Beyond the keiretsu? The persistence of large firms in Japan's startup-fueled technological innovation

Robyn Klingler-Vidra and Ramon Pacheco Pardo

Chapter 9 in Elgar Companion to Technology Life Cycles, 2026, pp 193-211 from Edward Elgar Publishing

Abstract: This chapter examines the institutional changes underpinning the rise of the Japanese state's pursuit of startup-fueled technological innovation since the 1990s. Multiple government bodies have increasingly backed startups as part of modern innovation ecosystems, ostensibly aimed at disrupting incumbent firms and technologies. However, this shift has not comprised the abandoning of Japan's traditional large firm-led model, where pension savings and main banks sustained lifetime employment and incremental innovation. Instead, the chapter highlights how the rise of “Startup Japan” exhibits continuity, with startups being integrated into open innovation systems alongside large corporations and main banks as key partners, investors, and beneficiaries. This tack may lend to the sustaining of incumbent technologies, rather than hastening the rise of novel technologies, as keiretsu and main banks boost startups that augment their competitive position.

Keywords: Corporate innovation; Japan; Schumpeter; Startup; Technological innovation; Venture capital (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035355488
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