＠~田 l込§
D工s
cuss工ON PAPER NO. 63、
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Japanese En七reprenuership in 七he Early
S七age of Econorn工C Developrnen七
byShinichi Ichirnura
June, 1973

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THE CENTER FOR SOUTHEAST ASIAN STUDIESDISCUSSION PAPER NO. 63

Japanese En七reprenuership in 七he Early
Stage of Economic Developmen七
byShinichi Ichimura
June, 1973

1.

Introduction
Several Asian nations were exposed to Western colonialism or

to Western influence at the same time towards the end of the last
But Japan was not only able to rema工n independent but

century.

t工cal reform andaユSo succeeded 工n achユev工ng un工quely domestユc polュ
modern industrialization during this period. The domestic reform
called the Meiji Restoration is sometimes identified with the
breakdown of feudal society.

Using the ter：
了1 1
1breakdown,1
1 however,is inappropriate, because fundamental changes occurred but thenational traits characteristic of Japanese society continued
throughout th工s perユod of rad工cal change. The fundamental reforms
are the following three:1.

the downfall of the Shogunate and clanship,

2. abolishment of social classes (warriors, farmers, artisans
and tradesmen),
3.

discontinuation of the national seclusion policy.

On the other hand， 七 he following institutions and attitudes
remained:．
ユthe bureaucra七
工 c government contユnued from the feudalistic
to the modern oligarchy, governed by a minority of thesamurai class,2.

the idea of loyalty continued from the time of the feudal
clans to the modern state or to the emperor; the impor七ance
attached to 11home" (iye) did not change either,3.

the substance of the merchant society remained the same.

The emergence of Japanese entrepreneurshユp 工n the early stageof economic development must be understood in light of this periodof chョnge.

Wユthout the ユ
工 beral atmosphere created by the last twochanges mentュ
oned aboveラ Japanese entrepreneurship could not havebeen born.

The type of Japanese entrepreneurship, howe'1eア， seems

to reflect a continuation of the leadership style characteristic ofJapanese leaders both before and after the 日eiji Restoration.

1

Professor G. Ranis is refer、ring to this type of continuation when
he compares Japanese entrepreneurs as "
:
:
o
J
T
u
'
T
I
¥
.
m
ity‑::entereヨH entァe‑preneurs against Schumpeterian "auto‑centered" entrepreneurs.
2.

工nheritance from the Edo Period

Japanese entrepreneurs did not appear out of a vacuum.

Theybenefited from many favorable conditions from the preceding society.
Since these conditions seem to differ considerablv from thoseprevalent in most developing countries now, they will be straightforwardly ユ sted before proceeding to more specific arguments on
Japanese entrepreneurship itseユf.
Ci) Well‑Established Political System:

The poユitical systemin the Edo period is usually described as a centralized
feudalism, which was more skillfully organized than most
European feudal socユet工es. ・
A comb工nation of hundreds ofユocal clans and scattered lands under direct control of
the Shogun, the al七erna七e‑year residence of daimyos'

ユn Edo and the extremely well establ工shed check‑and‑balance system of the centraユ government, almostラ

comparable with the modern separat工on of the three powers,
succeeded in establエshユng almost three hundred years ofinternal stability in Japan.
This heritage made it very easy to transform Japan into a unified
modern state.

The capitals of the clans became the ユocal centersof not only administrative but also economic, cultural, educationed
and communication activities. They contributed to the balanced
formation of a modern stable sta七e in critical times. Too muchconcentration of Capital in many developing countries in one place
is a source of instability.
(ii) The Warrior Class with a Strong Sense of Responsibility:
Japanese warr工ors seem to have been very earnestlyowers
educated in their responsibility to their folユ
(farmers, artisans and merchan七s), and they were required2

to be administrators and educators, not merely fighters.
They were not supposed to pursue money‑making but toremain noble and prestigeous. They were relatively poor

、thinking in
but proud. They were ユiberaユ in theirfinding a better way of administering to the common
people, the other three classes. Th工S may have been thereason why the largest number of entrepreneurs emerged
from among the samurai class.
(iii) The Well Prepared Economic System and Management:
Before the Meユ3工 Reform there were hundreds of prosperous
castle towns; money and measures were standardized;
nation‑wide roads and navigation passages were opened;
and a national economy was almost established. As Sorai
Ogyu, a famous Confucian scholar said, one price for one
commodity all over the country makes it difficult for. to control prices. The power of merchants was2
1
包 担'clearly recognエzed.

B工lls were used very widely as

checks. Commod工ty forward markets existed 工n Osaka. The
double entry bookkeeping system was discovered independ‑
ently in Japan just about the same time as in Europe.
Annonymous associations were established for limited
partnerships in businesses.

These seem to point to thereadiness of the Japanese economy in the Edo period formodern industrialization. Enterpreneurs appeared out ofsuch an atmosphere.
(iv) The Influence of the Japanese Type of Confucianism:
The Edo period was time when the highest value of theSociety was "Goodness", a result of Confucianism which
was the most influential teaching of this period. The
Japanese type of Confucianist teachings was characterized
by pragmatic, loyal, and chivalrous qualities. These
characteristics contributed to the promotion of thestudies of Western sciences among young and talented3

warriors and the formation of very high national ethicalcodes of industry, thrift, pride, filial piety andnat工onal工sm.
3.

Who Became Entrepreneurs
Japanese entrepreneurs emerged from all soc工al classes or fromall kinds of occupations. As we shall see, some common featurescharacterized people who became entrepreneurs in the early stageof development.

ェl
In order to observe them by induction, we wエ、s in major industrial fields andlist representative entrepreneur
briefly describe their lives.
1.

The earliest entrepreneurs:

By the Me工］工 Per工od,

investment in modern industrエes had already been started
by the central Shogun government or by powerful local
clans.

The most well known are the production of cannons

by the Mito clan, tex七ile factor、
ies by the Satsuma clan,and ship‑building by 七he Shogun government.

These local

clans had pioneering leaders like Naria
く｝i Shimazu.

He wasa daimyo himseユf, very active, well educa七ed, strongly
politically minded, patriotic and surrounded by many
enthusiastic followers.

One samurai who initiated theestablishment of textile factories in Japan for the firsttime was Shimazu's secretary, Seiryu Ishikawa, who wasborn in Nara as a son of a Confucious scholar and educatedin western sciences in his youth.

He was discovered andemployed by S
. Shimazu, who assigned him to translating
western books, during the process of which he discovereda book on the machinery of textiles.

The shortage of andthe rising prices for cot七on cloth struck Ishikawa, andhe realized then that textiles was the most urgent fieldof industrialization not only for the sake of enriching
the Satsuma clan but also for the sake of Japan, who wasfacing the threat of the western countries.

斗

He initiatedthe textile factories and ran them for many years. The
steel mill and the production of cannons by the Mito clan
was initiated by Konin Oshima.

Born as a son of a Western

medical doctor of the Nambu cユan, educatec. in western
くiscience in his youth, he was invited to Mito by NariaJ

Mito, to experiment with the western methods of steel、going home to Nambu
milling as described in books. After
where good sand iron ores are found, he carried out theexcellent ideas of developing mining industries. All
these entrepreneurial initiatives were started a long time
before the Meiji Reform. Afterwards these men were given
responsible positions in the new governmen七 andcontr工buted a great deal to the industrialization of new
Japan.
Needless to say, there are many other people likewo.
七hese td be enough, however, to sho~1 七 ha七They shouユin this early stage a combination of very pioneering and

工t工cally minded, lead工ng 包主主主s and young 工ntellectu‑
po工
als with good scholarly backgrounds with eyes open to
western sciences seem to be the foundation of Japanese
entrepreneurs.
.
2

Development of the Text工le Industry: The development of
the textile industry, one of the earliest industrialis‑、developments in Japan, shows most vividly the charactertics of early Japanese development. A somewhat detailed
exposition is, therefore, in order.

Five types of initialtextile factories existed in the early Meiji period.
Factories established by local clans. Typical ones
are those established by Satsuma wh工ch were moved from
Kagoshima to Sakai, Osaka in search of a supply of cotton.
The southern part of Osaka Prefecture and the area aroundNishinorniya were the well known places for cotton produc‑
七ion then.

d cotton from China and
e
t
"
.
:
Even later when iたつoother countries replaced domestic production of cotton,5the same area around Osaka remained as the center of the
textile industry because the area had a good port nearby,
Kobe. A number of entrepreneurial persons directly
contributed to the success of these factories.
工n工tユ
at工ve has already been mentioned.

Ishikawa's

H. Shinno went toNagasaki to purchase machines from England.

Since theywanted to have the best machines, Tomoatsu Godai was sent
to England.

They were all samurai s of the Satsuma clan.

The reason why a Southernmost clan such as Satsuma was
the first to develop a modern industry may be explainedby 工ts smuggl工ng wュ
th the Ok工nawans. The Satsuma clan
gained much from this unrecorded trade and at the sametime obtained new knowledge of the outside world, g工V 工ng
them the stimulus to under、take something new and warningthem of the need to develop Japan as soon as possible.
Later, these factorユes in Sakaュwere sold to Taheiji
HamazaJ
くi w
ho was the boss of the smuggling trade between
Ryukyu and Satsuma.

H工S manag工ng directorヲ日. Higo whose

posterity is still prosperous in Osaka, was well known asa capable manager. At HamazaJくi's factory was S. Kawasaki
who later became the famous founder of the Kawasaki Ship‑building Company. All of this seems to indicate anユmportant fact: once good bus工nesses are founded and七
ユ es are started, てhe c訂a
:
:
i
.
c
e
s
entrepreneur工al act工V ユ
are very good that many successful entrepreneurs will
begin to appear.
The next three types of factories are those estab‑‑i ,zoveァロ:
:
n
.
e
n
t
.
lished at the initiative of th
ε 門eiia.

The government established model factories in the
cotton‑growing areas like Hiroshima and Aichi;b.

The government 工mported mach工nes sold at reasonable
prices to prユvate entrepreneurs, such as the Toyoi
Weaving and the M工e Weaving Factories;

6. The government financed the import of textile machinescto companies like Kuwahara, Miyagi and Nagoya Weaving
Factories. Most of these factories initiated by thegovernment were owned by pr工vate persons who werelandlords, wholesale dealers, brewers, or, in otherwords, men of local reputation.
e
l
:
.
'
y:
a
.
'
I
Out of these three types, two entrepreneurs !
mentioned here. Denhichi Ito, the founder of the Mie
Weaving Factory, was from one of the seven most reputable
famiユies in the Shinobu Magistrate, !10W in Mie Prefecture.
／

His family had been in the brewery business for genera‑tions, but his father had already intended to start a
textile industry in Japan as early as the third year of
Meiji to prevent the import of foreign made cotton
clothes. Denhichi became an apprentice in the Sakai
Weaving Factory established by Shimazu and learned thetechniques firsthand.

He then established a weaving

factory in Mie by himself.
Ryoichiro Okada was the founder of the Futamata
Textile Co. in Shizuoka.

He was a landlord with 130 acres

and the leader of a moral movement which emphasizedindustry, thrift and giving.

He lead the commercializationof farming by intruducing new crops and had opened silk
culture factories to give job opportun工t工es to the samurai
class who lost their jobs after the Meiji Reform.

He

persuaded the other V工llagers to raise the funds for thisnew company.
These men are only two examples of many entrepreneurs
who more or less embarked on the same kind of economic
ng relat工vely small scale local
g, startェ
く工 n
J
a
t
r
e
d
n
l
.
.
'

エndustries but not necessar工ly succeedユng. They were apart of the civilized and well educated leaders of local
communities, who initiated not only the textile industry

7

but also banks and the modernization of sericulture or
agricul七ural reform.

Japan was very fortunate in keeping

the reserved army of potential entrepreneurs among the
工ntellectual common people.

The last type is purely pr工vate. Th工s is ‑
t
:!
1e :
:
‑
.
1
0s
t
important type of J2.panese entrepreneurship in the textile
industry or may even well be the most important in all
the industries.

It is the establishment of the qsaka

Textile Company by Eiichi Shibusawa.

When it was estab‑lished, it had 10,500 spindles. The initiative came from
Shibusawa, but the managerial running was done by Takeo
Yamabe.

By the middle part of the Meiji era this company

became so predom工nant in the text工le 工ndustry that othersmall and medium size factor工es lユ］
く e those of I
to, Satsuma
and others around Osaka and Kobe were all absorbed into
this company and became the present Toyobo Company.
Shibusawa is one of the most famous businessmen in
Japan since the Meiji era.

He was a son of parents who

undertook both farming and commerce at the same time but
received a samurai education.
teachings is well known.
lくeiki Tokugawa.

His devot工on to Confuci斗 5

Later he became a retainer ofWhen tくe工k工 became the last shogun, he wassent to Paris as one of the members to the World Fair in
1867. After his return he worked as a government official
until 1873, when he moved to the private business world.
Since then almost all the important private enterprises
have somehow been connected W 工th hュs ユdeas or his
initiatives in one way or another.

He really was the bossof the Japanese business world .
for many year、s.
until 1931.

He once said:

He lived"My economics is the Analects

Economics." He is typically a man of "the Japanese spirit
and of Western learning."
Yamabe was the son of a highly ranked samurai family8

of the small clan of Tsuwano.

He was sent by the clan to

study western sciences and studied English from ministers.
He was one of the many young samuraユs who worked andstudied in Yokohama and Tokyo.

He accompanied the prニ
乙ceof Tsuwano to England and remained there to further pursue
his study in London. At that t工me there were alreadyhundreds of Japanese students in London. After two years,
Shibusawa asked him to come home to direct t0e new textile
company. He immediately shifted his studies to textile
technology and not only tr工ed to learn engエ
neerエng byattending the university but also worked as a laborer ina factory in Lankaster.

＂extileThe success of the Osaka ：ユ s certainly due to Yamabe's exceptエonally talented
Co．
entrepreneurship aided by Shibusawa's desire to beat the
English textile industires.
3. Development of Heavy Industry:

While the textile industry

developed by prユvate ユnェtュ
atユVe 工n which the role ofmerchants or trading men in the Osaka area was verysignificant, heavy industry ユike shipbuilding, electricng, or even trading companies developed
machinery, shippエ
through the cooperatエon between government initiatives andcapable private entrepreneurs.

In this sense, there werea number of entrepreneurial bureaucrats. The function ofthese officials is also very important in understanding
the development of the Japanese Economy.

The case for、
nment is well taken in Japanesee;ntrepreneurial govereconomic circles.

But it is important to emphasize thatit did not go as far as socialistic ideas but always went
along with private enterprises.

In a sense it was aforerunner of the mixed economy which is widely recognized
as the prevalent economic system in most advanced
countr工es.
ラ but his father、
Shozo Kawasaki was born as a samuraエ9became a merchant. He alone went to Nagasaki to learn
Dutch and then Englェsh. He worked ェn Osaka for a while
where he observed the fast western boats.

This stimulus

determined his future course in life in the shipbuilding
industry.

In his case, this youthful experiences gave him

the spirit of entrepreneurshエp. The case of HisashigeTanaく｝a was different.

He was the founder、of the Tanaka

Manufacturing Factory which was the predecessor of thepresent Toshiba.

His profession was that of an artisan.

He was known as "tr工cky G工emon," because he was very good
工n dev
工S工ng tricJくy t
oys and model boats utilizing many newideas.

Even when he was 7斗 years old, he was asked by thegovernment to f工11 an order producing ten cable machines,
utユ工工 zing h工s own 工dea.
his own company.

He then 工mmed工ately established

His adopted son succeeded him in thecompany and moved into the amunition industry.

Later thiscompany failed and was sold to Mitsui which made it into
the present Sh工baura Factor
、
y.
4
.

General Characteristics of Japanese Entrepreneurship
We could continue to list many more entrepreneurs of the Meiji

era.

Indeed there are many varieties エn many different fields.

But

it seems very clear that there are a few distinctive features about
almost all of them.
A: They were either from the Samurai class or very highly
educated in 七he same way as samurais were. Although the
Osaka area has had a long tradition of trading in Japan,
it did not produce too many entrepreneurs since merchants
were trained not to change the profession. A typicalgreeting of merchants 工n Osaka on New Year s Day was"Please just as before." Those who became entrepreneurs
had the chance of being exposed to western sciences andreceived the impact of new techniques. The sense of10

responsibility as leaders of society or the nation was
extremely strong among the elite samurais.

This spirit

permeated even to the local leaders from the rest of thesocial classes. The common people were trained in
Confucianism and their、level of educa七ion was very high.
B:

They were all devoted to the interests of the Japanesenation.

Their patriotic sent.iment.
.
and worries are soconspicuous in their writings and proposals that one candoubt whether they were ever interested in making money.
Yukichi Fu
く｝uzawa, intellectual who regarded feudalism as
the enemy of hェs parents, was very much under the influenceof Confucianism when he argued about the modern state ofJapan.

Japanese entrepreneurs were very nationalistic 工na good sense of the word.
C:

They were very technology‑oriented. They sought after new
technologies but not necessarily the western way of
thinking.

They were very confident in their spiritual

tradition, although they did not hesitate to adοpt thewestern pol工t工cal system.

Whenever they had the chance oflearning from westerners, they utilized the opportunity to
the full. They exploited western engineers by paying
extremely h工gh salar、
工 esand asking them to stay in Japan.
Before finishing the paper, one should not underesti虫 ated thefavorab工e circumstances in international relations for Japan in theearly part of Meiji. No ideological wars between Communism andCapitalism existed then. They could concentrate on economic achieve‑
ments by trying extremeユy hard to catch up with the West.

This

seems somewhat similar to the circumstances facing Japan in the
postwar years. When the country is involved in more complicatedpolicical games, entrepreneuriaユ spirits in Japan have not shown
the same degree of success as エn the past.

It rema工ns to be seen

whether this is going to be repeated or not.

But for that matter

which country in the world could claim to be very successful inpolitical spheres?
11

REFERENCES

Horie, Yasuzo:

The Meiji Reform and Economic Modernization,
Shibundo, Tokyo, 1963

く。（ e
d.):
・ Leaders in Meiji
Tsukuba, Joji and Kikuchiヲ ToshihiJ

Vol.7 ‑ Industrial Development, Sanichi Shobo,
Tokyo, 1971く｝amura, Ta
く
｝a
hide:
Na

Builders of Japanese Economy, Nihon Keizai

Shimbun, 1973
Toyama, Shigeki (ed.):

Personalities in Japanese History,l一
一 Leaders in Meijiラ Yomiuri Shimbun,
Vol. ユ
1966
Miyamoto, Mataji:、
s in Osaka,""Textile Industry's Leader

く
｝om
工n t
く
oza, 1970