Sacrificing Entrepreneurship? The Labor Politics of Small Businesses in Korea and Japan

This study provides an analysis of contemporary difficulties that Korea and Japan are facing in promoting the entrepreneurial economy. Despite energetic policies to encourage small entrepreneurships, distinctive patterns of small business problems have persisted in the two countries. Drawing upon the new framework of labor politics, this study argues that the problems are associated with new employment systems resulting from national struggles toward industrial recovery. After the late 1990s, Korea reorganized its industry in a market-rational fashion and created a corresponding employment system that flattened most employment benefits throughout labor markets. This system has thus forced people to run small businesses in low-skilled sectors. Conversely, Japan endeavored to improve its industrial capacity of producing highquality goods by institutionalizing privileged employment benefits for regular workers. However, the resulting dualization of employment benefits has caused many Japanese people to avoid participating in productive activities through small business.