Introduction

Japan is often described as a society of loyal company men and bureaucrats in blue suits, working for a single organization for a lifetime. In this picture of the Japanese system, incremental innovations are rewarded with incremental seniority-based wages eked out over decades of service. This is indeed the story for about 1% of the biggest firms and about 25% of its workforce – at least until the economic collapse of the 1990s.

Japan is also chock full of stories of entrepreneurial struggles. These struggles are not limited to market competition. In fact, the fiercest battles are often waged against the institutional hierarchies of the Japanese national system of production and innovation. The entrepreneurial mavericks at the helm of small and medium-sized enterprises (SMEs) that populate the base of the Japanese production pyramid are the narrators of this struggle. This book explores the way the Japanese system is experienced by those entrepreneurs and workers comprising the 99% of firms and 75% of its working people – a critical source of new business and employment.

Until now, the story about high technology industry Japan has been told from the perspective of the top of the production pyramid (see figures 1.1 and 1.2). That is, most research about the Japanese political economy is conducted in and around the corporate headquarters of Japanese conglomerates (keiretsu groups).