Why Young People in Japan Will Work for Companies That Don't Exist. Yet.

March 4, 2014  |  6 comments

This blog has been cross-posted from Forbes.

By Amy Rosen,
President & CEO, NFTE

SAPPORO, Japan – A 10 year old in Japan today will likely be hired by a company that does not exist yet.

That’s because, according to two researchers from Hitotsubashi University and Nihon University here in Japan, Japanese companies created after 1996 contributed a net positive of 1.2 million new jobs. But older companies shed a net 3.1 million jobs in that time.


The crowd at Sapporo

It’s not news that startups are the jobs engine for Japan. It’s the same in the United States.

But what is troubling is that according to research from theWharton School at the University of Pennsylvania using World Bank data, Japan, ranks dead last among modern, industrial nations in the average annual entry rate of new enterprises. In other words, Japan is reliant on new companies for jobs but creates the fewest new businesses.

There are many reasons Japan lags in entrepreneurship. One is that Japan dramatically under-utilizes women.

According to the experts at Babson College in Boston, Japan has the second-lowest female entrepreneurship rate in the world. Only Pakistan did more poorly in engaging women in the business of business.

Some of the reasons are cultural. The relationship between women and work in Japan, though evolving, is tense. About half of the women in Japan’s workforce leave their jobs when they have children or start families. Only half of those return to the workforce.

According to a report from Goldman Sachs, if Japan were able lift the employment rate of women to equal men, it would add 15% to the nation’s GDP. That’s an impact equal to two Japanese auto industries.

There is little doubt that keeping women in the workforce or sparking them to create new businesses is a key to Japan’s future; Japan’s Prime Minister Shinzō Abe said recently, “we must capitalize on the power of women,” and “Enhancing opportunities for women to work and to be active in society is no longer a matter of choice for Japan. It is instead a matter of the greatest urgency.”

He’s right, of course.

And I’m here to help.

I’m in Sapporo, Japan today and I’ll be spending the rest of the week here – in Tokyo, Kyoto, Nagoya and other cities – as part of a U.S. State Department arranged trip to speak with women about the entrepreneurship mindset. I’ll make the case that entrepreneurial thinking is key to finding jobs in the new world economy.

To be clear, entrepreneurial thinking isn’t just about empowering women. When we create more innovators, it will help everyone. In Japan, however, the most visible place to start is with women because there is so much room for growth.

As important as it is to elevate women entrepreneurs and keep the Japanese economy moving, it’s just as important to me to spread the word about teaching entrepreneurship. Whether that audience is Japanese women or students in our new NFTE programs in Mexico City and St. Louis, the message is the same – owning your future through entrepreneurial thinking is powerful.

We know that just a fraction of those who learn entrepreneurship will launch and sustain businesses. Even fewer will invent the next big thing and start a global industry.

But some will. And whether it’s one in a thousand or one in a million students who find the next big thing, the key is making sure we’re teaching ten million people instead of just a million.

Because it’s not just that 10 year old in Japan who is counting on entrepreneurs. Every 10 year old is.

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