Economic Activity, Prices,
and Monetary Policy in Japan
Speech at a Meeting with Business Leaders in Kagawa
Goushi Kataoka
Member of the Policy Board
I. Economic Activity and Prices
A. Overseas Economies
I would like to start my speech by looking at developments in overseas economies.
After the global economy had grown synchronously since the second half of 2016, differences
in growth rates among countries have recently become evident. I consider that overseas
economies have now leveled off and are in a state where due attention should be paid to the
effects of various risks. According to the January 2019 World Economic Outlook (WEO)
Update released by the International Monetary Fund (IMF), as presented in Chart 1, the global
economic growth rate is projected to remain around 3.5 percent through 2020. However, when
compared with the April 2018 WEO forecast, downward revisions are evident, as seen on the
right-hand side in Chart 1. In addition, the global Purchasing Managers' Index (PMI), as
shown in Chart 2, has declined to a level seen during the global economic destabilization in
2016 for both manufacturing and services, although they are still above the 50-point level.
Thus, the pace of overseas economic growth as a whole for 2019 seems to have weakened
compared with that for 2018.
Let me elaborate on current developments by major countries and regions. With regard to the
U.S. economy, interest rate-sensitive housing investment has been weak and some soft data
have been showing signs of peaking out against the background of a rise in U.S. interest rates,
while growth in exports has been decelerating. Nevertheless, private consumption has been
supported by tax cuts and a favorable employment situation. As for the European economy,
its pace of growth has been decelerating, partly due to the effects of a tightening of European
Union (EU) emission standards and the political situations in Italy and France, although
domestic demand has been more or less firm. As with the European economy, the Chinese
economy has been decelerating, and the impact of this deceleration on emerging economies
is a matter of concern.
The following factors continue to pose a risk to the outlook: U.S. macroeconomic policies
and the consequences of protectionist moves, the impact these have on the global economy
and financial markets, and negotiations on the United Kingdom's exit from the EU. Future
developments require close attention as the effects of these risks have already been seen in
some economies.
B. Japan's Economy
Next, I would like to turn to Japan's economy. Starting with recent developments, the real
GDP growth rate for the October-December quarter of 2018 recovered to positive territory
after a decline in the previous quarter. This was partly due to the rebound from the decrease
in domestic demand caused mainly by natural disasters in the July-September quarter.
However, the recovery from negative growth is losing momentum amid heightening
uncertainties regarding overseas economies. Chart 3 shows the real GDP growth rate and the
breakdown by component. While private consumption and private business fixed investment
picked up, the contribution of external demand further decreased within negative territory
compared with that for the July-September quarter, partly due to an increase in imports.
Although exports increased after a decline in the previous quarter, the overall rate of increase
remained relatively low given a drop due to the effects of supply-side constraints caused by
natural disasters.1 The low rate of increase in exports is attributable mainly to a decrease in
orders from China against the background of U.S.-China trade friction and a gradual
deceleration in overseas economies.
Turning to the outlook for Japan's economy, as shown in Chart 4, the medians of forecasts
made by the Bank of Japan's Policy Board members for real GDP growth rates presented in
the January 2019 Outlook for Economic Activity and Prices (Outlook Report) are 0.9 percent
for both fiscal 2018 and 2019, and 1.0 percent for fiscal 2020. My view, however, is that the
pace of growth will be more modest than these forecasts. Specifically, I would project the
growth rate for fiscal 2018 to be around 0.5 percent, as the pace of economic recovery will
likely remain moderate amid the heightening uncertainties regarding overseas economies. For
both fiscal 2019 and 2020, the growth rate will likely be in the range of 0.5-1.0 percent. The
impact on households of the consumption tax hike scheduled to take place in October 2019
will likely be smaller than that of the previous hike in 2014, as the government will take
measures to smooth out possible fluctuations in demand. Nevertheless, it is a matter of
concern that the pace of expansion in consumption since fiscal 2014 has been quite slow and
households' sentiment indicators such as the Consumer Confidence Index have continued to
decline since 2018 (Chart 5).2 Moreover, I consider that the pace of pick-up in Japan's
economy will likely be slow from the scheduled consumption tax hike in October onward,
mainly because the heightening of uncertainties in the global economy, which I mentioned
earlier, might limit business activity to a certain degree through expectations of a slowdown
in external demand.
C. Recent Developments and Outlook for Prices
Next, I will move on to price developments. The year-on-year rate of increase in the consumer
price index (CPI) for all items less fresh food for January 2019 was 0.8 percent, as shown in
the left-hand graph of Chart 6. Looking at the CPI in detail, it should be noted that the
contribution of a rise in energy prices to the CPI was significant at 0.4 percentage point, and
the rate of increase for all items less fresh food and energy, which directly reflects supply-
demand conditions, stood at only 0.4 percent year on year. The right-hand graph of Chart 6
shows some indicators that represent the underlying developments in consumer prices. These
indicators have continued to show relatively weak developments.
The important indicators that affect underlying price developments are the output gap and
medium- to long-term inflation expectations. The output gap, as shown in the left-hand graph
of Chart 7, has remained positive, reflecting improvements in the capital stock and labor
markets. Nevertheless, the positive output gap shrank slightly for the July-September quarter
of 2018, mainly due to the effects of natural disasters. Inflation expectations have been
somewhat weak, as indicated in the right-hand graph of Chart 7. I am convinced that this is
attributable to the adverse effects of prolonged deflation in the past and recent weak price
developments. In addition, in my view, the credibility of achieving the Bank's 2 percent price
stability target has not been sufficiently enhanced among the public, and this is also affecting
inflation expectations.
Turning to the outlook for prices, the medians of the Policy Board members' forecasts for the
year-on-year rate of change in the CPI (all items less fresh food) presented in the January
2019 Outlook Report are 0.8 percent for fiscal 2018, 0.9 percent for fiscal 2019, and 1.4
percent for fiscal 2020, excluding the direct effects of the scheduled consumption tax hike
and policies concerning the provision of free education (Chart 4).3 Price projections have
continued to be revised downward, reflecting the weak price developments, but the Bank's
view is that the momentum of prices toward the 2 percent price stability target will be
maintained. However, I dissented from the relevant description in the January Outlook Report
as I think the possibility of the inflation rate rising toward 2 percent is low at the moment and
that the momentum of inflation has not been strengthened. There are four main reasons behind
my position.
First, under the present circumstances, the effects of a widening of the output gap on inflation
might have become less pronounced.4 Second, there is a possibility that the expanding trend
of the output gap will not continue. If the expanding trend of the output gap becomes even
more robust, firms will likely increase prices and wages to better reflect a rise in costs and a
tightening of labor market conditions. These firms' moves will likely progress more than an
increase in households' tolerance of price rises. However, taking account of the outlook for
Japan's economy, I consider that there is a strong possibility that the expanding trend of the
output gap will rather abate going forward.5 Third, based on the first two points, there is little
prospect for the time being of an increase in inflation expectations through the adaptive
formation mechanism pushing up the observed inflation rate. Fourth, it is unlikely for
inflation to be spurred by an increase in inflation expectations on the back of an enhancement
3
If a reduction in charges for mobile phone services takes place, it is expected to put downward
pressure on prices in the short term.
4
From the second half of 2016 through 2018, the output gap estimated by the Bank's staff widened
from a level of excess supply to excess demand of around 1.5 percent. Meanwhile, the year-on-year
rate of change in the CPI for all items less fresh food and energy remained more or less unchanged at
around 0.3 percent.
5
As I mentioned in section I. B., the pace of pick-up in Japan's economy will likely be slow from the
scheduled consumption tax hike in October 2019 onward, mainly considering the following factors:
in a situation where the pace of expansion in consumption since fiscal 2014 has been quite slow,
households' sentiment indicators have continued to decline since 2018, and the heightening of
uncertainties in the global economy might limit business activity to a certain degree through
expectations of a slowdown in external demand.
of the credibility of achieving the price stability target. This is because such enhancement is
unlikely in a situation where the monetary policy remains unchanged amid downward
revisions to the Policy Board members' price projections.
II. Conduct of Monetary Policy
Let me first outline the Bank's current monetary policy, based on the outlook for economic
activity and prices that I have described. I would then like to touch on my opinion about the
Bank's monetary policy conduct.
The Bank conducts monetary policy under the framework of Quantitative and Qualitative
Monetary Easing (QQE) with Yield Curve Control, aiming to achieve the 2 percent price
stability target. This current framework consists of three major components (Chart 8).
The first is yield curve control, in which the Bank sets the short-term policy interest rate at
minus 0.1 percent and the operating target for long-term interest rates at around 0 percent. As
for long-term interest rates, the Bank purchases Japanese government bonds (JGBs) while
allowing some degree of fluctuation in long-term yields, depending mainly on developments
in economic activity and prices.
The second component is the purchase of risk assets, including exchange-traded funds (ETFs).
The Bank purchases ETFs so that their amount outstanding will increase at an annual pace of
about 6 trillion yen. With a view to lowering risk premia of asset prices in an appropriate
manner, the Bank may increase or decrease the amount of purchases depending on market
conditions.
The third component is the Bank's public commitment regarding the future conduct of
monetary policy. In July 2018, the Bank introduced forward guidance for short- and long-
term interest rates, stating that "[t]he Bank intends to maintain the current extremely low
levels of short- and long-term interest rates for an extended period of time, taking into account
uncertainties regarding economic activity and prices including the effects of the consumption
tax hike scheduled to take place in October 2019." The Bank aims to strengthen market
confidence and expectations regarding the sustainability of monetary easing by making a
commitment to the levels of future policy interest rates, in addition to the inflation-
overshooting commitment regarding the monetary base that has been in place since
September 2016.
Of these three components, I dissented from two: the yield curve control, and the Bank's
commitment regarding the future conduct of monetary policy. As presented in the joint
statement by the Bank and the government, the Bank's mission is to achieve the price stability
target at the earliest possible time. With this in mind, as for the yield curve control, in the
current situation where the observed inflation rate is still evidently far from the 2 percent
price stability target, I consider it appropriate to strengthen monetary easing in order to
encourage further widening of the output gap within positive territory.6 At the same time, I
judge that it is necessary to strengthen the Bank's commitment in order to promote a rise in
7
inflation expectations. Moreover, to overcome deflation completely amid heightening
uncertainties regarding economic and price developments, I consider it important to influence
the expectations and forecasts of market participants and economic entities by implementing
the appropriate means to further coordinate fiscal and monetary policy.8
Furthermore, I have a difference of opinion regarding the Bank's monetary policy conduct of
continuing to persist with current monetary easing until the price stability target is achieved.
It is necessary to pay due attention to the fact that sustaining the situation where the output
gap is in positive territory over a prolonged period under bold monetary easing entails the
risk of accelerating business and financial cycles thereafter.9 Due attention is also required
6
Specifically, I consider it necessary to strengthen monetary easing so that yields on JGBs with
maturities of 10 years and longer would broadly be lowered further.
7
Specifically, I consider it would be necessary for the Bank to make a commitment to taking
additional easing measures if it revised downward its assessment of medium- to long-term inflation
expectations.
8
I would argue that the mindset of firms and households in Japan was formed under the prolonged
deflationary environment after the mid-1990s, such that it has become rational to assume that
economic activity is sustainable without inflation. In a situation where the anchor of inflation
expectations has been lost, I believe that to achieve the 2 percent price stability target and maintain
the target price level in a stable manner, it is important not only to enhance monetary easing, but also
to further strengthen the coordination of fiscal and monetary policy -- that is, a "policy mix."
9
Given that the output gap in Japan was in negative territory for a long period, some would argue that
it is necessary to maintain the output gap within positive territory for a long period in order to change
to the fact that, if monetary easing is continued for a protracted period, achieving the price
stability target would become less clear as uncertainties regarding the outlook for the
economy would be prolonged. In addition, the longer monetary easing is continued, the higher
the burden on an exit strategy becomes, and the more the side effects of monetary easing
accumulate. Therefore, I believe that in considering the possible side effects, the discussion
should be centered on finding ways to achieve the price stability target at the earliest possible
time in order to prevent monetary easing from continuing for a protracted period.
III. Germany's Industrial Policy and Its Implications for Japan10
Let me now take a slightly different approach and talk about Germany's industrial policy. I
am assuming many of you have heard the term "Industrie 4.0" in relation to Germany's
industrial policy. In my understanding, "Industrie 4.0" is a strategic initiative that aims for the
self-optimization of production, not only by improving the efficiency of production processes
and the quality of products and making small-batch production of a large variety of products
using digital technology, but also by predicting changes in business environment and
enhancing the ability of production to adapt to such changes. In other words, "Industrie 4.0"
goes beyond the idea of digitizing production processes; it embodies the concept of
optimizing production activities using digital technology so that they are able to adapt to
environmental changes.
"Industrie 4.0" is a national strategic initiative which was set forth by the German federal
government in 2011. The federal government continues to play a leading role in implementing
the policy. The framework of "Industrie 4.0" in Chart 9 shows the involvement of the
government, with ministers of the federal government serving as chairs, and an organizational
structure which encourages extensive cooperation across the public, private, and academic
sectors, including industrialists, labor unions, and research institutions, as well as within each
sector, from the management level to the field level. In other words, the government not only
drafts the basis of the strategy and promotes the policy, but a structure has been established
in which the government also gathers opinions and concerns from small and medium-sized
enterprises in order to spread the effects of the policy to the very end of the value chain.
Moreover, a virtuous cycle in which cooperation among the public, private, and academic
sectors is strengthened has become possible, partly because ministers of economic affairs in
German state government are often highly specialized and researchers at institutions such as
universities are very keen to have their findings used in business.
In addition to the federal government's "Industrie 4.0," local governments in Germany are
active in supporting start-ups as a means to promote industrial development. Knowledge,
skills, and funds are all essential throughout the process of starting up a new business: from
the early stages of generating business ideas and developing business plans, through raising
funds and merchandizing products, until the business can finally stand on its own. In each of
these stages, the local government provides considerable support and invests in the new
business on its own behalf to actively fulfill its role as a catalyst to encourage investment in
newly established enterprises.
As indicated in Chart 10, Japan and Germany have common features in that the share of
manufacturing in all industries is large, and that the birthrate is declining and the population
aging. Although the pace of aging for managers of small and medium-sized enterprises has
been more moderate in Germany compared with Japan, smooth business succession and the
development of newly established enterprises are important tasks for Germany as well.
Another common challenge is that both Japan and Germany need to enhance added value for
their domestic manufacturing in order to tackle the intensification of global competition in
manufacturing industry caused by the rise of emerging economies.
On the other hand, there are also differences between Japan and Germany. One particularly
significant difference is that small and medium-sized enterprises in Germany are more active
in expanding their businesses overseas and exporting their products than those in Japan. As a
result, there are many "hidden champions" in Germany -- that is, enterprises that have global
market shares and are leaders in a particular niche business area.
Given the declining birthrate and aging population, I believe that there are many lessons Japan
can learn from Germany's industrial policy and from its small and medium-sized enterprises.
Germany's industrial policy aims to enhance the added value in domestic industries through
extensive cooperation across and within the public, private, and academic sectors, and it
places importance on supporting innovative enterprises. Small and medium-sized enterprises
in Germany seek to expand their businesses overseas on their own in search of new markets
unlike those in Japan whose overseas business expansion typically depends on the corporate
groups they belong to. Since Japan and Germany share many common features, I believe that
they can expand each other's business opportunities by strengthening their cooperation.
Thank you for your attention.
Economic Activity, Prices,
and Monetary Policy in Japan
Speech at a Meeting with Business Leaders in Kagawa
February 27, 2019
Goushi Kataoka
Chart 1
World Economic Outlook by the IMF
January 2019 forecasts Difference from April 2018
(y/y % chg.) forecasts (% pts.)
2018 2019 2020 2018 2019 2020
World 3.7 3.5 3.6 -0.2 -0.4 -0.2
Japan 0.9 1.1 0.5 -0.3 +0.2 +0.2
United States 2.9 2.5 1.8 0.0 -0.2 -0.1
Euro Area 1.8 1.6 1.7 -0.6 -0.4 0.0
Germany 1.5 1.3 1.6 -1.0 -0.7 +0.1
Advanced
Economies
France 1.5 1.5 1.6 -0.6 -0.5 -0.2
United Kingdom
1.4 1.5 1.6 -0.2 0.0 +0.1
China 6.6 6.2 6.2 0.0 -0.2 -0.1
Brazil 1.3 2.5 2.2
-1.0 0.0 0.0
India 7.3 7.5 7.7
-0.1 -0.3 -0.2
Emerging
Economies
Russia 1.7 1.6 1.7
0.0 +0.1 +0.2
Chart 2
Global PMI
DI, % pts.
60
Global Manufacturing PMI Output Index
Global Services PMI Business Activity Index
55
50
45
13 14 15 16 17 18 19
CY 2013 14 15 16 17 18 19
Chart 3
Real GDP Growth and
Breakdown by Component
ann., q/q % chg.
15
10
5
0
-5
Private consumption
Private business fixed investment, etc.
Government spending
-10
Exports
Imports
-15
Change in inventories, etc.
Real GDP
-20
CY 13 14 15 16 17 18
CY 2013 14 15 16 17 18
Chart 4
Outlook for Economic Activity and Prices
(January 2019 Outlook Report)
medians of Policy Board members' forecasts, y/y % chg.
(Reference) Excluding
CPI (all items
the effects of the
consumption tax hike
Real GDP less fresh
and policies concerning
the provision of free
food)
education
Fiscal 2018
+0.9 +0.8
Forecasts made in October 2018
+1.4 +0.9
Fiscal 2019 +0.9 +1.1 +0.9
Forecasts made in October 2018
+0.8 +1.6 +1.4
Fiscal 2020 +1.0 +1.5 +1.4
Forecasts made in October 2018
+0.8 +1.6 +1.5
Chart 5
Household Consumption
Consumer Confidence Index
Consumption Before and After Tax Hikes
s.a.
Apr. 1996 and Apr. 2013 = 100
106 46
105.1
105
104.6
104 44
103.9
103
102
42
101
100.0
100 40
99.4
99
improved
98 38
worsened
Tax hike in April 2014 (from 5% to 8%)
97
Tax hike in April 1997 (from 3% to 5%)
96.7
96
36
13 14 15 16 17 18 CY 2013 14 15 16 17 18 19
FY 1996 97 98 99 00 01 13 14 15 16 17 18 19
FY 2013 14 15 16 17 18
Note: Households of two or more persons. Consumer Confidence Index is
Note: The latest figures are as of December 2001 and December 2018.
composed of four categories: "overall livelihood," "income growth,"
Source: Cabinet Office, "Synthetic Consumption Index."
"employment," and "willingness to buy durable goods." There are
discontinuities between March and April 2013, and between
September and October 2018, due to changes in the survey
method.
Source: Cabinet Office, "Consumer Confidence Survey."
Chart 6
Consumer Prices
Consumer Price Index Measures of Underlying Inflation
y/y % chg. % points
y/y % chg.
2.0 1.0 50
1.5
1.0 0.5
0.5
0.0
0.0 0
-0.5
-1.0
-0.5
Trimmed mean
CPI (all items less fresh food)
Weighted median
-1.5
CPI (all items less fresh food and energy)
Diffusion index (right scale)
-2.0
-1.0 -50
11 CY 2011 12 12 13 13 14 14 15 15 16 16 17 17 18 18 19
CY 2011 12 13 14 15 16 17 18
CY11 12 13 14 15 16 17 18
Notes: 1. The latest figures are as of December 2018.
Note: Figures are adjusted for changes in the consumption tax rate.
2. The diffusion index is defined as the share of increasing
items minus that of decreasing items. The share of
Source: Ministry of Internal Affairs and Communications, "Consumer
increasing/decreasing items is the share of items in the CPI
Price Index."
(less fresh food, consumption tax adjusted) whose price
increased/decreased from a year earlier.
Sources: Bank of Japan, "Measures of Underlying Inflation"; Ministry
of Internal Affairs and Communications.
Chart 7
Output Gap and Inflation Expectations
Synthetic Indicators of Inflation
Output Gap
Expectations
%, % points y/y % chg.
y/y % chg.
8 4
2.0
5.07% Firms, households, and experts (Consensus Forecasts)
1.78% 2.02% 1.57%
(1990/4Q)
(1997/1Q) (2007/4Q) (2018/2Q)
Firms, households, and experts (QUICK Survey)
6
Firms, households, and markets (inflation swap rate)
4 2 1.5
2
0 0
1.0
-2
-4 Labor input gap -2
0.5
Capital input gap
-6
Output gap
Reference: CPI (all items less fresh food and energy; right scale)
-8 -4
0.0
85 88 91 94 97 00 03 06 09 12 15 18
CY 1985 CY 2010
10 11 12 13 14 15 16 17 18
Notes: 1. The data of the output gap in the left-hand graph are the estimates by the Bank's staff as of January 30, 2019. The CPI figures are adjusted for
changes in the consumption tax rate.
2. In the right-hand graph, semiannual data from the Consensus Forecasts up through 2014/Q2 are linearly interpolated. Figures for the Bank's
Opinion Survey on General Public's Views and Behavior exclude inflation expectations by respondents whose annual inflation expectations were
±5% or greater. The output prices DI in the Tankan (Short-Term Economic Survey of Enterprises in Japan) represents the difference between
the share of firms that raised prices in the preceding three months and the share of firms that lowered prices.
3. In the right-hand graph, inflation expectations of firms are taken from the Tankan and those of households are taken from the Bank's Opinion
Survey. For experts' and markets' inflation expectations, data from the Consensus Forecasts, the QUICK Survey, and the inflation swap rate are
used as indicated by their respective lines.
Sources: Ministry of Internal Affairs and Communications, "Consumer Price Index (Japan; 2015-base)"; Consensus Economics Inc., "Consensus Forecasts";
QUICK, "QUICK Monthly Market Survey (Bonds)"; Bloomberg; Bank of Japan.
Chart 8
Outline of the Bank's Monetary Policy
(1) Yield Curve Control
Short-term rate: The Bank will apply minus 0.1 percent to the Policy-Rate Balances.
Long-term rate: The Bank will purchase JGBs so that 10-year JGB yields will remain at
around zero percent. While doing so, the yields may move upward or downward
to some extent mainly depending on developments in economic activity and
prices.
(2) Asset Purchases
The Bank will purchase ETFs and J-REITs so that their amounts outstanding will increase
at annual paces of about 6 trillion yen and about 90 billion yen, respectively. With a
view to lowering risk premia of asset prices in an appropriate manner, the Bank may
increase or decrease the amount of purchases depending on market conditions.
(3) Commitment
Overshooting commitment: The Bank will continue expanding the monetary base until
the year-on-year rate of increase in the observed CPI (all items less fresh food)
exceeds 2 percent and stays above the target in a stable manner.
Forward guidance for policy rates: The Bank intends to maintain the current extremely
low levels of short- and long-term interest rates for an extended period of time,
taking into account uncertainties regarding economic activity and prices including the
effects of the consumption tax hike scheduled to take place in October 2019.
Chart 9
Structure of "Industrie 4.0"
Federal Minister for Economic Affairs and Energy
and Federal Minister of Education and Research
Technical/practical
Policy guidance,
Activities on the
expertise
society, multipliers
market
decision-making
Strategy Group
Steering Body
Industrial Consortia and
 Strategy development, technical 
Agenda setting, political
Initiatives
coordination, and
steering, and multipliers
 Implementation on the market
decisionmaking

Members:
 Test beds

Members: Federal Ministers,
•
State Secretaries
 Examples of applications
business representatives, and
•
Representatives of steering
chairs of working groups
body
•
Representatives of Federal
Working Groups
Chancellery, Interior Ministry Standardization Council
•
State representatives
1. Reference architecture,
•
Representatives of
standardization and standards
associations
2. Technology and application
Labs Network
•
Representative of trade union
scenarios
•
Representative of science
3. Legal framework
4. Work, education, and training
5. Digital business models
Research Council
6. Security of networked systems
Secretariat
Source: Federal Ministry of Economic Affairs and Energy in Germany, "Structure of the 'Industrie 4.0' platform."
Chart 10
Similarities and Differences between Germany and Japan
(1) Industrial distribution (2) Declining birthrate and aging population
Agriculture, (a) Distribution of ages of SME managers (b) Birth rates
%
forestry, and
60 3.0
fisheries
Germany
31%
Germany CY 2002
Germany CY 2016
50 2.5
Japan CY 2000
Mining,
Japan CY 2015
manufacturing, 40 2.0
and
30 1.5
construction
Japan 27%
Other
20 1.0
industries
Germany
Japan
10 0.5
0% 100% World average
0 0.0
Note: Figures are as of CY 2018 for Germany and as of FY 2017
CY 2000 00 04 08 12 16
for Japan. below 39 40-44 45-49 50-54 55-59 over 60
Sources: Statistisches Bundesamt, "National accounts"; Cabinet
Sources: KfW; The Small and Medium Enterprise Agency, "White Paper on Small and
Office, "Annual Report on National Accounts for 2017."
Medium Enterprises in Japan"; World Bank.
(3) Share of exports by SMEs
%
(4) International comparison of "hidden champion"
35
num. of firms
Germany
1400 Note: The three criteria to be
30
Japan
considered a "hidden
1200
25
champion" are the following:
1000
20
(a) the firm is among the top
800
three in the global market or
15
600
is number one for a particular
10
400 niche business area on the
5
continent where the firm is
200
based, (b) the firm has less
0
0
than 5 bil. euro in revenue,
CY/FY 2009 09 10 11 12 13 14 15 16
Italy
and (c) the firm is little known
China
Japan
States
Note: Horizontal axes are CY for Germany and FY for Japan. The
France
Austria
to the general public.
Kingdom
Germany
latest figure available for Japan is for fiscal 2015.
Switzerland
Source: Hermann Simon, Hidden
United
Sources: OECD, "Exports by Business Size"; The Small and Medium
Champion of the 21st
United
Enterprise Agency, "White Paper on Small and Medium
Century.
Enterprises in Japan."