What's Bad for Japan Inc. ...

Bad news is good news in Japan these days. Last month Nissan announced a sweeping restructuring with thousands of job cuts, and last week it reported a $3 billion loss, one of the biggest in history. The overwhelming reaction among Japan watchers was...jubilation. These days each time Mitsubishi, NEC or Hitachi announces a plant closing, the Tokyo stock market surges higher. Economists now cheer as banks that once could have bought small countries desperately merge or plead for a white knight (even foreigners are welcome) to save them from insolvency. Behind this seemingly misplaced optimism in Japan's ailing economy, however, is not so much faith in the ability of these stumbling Goliaths to right themselves as it is faith in people like Hiroshi Mikitani.

Mikitani, 34, owner of Japan's most popular e-commerce sites, represents a new generation of feisty entrepreneurs who would rather die than work for Japan Inc. He started out in the mainstream--the best universities, a top job at a respected bank. But like a lot of Japanese in their 30s and 40s, Mikitani decided that his future would be more prosperous if he were in charge. "No smart young person wants to work at a big company," he says. "That would be risky."

Amen. Even as giants like Nissan and Mitsubishi are racked by restructuring woes, new start-ups emerge every day in Japan. To be sure, their ranks are puny by U.S. standards, but the movement seems to have taken hold. This fall 2,300 enthusiasts turned out for a meeting promoting the establishment of a NASDAQ over-the-counter market in Japan. Old business models are being tossed aside like yesterday's sashimi. The hero of a popular novel is the young president of a chain of bars. One of Japan's biggest growth industries is continuing education. And Tokyo's newspapers are filled with ads for night schools designed to turn salaried workers into entrepreneurs.

Among the most talked about is the Attackers Business School. Founded by Kenichi Ohmae, an illustrious Tokyo business figure who has dabbled in politics, Attackers offers a six-month course with guest lectures by star entrepreneurs like Softbank's Masayoshi Son and Masahiro Origuchi, the 38-year-old chairman of Goodwill Group, a prospering new agency for temporary workers. "These are the Michael Dells of Japan," says Ohmae. "The bright ones are jumping off the old companies, which are going to end up destroyed."

The hope for Japan now is that the new will rise on the ashes of the old. It won't be easy. There's no flood of new money on which to float a lot of start-ups, nor is there patience for companies that don't start making money immediately. The threat of massive failures at the big old companies has already drawn a backlash from top politicians who want to preserve lifetime employment. Next March, analysts predict, Nissan will announce an even bigger loss. But then, what's bad news for Nissan is good for Japan.