Small and midsize companies account for 90 percent of domestic enterprises, and are a huge potential source of technological and human capital. We hope they will play a significant role in kick-starting the economy.
A panel of the Economy, Trade and Industry Ministry formed to investigate the future of small and midsize businesses recently announced its proposals for revitalizing this sector. The panel’s report compiled the views of workers at small and midsize companies including managers, female entrepreneurs and younger workers.
An important part of the proposals is the request for the government to revise conventional measures by paying more attention to smaller companies, instead of supporting the relatively major members of this sector with priority.
The number of small and midsize companies has decreased by 650,000 over the last decade, to the detriment of about 3 million jobs. Smaller firms that close or struggle are particularly noticeable.
With the domestic market shrinking due to the aging population and low birthrate, and businesses being pinched by an unusually high yen, smaller companies tend to be affected also by overseas transfers and poor performance by the large companies they do business with. Small and midsize companies face an increasingly harsh business environment.
The decline in small and midsize businesses has led to a vicious cycle that exhausts regional economies. This can no longer be ignored.
The panel displayed a stronger level of concern, pointing out that “small enterprises can change Japan”. Indeed, we believe that only revitalized small and midsize firms can maintain regional jobs and prevent the further hollowing out of domestic industries.
Many major firms such as Toyota Motor Corp. and Panasonic Corp. started out as small, local factories. A vital question for today is how to discover and support a future Toyota that has growth potential.
Unfortunately, many small firms miss opportunities for dramatic growth because of a lack in practical management expertise.
The panel’s proposal emphasized the importance of boosting a one-stop management support system where financial institutions, certified tax accountants and others could help small and midsize enterprises in cooperation with the central and local governments. Aid would be provided depending on the individual company’s stage, whether just starting out, stable or growing, or looking for successors. Details of the system should be worked out as soon as possible.
Measures are also necessary to assist small and midsize businesses in improving unique technological skills and enhancing their products’ market competitiveness. We think an initiative to create a concentrated area for overseas-oriented industry ― one of the panel’s proposals ― deserves serious consideration. Parties involved need to rack their brains to discover the best ways for small and midsize firms to expand their sales in Asia and elsewhere.
In addition to manufacturing, companies in service industries such as nursing care and medical services need to be developed, as women and young people can work comfortably in these fields. It is important to develop working environments that can better utilize the potential of this nation’s women.
Policies concerning small and midsize companies should be one of the pillars of the government’s up-coming strategy for revitalising Japan. However, care must be taken so these measures are not just an additional form of lavish support.
Small and midsize companies have no hope of success if they merely rely on government support. They must have the originality and ingenuity to proactively find new opportunities on their own.
(The Yomiuri Shimbun)
(Asia News Network)
