I recently had a piece at The Freeman, on tiny businesses in Japan and some of the regulatory reasons that make them easy for people to start and run. I followed up on that piece here at this newsletter.
My argument was that there’s no reason Americans couldn’t also run tiny businesses out of their homes, or commercial accessory units on their properties, or in tiny leasable retail spaces. Culture is probably a factor, but the Japanese are not mystically different; they just have a regulatory framework that allows them to do this, so some of them do it. America has a regulatory framework that makes it almost impossible, so very few of us do it.
In my follow-up, I wrote:
Japanese people start tiny physical businesses because it is possible. And a great deal of what we call “culture” is an interplay of human choices with the set of things which seem possible. There is no wall of separation between “culture” and “technocratic tinkering,” because a thing which is artificially foreclosed by the regulatory regime cannot be a part of the common culture.
In the course of making this argument, I briefly mentioned online, social-media-driven businesses as a kind of American alternative—not that only Americans do this, but that perhaps this fills the same niche as tiny physical businesses in Japan.
I want to think a little more about that here. Should we think of online businesses—whether accounts on e-commerce platforms, or people doing sales on TikTok, or other similar enterprises—as real businesses? Or, with a slightly different emphasis, real businesses? We don’t exactly have a good language for this. Someone with a successful eBay or Poshmark account is technically an independent contractor or a “gig worker,” and only in a very narrow formal sense a “business owner.”
Someone who uses social media accounts to sell directly to consumers, or who sells at volume through a looser platform like Facebook Marketplace, is probably a sole proprietor, but their business is still tied to a specific corporate platform. What about someone who sells cakes or other homemade foods through very informal networks in a manner which might be only quasi-legal?
In any case, though, almost anyone can just up and start an online business, if we consider these things businesses. And that ability to just do the thing is to me what distinguishes the Japanese tiny businesses from what we Americans would think of as “small businesses,” which are already larger than these micro-enterprises.
Is the online/social-media-driven business, basically, the “same thing” as the Japanese tiny physical business, filtered through American culture and land use? Is it a bit misguided to try to insist on bringing a different culture’s expression of micro-enterprise to America? Or is there an important difference, such that we really should see Americans as deprived for not being able to easily do micro-scale business in the physical world?
I also wonder if there is a gender aspect to this—whether these online or social-media-driven micro-enterprises are seen as things women do, and if this marginalizes the idea of being a micro-entrepreneur in the larger culture. In my experience, it is often women doing such things. Of course, it would be narrow-minded and sexist to think that this makes that kind of work less valuable or worthwhile, or that it is inherently “women’s work” in any way. And I don’t think that, but I wonder if that is one of the reasons why “anybody can start a tiny online business” isn’t a little bit more of a universal cultural script.
Now on the matter of culture, there is one counterpoint. I was chatting with someone who’d spent some time in Japan, about the excellent trains and public transit. She said that reducing it to it’s allowed so they do it there is actually missing something. A lot of the important decisions about transportation policy were made in the postwar period, and the Japanese have had decades under that set of rules to develop along those lines. We have had many decades with an opposite set of rules and incentives, so what you’re really seeing is a split which then self-reinforces, or develops along a different set of path dependencies.
It’s a bit like the point I made here, using the idea of schism as an analogy for America’s break with traditional urbanism. The point is that time changes things; it hardens differences; it leads to divergent logic chains and understandings. So the immediate things we urbanists like about Japan, that you can just go there and see, aren’t things you can just copy; they’re the endpoints of decades of development along a distinct path.
Is that true? Or is it just a different way of saying they’re so different, we could never be like them?
I’d love to hear your thoughts on anything to do with this; it’s one of my favorite topics with regard to urbanism and urbanism-adjacent issues!
Related Reading:
Why Don’t Local Governments Help Small Businesses More?
Backyard Coffee And Jazz In Kyoto, Japan
That Damned Elusive Parking Spot
I don't think there's any kind of mysticism or Orientalism in saying that we can't just copy what we like about tiny businesses in Tokyo, and it's because we can't just copy the fact that rent there is lower. I'm no expert here, just an interested observer, but if there was any kind of policy change that could lower rents in US cities I presume we'd already have done that, because it's a problem! In fact, given what I'm hearing people in Tokyo say about rising residential rents, I'm wondering and worrying whether this is going to start affecting those kinds of businesses too.