Entrepreneurs and Managers in the Development of Japanese Business

Abstract

The development of business is not only an integral part of economic modernization but also its centre. Entrepreneurs and managers are the dynamic human actors in this development. Yet, the definitions of innovation and entrepreneur are not always clear. If one insists on academic rigidity of “pure innovation” and “idiosyncratic entrepreneur” the argument for late developers like Japan and Korea is limited. Rather, Schumpeter’s classic broad concepts of entrepreneur and innovation are useful for comparative research. He gave the entrepreneur a singular role in economic development with an emphasis on innovation (or commercialization of an idea) rather than the invention. According to Schumpeter, the prime function of the entrepreneur is:

to reform or revolutionize the pattern of production by exploiting an invention, or more generally, an untried technological possibilities for producing the new commodity or producing as old one in a new way, by opening up a new source of supply of materials as a new outlet for products, by reorganizing an industry. (Schumpeter, 1934: 132)

Schumpeter contended that innovation and technological change came from entrepreneurs. But he went on to argue that the actors or vehicles that drive innovation are large enterprises that invested the capital and resources in research and development.