entrepreneurs, entrepreneurial activity, and entrepreneurship education in Japan. For this reason a comprehensive study of Japanese small businesses and entrepreneurs was completed to determine who entrepreneurs are, why these respondents became entrepreneurs, and the nature of the culture that has developed among entrepreneurs.


Two associations representing small businesses provided total sample of 9,145 small business owners. Fifty percent are manufacturers; 25% are retailers, wholesalers and food services; and the remainder included business and consumer services such as construction, etc. A mailed survey was returned by 1,1996 presidents or owners/managers, including founders or successors. The interview schedule included information about the respondents’ personal or business attributes; details of business start-ups or becoming the president or owner; management policies or methods; and expectations for the future and others.

Major Findings

Analysis of the responses revealed the following about entrepreneurship in Japan:

1.) 61% of entrepreneurs (founders) started their own businesses to realizing their dreams and pursue ideals.

2.) Good relationships with employees and consumer satisfaction are seen as the key factors to success.

3.) The dominate management philosophies emphasize employees’ satisfaction and contribution to the community.

4.) More than 60% of respondents have supported other entrepreneurial start-ups.

5.) 64% of responders believe that it would be best for their companies not to develop into large corporations.


We can learn more about the culture among Japanese entrepreneurs from a closer look at the survey responses.

1.) Entrepreneurial activities are seen as a high risk path to self-realization.

2.) There is a high degree of self-evaluation among entrepreneurs.

3.) Management policies are oriented toward individuals.

4.) There exists a high degree of responsibility for and involvement by employees, stake holders, and community among entrepreneurs.

5.) Many feel a need to escape from the restraints imposed by large corporations.

6.) The entrepreneurs themselves are active in trying to increase the number of new business start-ups.

Small businesses had been recognized as unimportant and secondary as a source of economic growth. This analysis suggests quite a different posture. Japanese entrepreneurs do consider their contributions as insignificant. They are satisfied to be one of many successful small businesses, rather than the single dominant large firm. The analysis suggests that many Japanese entrepreneurs have admirable management philosophies and these contribute to improved business performance. We expect these entrepreneurs to provide major contributions as Japan adapts to changes in the industrial structure and economic activity.

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