Editor’s Note
This article challenges the conventional view that low entrepreneurial activity is inherently problematic. It argues that in societies like Japan, robust economies with ample stable employment can provide viable alternatives to entrepreneurship. The key issue, it suggests, is not the startup rate itself but the long-term capacity to generate quality jobs for future generations.
In a society like Japan where few people start businesses, it is also a wealthy society with many stable employment opportunities that allow people to “get by without starting a business.” Therefore, a low startup rate is not necessarily a problem in itself. The real problem is likely that “next-generation large corporations that create a massive number of jobs for our children’s and grandchildren’s generations are not emerging.”
At this point, Japan is overwhelmingly losing globally in terms of the number of unicorn companies per 10 million people as these next-generation large corporations. It is losing to China and Brazil, and being soundly defeated by countries with many large corporations like the United States, the United Kingdom, Germany, and France. The gap between Japan and the United States is a staggering 23.5 times.
If this continues, the excuse that “Japan has many large corporations” will no longer hold. If Japan remains like this for another 100 years, our children’s and grandchildren’s generations will experience severe poverty. For those currently in their teens or twenties, they themselves, not just their children’s generation, will likely struggle.
The key to escaping this situation will likely be the democratization of value creation (Editor’s note: A management philosophy advocated by the author, where humans are the main actors in value creation, and management is the continuous resolution of conflicts that hinder value creation. It features (1) all stakeholders—customers, employees, shareholders, creditors, business partners, society, managers—working together as comrades on value creation, and (2) the broad education and sharing of knowledge necessary for value creation within the organization).
As a starting point, let’s focus on Israel. Israel is a startup powerhouse boasting the world’s largest number of unicorn companies per capita, surpassing even the United States. It is, of course, also an advanced nation with many large corporations. While Israel has recently become a target of criticism in international politics, such as for its invasion of Gaza, there is no doubt it is top-tier in business.
One could even say they are so good at business that they have become arrogant.
So, what is Israel’s startup environment really like? It turns out it’s not actually such an easy environment to start a business in.