Study Abroad Blog
Group 4

June 27, 2006

Welcome to the blog of Debra, Erik, Kizzy, Andrea and Ramesh. We are very excited to be part of a team that will explore Japan and South Korea in search of the answer to the question “Even though South Korea is following Japan's economic development plan, why has it developed a much more entrepreneurial society.”  We will also seek to understand the cultural differences between the two countries and how to do business with these countries.

This team has great diversity and unique strengths that we intend to capitalize over the next several weeks. A brief introduction to each of the team members –

Debra Stanley is part of the BBA program graduating in May 2007, to follow with an EMBA program. She currently works as the Director of Administration and Finance for the BPS companies and is on the company’s succession plan to be the next President/CEO. As their company has been importing exporting since the 80s, she has a strong affinity to globalization.

Erik Rostad is currently enrolled in the dual degree program of a Masters of Int'l Business and a Master's of Arts in Political Science/Int'l Affairs.  He is very interested in the interplay between int'l politics and business and currently works for the athletic wear company, Russell. He is also a musician and has recently been recording violin with the local Soul/R&B artists.

Kizzy Hayes is a senior graduating in Fall 2006 majoring inReal Estate. She certainly keeps herself busy on and off campus. Her activities include the Professional Business Fraternity of Delta Sigma Pi where she has held the position of Chancellor for three semesters.  She has also been a student member of the Student Life and Development Committee and a member of the Atlanta Urban League.  She loves to travel and employ the learning in the global real estate business.

Andrea Hoffer is on the way to completing her MBA concentrating in Entrepreneurship in Fall 2006. She has a great background having been the Director of a performance venue where she booked professional artists and managed daily operations. She currently manages two retail operations on the Georgia Tech campus, a bowling alley/pool hall and a copy center.  She intends to invest in a franchise that she will manage after graduation She holds a MS degree in Higher Education Administration and a certification in personal training.

Ramesh Munamarty also plans to graduate in Fall 2006 with an MBA concentrating in International Business. He is currently working as a Director for Oracle Corporation, where he is responsible for managing the outsourced IT divisions of several customers across the Eastern USA. He has a Masters in Electronic Packaging and is certified as a PMP in Project Management, and CPIM in Production and Inventory Management. He has a strong exposure to International business having managed global multi million dollar projects and people from various countries and cultures. He started his career in India with the country’s largest automobile manufacturer, Tata Motors.

 

June 30, 2006

We were able to get in touch with Tune Fujioka, a leading entrepreneur from Tokyo who has agreed to meet us in his office in Ushida, Tokyo.

He was a featured speaker in Entrepreneurship Association of Tokyo. He has a unique background of being part of his father’s business, breaking away from it and venturing out on his own. We feel he will make a great candidate for a Case Study to learn about entrepreneurship in Japan, Japanese culture, and the conflict between the older and newer generations of Japanese. His interview with Entrepreneurship Association of Tokyo is below, where you can get a high level background on him:
 
http://www.ea-tokyo.com/membership/featuredmembers/TuneFujioka.php

 

July 19, 2006

We had a good get-together today at Starbucks where we got to know each other better. We also compiled a list of questions based on motivation, support and capacity aspects of entrepreneurship for the Japanese and Korean Scavenger Hunt. It was highly productive meeting and we are planning to meet again before we leave. We also want to listen to the violin Erik has been recording with local Soul/R&B artists. Interestingly enough, when we were in Starbucks they were playing the album of the person he was recording with. That was a nice coincidence. We want to get to know him better before he becomes really famous!

We also have finalized that we will meet with our Japanese Entreprenuer on Tue Aug 15 morning in Ushida near Tokyo.

I found an interesting article on a comparison of Venture and IT industries in Korea and Japan.

Another article is an interesting discussion on applying Silicon Valley VC techniques to Japanese entrepreneurship.

 

 

July 22, 2006

Our first group outing at a Korean Restaurant, Han Il Kwan Restaurant, was great. Although the only Korean dish that everyone knows about is kimchi, the choices on the menu were amazing. A number of people loved the Barbeque, and the veggies in the group had a great rice and vegetables dish. A couple of the Korean dishes that our group tried are below:

We are all looking forward to having a great time in Korea. Ms June Towery told us a number of interesting things about Korea including shopping in Itaewon. An interesting tidbit on the Origin of the Area Name for Itaewon - According to the Ministry of Culture and Tourism, Itaewon has had two different sets of Chinese characters representing its name. One set used I (meaning different or foreign) and T'ae (meaning pregnancy or conception). The other set used the characters for pear (I) and big (Tae). When the Japanese army occupied Seoul during the 1592-98 Japanese invasion, the head of Japanese army went to Unjong-sa temple in Whanghak-dong (the current It'eawon area) where female monks were residing. They raped the female monks and burned the temple when they left, leaving the female monks homeless. Several of the monks became pregnant and built a tent house where gave birth to the children. People started to call the place It'eawon, a place for foreign pregnancy. Years later, someone planted a pear tree on the area and it grew very well. People then started calling the area It'eawon meaning pear and big place. This is the Chinese form used up to current times.

 

July 27, 2006

There was an interesting section of a recent Economist magazine that contained over 20 pages of information about Japan.  One article talked about the 1990's in Japan, which is referred to by some as "the lost decade."  Another article described the strength of the Japanese economy, which in a large part is due to mastering production processes.  The article claimed that this ability was due to the Japanese society's long-term management and labor cooperation.  But how will this change with life-long employment no longer a guarantee?

In terms of our entrepreneurial approach to Japan, the most interesting article spoke about incentives.  In the largely collective society in Japan, the group will receive the credit for a new idea rather than the particular individual.  The article raises the question, "If there is no reward in
taking a chance, why risk failure?"  This is a very important issue that we hope to explore in our travels to Japan and South Korea.  Are there sufficient societal incentive programs to encourage risk?  Does the society view an entrepreneur as successful?  Does the company reward the individual
or the group?  How do incentive programs differ between Japan and South Korea?  If there is a big difference in incentives between the countries, how much do those incentives encourage people to proceed with a new idea or product?  And how do these ideas differ between age groups within each
country?

There are so many interesting angles in which to approach the main thesis for the course.

 

August 5, 2006

We have made it to Korea after 20+ hours of travel. I think we are all running on adrenaline at this point. We arrived in Seoul with enough time to venture out to dinner. Some members of the group opted for Korean barbeque. That was quite an experience. The menu did not contain English nor did it contain pictures, and no member of the restaurant staff spoke english. It made for an interesting experience. It took us about 15 minutes of hand motions and pointing to order bowls of rice. We finally found out what the Korean word for rice is and the word sounds like Pop. Pop is the Korean word for meal which
means that rice is such a staple food that it roughly translates to meal.

The other half of the group went to TGI Friday. The energy of the staff was amazing, they were all very keen on taking the surveys for the scavenger hunts and were thrilled to be part of a group snap. They wanted to take pictures with us and so we posed for another group snap. We had a great dinner experience and felt very welcome on the first night in Korea.

Another interesting part of the evening was walking around the streets. We saw live bands performing in front of people getting haircuts on the street. We saw salons with pictures of what they could do to both human and dog hair. And most surprising of all were the incredible number of people walking around with shops still fully open at 10pm on a Sunday night.

 

August 7, 2006

The first day on the tour was packed with a wealth of information on South Korea’s culture, lifestyle and entrepreneurship.

Bus Ride
We had a chance to talk to two gentlemen on the bus on the way to the Songwon Edwards Cheonan Factory. One of them was Mr. Daniel Lee, who is a Sales Director with Acticom which specializes in advertising in the airports. The other person Mr. Jeon Jae Ha,  works at Social Solidarity Bank which gives loans to Small businesses.

One of the things we talked about was the housing market in South Korea. People who would like to rent a house or an apartment have to pay a deposit for 2 years, which they get back once they leave the house after 2 years. This was a concept that was very hard for us to grasp, because it essentially means that one can rent for free, as the renter gets the entire amount that was deposited and there is no monthly payment. The other concept that was hard to understand in this unique housing market system is how the landlord makes any money. It was explained that with each rental the deposit amount is raised and the landlord makes money from the differential. It was also interesting to note that some people such as Mr Jeon Jae Ha buy the houses by paying fully for the house upfront without taking any loans. In general we learnt that loans are not popular and very few Koreans take loans.

The next concept that we explored was why Korea is considered expensive. The average pay for an fresh graduate engineer is about $30,000 and about $10,000 bonus. Out of this the breakdown of the monthly expenditure is:

The most interesting item on the list is Children’s education that constitutes 40% of the monthly expenditure. Most of the education is in private institutions and after school activities such as martial arts etc. are very expensive. Koreans consider this as an investment as in the old age, traditionally children take care of the parents. There is no social security scheme so a lot of money and effort is spent to educate the kids and ensure that they are successful.

The top companies in Korea are:

Songwon Edwards, a BOC Edwards Company
Our first stop was with Songwon Edwards Cheonan factory (BOC Edwards company) and we had an amazing and emotionally charged presentation by Mr. J.C. Kim, CEO and Chairman.  He covered a lot of topics on aspects on Culture, History, Business Management, and Leadership.  Mr. Kim was a refugee from N. Korea during the Korean
War.  He and his immediate family came here to S.Korea to find a better life and for safety reasons. Unfortunately, he had to leave behind many family members.  To this day, he is not able to communicate with any of his family members who are still living in
N. Korea. 

From a refugee to a CEO, Mr. Kim's story is inspirational.  His first factory opened in October, 1990.  In September, 2002, Mr. J.C. Kim and the BOC Group in the United Kingdom established a joint venture that specializes in vacuum systems, exhaust management, specialty gases, F2 Generators, and Chemical Management systems.  Today, they have 300 employees and revenue exceeding 136 million dollars a year.

Culture – Mr. Kim talked about how Koreans are very open and joke around. This is in contrast to Japanese who are more formal and a close society.. His business philosophy reflects the culture of his company – “To pursue small profit with justice is better than to pursue large profits with injustice”. The other business philosophy which articulates the culture is “Make people follow by Virtue and not power”. Mr. Kim spoke to us about the importance of knowing what philosophy we have in our heart when we start a company.  This philosophy will come through in every step we take with our company. The philosophy on which Mr. Kim operates the company and the motto that is displayed everywhere is “Good People make good company”. He stressed the importance of a happy workplace.  You achieve this by taking care of your employees and satisfying them. Deep commitment, respect, and trust from employees comes out of a happy workplace.

History and Politics – He discussed the Korean War in great detail that was emotionally moving. Six million Koreans died in the Korean War fought between Jun 1950 and July 1953. The outbreak of the Korean War happened on 25 Jun 1950 and North Korea troops captured Seoul in June 1950. He says that the tension between South and North Korea is very high contrary to what the outside world thinks. Seoul was liberated in Sep 1950 and the second liberation in 1951. The armistice happened in July 1953. The Korean War had a far-reaching impact on Korea. He is grateful to the US for their help during the Korean War and believes the US is a great country for its efforts in helping other countries that need help.

Business – Mr. Kim described the Korean business character as 3D – Different, Difficult and Dangerous. He also described another 3D which helps Korea distinguish and aids it rise in the global economy – D-RAM (Dynamic Random Access Memory), Display (LCD), Dynamic.

He then articulated the key qualities of leadership and talked about how one has moments of trust with the customers. Mr. Kim spoke about a hotel reservations personnel who went out of her way to get a room for a couple on their anniversary.  The couple had stayed at this same hotel on their honeymoon years ago and the wife wanted to bring her husband there one more time.  Her husband was dying.  The hotel was fully booked, but the reservationist made it happen. This was a moment of trust for that customer and the reason why the wife will recommend the hotel to friends in the future. These are small things that may need going out of the way to take care of special customer needs. He also said that if the businesses don’t change the customers will.

He used simple analogies to get his point across  - one such example is he says a duck is very adaptable in air, water or land, although the leaders are eagle, seal and cheetah. He e says one needs to decide early on, whether they want to be a duck or a leader in one niche.

The statement that struck us was, "Make people follow you by virtue not power."  We don't know if this is the norm in Korea, but in the US you see a lot of leadership coming from power instead of respect and belief.  It would be interesting to see how this will be adopted in US.

He also said that each leader and the leadership style is unique and can’t be copied from other leaders. Success is ongoing and not a destination according to Mr. Kim. Before we went on the factory tour, he ended his presentation with a very moving quote – When a person has a dream it is no more than a dream, when you share with others it comes true.

Hoseo Gradaute School of Global Entrepreneurship
We then went to Hoseo School of Entrepreneurship, which is the leading university in Korea on entrepreneurship with about 13000 students (including 2000 graduate students).
We met with Dr. Hong Kim, Dean of the Graduate School of Entrepreneurship.  He talked to us about the business incubation program at the University.  It was amazing.  We don’t have anything that impressive as far as support for new businesses in the US.

In 1991, the New Tech Venture Consulting Program was started.  This is what eventually grew into the program they have today with 60 companies.  The goal of the program is to increase the success rate of these start-ups, so they can succeed on their own typically after 3 years.  

Each entity that supports this program has different goals.  The business wants to make a profit.  The government wants to see more jobs and the University wants to increase their reputation thereby bringing in more research money.  It is a win for all if the businesses succeed.  They currently have a 68.5% success rate amongst the businesses that start through this program.

Some of the key points from Dr. Kim’s lecture include:

Key Facts on Korea

After our talk with Dr. Kim, we were brought into a room where one of the companies works- CMS Technology. We were shown their electronic stethescopes. It is amazing what technology can do for the health industry.  They even had a stethescope that a patient can administer oneself at home and the data is transferred to the doctor's computer. This would be useful foe Seniors and disabled.

The day was a very satisfying and rewarding day.

 

August 8, 2006

Hello Everyone!!  As you know by now, we’re blogging live from South Korea!!  We actually woke up in Jeonju, Korea this morning.  This city is the “Williamsburg” of Korea as Jim would say.  It is rich in the ancient history of South Korea.  All of the buildings are maintained in traditional Korean architecture through renovations.  We were given the special honor of staying in the house of the last remaining descendant of the Jeonju Lee Dynasty.  In Korea, the place where your family originated comes before the family name.  That is why it is the Jeonju Lee Dynasty.  Another interesting fact of the last descendant of the Jeonju Lee Dynasty is that the government confiscated all of the property of the Jeonju Lee Royal Family and left them without money.  The last descendant had been reduced to begging on the streets to survive until the government suggested that he live in and help maintain the ancient village within Jeonju.
Before breakfast this morning, we took a tour of the Shrine of Kings from the Jeonju Lee Dynasty.  This is where anyone can now go to view 6 portraits of the 27 Kings that reined during that dynasty.  Only one original portrait remains here.  The Shrine that was thought to be a very Holy place during the times of the dynasty was first constructed 600 years ago.  It was burned during the Japanese and Korean War.  The structure that we visited today was reconstructed after the war and is now 400 years old.  All of the king’s portraits were destroyed during the fire except for one. 

The Shrine does not normally open until 9 AM.  However, Jo hee-suk from the Municipal Government felt that our group was special enough to warrant an early opening and entrance into this very important place.  There are two entrances into the Shrine.  One is for the footprints of the Kings of the past (Basically, their ghosts) and the other is for living humans.  We were able to view the portraits of six of the kings that hung in the shrine.  The bottom half of two portraits were burned during the war and these portions were re-created.  The other three portraits were entirely recreated from memory.  We also got to see the place where all of the history books were kept before the war.  Due to the efforts of citizens at that time, they were able to save some of the books and this is why the people of Jeonju are able to trace their ancestry.

After our tour, we went to a famous Korean Restaurant that had been featured on Korean television and had bean sprout soup that included chopped squid with Kimchi and cut onions in spicy red sauce on the side.  But the most popular items on the table were bowls of dry puffed wheat.  All we needed was milk. J  The owner of the restaurant invited us to see her personal gallery of collected items to view with coffee and tea. 

Everyone has been so nice to us while here in Jeonju and so sincere.  We thanked Daniel for providing us with this traditional experience.  And as a wonderful gift for our send- off, Major Song Ha Jin gave us “Family Fans” that are unique for the Jeonju city.  There are three red, yellow and blue fans that are beautiful in color.  There is one for the Father, Mother and Son or Daughter.  He wanted us to have a long lasting memory of Jeonju.  Jeonju is a place we will never forget.

Shortly after returning to the hotel from Jeonju, we climbed back on the bus to take a tour of Seoul.  Seoul has 12 Million people and is the largest city.  Korea has always been at war.  It lies in the center of China and Japan.  The current generation is the only generation that has not seen Korea at war.  Korea was under the rule of the Chong Jui dynasty from 1813 - l 1910.  After the Japanese invasion, they were under Japanese rule from 1910-1945.  After their independence, Korea was a poor country that was not well known through out the world.  The economy began to change in the 1970’s and after the 1988 Olympics that were held here in Korea, knowledge of Korea began to grow.

During our tour, we visited Changdeokgung palace.  It was constructed in 1405, the 5th year of King Taejong’s reign.  This palace was also burned during the Japanese invasion of 1952, but restored in 1610.  Changdeokgung was built according to the layout of all Chosun palaces.  The first is for administrative offices, the second includes the throne hall and audience area for the king and residences for the royal family.  The third important area is the garden.  This palace is also characterized by the arrangement of buildings in harmony with the surrounding landscape.  It took us 1 ½ hrs to get through the palace.  It is truly a beautiful place. 

Our eventful day was ended with a subway ride to Itaewon for some eating, shopping and fun.  Even with all of our work and hectic schedule, you know we still had to find play time.  See you tomorrow!!

 

August 9, 2006

We started the day with a visit to Seoul Venture Town where we met two entrepreneurs and representatives of Seoul Business Agency (SBA).

One of the entrepreneurs was from Chip and Media. Chips&Media was established by electrical engineers with experienced in MPEG audio and video technology and semiconductor based algorithm implementation. It was created to provide support for both home consumer electronics and personal multimedia devices.
Chips&Media has developed a line of reliable, high-quality IP & SoC solutions that allow manufacturers to satisfy the growing consumer demand for high-definition digital set-top boxes, PVRs, cellular phones, and digital camcorders.

It is a fables semiconductor company with 75 employees est. Mar 2003, specializing in video technology. Their business model is to be the advanced multimedia IP provider in fast moving markets. They are in competitive multimedia chipset vendor in already-mature markets. The market coverage is both in the mobile market (3-G phones, PMP, Palmcorder) and in the standalone consumer market (DVD, PVR, HDTV).
Over the next 3-5 years they would like to enter the automotive and the network top devices. They already have a MPEG-2 SD decoder, MPEG-2 HD Decoder and a multi-standard video codec.
They got their funding from 3 venture capital firms and their exit strategy is to grow the company and they are also open to M&A.

The next entrepreneur we met was from Xonda.net. This is a company that is taking the concept of Reverse Auction to the Consumer market. In a regular auction prices goes up as new bidders enter their bids. In the Reverse Auction, the prices go down as a new bidder enters the transaction. Traditionally Reverse Auction was always for a B2B market where a company would engage a Reverse Auction company to get bids from their select list of vendors. The vendors would bid to sell the item at a certain price and get outbid by someone selling for a lower price. In this case, Xonda.net is opening this concept to consumers. Each bidder views the price for 100 Won and say the seller’s original price was 50,000 Won, and after 100 bidders who paid 100 Won each to bid, the price for the buyer is 40,000 Won. The seller still gets his 50000 Won and the buyer gets it for a lower price. This appears to be a very good business model creating a win-win for every one.

Registration is ongoing in 35 countries and Patents are on the way. The company has not introduced this to the American market yet.

Our next speaker was from Seoul Business Agency, which provides Seoul’s Hi-tech Small and Medium Enterprises (SMEs) with opportunities to develop as advanced enterprises and to help them adapt to the high value-added knowledge industry. It builds specialized infrastructures and does market development in Korea and overseas for the SMEs. It is also responsible for trade and foreign investment and overseas recruitment. It participates in the fields of

It has two facilities – one is a incubator center and the other is the venture town, where we went. The business incubation helped companies with technology, management, market research, M&A, rental facilities for equipment and space and provide education.

This service is valuable to SMEs and the first company that we met from Chips and Media was incubated at SBA.

We had a good lunch at a Korean restaurant where things were served in a traditional way and we had to sit down and eat with metal chopsticks (which is how Korean chopsticks distinguish themselves from the wooden ones in Chinese or Japanese)

In the afternoon we had a lecture by Mr. In-Kwan Cho, Director of Hoseo Venture Capital. His lecture was very informative. According to him the most VCs have been focused on mobile phone’s eco-system, however they are now moving to Digital TV supply chain. Annually the market is about $600B and the market is still sluggish although there has been an improvement in quality.

The local VCs are bridging and filtering between Government and local start-ups, however they are struggling to be independent and successful. According to Mr. Cho the number of VCs will be halved in 4-5 years. The role that VCs play currently is a limited role as a passive money supplier and not a trusted business advisor. Most of the funding for startups come from Venture funding and there is very little angel funding in Korea.

He helped us answer our thesis question of why Korea’s entrepreneurship rates are so high compared to Japan even though they are similar culturally. Mr. Cho feels that Koreans like more challenge than Japanese as there is a stronger individualism in Korea as opposed to Japan. Big companies in Japan are not lifetime-employers like the ones in Japan. As we have seen with SBA and others, there is a higher government support to VCs and start-ups.

In terms of VC Japan and Korea are similar in the following ways:

The differences are:

Hitting the Streets in Korea

We hit the streets of Korea to learn about the thoughts, perceptions and experiences of the Korean people and how these factors influence their decision to become an entrepreneur.  The results of these surveys will later be compared to the results of the same survey being completed by people in Japan.  This will help us to determine the reasons for the differences in entrepreneurship levels between Korea and Japan.

Armed with our surveys written in Korean we approached locals in restaurants, gathering areas, and even a lounge at HOSEO University.  The response we received was overwhelmingly positive.  The Koreans were curious about our survey and wanted to help.  At one point, we had a small crowd waiting to get a survey.  We did not expect this generosity of assistance.  The experience gave us a good picture of the friendly and helpful nature of the Korean people.

The Survey & Respondents
The survey questions can be organized into the three main categories we have been focusing on throughout our trip: Culture, Politics, and Business.  Just about half of the respondents fell into the 30-39 age bracket while the other half fell into the 40-49 range.  One respondent was over 60 years old.  The majority of the respondents were male.

The survey was broken out into two separate sets of questions.  One set was specifically asked of current and past business owners (entrepreneurs) while the other set was for non-business owners.  We found that a little over half of the respondents are currently not entrepreneurs.

The Results

Culture
When asked about their motivation for starting their own business, the majority of the entrepreneurs said, “It was my dream.”  This was closely followed by the desire for financial independence.  We found this indicative of the growing individualism and need for financial security of the Korean people.  The respondents who are not currently business owners overwhelmingly said they either casually or seriously thought about business ownership indicating a strong trend towards increasing entrepreneurship in Korea.

The entrepreneurs described themselves as, “achievement-oriented, leaders, and highly confident” while the non-business owners felt that entrepreneurs should be achievement-oriented, leaders, and creative in order to be successful.  More than half of the entrepreneurs have family members, typically parents, who own or have owned businesses.  Only a couple of the respondents who are not entrepreneurs had family members who own a business and in both cases they were siblings.  As is with the trend with most cultures, this shows a tendency of the child of entrepreneurs to become an entrepreneur him/herself.
“One should not start a business if there is a risk it might fail.”  Interestingly, the majority of the entrepreneurs agreed with this statement while a majority of the respondents who are not entrepreneurs disagreed the statement.  Our best assessment of this result is that the Korean business owners approach entrepreneurship very carefully and minimize risk as much as possible.  The non-business owners view any form of business-ownership as a risk, but do not rule out the possibility of future business ownership.

The top two fears of owning their own business for both entrepreneurs and non-entrepreneurs are “suffering a personal failure” and “uncertainty of income.”  Entrepreneurs also stated “consequences for your family” as amongst one of their top fears.  These responses showed the high importance Koreans place on their personal achievements and how money and income is strongly linked to their view of themselves and others.

All respondents, both entrepreneurs and non-entrepreneurs, felt people who started their own business and failed should be given a second chance.  This sentiment shows a tendency in the Korean culture to forgive this type of business failure and allow the failed entrepreneur to save face and start over.

Politics
The perception of governmental influence over entrepreneurship and business seems to have a wide range.  The entrepreneurs were split in their assessment of the government’s role in controlling pricing and promotion.  Exactly half of the entrepreneurs feel they have no flexibility in controlling pricing while the other half felt they had complete control over pricing and promotion.  All of the non-business owners feel the government leaves them very little to no control over pricing and promotion.  We hypothesized that the discrepancy in the responses may have something to do with the varied industries of the respondents.  Unfortunately, we did not collect data about the specific industries of the respondents and therefore do not have those variables to compare.

Business owners said they enjoy tax advantages while the non-business owners were split on the issue.   Non-business owners may not be educated in all of the tax advantages for entrepreneurs and therefore have a different perception on the matter.  The university was named by the entrepreneurs as being the largest resource for information about starting a business.  Non-business owners see the University and the Internet as the best place for entrepreneurship information.

Business
When asked about challenges at start-up, the entrepreneurs said lack of available financial support and information on how to start a business were their biggest challenges.  The non-business owners are split on their perception of how difficult it would be for them to start up a business.  Half said they think it would be “somewhat easy” to start up their own business while the other half feel it would be difficult. 

Most of the entrepreneurs felt luck contributed to their success closely followed by networking, being open to learning, and being adaptive to change.  The entrepreneurs use the Internet and television to market their product while the companies of the non-entrepreneurs us television, newspaper, and magazines to market.

All of the entrepreneurs said their prior work place created a very creative environment while slightly more than half of the non-business owners feel their current work place creates a creative environment.  This may be indicative of entrepreneurs around the world, as they tend to find ways to be creative at work. 

In describing their previous work place, entrepreneurs also said that there were few incentives to contribute to the growth of the business or new products and services, but when there were incentives they typically were monetary.  The non-business owners concurred with the entrepreneurs on this subject.

All of the non-business owners said they would seek funding to start a business from a bank.  Our question about funding for the entrepreneurs got lost in the translation, therefore we do not have this data for comparison.  However, as stated above, the entrepreneurs indicated that funding was one of their biggest challenges at start-up demonstrating that getting the necessary funding from a bank may not be that easy.

The majority of both of the entrepreneurs and non-entrepreneurs do not have foreigners working in their business or company.  All of the respondents feel it would be difficult for a foreigner to start a business in Korea.

Most of the respondents said they make business decisions as a group by consensus while a few respondents from each group said they make decisions individually. 

The survey results gave us an interesting picture of the culture, politics, and business processes that contribute to Korea’s level of entrepreneurship.

Today we were supposed to go for a boat ride but it got cancelled because of the traffic jam caused by first day of summer vacation. Instead we went to the Kamakura shrine, which was really worth it. We saw “The Great Budha”  that was cast in 1252 A.D. It is amazing how the pagdodas and the Budha Statues are built on the same principles that modern earthquake proof buildings are built. On the way, we interviewed Kanake San and learnt some interesting things that helped us contract living expenses in Japan compared to Korea.

In Japan the average split of expenses for an average household is:

The average income for a 43-year old male is 5.58 M Yen per year, whereas it is 2.78 M Yen for the same age woman.

Unlike Korea, rent is not free in Japan and it is pretty expensive to rent apartments. Since it costs about the same to rent or mortgage, a number of people prefer to buy the houses, if they can make the down payment. The mortgage rate is 3% as the interest rates are very low.

We had a short lesson on religion in Japan as well. The primary religions are Budhism and Shintoism. Budhism came from India and went to China which had Taoism. It then went to Japan, where Shintoism was prevalent. Shintoism did not have any particular God, but believed in spirit and traditional Shintoists believe that whatever they depend on the most is their shrine. Budhism had a influence on Shintoism and that resulted in Shinto Shrines (physical structures) being built.

Moving from religion to defense, Japan has the fourth largest defense spending in the world with a staff of about 26,000. It is called the security force.

In the evening we went to Roppongi, the district with lot of fashion stores and nice bars and restaurants. We also got to go on the Tokyo Tower, which was copied from the Eiffel tower but is 33m higher than the tower in Paris. The view from the observatory was incredible.

It was an interesting day where we learnt a lot about Japanese culture and the lifestyle of an average household.  Our special thanks are due to Kanake san for sharing a LOT of useful information on Japan.

 

Today we went to the Meiji Shrine, which is a Shinto Shrine for the Emperor Meiji, which is regarded as a National Shinto Shrine. We saw that the Shrine was not painted red like the other shrines we have been to. Some of us offered our prayers and asked for blessings while admiring the architecture of the shrine, their practices and nice Sake containers.

Just prior to our trip we learnt about Meiji restoration from Eric and Kaneko-San, where Emperor Meiji brought a divine image to Japan to restore from the bad image that Japan had in the world. He was successful in doing this and brought Japan back on the path of prosperity.

We then went to a place where we could see Japanese dressed as punks or freaks with weird costumes and hairdo.

In the evening some of us went to see the fireworks from the 52nd floor of the Mori Tower, which was a great experience. The location for seeing the fireworks was awesome as we got to see the “beer gardens” that were on some of the skyscrapers which are gardens on rooftops where Japanese meet especially in summer to hang out after a long day or on weekends and have a beer.

 

 

 

Today we met an entrepreneur Tune Fujioka, CEO, Brand Architecture (www.ecodecor.jp) . Their company designs eco-friendly items ranging from furniture to utensils. He met us at their furniture manufacturing facility and gave us a tour of his factory. It was interesting to see how furniture was built using natural elements including rice for glueing and finishing and polishing furniture. They take about 10 days to make one bed and it sells for about 1-2 million yen. The target market is niche without any significant competition. The material used was bamboo and recycled material. It was interesting to note that Bamboo is 1.5 times stronger than steel and it is flexible and light weight. He currently has his business only in Japan but is planning for expansion to France (Paris) and other countries. He has an exhibition in Paris next year. His firm is equipped to take international orders and ship them. The annual revenue from the furniture is 7.5 Billion Yen. His grandfather started the furniture company Tanuma, 66 years ago, but now Fujioka San does his designs and manufacturing methods using eco-friendly methods. His motivation to do new business is that Japan is slowing down and it was time to do new things. He had this idea of eco-friendly items to latch on to the growing Japanese trend to avoid chemicals and use items that would be beneficial to the eco-system.

Since we just had the revelation yesterday from Tomita san about how he defines entrepreneurship to be something which is successful new business with a new idea benefiting the Japanese economy as a whole, we wanted to get Fujioka San’s opinion.

Fujioka San defines entrepreneurship to be the spirit to change the needs of the industry. He says the new idea should be beneficial to society and not damage it in any way. He says that many entrepreneurs in Japan start the business because of the passion to make money. Since there is no more lifetime employment, he feels younger entrepreneurs who want to make money are beginning to looking at starting new businesses. He feels his grandfather was an entrepreneur because he started from scratch and made it big, but not his father as he just inherited and was running that business.  Fujioka San does not consider flower shops and individual mom and pop dry cleaning shops to be entrepreneurs as they did not start anything new and did not make a significant difference to economy.

He started his company by taking loans from friends and family and from Small Venture Business. He got a nice office space in a big building subsidized for 400 yen/month for 2 years. Fujioka San feels that most entrepreneurs are not aware of such governmental help. His view on entrepreneurship is that it can’t be taught, one needs to have passion to make it succeed and keep persevering without fearing failure.

When he started his company, his family and friends did not like him and his father was not happy that he was starting something of his own. He attributed this to fear of uncertainty. Since they were not experienced in starting a new business, they did not want their son to start something new. He says that the fear of failure is very prevalent in Japan and no one likes to fail due to societal pressures.

Fujioka San has 3 full time entrepreneurs and 5 freelancers working for him. His growth plans are that he wants to create the image of the brand, the green concept and health conscious image of the company in 2006 and by 2010, he wants to design the interiors of the hybrid cars. He works with only “green companies” that believe in helping the environment.

He had no influence from society and family, as they were not experienced. His marketing strategy is to advertise in yellow pages under “green”. He does not have advertising but does PR work on TV and Radio.

Fujioka San does not use IT other than the software to design. It was interesting that he did not consider a lot of small technology companies such as those supporting the gaming industry to be entrepreneurs because he feels IT is now mature and they are not doing anything to help the society.

In closing, we asked him what he would advise budding entrepreneurs and he said that the idea should be new and one should differentiate oneself. Fujioka San said that one should do it passion and not be afraid of failure. Persistence is key especially if the idea is new and unconventional.

After our “deep interview” with the entrepreneur we took the Shikansen (means new artery, referred as bullet train in Western countries) to Kyoto. This train travels at maximum speed of 187 miles/hr. This was started after the Olympic games in 1964.

Japan & Entrepreneurs

In our Japan survey process we met several people with different business backgrounds. We found that the Japanese culture has a big influence on entrepreneurship. The results of our surveys will help us determine the reasons for the differences in entrepreneurship levels between Korea and Japan. We also noticed that the Koreans and Japanese had a different perception of entrepreneurship. The Koreans felt that they were entrepreneurs if they had started a company or had an idea they used to become self employed, while many of the Japanese felt that being an entrepreneur was starting a successful company from scratch which contributed to society either economically or environmentally.

The surveys for Japan were also written in their native language.  We met people in local restaurants, gathering areas, shops and other places of business.  We found it a little more challenging to have the surveys completed in Japan than in Korea. We had to warm the people up to us because their first response was hesitation to participate in the research.  The Japanese were much more reserved while the Koreans were curious about our survey and wanted to help. Once we had the communication going with the Japanese they were friendly but not quite as friendly and helpful as the Korean people. Some of us decided to take a different approach to get communication started by purchasing something from the places of business. Then getting the surveys completed was easier.

The Survey & Respondents
The survey questions were organized the same for Japan as the surveys for Korea.  There were three main categories we have been focusing on throughout our trip: Culture, Politics, and Business.  Just about half of the respondents fell into the 20-29 age range while the majority of the remaining half fell into the 30-39 range.  One respondent was over 60 years old.  The respondents were approximately 50 percent male and female.

The survey was broken out into two separate sets of questions.  One set was specifically asked of current and past business owners (entrepreneurs) while the other set was for non-business owners.  We found that 33 percent of the respondents owned a business but only about half of them considered themselves to be entrepreneurs.

The Results

Culture
Just as in Korea, when asked about their motivation for starting their own business, the majority of the entrepreneurs said “It was my dream.”  For Japan the desire to be different followed closely. This was surprising since historically the culture as a whole has been a collective society. This change in the culture could be part of the reason the percentage of entrepreneurship from our surveys was higher than the 1.7% recorded by Babson College and the London School of Economics.  Approximately 60% of the respondents who are not currently business owners said they either casually or seriously thought about business ownership. Again, this was surprising since normally the Japanese have desired to work for corporations.

The entrepreneurs described themselves as, opportunistic, visionary, and resourceful while the non-business owners felt that entrepreneurs should be visionary, leaders, and creative in order to be successful.  Half of the entrepreneurs did not have family members who own or have owned businesses.  Over 30% of the entrepreneurs had a sibling that own or have owned a business. However, 60% of the non entrepreneurs’ parents did own or previously own their own business. This indicated that these entrepreneurs did not have family businesses passed down to them and had started their own business.

“One should not start a business if there is a risk it might fail.”  The majority of entrepreneurs answered that they did not agree or somewhat agreed. However, the majority of the respondents who are not entrepreneurs somewhat agreed with the statement. These results support that risk taking it an attribute for entrepreneurs and non entrepreneurs are cautious.

The top two fears of owning their own business for both entrepreneurs and non-entrepreneurs in Japan are “uncertainty of income” and “consequences for your family.” “Losing property” is also among their top fears for both the entrepreneurs and non entrepreneurs.  These responses indicate the Japanese are closely linked to income and that financial stability is a major part of their culture.

All respondents, both entrepreneurs and non-entrepreneurs, felt people who started their own business and failed should be given a second chance.  These responses shows that the society is becoming more forgiving and accepting of those who start a business and fail.

Politics
For the most part the entrepreneurs feel that they have very little flexibility in setting and controlling prices, and promotions. This is mainly controlled by the government. The majority of non entrepreneurs feel that the government does not get involved in pricing and promotions. The different responses may be due to the non entrepreneurs’ understanding of the government involvement. Both business and non business equally said they enjoy tax advantages. 

Business
When asked about challenges at start-up, the entrepreneurs said lack of available financial support and complex administrative procedures were their biggest challenges.  The majority of non-business owners feel that it would be difficult to start a successful business. 

Most of the entrepreneurs said that staying open to new opportunities, networking, and being flexible and adaptive to change equally contributed to their success.   The entrepreneurs use the Internet and door to door sales calls to market their product. Over 80% of the non entrepreneurs also market their products through the internet. The remaining non entrepreneurs use newspapers and magazines to market their products.

About 80% of the entrepreneurs said their prior work place did not encourage a creative environment. Over 50% of the non entrepreneurs agreed that their work place did not encourage creativity followed by creativity being encouraged only within certain divisions.

Fifty percent of the entrepreneurs that said there were no incentives to grow the business or develop new products or services while 50% that said there were monetary incentives.  The non entrepreneurs mostly responded to monetary incentives and pride being the incentives.

Most of the entrepreneurs said that they used money from their savings to fund their business followed by the bank. Over 50% of the non-business owners said they would seek funding to start a business from a bank followed by family and investors.

Over 70% of the entrepreneurs said that they individually make decisions and to no surprise over 75% of the non entrepreneur said that their decisions are made as a group through consensus. 

The survey results gave us insight that the culture and politics have a positive approach towards raising the entrepreneurship level in Japan.