Japan has a lot of smart businessmen, but their problem is actually that the government has supported their businesses too much. Japan is in a horrible economic situation precisely because they've honored failed entrepreneurs (or at least their ventures) too much. They've honored them by preventing them from failing completely when they should have -- they've backed them with state funds and as a result have created zombie entities that have contributed to the prolonged deflationary cycle that Japanese citizens continue to experience.
It's a fine idea to honor peoples' attempts at entrepreneurship, but by propping up failed ventures instead of making room for new innovators sends the wrong message to their economy and is causing untold number of problems.
The article is about honoring failed entrepreneurs in the sense of valuing people who start companies and fail (by correctly realizing that the success of a start-up is almost completely uncorrelated with the technical skill of it's employees and only weakly correlated with their future start-up success rate). It doesn't have anything to do with government subsidies.
When companies break up, the employees, assets, and consumers are freed to be used again. If that doesn't happen, the company's operations continue to serve the existing demand and tie up resources, but there are no productivity gains, or possibly even diminishing ones. A zombie company is a company that should be destroyed by disruptive innovators.
This is the situation in recorded music right now. The major labels have consistently succeeded in winning strong copyright protection, so instead of collapsing, they are now seeing their position eroded by the innovators at a very, very slow rate; if it were not for the government's protection enabling the "copyright mafia" scenario, this situation wouldn't have happened and we would not have an unending trainwreck of music startups that try to reinvent the distribution process, but end up getting destroyed with fees or legal battles. The situation is so bad that it hinders even the companies that try to eschew all major label music(e.g. Jamendo), because the existing trade groups get in the way of non-traditional licensing schemes.
I wasn't making a claim about subsidies. I was just saying I don't think your comment was relevant to the article because of a misunderstanding about the article's use of the word "honor".
Comments
Japan has a lot of smart businessmen, but their problem is actually that the government has supported their businesses too much. Japan is in a horrible economic situation precisely because they've honored failed entrepreneurs (or at least their ventures) too much. They've honored them by preventing them from failing completely when they should have -- they've backed them with state funds and as a result have created zombie entities that have contributed to the prolonged deflationary cycle that Japanese citizens continue to experience.
It's a fine idea to honor peoples' attempts at entrepreneurship, but by propping up failed ventures instead of making room for new innovators sends the wrong message to their economy and is causing untold number of problems.
The article is about honoring failed entrepreneurs in the sense of valuing people who start companies and fail (by correctly realizing that the success of a start-up is almost completely uncorrelated with the technical skill of it's employees and only weakly correlated with their future start-up success rate). It doesn't have anything to do with government subsidies.
Subsidies are highly relevant to startups.
When companies break up, the employees, assets, and consumers are freed to be used again. If that doesn't happen, the company's operations continue to serve the existing demand and tie up resources, but there are no productivity gains, or possibly even diminishing ones. A zombie company is a company that should be destroyed by disruptive innovators.
This is the situation in recorded music right now. The major labels have consistently succeeded in winning strong copyright protection, so instead of collapsing, they are now seeing their position eroded by the innovators at a very, very slow rate; if it were not for the government's protection enabling the "copyright mafia" scenario, this situation wouldn't have happened and we would not have an unending trainwreck of music startups that try to reinvent the distribution process, but end up getting destroyed with fees or legal battles. The situation is so bad that it hinders even the companies that try to eschew all major label music(e.g. Jamendo), because the existing trade groups get in the way of non-traditional licensing schemes.
I wasn't making a claim about subsidies. I was just saying I don't think your comment was relevant to the article because of a misunderstanding about the article's use of the word "honor".
If that is so, then perhaps they aren't honoring the concept of failure.
They are trying to hide from failure rather than using it to learn. You can't learn from a failure you can't afford to admit making.