Analysis of Entrepreneurship and Multisectoral Farm Business Development

Abstract

Recently, in Japan, farming entities demonstrating a dramatic breakthrough in their development are emerging. Such entities often extend business activities beyond farming as such to other entrepreneurial endeavors, including distribution (i.e., collecting and marketing) of agricultural products, transportation service, food processing, and mail order and Internet sales. The emergence of these entrepreneurial endeavors has led to this study to examine how agricultural entrepreneurship can be materialized. More specifically, this chapter aims first to propose a theoretical framework to analyze the agricultural entrepreneurship, then using case studies, to elucidate the process of entrepreneurial business development and characterize essential features of agricultural entrepreneurship. Until recently, research on farm business development in Japan has tended to center on the managerial ability of farm executives (owners or managers), yet paid scant attention to entrepreneurship. While entrepreneurship with innovation as its central element has been considered the primary engine of economic development, it has distinct meanings for a diverse range of researchers, namely, innovation, establishment of a market, and creation and management of a business, and hence has resulted in varying approaches to investigate it. In Japan, private financing, consulting services, and human resource providers are way less developed than most European countries and some in the Americas, and farm managers attempting to embark on entrepreneurial activities are faced with many challenges and need to figure out alternatives, such as networking with partners with similar interests. To address the problem stated above, this chapter proposes that agricultural entrepreneurship can be organized with four elements including (1) competence of farm managers, (2) organizational capability of farm entities, (3) supporting policy measures and institutional frameworks and government, and (4) networking with partners or collaborators. This theoretical framework is applied to analyze two Japanese and one Dutch farm entrepreneurial entities and has elicited the following conclusions. First, it can be argued that for sustainable business development, individual farm managers should be armed with entrepreneurial competence combined with mindset to understand the nature of farming. Second, the organizational capability to capture business opportunities is critical for materializing entrepreneurial development in a farm business. Third, supportive institutional and cultural backdrops as enabling environments for entrepreneurship are essential. Fourth, networking and cooperation with partners or collaborators are vital to enhance and consolidate advantages in business.