The search for a new entrepreneurial drive in manufacturing in Japan

Japanese per capita GDP growth has been decelerating for at least three decades despite the fact that Japan has been groping to find better ways of accommodating individualistic Smithian market forces. Japan has made great progress in opening markets, and empowering profit-seeking, yet it has not so far reaped the benefits anticipated. Facing the most severe economic downturn of the post-war period, Japan is now reconsidering the basis of its economic and management system. The necessity of developing competitive advantages in new industries has been identified but a crucial question is how it will affect the way that industry has organised itself to maximise quality, efficiency and flexibility. Despite a number of entrepreneurial success stories, the Japanese economy has been largely controlled and driven by large established companies during the post-war period. It is said that an entrepreneurial culture was not so necessary because a group-based industrial organisation could generate about the same dynamism and outcome. New blood was deemed necessary, but merely to complement the activities of established interests. This is shown by the extremely low mobility of firms in many industries, compared to the USA, during the last forty years [1]. The success of Japanese industry until the end of the 1980s may have vindicated that opinion. Nevertheless, the structural low growth period of the 1990s indicates a need for change in that respect. The development of a venture-type business culture may be a key factor in the renewal of Japanese economy to put it back on a sustainable growth path.