Entrepreneurship in Japan and Silicon Valley: A Comparative Study

Abstract

Entrepreneurial activities of a region reflect its business climate and habitat for innovation. This is particularly evident in a comparison of firms in Japan and Silicon Valley as entrepreneurial activity in these areas especially faces a different culture and business environment. The objective of this study is to identify the differences along four dimensions affecting the entrepreneurial process and management of start-up companies: entrepreneurial motivation, risks and obstacles, perceived growth factors, and supporting infrastructure. A survey was conducted of 396 Japanese firms and 188 Silicon Valley firms. The survey results indicated major differences between the two regions. In the area of entrepreneurial motivation, Japanese entrepreneurs were more society-oriented (i.e., in search of social recognition) while Silicon Valley entrepreneurs were motivated by more individualistic factors such as personal achievement and accumulation of personal wealth. In the area of risks and obstacles, Japanese entrepreneurs were concerned more about personal and globalization risks and less about market and financial risks. In the area of perceived growth factors, Japanese entrepreneurs rated higher on strategic focus and R&D priority, whereas the Silicon Valley entrepreneurs put greater emphasis on growth-orientation, customer focus, opportunity recognition, and timely inflow of venture capital as critical factors of growth. Finally, with respect to infrastructure, Silicon Valley entrepreneurs appeared to be benefiting from superior professional services, university resources, and venture capital, while Japanese firms seemed to have better access to diverse financing resources including bank loans and government financing. The findings are expected to provide valuable insights for policy makers. (C) 2002 Elsevier Science Ltd. All rights reserved.