Policy impacts on innovation and entrepreneurial ecosystems: Evolutionary and multi-scalar perspectives from Japan

Entrepreneurship policy is by nature multi-level and multi-dimensional. Contextual factors—geographical and institutional—influence the policy’s operations and cumulative impacts. This chapter seeks to better understand the interdependence and interplay of the policy across different levels of government, and its evolution over time, as an integral part of innovation and entrepreneurial ecosystems. We look at the case of Japan, examining small and medium-sized enterprise (SME) policies introduced at national and sub-national levels since the mid-1990s. Our examination reveals three related policy turns—entrepreneurial, networking, and local ecosystem—in the country’s SME policies, which constitute the evolutionary dynamics of its innovation and entrepreneurial ecosystems. The chapter also assesses the effects of those policy measures and programmes, showing varied contributions of subsidies, an overall shift of policy instruments from subsidies to networking supports and the latter’s greater effectiveness, and significant effects of a recent place-based start-up support programme. The chapter concludes by identifying opportunities and challenges, showing the diversity and complexity of recent place-based policymaking for the revitalization of local economies.