A Brief Introduction to SME
policies of Japan
2 September, 2009
Addis Ababa, Ethiopia
Go Shimada
Director,
Trade, Investment and Tourism Division,
Industrial Development Department,
JICA

The project of policy dialogue on IndustrialDevelopment●A coherent SME policy framework constitutes an integral component of overall mediumterm industrial policies.
2009

2010

2011

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

Policy Dialogue
Schedule of HLF
1) Policy vision
with Prime Minister’s Office2) PASDEP

Review on Policies &Strategies

Review on PASDEP

with MoFED & MoTI

3) Sectors
with MoTI

4) Project and Action
with MoTI

Kaizen Project1) Quality &Productivity
Improvement by Kaizen

Review on MoTI'sImplementation

Sharing of Japan'sExperience

Preparation

Sector Study(phase 1)

1stReport
Depth Review & Recommendation
on MoTI's Implementation in
Selected Sub-Sectors

2ndReportProgress and Findings of Study Project

Pilot Projects(phase 2)

Disemination(phase 3)

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Weight of SMEs in Japan andEthiopia(1)● The definition of SME in Japan and Ethiopia is different.
Ethiopia• Micro Enterprises▫ Small business enterprises with a paid-up capital ofnot exceeding birr 20,000(≒2,000USD), andexcluding high tech. consultancy firms and other hightech. establishment• Small Enterprises▫ Business enterprises with a paid-up capital of above
birr 20,000 (≒2,000USD) and not exceeding birr
500,000 (≒50,000USD), and excluding high tech.
consultancy firms and other high tech. establishment.

4

Weight of SMEs in Japan andEthiopia(2)Japan

Manufacturing

Large
>300

Medium300> >20

Small
20>

100> >55>50> >5

5>50> >55>300 mil.yen

Wholesale Trade>100
100 mil.yenRetail Trade>5050 mil. yen

Services>10050 mil. yen

5Weight of SMEs in Japan andEthiopia
JapanThe share of SMEs in terms of the added value by all industries has
historically been steady at around 55 - 60%, indicating the continuity of thefirm role played by SMEs despite dynamic changes of the industrialstructure.
Added Value (all industries) (¥ trillion, left scale)

Share in Added Value (%, right scale)

180

100.0

160

90.0

140

80.0
70.0

120

60.0
100
50.0
80
40.0
60

01

99

97

95

93

91

89

87

85

0.0

83

081

10.0

79

207720.0754073

Ethiopia

30.0

Source: 2003 White Paper on SMEs inJapan
Note:
SMEs are defined a those ofwhich the capitalisation is lessthan 100 million.

Informal and small manufacturing sector contributes 33% of the industrial
sector output, and 52% of the manufacturing sector’s contribution in
1996.

Changing Goals of SME Policies in
Post-War Japan＜Comparison Between Old and New Policies ＞
PolicyConcept

Old Basic Law (1963)● Rectification of the gaps between
large enterprises and SMEs

PolicyObjectives● Improved productivity (upgradingof the business structure of SMEs)● Improved trading conditions(correction of the disadvantages inbusiness activities)

Viewpoints
toDetermine
PolicyTargets● SMEs at the bottom of thestructural gap between enterprisesof different sizes● Ability to rectify the gap● The scale of the gap and ability torectify it depend on the size ofenterprise

New Basic Law (1999)● Fostering and support of a wide
range of independent andvibrant SMEs
● Prompting of business
management innovation andstart-ups● Difficulty of access to themanagement resources
necessary for business growthand development● This difficulty of access tomanagement resources changes
with the business size)

Source : SME Agency, “New SME Basic Law: Outline of Revisions and Detailed Explanation of Each Article”, Doyukan, 2000

6

Planning of SME Policies and SME
AgencyPolicyPlanning
Fact-finding(interviews/studies/statistics)

SME Policy
Making Council

SME Agency

Expressing requirements,
requests and concerns

ReportingMembers representing
various circles

PoliticiansCompetent
government offices

SME
organizations

Mass media<Stakeholders>

Local publicbodies

Industrialassociations

Academia

Petitions and requests to solve problems
SMEs

7SME Policy Implementation System
National Level

METI
Regional Bureaus of the METI

BudgetOrganization for SMEs andRegional Innovation, Japan(SMRJ)

Prefectures
MutualCooperation

SME
universities

SME Support
Centres

BudgetPolicy-Based
Financial Institutions- JASME- NLFC- Shoko Chukin Bank

MutualCooperation
Business Consultation
Seminars
Information Service
Dispatch of Expert

SME Level

SME Agency

MutualCooperation

BudgetPrefectural Level

Chamber of Commerceand Industry, etc.(520)Business Consultation
Seminars
Information Service

Human Resources
Development
Programme

BudgetCreditGuarantee
Corporations

CreditGuaranteeInvestmentand LoanSMEs
Note: Compiled from a reference material published by the SME Agency (July, 2008)

8National Measures for Local SMEs Promotion

SMEA : Policy--------> SMRJ : Implementation■SMRJ : (Organization for Small & Medium
Enterprises and Regional Innovation, Japan)- Newly Established in 2004 by Merging JASMEC, JRDC, and ISIF
- Staff Number : 811- Capital : ¥1,094 billion (US$10 billion)- Branches & Offices : 10- SME Universities : 9 campuses

SMRJ’s Supports for Company Operations-HRD program making-Advice of experts-Expert dispatching-Subsidy for grade up-Funding, Investment

HumanResources

Funding

Infrastracture

Information-Leasing facilities-Industrial Parks-SMRJ’s Web sites-Advice counterSome of the SMRJ’s Activities

SMRJ Network

Local Government’s Measures forLocal SMEs Promotion

1) Finance (Loan, Tax, Subsidy)
2) Management Infrastructure Strengthening
3) Training and Human Resources Development
4) R & D Support5) New Industrial Area Entry Support(i.e. Automotive Industry, IT & Software, etc.)
6) Shopping Center Activation Support
7) Industrial Park, Science Park Provision■ SME Support Center as One-Stop-ShopSME Support Center’s Activities

1) Consultation and Guidance by sending registered SMEconsultants (Diagnosis)
2) Providing information on useful supporting measures forSMEs according to the Diagnosis (Channeling SMEs topublic services, such as Finance, Technology,
Management , Marketing)3) Sending specific experts for further advice/ consultation
4) Conducting seminars, training courses for SMEs

SME Support Center’s Activities