Innovation in Rural Japan: Entrepreneurs and Residents Meeting the Challenges of Aging and Shrinking Agricultural Communities

Abstract

This paper examines the function and features of entrepreneurial leadership in aging rural communities in Japan, referring to the Schumpeterian concept of entrepreneurship. In the demographically oldest society, Japan, agricultural communities in rural hilly and mountainous regions suffer most from demographic change. This usually leads to decline in the regional economy. Such communities have to redefine local business in order to survive. Schumpeter (2006) claims the importance of the function of entrepreneurs: they create innovation through new combinations of given resources with a strong leadership. In aging communities, elderly residents as a large population group there should and could be combined in a new business; however, in most communities they are not integrated into enterprises. The cases examined here suggest that the entrepreneurs who contribute to the economic reconstruction of the communities have, beside typical entrepreneurial features, strong empathy for the community, as well as for the residents there.JEL Codes: J14, L26, O22, P25