Understanding Japan’s Sharing Economy: National System of Innovation and Institutional Work Perspectives

In recent years, the rise of so-called the Sharing Economy and collaborative consumption (CC) has caught our eye. The emergence of ‘the Sharing Economy’ has brought people plenty of conveniences to use under-utilised inventory through fee-based sharing collaboratively. It is widely believed that Japan's sharing economy is relatively small in comparison to other major economies, with platforms like Uber and Airbnb having a limited presence in Japan compared to their popularity in the US, Europe, and China. The Japanese Ministry of Internal Affairs and Communications also states that the size of Japan’s Sharing Economy is relatively small compared to the USA, China, Germany, India, the UK, and Korea. This research addresses this puzzle by seeking answers to why Japan’s Sharing Economy has evolved relatively slowly, and why it remains small, especially compared with many other developed and even some developing countries.
As there is no existing theory to explain the lag of Japan’s Sharing Economy, this research takes a macro perspective, theoretically informed by the national system of innovation (NSI) literature that has won recognition in explaining innovation processes and specific innovation patterns of countries. The Sharing Economy has been regarded as a new form of progress innovation that creates a new way for people to access goods and services. This research adds a meso-layer analysis, by adopting the institutional work framework to understand the dynamic development of Japan’s Sharing Economy. As there is scarce literature about Japan’s Sharing Economy, an exploratory approach was chosen for this thesis. By adopting qualitative methods, this original study identifies and examines the different factors that can explain the relatively slow development of Japan’s Sharing Economy. This study found that Japan’s National System of Innovation overall does not drive the development of Japan’s Sharing Economy. Adopting the institutional work lens, we can see that efforts have been made by actors that intend to promote Japan's Sharing Economy. However, their institutional work is not yet influential enough to fundamentally encourage the development of Japan's Sharing Economy. This research contributes to the Sharing Economy’s theoretical foundation, tests the national innovation system in this new form of innovation, and proposes a two-layer macro/meso perspective to look into the Sharing Economy.