Issues on Innovation in Japanese Farm Business

Abstract

This chapter treats agricultural entrepreneurship and innovation in Japan. The key question is, in spite of so many farmers with strong business mind have been appearing everywhere in Japan, why Japanese agriculture has still been shrinking? As we call the driving force of getting industry up as innovation, we expect it to create a new market. But the concept of innovation has multiple meaning today, and we have to consider the concept theoretically. In this chapter, we define innovation as activities of producing new business ideas or behaviors for developing new business value. Innovation works in business field. And we treat business not only private business but also community business and social business. We understand the essence of business as creating new value and improving social welfare. To discuss entrepreneurship and innovation, I take up three studies of innovation research. The first is disruptive innovation theory by Clayton M. Christensen, the second is P. F. Drucker’s innovation and entrepreneurship theory, and the last is diffusion of innovation theory by E. M. Rogers. Through discussing the three studies, we search for a key point of treating innovation and entrepreneurship. And we proceed to the next discussion using Anita McGahan’s industrial model which divides all industry into four patterns. Showing statistical data, we search the pattern for Japanese agriculture. And in the last discussion, we consider the value process of farm products. What players get involved in this value – generating process? If there are so many kinds of players there, they exchange the business ideas and actions, that will be a source of generating innovation. And ideas and actions are intangible assets. We can say intangible assets have an advantage over tangible assets to generate innovation.