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13 - Abenomics and Japan’s Entrepreneurship and Innovation

Is the Third Arrow Pointed in the Right Direction for Global Competition in the Silicon Valley Era?

from Part IV - Third Arrow of Abenomics

Published online by Cambridge University Press:  05 February 2021

By
Kenji E. Kushida
Edited by
Takeo Hoshi  and
Phillip Y. Lipscy
Takeo Hoshi
Affiliation:
University of Tokyo
Phillip Y. Lipscy
Affiliation:
University of Toronto
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Summary

This chapter asks whether the Abe administration’s “third arrow” of structural reforms was useful in fostering innovation and strengthening the global competitiveness of Japan’s economy. It takes the Silicon Valley model and evaluates how much the third arrow of Abenomics added flexibility to some of the core institutions of Japan’s traditional model by pushing toward or adding institutional elements of the Silicon Valley model. The goal for Japan should not be piecemeal adoption but instead strengthening the institutional underpinnings that enable Japan’s startup ecosystem to flourish and coexist with the large-firm-dominated model. This chapter concludes that Abenomics’ third arrow legitimized the institutions supporting Japan’s startup ecosystem by amplifying trajectories of change already underway – not by forcing change in areas that were headed in a different direction. Since institutions supporting the startup ecosystem are emerging in parallel to the existing institutional configuration, the legitimacy provided by Abenomics’ third arrow reforms do represent positive developments and policy for helping innovation in Japan’s economy.

Keywords

JapanentrepreneurshipinnovationAbenomicsthird arrowSilicon Valley
Type
Chapter
Information
The Political Economy of the Abe Government and Abenomics Reforms , pp. 394 - 420
Publisher: Cambridge University Press
Print publication year: 2021

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