Foreign entrepreneurship in the Japanese startup ecosystem: Can deviance fuel innovation?

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ABSTRACT The Japanese economy has experienced continued modest growth, and recently contraction, and has struggled with a formidable demographic crisis. In dire need of innovation, the Japanese government has started to focus on foreign entrepreneurship, encouraging innovation from abroad. This article examines the practices of knowledge-intensive, or “innovation-driven”, foreign entrepreneurship in contemporary Japan. Using qualitative data from in-depth interviews with foreign entrepreneurs of varied ethnic and national backgrounds, stakeholders of the Tokyo startup scene, as well as from participant observation at events of the Tokyo startup community, I propose that the concept of positive deviance can help us understand migrant entrepreneurs’ strategies for navigating business formation. As argued by previous migration literature, foreign migrants are suspected of deviance and are tightly controlled by the state. At the same time, the newly created Startup visa, which allows the entrepreneurs relatively easy and affordable access to the Japanese market, signals an unprecedented openness to migrants with the hope that their transnational experiences and connections facilitate innovative business creation and overcome Japanese norms of risk-aversity. The analysis reveals that the migrants walk a fine line between challenging social norms and slipping into illegality due to inflexible visa policies and structural constraints. Eventually, immigration policies, which have become increasingly flexible regarding skilled foreign employees, keep a firm grip on skilled foreign employers, thereby exposing migration authorities’ deeply ingrained notions of foreignness as negatively deviant. That said, migrants with sufficient socialization in Japanese institutions increasingly know how to maneuvre the legal system and the startup ecosystem.