In 2006, I took a trip to South Korea and Japan for the purpose of studying entrepreneurship as part of my graduate degree program.  A group of 20 students & faculty spent one week in each country for the purpose of answering this thesis question:

Explain the difference between Japan & South Korea and understand why, even though South Korea is following Japan’s economic development plan, it has developed a much more entrepreneurial society.

At the time of this study trip, South Korea’s rate of entrepreneurship was 14% and Japan’s was 1.7%.  These numbers came from a study done by the Babson College of Entrepreneurship and the London School of Economics.

Our goal was to explain the why South Korea and Japan had such drastically different rates of entrepreneurship.

It was clear from our entrepreneurship interviews, company visits, and dialogue with students that South Korea clearly had entrepreneurship in their blood.  Parents encouraged their children to venture out on their own.  Entire universities were set up for research and implementation of new ideas.

Although these same things existed in Japan, they were not as strong.  Japan also had a very strong corporate culture that pushed working for the man your entire life.  This has just started to change in the last 10 years in the wake of layoffs and instability.  But still, this did not explain such a drastic difference in the entrepreneurship rates.

Our final response to the thesis question was that South Korea’s rate of entrepreneurship was indeed higher than Japan’s, but not at the rate proposed by Babson & London.

The reason for this came down to semantics.  The Japanese have two main words for Entrepreneur.  They are:

Ki gyo ka
&
Ki gyo sei shin

Ki gyo ka literally means – start business house – basically, the idea that you own your house, and so you start a business that you own.

Ki gyo sei shin literally means – start business spirit – basically, one who has the spirit of entrepreneurship.

The most common translation for entrepreneur in Japan is Ki gyo ka.  What we learned about this word is that it has both a positive and negative connotation in Japan.  The positive is that the founder of Sony is called a Ki gyo ka.  This type of person is one who has started a business from scratch, builds it to great heights, and uses his or her wealth and status to give back to society.

But this word also has a negative connotation.  These days, when a young person starts a business that gets big quickly, they use their money & prestige to buy cars, women, and apartments.  Many times, these young entrepreneurs get caught up in graft cases and go to prison.  Thus, “Ki gyo ka sentenced to 30 years” can make one use caution when describing themselves with the same word.

So, the Japanese view Ki gyo ka as either one of the top businesses in the world, or as a young, brash, egomaniac.

When our study group went into Japanese stores where it was clear the person had started the store and was what we would refer to as an Entrepreneur, the person would flatly deny that they were a Ki gyo ka.  It was easy to see that a person running a small shop as an entrepreneur did not think themselves lofty enough to say they started from scratch and built an empire.

Yet, when we asked that same person if they were a Ki gyo sei shin, if they had the spirit of entrepreneurship, they readily agreed.

Our conclusion was that Japan’s rate of entrepreneurship was low when compared to most other countries, but that the official rate put out by Babson School and the London School of Economics was incorrect because they were using the incorrect word for Entrepreneurship in their surveys.

Click the following link to see a full list of entrepreneurship rates by country.