A 2003 study by Global Entrepreneurship Monitor showed that Japan has the lowest entrepreneurship activity among 37 countries surveyed. After reading past studies in this area, I discovered that the best predictor of entrepreneurial activity is population growth.

So, we might assume that developed countries usually have low entrepreneurship rates because there is lower population growth. However, Japan has a higher birthrate than Singapore or South Korea and still scores lower in the entrepreneurship index.

Moreover, Japan has characteristics that make it a very suitable country for entrepreneurs, such as a relatively low tax rate, high work ethic, an educated workforce and high integration with the rest of the world. Why, then, are there few startups in Japan?

Japan scores lowest of all countries with regard to risk-taking behavior (World Value Survey, 2005-2008). Starting a company with a few people on a small budget is taking a huge risk.

? Japan is a collective society, and in collective societies there's a lower need for "individual self-achievement." If you don't have a strong desire for "self-fulfillment" or being very influential or very rich, you wouldn't want to start a company.

Japanese society is one of "high power-distance." This makes things very hard for young entrepreneurs to deal with suppliers, creditors and even employees. Decision-making takes longer.

In Japan, the best job is thought to be the most secure job — not the best-paying job. That's why, even today, most students want to get a lifetime job regardless of the type of job.

In Japan, one of the worst things is disappointing others. If you found a startup that fails, you'll take others down with you.

Japan has the lowest social network usage in the world as a result of smaller social circles (usually limited to coworkers and high school friends). In the West, people have larger circles. A smaller circle means less social capital. That means it's harder for Japanese to find individuals to collaborate with. ...

Risk avoidance and a long-term orientation are not necessarily bad things. In fact, they represent the Japan Inc. philosophy that created the world-beating products of the 1970s, '80s, and '90s.

We just have to teach kids that sometimes there are more merits than demerits to risk-taking. The question is, can Japan change before it's too late?

The opinions expressed in this letter to the editor are the writer's own and do not necessarily reflect the policies of The Japan Times.

adam acar