Takako Hashimoto, Director of Chiba University of Commerce Research Center for Economics

The author's specialty is computer science. In the United States, if you say that you are working in computer science, many people will say, "That must be profitable." This is because in the field of computer science, not only large corporations but also many venture companies are creating innovations and generating high profits. Timmons (1994), a report on venture companies, also states that 50% of postwar innovations in the United States, and particularly 95% of groundbreaking innovations (e.g., computer science product services such as personal computers, search engines, and social networking sites), were born not from large corporations but from venture companies.
On the other hand, what about Japan?
Of course, there are some ventures that are achieving remarkable results, but overall it feels like society as a whole lacks vitality.
In fact, the 2012 edition of the White Paper on Small and Medium Enterprisesii also indicates that the start-up rate for small and medium enterprises in Japan is less than 5%, significantly lower than the United States (approximately 10%) and the United Kingdom (approximately 12%). Also, in recent years, the United States has seen the birth of ventures with sales exceeding trillions of yen, such as Google, Amazon, and Facebook, whereas in Japan, even companies such as Rakuten and Gree have sales of less than 1 trillion yen, and it has been pointed out that no ventures have grown significantly. It can be said that Japanese ventures are still sluggish compared to the United States.
What is the cause of these differences? Based on my own experience in the United States, I would like to point out the following two reasons.

(1) A culture that tolerates failure Are you familiar with the phrase "Don't take it personally"? It means "Don't take it as a personal problem." It is a phrase that Americans often say when a mistake or a bad situation occurs. They do not take failure as a personal problem. They do not see failure as shameful, but as something that can be learned from and considered a step towards the next challenge. Of course, there may be various real thoughts, but taking failure as a personal problem and simply becoming depressed is considered "weakness" and shameful. I think that this attitude leads to a culture that produces ventures that are not afraid of failure and try again and again until they succeed.

(2) Respect for entrepreneurship In the United States, seminars and workshops on starting a business are held frequently, and many people with a burning desire to start a business participate. People find meaning in starting a new business on their own and taking on challenges that no one has ever done before, and others around them tend to respect this. Another characteristic is that many entrepreneurs are born from top universities such as Harvard or former corporate elites. Seminars and lectures on starting businesses are gradually being held in Japan as well, but compared to the United States, awareness of entrepreneurial activities and knowledge, ability, and experience in starting a business are low. This suggests a lack of respect for entrepreneurship (Global Entrepreneurship Monitoriii).

In addition to this social culture, there are also differences in the social system in the United States, such as the fact that debt repayment responsibilities are largely waived and it is easy to raise funds from "angel investors." In Japan, the Ministry of Economy, Trade and Industry has also started measures such as training venture and new business creators and support personnel, improving the operation of the angel tax system, promoting venture investment, and crowdfunding, but it is difficult to say that sufficient results have been achieved. Not only social systems but also the social culture described above needs to be reformed. In order to help create innovations that change society, the Small and Medium Enterprise Research Support Organization at Chiba University of Commerce Research Center for Economics Research Institute, as a university research institute, is also actively engaged in fostering entrepreneurial spirit that does not fear failure, monitoring and publicizing social systems, and supporting venture startups.

This article is an updated version of "Startup Support That Generates Innovation" (Small and Medium-sized Enterprise Support Research Vol. 4).

References
i Timmons, JA 1994. New Venture Creation: Entrepreneurship for the 21st Century. Fourth edition. Irwin Press, Burr Ridge, IL.
ii Small and Medium Enterprise White Paper (2012 edition) http://www.chusho.meti.go.jp/pamflet/hakusyo/H24/PDF/h24_pdf_mokuji.html
iii Survey on Entrepreneurship (GEM Survey) http://www.vec.or.jp/report_statistics/gem/