2015 White Paper on Small and Medium Enterprises in Japan and White Paper … · 2018-11-20 · ...

2015 White Paper on Small and Medium Enterprises in Japan and White Paper on

Small Enterprises in Japan (outline)

April 2015 Small and Medium Enterprise Agency

2015 White Paper on Small and Medium Enterprises in Japan and White Paper on Small Enterprises in Japan

<White Paper on Small and Medium Enterprises in Japan> Annual Report Based on Article 11 of the Small and Medium-sized Enterprise

Basic Act (Statutory White Paper) The 52nd White Paper; Scheduled to be approved by the Cabinet and

submitted to the Diet on April 24, 2015. <White Paper on Small Enterprises in Japan> Annual Report Based on Article 12 of the Basic Act for Promoting Small Enterprises (Statutory White Paper) The 1st White Paper; Scheduled to be approved by the Cabinet and

submitted to the Diet on the same day as the approval and submission of the White Paper on Small and Medium Enterprises.

Definitions under the Small and Medium-sized Enterprise Basic Act

SMEs Small enterprises* (Micro businesses)

Business type Stated capital or number of employees Employees

Manufacturing industry and

others 300 million yen or less 300 or fewer 20 or fewer

Wholesale trade industry 100 million yen or less 100 or fewer 5 or fewer

Service industry 50 million yen or less 100 or fewer 5 or fewer

Retail trade industry 50 million yen or less 50 or fewer 5 or fewer

Number of enterprises

Number of employees

Large enterprises 0.011 million 13.97 million

SMEs 3.853 million 32.17 million

Small enterprises 3.343 million 11.92 million

SMEs 3.853 million Small enterprises 3.343 million

Medium enterprises Approx. 0.510

million 13.2%

Small enterprises Approx. 3.343 million

86.5%

Large enterprises Approx. 0.011 million 0.3%

*Note: In order to differentiate businesses in an understandable manner that sole proprietorships are also included, rather than the term “small enterprises,” the term “micro businesses” will be used hereinafter. 1

Structure of the 2015 White Paper on Small and Medium Enterprises in Japan

Part I. Developments among SMEs and Micro Businesses* in FY 2014 Chapter 1 Economic Developments in Japan Chapter 2 Developments among SMEs and Micro Businesses Chapter 3 Environment Surrounding SMEs and Micro Businesses

Part II. Further Dramatic Growth of SMEs and Micro Businesses Chapter 1 Innovations and Development of Sales Channels by

SMEs and Micro Businesses Chapter 2 Securement and Fostering of Human Resources by

SMEs and Micro Businesses Part III. Considering “Regions” –Confronting Their Own Changes and Characteristics–

Chapter 1 Specific Efforts for Regional Revitalization Chapter 2 Responses by Regions in Light of Changes in

Economic and Social Structures Note about the term “SMEs and micro businesses”: The term “small and medium enterprise” is defined in Article 2, Paragraph 1 of the Small and Medium-sized Enterprise Basic Act as a concept that even includes small enterprises. However, the government uses the term “SMEs and micro businesses” in order to expressly indicate that sole proprietorships are included in the scope of measures and support. Accordingly, the term “SMEs and micro businesses” shall be used in this White Paper, excluding cases where this term is used as a strict legal term and cases where there are statistical restrictions.

2

Part I Developments among SMEs and Micro

businesses in FY 2014

3

▲ 5

▲ 4

▲ 3

▲ 2

▲ 1

0

1

2

3

4

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ

2010 11 12 13 14

Imports Exports

Public demand Changes in private inventories

Private non-residential investment Households

Growth rate

(percentage points)

(Year/ quarter)

Source: National Accounts of Japan, Cabinet Office Notes: 1. Chained at prices in CY 2005

2. Figures are sourced from the 2nd Preliminary Quarterly Estimates of GDP Oct.-Dec. 2014 (announced on March 9, 2015).

▲ 20.5

▲ 12.7

▲ 18.7

▲ 55

▲ 50

▲ 45

▲ 40

▲ 35

▲ 30

▲ 25

▲ 20

▲ 15

▲ 10

▲ 5

0

5

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ

2007 08 09 10 11 12 13 14 15

(Diffusion Index, seasonally-adjusted change from the previous quarter)

Trends in Business Conditions DI for SMEs and Micro businesses by Enterprise Size

Source: Survey on SME Business Conditions, Small and Medium Enterprise Agency (SMEA) and Organization for Small & Medium Enterprises and Regional Innovation, Japan (SMRJ)

Note: The business conditions DI is calculated by subtracting the percentage of enterprises that answered “worsened” from the percentage of enterprises that answered “improved” when questioned about business conditions in comparison with the previous quarter.

Micro businesses Medium enterprises All SMEs

I. Developments among SMEs and Small enterprise in FY 2014 (1)

Although the Japanese economy has recovered, primarily driven by domestic demand including consumer spending, GDP growth rates fell into the negative for two consecutive quarters, the second quarter and the third quarter of 2014, because consumer spending was weak, due to the impacts of the consumption tax hike and other causes. Thereafter, GDP growth rates turned positive in the fourth quarter of 2014, due to growth in exports and increases in consumer spending.

Although business conditions for SMEs steadily continued to improve from the first quarter of 2013, they deteriorated in the second quarter of 2014. Thereafter, there were periods when they remained flat. But currently, they are showing movement toward picking up.

Changes in Real GDP Growth

4

(Year/ quarter)

20406080

100120140160180

1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 12

07 08 09 10 11 12 13 14 15

(Yen/liter) Regular gasoline Diesel

70

80

90

100

110

120

130

20

40

60

80

100

120

140

1 4 7101 4 7101 4 7101 4 7101 4 7101 4 7101 4 7101 4 71012

07 08 09 10 11 12 13 14 15

(US dollars / barrel) (Yen / US dollar) Dubai (left axis) Exchange rates for

Yen / US dollar

(Month) (Year)

Trends in Crude Oil Prices and Exchange Rates

(Month) (Year)

Trends in Prices of Domestic Petroleum Products

DIs for Unit Purchase Price of Raw Materials, for Unit Selling Price and Average Sales Per Customer, and for Profitability of SMEs and Micro businesses

I. Developments among SMEs and Small enterprise in FY 2014 (2)


Source: Primary Commodity Prices, IMF; Bloomberg

Source: Survey of Petroleum Product Prices, Agency for Natural Resources and Energy, METI

Since 2013, the prices of domestic petroleum products have been on the rise against the background of a trend toward a depreciation of the yen. Due to this rise, SMEs’ and Micro businesses’ unit purchase prices for raw materials have been on the rise. During the rise of unit purchase prices, their unit selling prices and average sales per customer have also been on a moderate rise. However, the rise in unit purchase prices of raw materials pushed down profits.

Due to the decrease in crude oil prices, the prices of domestic petroleum products have decreased as well since the autumn of 2014. Meanwhile, the profitability of SMEs and Micro businesses is continuing to face a challenging environment, and it is thus important to continue to take countermeasures so that a rise in the unit purchase price can be shifted to the selling price.

▲ 60

▲ 40

▲ 20

0

20

40

60

80

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ

2007 08 09 10 11 12 13 14 15

DI for unit purchase priceof raw materials

Profitability DI

DI for unit selling price andaverage sales percustomer

(DI, percentage points)

(Year/ quarter)

5

Under the interdependence that has conventionally existed between large enterprises and both SMEs and Micro businesses, SMEs and Micro businesses, which have focused on contract processing as their business, have enjoyed the benefit of the demand that large enterprises have been able to garner from the market.

However, the interdependence between large enterprises and both SMEs and Micro businesses has become shallow against the background of the advancement of globalization, which is forcing SMEs and Micro businesses to directly face the market and to gain demand by themselves.

Looking at the long-term growth patterns of large enterprises and both SMEs and Micro businesses, both groups grew together in the 1980s. But their growth patterns came to vary in the 1990s, and both groups grew again in the 2000s. However, changes, including the fact that disparities in earning power between enterprises of the same scale, have been identified (more details will be given later).

Changes in the Structure of Transactions of Large enterprises, SMEs, and Micro businesses (Manufacturing Industry)

Large enterprises

Market

Interdependence

Large enterprises

Interdependence

Weakened interdependence

Market

Advancement of globalization, etc.

<Con

vent

iona

l pat

tern

> <C

urre

nt p

atte

rn>

SMEs and Micro businesses Focus on contract processing

It will become more necessary not only for large enterprises but also for SMEs and Micro businesses to proactively face the market and

make efforts for business.

SMEs and Micro businesses

Changes in Real Value Added per Enterprise (Manufacturing Industry)

130.5

140.6 139.1

90100110120130140150

80 81 82 83 84 85 86 87 88 89

<Value in 1980=100>

(FY)

60.3 57.3

95.8

5060708090

100110

90 91 92 93 94 95 96 97 98 99

(Value in 1990=100)

(FY)

133.3

121.0

134.4

8090

100110120130140

00 01 02 03 04 05 06 07 08 09 10 11 12 13

(Value in 2000=100)

(FY)

<1980s>

<1990s>

<2000s and after>

Source: Financial Statements Statistics of Corporations by Industry (annual report), Ministry of Finance; Japan Industrial Productivity Database 2014, Research Institute of Economy, Trade and Industry 6

Small enterprises (Stated capital: less than 10 million yen)

Medium enterprises (Stated capital: 10 million yen or more

and less than 100 million yen) Large enterprises (Stated capital: 100 million yen or more)

I. Environment Surrounding SMEs and Small enterprises (1)

0

10

20

30

40

50

60

Deve

lopme

nt of

new

custo

mers

and

marke

ting

(%)

0

5

10

15

Secu

reme

nt of

supe

rior h

uman

reso

urce

san

d dev

elopm

ent o

f hum

an re

sour

ces

Reco

nside

ratio

n of e

xistin

g cus

tomer

san

d mar

ketin

g

Expa

nsion

of te

chno

logica

l dev

elopm

ent

Deve

lopme

nt of

new

busin

ess

Expa

nsion

of em

ploym

ent

Stre

ngthe

ning o

f man

agem

ent s

ystem

s

Deve

lopme

nt of

new

supp

liers

Enha

ncem

ent o

f equ

ipmen

t

Reco

nside

ratio

n of e

xistin

g bus

iness

Redu

ction

of in

teres

t-bea

ring l

iabilit

ies

Reco

nside

ratio

n of e

xistin

g sup

plier

s

Othe

r issu

es

High-profit enterprises Low-profit enterprises All enterprises

(%)

(n=633) (n=633) (n=2,532)

▲ 25

▲ 20

▲ 15

▲ 10

▲ 5

0

5

10

15

20

83 85 87 89 91 93 95 97 99 01 03 05 07 09 11 13

(percentage points)

(FY)

Medium enterprises (Stated capital: 10 million yen or more and

less than 100 million yen)

Large enterprises (Stated capital: 100 million yen or more)

Small enterprises (Stated capital: less than

10 million yen)

As for the trend toward a disparity in earning power between enterprises of the same scale, the disparity is expanding. In particular, the disparity between Small enterprises is widening, and the earning power of low-profit Small enterprises continues to decline. Meanwhile, the earnings ratios of high-profit Small enterprises surpass even those of large enterprises. (*) Enterprises whose ordinary profit ratios are in the top 25% among enterprises of the same scale are defined as high-profit enterprises, and those whose ordinary profit margins over sales are in the bottom 25% are

defined as low-profit enterprises. Concerning the issues in moving towards an improvement in earning power, both high-profit enterprises and low-profit enterprises are acutely focused on the development of new customers and

marketing. Meanwhile, compared to low-profit enterprises, high-profit enterprises are acutely focused on the securement of superior human resources, development of human resources, and expansion of technological development.

Ordinary profit margins over sales of high-profit enterprises and low-profit enterprises (manufacturing)

Issues in moving towards the improvement of earning power

Source: Survey on the Structural Competitiveness of Large Enterprises and SMEs, Teikoku Databank, Ltd., under contract from SMEA, September 2014

Source: Recompiled from Financial Statements Statistics of Corporations by Industry (annual report), Ministry of Finance 7

I. Environment surrounding SMEs and Small enterprises (2)

Enterprises whose ordinary profit margins over sales are in the top 25% among enterprises of the same scale

Enterprises whose ordinary profit margins over sales are in the bottom 25% among enterprises of the same scale

Part II Further Dramatic Growth by SMEs and

Micro businesses

8

Innovation activities in general give many people the strong impression that the scale of these activities is relatively large and that these activities are efforts taken by business operators who support large areas.

When examining the situations of activities performed towards the realization of innovations, breaking down SMES into local demand-oriented enterprises and wide-area demand-oriented enterprises, it appears that wide-area demand-oriented enterprises are conducting these activities more proactively. *As for the target markets, enterprises that prefer to focus on the same municipality or prefecture as the one in which they reside in the future are defined as local demand-oriented enterprises, and enterprises that focus on all prefectures or foreign countries are defined as wide-area demand-oriented enterprises.

When examining the specific details of efforts by scale of enterprise, medium enterprises are making efforts that revitalize their organization and human resources including “cooperation across departments” and “enhancing human talent base through recruiting mid-career personnel” more proactively than Small enterprises.

Also, when examining the specific details of efforts by demand orientation, the larger the trade area an enterprise operates within, the more proactive efforts considering factors outside of the enterprise including research and development for differentiation in the market and efforts to expand external cooperation seem to be made.

II. Further Dramatic Growth of SMEs and Micro businesses – Innovation (1) Actual State of Innovation Activities –

43.4

53.1 48.5 50.6 50.8

65.5

75.3 69.0

75.8 72.5

0

10

20

30

40

50

60

70

80

Constructionindustry

(n=145) (n=55)

Manufacturing industry

(n=275) (n=575)

Wholesale tradeindustry

(n=132) (n=168)

Retail tradeindustry

(n=255) (n=62)

Service industry(n=551)(n=240)

Local demand-oriented enterprises Wide-area demand-oriented enterprises(%) Situations of Innovation Activities by Demand Orientation

Source: Surveys on Development of Markets and New Efforts, Mitsubishi UFJ Research and Consulting Co., Ltd., under contract from SMEA, December 2014

Note: The percentages in the figure above are calculated based on the total number of enterprises that conducted innovation activities performed towards realizing either product innovations or process innovations during the past three years.

30.6

19.4

9.5

22.8

35.7 38.8 38.1

24.5

13.3

55.7

41.8

13.1

17.4

45.7

33.2

41.0

30.5

13.9

44.6

21.1

10.0

19.5

45.0

31.9

51.0

33.5

10.8

61.7

40.8

13.6

27.1

54.0

36.9

45.6 42.6

11.9

0

10

20

30

40

50

60

70

部署を越えた協働や社内

コミュニケーションの

活性化を行う

中途採用を行い新しい

空気を取り込む

人材採用の際に多様性

を重視して採用する

景況に関わらず、一定

の予算を割いている

常に新市場開拓を意識

した情報収集･

分析を

している

商品を安価に提供する

ための情報収集･

分析を

している

市場での差別化をするため

の研究･

開発をしている

社外との協働が増える

ような取り組みをしている

社外とのコミュニケー

ションを増やすため、便利

な場所に立地している

(%)

Efforts enterprises make for innovations

Organization and human resources External partnerships Goods and services

Local demand-oriented Small enterprises(n=294)

Local demand-oriented medium enterprises (n=512)

Wide-area demand-oriented Small enterprise (n=251)

Wide-area demand-oriented medium enterprises (n=605)

Cond

uct c

oope

ratio

n acro

ss

depa

rtmen

ts an

d rev

italiz

e inte

rnal

comm

unica

tions

Injec

t new

bloo

d thr

ough

recru

iting

mid-

care

er pe

rsonn

el

Prior

itize t

he di

versi

ty of

huma

n re

sour

ces w

hen e

mploy

ing hu

man

reso

urce

s

Alloc

ate ce

rtain

amou

nts of

the

budg

et re

gard

less o

f bus

iness

co

nfide

nce

Cond

uct c

ollec

tion a

nd an

alysis

of

infor

matio

n, alw

ays h

aving

the

deve

lopme

nt of

new

marke

ts in

mind

Cond

uct in

forma

tion c

ollec

tion a

nd

analy

sis of

infor

matio

n in

orde

r to

prov

ide go

ods a

t low

cost

Make

effor

ts to

expa

nd ex

terna

l co

oper

ation

Cond

uct r

esea

rch an

d de

velop

ment

for di

ffere

ntiati

on of

pr

oduc

ts in

marke

ts

Choo

se ac

cess

ible l

ocati

ons i

n or

der to

expa

nd ex

terna

l co

mmun

icatio

ns

9

32.0

40.6

34.9

30.9

33.1

28.4

0% 100%

Not conducting innovation activities(n=375)

Conducting innovation activities(n=908)

Wide-area demand-oriented enterprises

25.9

39.5

42.5

34.4

31.7

26.1

Not conducting innovation activities(n=897)

Conducting innovation activities(n=855)

Profits have been on the increase. Profits have been remaining flat. Profits have been on the decrease.

Local demand-oriented enterprises

II. Further Dramatic Growth of SMEs and Micro businesses – Innovation (2) Outcomes of and Issues from Innovation –

Enterprises that are making efforts for activities towards the realization of innovations, even if they are local demand-oriented enterprises, tend to be increasing their profits. It is thought that local demand-oriented enterprises should thus make efforts for innovation activities to proactively continue to improve their productivity and enhance their earning power.

When examining challenges in making efforts for innovations, there are many enterprises that consider the assessment of necessity and timing difficult; for example, some stated, “it is difficult to assess the necessity of efforts,” and, “it is difficult to assess the timing of commercialization.” When examining enterprise issues by scale of enterprise, many medium enterprises list issues concerning human resources while many Micro businesses list issues concerning funding.

36.9 36.2

34.3

27.3

39.7

33.4

25.3 24.1 20.2

41.3

35.7

32.4

19.8

10.6

36.4 33.8

23.4

28.0

34.3

25.9

37.7

20.0

12.7

34.7

24.0 27.6

33.5

8.6

0

5

10

15

20

25

30

35

40

45

イノベーションの取組の

必要性の見極めが難しい

情報収集やアイデア

だしに手間がかかる

検討を担当する人材の

見極めが難しい

本格的な検討を開始する

時期の見極めが難しい

投資時期･

必要性の


投資を決定づける事業内容や

規模の見極めが難しい

投資をするための

資金調達が難しい

投資を決定づける判断材料となる

十分な情報収が集まらない

試行を担当する人材の


事業化の時期の


事業を担当する人材の


事業化を決定づける判断材料

となる十分な情報収が集まらない

運営資金の調達が難しい

事業を行う上で社外の経営

資源を活用することが難しい

(%)

Issues by process in innovation

Phase of making decisions on whether to begin deliberations

Medium enterprises (n=1,233) Micro businesses (n=582)

Phase of decision on investment Medium enterprises (n=1,230)

Micro businesses (n=531)

Phase of decision on commercialization Medium enterprises (n=1,199) Micro businesses (n=579)

It is

diffic

ult to

ass

ess t

he n

eces

sity

of eff

orts

for in

nova

tion.

It is

time-

cons

uming

to co

llect

infor

matio

n an

d pr

opos

e ide

as.

It is

diffic

ult to

dete

rmine

whic

h hu

man

reso

urce

s wi

ll be

in ch

arge

of

delib

erati

ons.

It is

diffic

ult d

eterm

ine th

e tim

ing

when

we

shou

ld be

gin fu

ll de

liber

ation

s. It

is dif

ficult

to a

sses

s the

timing

and

ne

cess

ity o

f inve

stmen

ts.

It is d

ifficu

lt to a

sses

s the

deta

ils a

nd sc

ale

of bu

sines

s, wh

ich pl

ay im

porta

nt ro

les

when

deter

minin

g wh

ether

to in

vest.

It is

diffic

ult to

cond

uct f

und

proc

urem

ent f

or in

vestm

ents.

We f

ail to

colle

ct su

fficien

t inf

orma

tion

for u

s to

decid

e to

inves

t.

It is d

ifficu

lt to a

sses

s whic

h hum

an

reso

urce

s will

be in

char

ge of

pilo

t effo

rts.

It is d

ifficu

lt to a

sses

s the

timing

of

comm

ercia

lizati

on.

It is d

ifficu

lt to a

sses

s whic

h hum

an

reso

urce

s will

be in

char

ge of

bus

iness

.

We f

ail to

colle

ct su

fficien

t infor

matio

n ac

cord

ing to

whic

h we c

ould

make

de

cision

s on

comm

ercia

lizati

on.

It is

diffic

ult to

pro

cure

fund

s for

op

erati

ons.

It is d

ifficu

lt to u

tilize

exte

rnal

mana

geme

nt re

sour

ces w

hen e

xpan

ding b

usine

ss.

Medium enterprises Micro businesses

A local demand-oriented enterprise that has realized improvement of customer service by introducing IT This enterprise has been engaged in the real estate and building industries in Ota Ward, Tokyo.

It was established in 2000 and has provided its customers with finely tuned support by collecting and incorporating regional real estate information, as an enterprise rooted in the local community.

Local real estate enterprises generally showed customers real estate information on paper and used faxes for communication in the past, but in recent years, portal sites for real estate run by large enterprises have been increasing, enormous amounts of real estate information is available, and anyone can search and access the information. In the past, there were some advantageous aspects to agents having their own real estate information, but now, the balance of demand and supply has reversed, and the environment surrounding the market has largely changed.

Early on amidst this changing environment, this enterprise introduced a cloud service provided by a major IT enterprise in 2009. Using functions such as data management and a calendar through the cloud service allowed the enterprise to succeed in sharing information within the enterprise and making progress in operational efficiency. Response time for customer requests dramatically improved by speeding up information sharing within the enterprise in addition to improvements in productivity because of this improved operational efficiency. Responses to customer needs are becoming more finely tuned, and consequently profit is increasing.

10

Source: Surveys on Development of Markets and New Efforts, Mitsubishi UFJ Research and Consulting Co., Ltd., under contract from SMEA, December 2014 Note: Enterprises that answered, “our profits have been on a significant increase,” and, “our profits have been slightly on the increase” concerning the trends in their

ordinary profits for the most recent three years are classified under “Profits have been on the increase,” and enterprises that answered, “our profits have been on a significant decrease,” and, “our profits have been slightly on the decrease,” are classified under “Profits have been on the decrease.”

Trends in Ordinary Profits by Orientation of Demand and Status of Innovation Activities

Source: Surveys on Development of Markets and New Efforts, Mitsubishi UFJ Research and Consulting Co., Ltd., under contract from SMEA, December 2014

Note: The total may not be 100% due to multiple answers.

A group of enterprises that formed a network of SMEs and succeeded in meeting demand This network comprises SMEs related to machinery and metals in southern Kyoto and “provides solutions specialized

for prototyping” from the processing of parts through the development of devices. By forming a network of enterprises having advanced technologies such as cutting and surface treatment, it realizes

multiple processes, which cannot be done by single enterprises, and this enables the network to take commissions for challenging prototypes. At the present, the network receives inquiries from around the nation because it has developed an integrated system from the processing of parts through the development of devices.

It gives first priority not to “cost” but to “speed,” which is the most important factor at the development stage. So, it built a mechanism by which customers can order through its website and can expect to receive a quote within two hours, which streamlines the development of products.

An example of winning orders by pulling single-process enterprises together A Kyoto-based enterprise engaging in the manufacture and sale of precision machine parts. This enterprise

pulls together mid-ranking and small and medium enterprises which have advanced processing technologies and are the best in Japan or at the top level in the world especially in the fields of single processes (such as casting, forging, processing, heat treatment, surface treatment, pressing, forming, and die-casting), manufactures the best quality parts and units by managing what happens between processes, and sells them all over the world.

This enterprise believes that Japan’s unique technologies from unprecedentedly specialized single-process enterprises have supported industries in Japan, and it has done business in cooperation with industry, government, and academia to sustain “Monodzukuri (manufacturing) Japan” as globalization progresses.

II. Further Dramatic Growth of SMEs and Micro businesses – Innovation (3) Specific Cases –

Partnerships between enterprises are important in making efforts for innovation activities In order to achieve business success in partnerships between enterprises, the presence of entities that serve as cores of such partnerships is important. The existence of enterprises or

offices that are the cores of such partnerships, which serve to coordinate between all these enterprises, is thought to facilitate the winning of orders from downstream enterprises.

A group of enterprises that formed a network between small and medium enterprises (SMEs) and succeeded in meeting demand This group of enterprises was formed by four SMEs in Japan, with one of them, YURA Sansho Co., Ltd. (Osaka City),

a wholesaler of screws, as a core member. By understanding the needs of downstream manufacturers, the group makes capabilities such as special processes

and non-destructive inspection available within the network, which allows them to implement the “integrated production of parts,” having responsibility for the entire process from orders received through the final quality assurance of products and shipping, and to deliver the necessary amount of complete parts just in time to meet demand from downstream factories.

11

17.8

16.5

16.6

33.4

28.7

26.4

0 20 40 60 80

Understanding (n=386)



Not understanding (n=1,526)



Markets’ needs

Scale of markets (in terms of monetary scale)

Trade areas of markets

41.9

57.4

64.0

58.4 57.0

38.3

60.1 65.4

46.6

52.3

46.4

28.7

20.7

30.8 29.5

0

10

20

30

40

50

60

70

Construction industry(n=248)

Manufacturingindustry

(n=1,074)

Wholesale industry(n=367)

Retail trade industry(n=373)

Services industry(n=945)

Existing markets New markets Not making efforts for the development of sales channels(%)

When examining the efforts for developing sales channels conducted by SMEs and Micro businesses by breaking down these efforts into those in existing markets and those in new markets, the percentages of enterprises that are making efforts to develop sales channels in new markets are higher in the manufacturing industry and wholesale industry than those in other industries. Meanwhile, the percentage of enterprises that answered, “not making efforts for the development of sales channels,” is anywhere from 20% to over 40%.

When examining the percentage of enterprises that achieved their sales targets as a function of their understanding of the market, the percentages of enterprises that achieved their sales targets in new markets are lower in general compared to those in existing markets, which shows that it may be difficult for SMEs and Micro businesses to develop new markets.

Meanwhile, the degree of progress toward the goals of enterprises that answered, “We understand the needs, trade area, and scale of markets,” is higher compared to that of enterprises that answered, “We don’t understand them.”

II. Further Dramatic Growth of SMEs and Micro businesses – Development of Sales Channels (1) – Efforts for Developing Sales Channels and Amounts of Sales by SMEs and Micro businesses –

Progress towards sales targets by situation of the understanding of markets

Source: Survey on Development of Markets and New Efforts, Mitsubishi UFJ Research and Consulting Co., Ltd., under contract from SMEA, December 2014

Note: The total may not be 100% due to multiple answers. (%)

(2) Development of new markets

(1) Development of existing markets Efforts for the Development of Sales Channels by Industry and Market

51.1

50.7

49.0

60.6

59.8

60.2

0 20 40 60 80 (%)


Understanding (n=1,279)

Understanding (n=1,092)




Markets’ needs

Scale of markets (in terms of monetary scale)

Trade areas of markets

12

11.0

50.8

38.2

Have already acquired.Have the intention to acquire, but have yet to acquire.Don’t have the intention to acquire.

(%)

(n=1,784)

When examining the issues in developing new markets that enterprises that failed to achieve their sales targets are facing, it appears that the percentage of enterprises that are facing issues concerning human resources is the highest, and the percentage of enterprises that are facing issues concerning marketing including collection and analysis of information is the second highest.

More than 50% of enterprises that are facing a shortage of human resources fail to acquire external human resources. Many enterprises and businesses list “cannot expect to earn profit that pays off the costs,” as a reason for this failure.

Also, when examining attitudes concerning marketing towards the future development of markets, it can be seen that more than 60% of enterprises have the intention to conduct market surveys. Furthermore, when breaking down markets to be developed into existing markets and new markets, it can be seen that the drive to conduct market surveys for developing new markets is stronger than that for developing existing markets.

II. Further Dramatic Growth of SMEs and Micro businesses – Development of Sales Channels (1) Issues in Development of Sales Channels –


Note 1: The percentages in the figure above were calculated for enterprises that are facing issues concerning human resources among issues in the development of sales channels.

2: “Acquisition of external human resources” refers to the recruitment of human resources who have the ability to develop sales channels regardless of whether they are new graduates or mid-career personnel.

Intentions of enterprises that are facing a shortage in human resources to acquire external human resources


58.0 51.9

41.7 37.0 35.5 34.9 34.5 31.1

22.8 20.9 19.4 19.1 18.5 17.4 16.1 13.1

0

10

20

30

40

50

60

70

We d

on’t h

ave

huma

n re

sour

ces f

or sa

les ac

tivitie

s who

ca

n dev

elop

new

custo

mers.

We d

on’t h

ave

huma

n re

sour

ces w

ho p

ropo

se a

nd

reali

ze pl

ans a

nd id

eas.

It is h

ard t

o ide

ntify

marke

ts in

which

our c

ompa

ny ca

ntak

e adv

antag

e of o

ur st

reng

ths.

We d

on’t h

ave

huma

n re

sour

ces w

ho co

llect

and

analy

ze in

forma

tion.

It tak

es tim

e to c

ollec

t infor

matio

n for

prop

osing

plan

san

d ide

as.

It is d

ifficu

lt to a

scer

tain

the m

arke

ts’ ne

eds.

It is d

ifficu

lt to s

ecur

e sale

s cha

nnels

.

We h

ave d

ifficu

lties i

n gain

ing pu

blicit

y for

our c

ompa

ny.

Utiliz

ation

of IT

for d

evelo

ping n

ew cu

stome

rs is

not

adeq

uatel

y car

ried o

ut.

We d

on’t h

ave

enou

gh fu

nds t

o car

ry ou

t trial

s and

the

like.

We d

on’t h

ave

exter

nal n

etwor

ks o

r adv

isers

for th

e de

velop

ment

of sa

les ch

anne

ls.

It is d

ifficu

lt to a

scer

tain t

he sc

ale of

mar

kets

and t

rade

area

s.

We d

on’t h

ave

enou

gh fu

nds t

o coll

ect a

nd a

nalyz

e inf

orma

tion.

We d

on’t h

ave

prom

otion

al ma

terial

s and

it is

costl

y to

prep

are

their

deve

lopme

nt.

We d

on’t h

ave

huma

n re

sour

ces w

ho ca

rry ou

t tria

ls an

d the

like.

We d

on’t h

ave

exter

nal a

dvise

rs for

deve

lopme

nt.

(n=822)

(%)

Phase of collection and analysis of information

Phase of development of goods and services

Phase of development of sales channels and provision of goods and services

Issues facing enterprises that failed to achieve their sales targets in the development of new markets


Note: The total may not be 100% due to multiple answers.

31.2

56.1

28.9

0102030405060

Don’t have necessary funds.

Cannot expect to earnprofit that pays off the

costs.

Don’t know how to acquire.

(%) (n=852)

62.2

30.4

7.4

68.2

18.2 13.7

0

20

40

60

80

Have the intention to conduct detailedsurveys.

Current understanding of markets issufficient.

Don’t really know.

Development of existing markets(n=2,689)

Development of new markets(n=2,556)

(%) Attitudes towards future market surveys by markets to be developed

13

III. Further Dramatic Growth of SMEs and Micro businesses – Development of Sales Channels (3) Specific Cases –

It is necessary to change the idea of producing “goods with better quality” to an idea of producing “goods that sell well.” The possibilities of the development of new sales channels will be increased by establishing brands such as by meeting the market needs and leveraging the power of designs.

It is also important for local SMEs to continue to expand their businesses not only in the domestic market but also in the growing overseas market. As methods for developing sales channels, enterprises can exhibit products at overseas exhibitions as well as directly sell products to overseas consumers on the Internet.

This city integrated designs and technologies under the Higashiosaka Design Project. Ohshin Co., Ltd adopted designs fitting for modern dining tables, in cooperation with designers, with the idea of making an earthenware pot which can also be used all over the world.

Taking the opportunity to exhibit at an international trade fair in France,

it started sales in France, and succeeded in the development of overseas markets, mainly through overseas and domestic online shopping.

14

This enterprise is developing a B to C internet mail order business for overseas markets. Through a multilingual website (Japanese, English, and Chinese), it sells products popular in Japan including fashion, sundry goods, foods, and traditional crafts for women to more than 700,000 consumers in 120 countries.

This enterprise’s strength is its ability to deliver a large amount of various products at once, significantly reducing shipping costs.

A traditional manufacturer which engages in the

manufacture and sale of shoji paper launched a new business and developed products such as bags and wallets made of Naoron, which is a paper that does not easily tear, developed by the enterprise in cooperation with industrial designers.

The products are sold in 18 countries and are well accepted because of the distinctive paper’s good texture, sophisticated design, and other characteristics.

Although the city is famous for cutlery manufacturing, the value of shipments of cutlery has decreased to half of what it was over the last 50 years. Young members of the Cooperative Union who felt the crisis in this situation took the lead to establish a new brand, Banshu Hamono, in cooperation with local designers.

The designers themselves prepare materials for PR, actively promote Banshu Hamono on their own, and are succeeding in the development of overseas markets.

The number of SMEs and Micro businesses feeling that they lack necessary employees is increasing nationwide. In questionnaire surveys, the percentage of enterprises that answered that they had “adequately secured human resources” or “minimally, although not adequately,

secured human resources” was less than 50%, which showed a situation in which SMEs and Micro businesses failed to adequately secure human resources. When examining the reasons why they failed to secure human resources, it can be seen that the reason “Because we do not receive applications from human resources,” accounted for a little less than 60% among all the reasons. Meanwhile, the reason “Although we receive applications, there are no superior human resources among the applicants,” accounted for 40%. This situation shows that SMEs and Micro businesses are facing a shortage of human resources in terms of both quality and quantity.

Source: Survey on the Securement and Fostering of Human Resources by SMEs and Micro businesses, Nomura Research Institute, Ltd., under contract from SMEA, December 2014

II. Further Dramatic Growth of SMEs and Micro businesses – Human Resources (1) Securement of Human Resources –

6.7

37.1

36.3

20.0

Having adequately secured human resources.Having minimally, although not adequately, secured human resources.Having failed to secure human resources.Not having secured human resources.

(％)

(n=3,092) 56.8

39.9

3.3 (%) (n=1,121)

State of Securement of Human Resources by SMEs and Micro businesses

▲ 20

▲ 15

▲ 10

▲ 5

0

5

10

15

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ

2009 10 11 12 13 14

Hokkaido Tohoku Kanto

Chubu Kinki Chugoku

Shikoku Kyushu & Okinawa

(DI)

DI for Excess and Shortage of Employees for SMEs and Micro businesses by Area


Note: The DI for excess and shortage of employees is calculated by subtracting the share of enterprises that answered “shortage” from the share of enterprises that answered “excess” when questioned about the number of employees in the current quarter.

Shortage

Excess

(Year/quarter)

15

Because we do not receive applications from human resources. Although we receive applications, there are no superior human resources among the applicants. Although we receive applications from superior human resources, we cannot employ them.

II. Further Dramatic Growth of SMEs and Micro businesses – Human Resources (2) Recruitment of Human Resources –

Note 1: “Have applicants from the use of certain means” refers to the percentage of enterprises that utilized each method as means for recruitment.

2. The recruitment success ratio was calculated by dividing the number of enterprises with successful recruitment results by the number of enterprises with applicants from the use of certain methods as means for recruitment.

SMEs and Micro businesses are acutely feeling a shortage of human resources that can play a core role in management. SMEs and Micro businesses are also feeling not only a shortage of human resources for the development of sales channels (sales activities) as described heretofore but also a shortage of human resources who can play a core role in a wide range of departments such as research and development, production, IT-related departments, and management.

As SMEs’ means for recruitment of mid-career human resources, many enterprises use “Public Employment Security Offices” and “introductions by acquaintances or friends.” When examining the recruitment success ratio (number of cases of successful recruitment divided by the number of applicants who applied using a certain channel), it can be seen that the ratio is high in cases where the means for recruitment is “introductions by acquaintances or friends” or “introductions by business partners or banks,” and on the contrary, the ratio is the lowest in cases where the means for recruitment is “through the enterprises’ own websites,” which shows the importance of means for recruitment by which enterprises can ascertain who applicants are at the time of the SME’s recruitment of those human resources. Meanwhile, it may also be necessary to take diverse measures for SMEs’ securement of human resources by increasing the recruitment success ratio through various recruitment means.

Also, when examining the recruitment of core human resources, it can be seen that the results for both the number of applicants who applied using a certain means and the recruitment success ratio were similar to those for the recruitment of mid-career personnel, which shows that SMEs have extremely limited means for recruitment and sources of core human resources.

Note: The term “core human resources” in this survey refers to human resources that can play a core role in various duties in business or administration and who have special qualifications and highly specialized work experience and are ready to work immediately using their relevant skills.

Source: Survey on the Securement and Fostering of Human Resources by SMEs and Micro businesses, Nomura Research Institute, Ltd., under contract from SMEA, December 2014

Means for Recruitment of Core and Mid-carrier Human Resources

16

Sense of Excess or Shortage of Core Human Resources by Department

69.0

7.1 4.6

15.4 17.0 25.5

13.7 4.1

46.7

2.9 8.7

42.4

3.7 2.8 9.4 9.7 13.0 9.3

2.0

25.5

2.0 6.1

76.4

67.0 59.9 69.9 73.6 72.6

46.4 57.3

83.2

58.1

79.8

70.4

59.8 56.7 61.8

64.1 62.8

38.7 49.2

80.0

51.6

77.2

0102030405060708090

0102030405060708090

100

Publi

c Emp

loyme

nt Se

curity

Offic

es

Intro

ducti

on by

educ

ation

al ins

titutio

ns (b

y staf

fin

char

ge of

emplo

ymen

t and

the l

ike)

Match

ing by

orga

nizati

ons t

o sup

port

SMEs

Porta

l site

s for

emplo

ymen

t

Match

ing by

staff

ing co

mpan

ies

Job a

dver

tisem

ents

in job

infor

matio

nma

gazin

es, n

ewsp

aper

s, ma

gazin

es, e

tc.

Anno

unce

ments

on e

nterp

rises

’ own

web

sites

Prov

ision

of in

terns

hips

Intro

ducti

ons b

y acq

uaint

ance

s and

frien

ds(in

cludin

g rela

tives

)

Emplo

ymen

t sup

port

cente

rs

Intro

ducti

ons b

y bus

iness

partn

ers a

nd ba

nks

Have applicants from the use of certain means (mid-career human resources)Have applicants from the use of certain means (core human resources)Recruitment success ratio (mid-career human resources)Recruitment success ratio (core human resources)

(Having applicants, %)

(n=3,186) (Success ratio, %)

1.0

1.2

0.7

0.3

1.2

0.8

41.8

48.0

55.9

57.0

67.3

74.8

57.2

50.9

43.4

42.7

31.5

24.3

0% 100%

Research, development,and manufacturing

(n=1,678)

Domestic sales activities(n=2,035)

Overseas sales activities(n=703)

IT-related departments(n=1,324)

Management(n=1,949)

Finance and accounting(n=1,892)

Excess Well-balanced Shortage

The turnover rate for employees hired through mid-career recruitment (three years after employment) in SMEs and Micro businesses is about 30%, and that for new graduates in such enterprises is about 40%. In particular, more than 50% of new graduates in Micro businesses quit their jobs within three years from their recruitment, and it is necessary to increase the retention rate for hired employees as a prerequisite for the fostering of human resources that will be responsible for the enterprises’ futures.

SMEs and Micro businesses are also facing various issues in terms of fostering human resources that will play a core role in management. In particular, remarkably large numbers of SMEs and Micro businesses are facing a shortage of human resources who are capable of coaching and fostering others.

However, concerning the extent to which SMEs and Micro businesses retain and foster human resources, it is not adequate for enterprises simply to make independent efforts working within their limited management resources. In such situations, there are cases of efforts in which the retention and fostering of human resources are conducted through overall cooperation within local communities.

II. Further Dramatic Growth of SMEs and Micro businesses – Human Resources (3) Retention and Fostering of Human Resources –

56.8

38.2

44.2

31.0

30.5

30.6

43.2

61.8

55.8

69.0

69.5

69.4

0% 100%

Small enterprises （n=481)

Medium enterprises (n=1,009)

SMEs (n=1,490)

Small enterprises (n=1,612)

Medium enterprises (n=2,599)

SMEs (n=4,211)

New

grad

uates

Mid-

care

er hu

man r

esou

rces

Turnover rate Retention rate42.0

17.1 15.7 11.6 13.6

01020304050

We do not have employees whoare capable of coaching and

fostering core human resourcesor are facing a shortage of such

employees.

Employees are too busy toreceive coaching.

Know-how on coaching andfostering of core humanresources has not been

accumulated in our company.

We have difficulty in handingdown techniques and know-howfrom senior employees to junior

employees on work sites.

Other

(%)

(n=2,212)

An example of retaining and developing local human resources in the region This consortium (organization) was formed in cooperation with local NPOs, governments,

industrial support organizations, and business communities to retain and develop local human resources in the region.

This consortium fosters camaraderie in the community and connects that to the retention and development of human resources by promoting connections between enterprises through meetings for the exchange of information and networking, joint workshops, and the provision of opportunities for workshops for young people. In addition, this consortium is working on an effort related to rotations between enterprises. This effort is a portion of a mechanism by which human resources are exchanged between enterprises over a period of time with the purpose of “compensating for surpluses and shortages” and “developing human resources who will be responsible for the future.” Through a series of projects, Akitakata Conso is working on the retention and development of human resources and the amelioration of the sense of shortage in human resources among local enterprises as the personnel department for the community.

Turnover Rate for Employees in SMEs and Micro businesses (Three Years after Recruitment)

Issues concerning Fostering of Core Human Resources

Source: Survey on the Securement and Fostering of Human Resources by SMEs and Micro businesses, Nomura Research Institute, Ltd., under contract from SMEA, December 2014 (Figures on the left and upper right) 17

Part III Considering “Regions”

–Confronting Their Own Changes and Characteristics–

18

III. Considering “Regions” –Changes in the Industrial Structure–

Construction industry Manufacturing industry Retail trade industry Service industry Medical care and welfare industry Other industries

Source: Statistical Survey on Enterprises, Ministry of Internal Affairs and Communications and recompiled data from 2012 Economic Census-Economic Census for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry 19

In 1986, the manufacturing industry was the employment leader (the industry in which there were the largest number of employees within each municipality) in many municipalities nationwide, excluding Hokkaido.

As of 2012, the industries that supported regional employment had become more diverse, due to changes in social structures that differed by region, including a decrease in the number of employees in the manufacturing industry and an increase in the services industry and the medical care and welfare industry.

Changes in regional employment by industry (by municipality)

Source: Statistical Survey on Enterprises, Ministry of Internal Affairs and Communications and recompiled data from 2012 Economic Census, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

Note 1: The number of employees was calculated by industry (based on major classes of industries), and the map of Japan above was colored according to the industry in which there was the largest number of employees by municipality.

2: As for Tokyo Prefecture, the number of employees was separately calculated by ward (there are 23 wards in Tokyo).

▲ 200

▲ 150

▲ 100

▲ 50

0

50

100

150

200

250

Constructionindustry

Manufacturingindustry

Wholesaletrade industry

Retail tradeindustry

Serviceindustry

(includingrestaurants)

Medical careand welfare

industry

Otherindustries

Tokyo area Nagoya area Osaka area Other areas(10,000 persons)

Changes in the number of employees by region (from 1986 through 2012)

67.4

42.3

8.2

5.0

24.4

52.8

0% 100%

Commerce and industryassociations and chambersof commerce and industry

(n=837)

Municipalities (n=885)

Have unused resources. Don’t have unused resources. Don’t know.

54.1 50.5 43.2 39.8

30.5 25.2 17.3 16.3

42.3

54.1

45.2 46.2

22.2 30.7

15.4 14.5

0102030405060

Deve

lopme

nt of

good

san

d ser

vices

with

bran

dpo

wer

Deve

lopme

nt of

sales

chan

nels

Cons

idera

tion o

fme

thods

for u

tilizin

gre

giona

l reso

urce

s

Deve

lopme

nt of

good

s an

d ser

vices

that

meet

the m

arke

ts’ ne

eds

Disc

over

y of r

egion

alre

sour

ces

Marke

t sur

veys

(u

nder

stand

ing of

the

marke

ts’ ne

eds)

Unde

rstan

ding o

fch

arac

terist

ics of

regio

nal re

sour

ces

Sales

prom

otion

activ

ities

Municipalities (n=741) Commerce and industry associations and chambers of commerce and industry (n=827)(%)

III. Considering “Regions” –Specific Efforts for Regional Revitalization (1) Utilization of Regional Resources–

An example of opening overseas sales channels for local specialties Hachinohe City is one of the leading fishing cities in Japan. Regular service by container

vessels linking Singapore, Hong Kong, and Taiwan was launched at Hachinohe Port in 1994. Aiming to support the export of local specialties, members of the Young Entrepreneurs Group of

Hachinohe Chamber of Commerce and Industry took the lead to establish this company in 1994 and started exporting apples to Taiwan in 2002. The company is not only connecting producers (farmers) with markets but also providing farmers with support including instructions on how to select fruits, design boxes for export, and pack the produce for overseas shipment.

Exports of apples have been increasing year by year. Sales rose from 1.0 billion yen in 2005 to 1.4 billion yen in 2014.

The company has been contributing to job creation within the area. Six out of seven employees of the company are young locals who are proficient in foreign languages.

Existence of unused resources in local communities

“An example of utilization of unused resources” Located in the easternmost tip of Hokkaido, this city has been a prosperous fishing area

since ancient times. A passenger on an excursion cruise noticed the potential of the sea area, a breeding place

for seabirds call tufted puffins, which can be commonly found in the region, but are a rare species globally, and advised the local community on the potential of the sea around the region to attract tourists. Subsequently, the locals launched a cruise business using fishing boats.

Accepting suggestions from experts on the project’s feasibility, local fishermen took pragmatic and strategic steps to boost its value.

The number of passengers has reached just under 1,000 per year. More than 40% of them are from outside Hokkaido, and the number of foreign tourists has been increasing recently. As a result, jobs for young people are expected to be created.

<A scene of a cruise using a fishing boat>

While the importance of specific industries for regional economies is declining, it is necessary to continue to pay attention to resources that are inherent in regions and have the potential to create relative advantages compared to other regions (regional resource).

It is thought that regions have dormant resources that have not been utilized yet. However, many regions consider that there are challenges in utilizing such resources to refine into higher value-added goods and services and to promote sales activities (development of sales channels) for such goods and services. Meanwhile, some regions have overcome such challenges and have succeeded in regional revitalization through the utilization of their regional resources.

<Apples, a local specialty in Aomori Prefecture」>

Issues at the Time of Utilization of Regional Resources

Source: Survey on Efforts for Regional Revitalization, Land Brains Co., LTD., under contract from SMEA, December 2014 Survey on Support for Regional SMEs, Land Brains Co., LTD., December 2014

Source: Survey on Support for Regional SMEs and Survey on Efforts for Regional Revitalization, Land Brains Co., LTD., under contract from SMEA, December 2014

Note: The term “unused resources” in the figure above refers to regional resources that have been left unused.

20

10.2

7.1

18.4

21.4

22.4

29.6

39.8

44.9

59.2

0 20 40 60 80

Other

Visible effects have not been identified.

The solutions have been leading to themaintenance and increase of the population.

Existing industries have been revitalized.

Environmental awareness has beenenhanced.

New industries have been growing.

Human resources that will be responsible forenterprises and regions have been fostered.

Local residents have been enabled to livehealthy and vigorous lives.

New employment has been created.

(%)

(n=98)

III. Considering “Regions” –Specific Efforts for Regional Revitalization (2) Solution of Communities’ Issues–

An example of solving communities’ issues Shunan City is located in the southeast of Yamaguchi Prefecture with a population of 145,000. This association has been conducting operations such as solving managerial challenges that

local enterprises are facing, contracting operations, and developing workers’ vocational abilities by utilizing retired senior members. Utilizing the abundant knowledge, skills, experiences, and connections that the seniors have accumulated in various fields as well as giving back what they have built to the local communities has resulted in the creation of satisfying lives for the senior members. (105 senior members in total)

The association originally started as a voluntary organization engaged in a project for the afforestation of slopes and retaining structures built to prevent slope failure in the mountainous regions in the prefecture. As its range of operations diversified and the organization expanded, the organization founded the NPO Corporation, Association of Yamaguchi Senior Activists in 2004.

This NPO has been developing a remarkably wide range of operations to respond to regional issues, including matching projects with senior human resources and local enterprises to solve management challenges, support for spouse-finding initiatives, projects for fostering children such as hospitals for toys and an invention club for boys and girls, and local community activities such as a service for showing films for seniors. Also, at present, this NPO is considering organizing a team around the topic of how to make and imbed support systems for the “sixth industry” (the combination of primary, secondary, and tertiary industries) in the region.

Through the operation of the Shunan Matching Bank for Senior Human Resources, which aims to promote the employment of seniors as well as provide managerial support for SMEs in the region, a cumulative total of 300 jobs have been created.

This NPO has contributed to the development of 266 human resources through a project for training senior management named “AYSA Corporate Management School.”

In local communities, community issues such as depopulation and an aging society are becoming more diverse and severe. However, SME projects and micro businesses that conduct community-based business activities are exerting positive effects not only on the improvement of the living environment and other factors for local residents but also on the revitalization of local economies, including the creation of new employment and the fostering of human resources.

There are cases in which not only enterprises but also various entities including NPOs and local residents have been expanding their activities in local communities as new entities that are responsible for solving such community issues and also have been exerting positive effects on local communities in terms of the economy (employment etc.).

Source: Questionnaire Survey on Advanced Efforts for Creating and Realizing Shared Value (CRSV), under contract from SMEA (July 2014, Mizuho Information & Research Institute Co., Ltd.) Note: The values in the results of a survey for business operators that are making efforts for the solution of social issues in

regions were calculated. The total may not be 100% due to multiple answers.

Solution effects of local issues on local communities by businesses

A gathering of the Forum for Considering the Sixth Industry.

21

III. Considering “Regions” –Efforts for the Understanding of Characteristics of Producing Regions (1)– The Ministry of Economy, Trade and Industry (METI) developed the FY 2015 Regional Economy (and) Society Analyzing System (RESAS) and began to use

it for the purpose of analysis in April 2015. The goal of this system is to ascertain the industrial structures in local economies and the flows of persons and goods both in terms of area (spatially) and in time series by utilizing official statistics and various kinds of data held by private enterprises (such as data for transactions between enterprises and location information from mobile phones).

What kind of insights for regions can be obtained by visualizing data in terms of area and in time series? This question is to be examined using actual output screens from the system.

[Example of analysis (1)] Data on Transactions between Enterprises [Example of Analysis (2)] Data on Location Information from Mobile Phones

Transactions in the transportation equipment industry in Gunma Prefecture

Transactions in the transportation equipment industry in Gunma, Saitama, and Tochigi

Prefectures

Utilizing data on transactions between enterprises, user connections by region and between enterprises are visually displayed by linking the enterprises with lines. (*) It is also possible not only to examine linkages between certain enterprises but also to examine those between all the enterprises in areas under local governments subject to analysis. [Figures on the Left: Linkages in Transactions in the Transportation Equipment Industry in the Kanto Area] In the RESAS, multiple prefectures

can be chosen, and the transaction situation by industry within the chosen regions can be ascertained.

When examining the relationships in transactions in the transportation equipment industry in the Kanto area, the number of lines for linkages for transactions in the three prefectures of Gunma, Saitama, and Tochigi are found to be significantly larger than that in Gunma Prefecture alone.

Movements of persons in places such as sight-seeing spots are grasped by utilizing location information from mobile phones. [Figures on the Left: State of Inflow of Visiting Population (Saitama Prefecture)] In the RESAS, it is possible to

ascertain the prefecture and municipality of origin of the visitors who are in the user’s administrative area.

For example, when comparing the flow of persons into Kawagoe City, which is a famous sight-seeing spot in Saitama Prefecture, and that into Chichibu City on holidays, a situation in which persons from wider areas are flowing into Kawagoe City, while persons from neighboring areas are flowing into Chichibu City can be seen.

Population flowing into Kawagoe City

Population flowing into Chichibu City

Differences between inflow characteristics can be seen by examining origin of departure.

22

III. Considering “Regions” –Efforts for the Understanding of Characteristics of Producing Regions (2)–

RESAS comprises four maps, namely, (1) a map on industry, (2) a map on population, (3) a map on sight-seeing, and (4) a map on comparisons between local governments. RESAS is also expected to be utilized by prefectures and municipalities in the future by examining some or all of this data in an integrated manner when formulating not only industrial policies but also regional comprehensive strategies.

Number of net migrants by regional block in Shiga Prefecture

Number of net migrants by age group in Shiga Prefecture

Comparison between effective ratios of job offers to applicants for clerical work

Comparison of the average ages of business owners in the cities of

Kanazawa, Oita, and Morioka (production machinery industry)

Various kinds of data such as data on economic structures and business activities are utilized to compare municipalities to each other, and the results of the comparisons are displayed by means including graphs. [Figure on the Upper Left: Situation of Average Age of Business Owners, Figure on the Lower Left: Trends in Effective Ratio of Job Offers to Applicants] In RESAS, it is possible to choose

multiple prefectures and municipalities and to make comparisons of the average ages of business owners, effective ratios of job offers to applicants, and wages between them.

The figure on the upper left shows that the average age of business owners in the cities of Oita and Aomori exceeds 60.

The figure on the lower left shows that the effective ratio of job offers to applicants in Tokyo Prefecture is higher than the national average, while that in Miyazaki Prefecture is lower than the national average.

Figures such as changes in population, societal changes, natural increases in population, and estimated future populations are displayed graphically by utilizing data obtained from the Population Census and Report on Internal Migration in Japan Derived from the Basic Resident Registration. [Figures on the Left: Trends in Social Migration in Shiga Prefecture] In RESAS, trends in social

migration by region and age group for any prefecture can be ascertained.

When examining social migration in Shiga Prefecture, it can be found that population is flowing into Shiga Prefecture from many regions, mainly from the Kansai region. Also, when examining the migration by age group, it can be found that populations in the age groups typical of child rearing-households, such as those from age 30 to 34 and from age 35 to 39, are flowing into the prefecture.

23

2015 White Paper on Small Enterprises in Japan

(Summary)

July 2015 Small and Medium Enterprise Agency

24

Part II. Challenges of Running Micro Businesses – Opening up the Future –

Part I. Structural Analysis of Micro Businesses (*)

Outline of the 2015 White Paper on Small Enterprises in Japan

Chapter I. Overview and Underpinnings of Micro Businesses (Definition, Diversity, and Business Foundations)

Chapter II. Trends in Micro Businesses (Changes in the numbers of Micro Businesses and Establishments and Causes of Change)

Chapter III. The Future of Micro Businesses (Effective Ways of Development of Sales Channels, New Ways of Working, and New Efforts Involved in Business Succession)

Chapter IV. Micro Businesses in Regions (Current Situation of Retail Trade in Regions and Roles as Regional Leaders)

25

Four goals for the promotion of small enterprises 1) Promotion of management with an eye on demand 2) Promotion of regeneration of institutions 3) Promotion of business activities that contribute to the revitalization of regional

economies 4) Enhancement of support systems through region-wide collective efforts. Introduction of case studies in line with the four goals above (42 cases in all)

(*) A small enterprise is defined as a business operator whose number of regular employees is not more than approximately twenty (the number is five in the case of a business operator whose business is a retail business or service business) based on Article 2, Paragraph (5) of the Small and Medium-sized Enterprise Basic Act and Article 2, Paragraph (1) of the Basic Act for Promoting Small Enterprises. Although the White Paper on Small Enterprises in Japan is for small enterprises as defined above, micro businesses shall be referred to as small enterprises in order to articulate that not only companies but also sole proprietorships are included within the scope of this White Paper.

Part I Structural Analysis of Micro Businesses

Chapter I

Overview and Underpinnings of Micro Businesses

26

Overview - Diversity of Micro Businesses (1) Breakdown of Business Types and Dynamics of Regular Employment

○ Regarding the breakdown of business types: wholesale trade and retail trade; accommodations, eating and drinking services; construction; manufacturing; living-related, personal, and amusement services; and real estate, goods rental and leasing exceed 80% of all micro businesses.

○ Also, a little less than 50% of micro businesses manage their businesses without regular employees.

1.51 million 45% 1.83 million

55%

Have regular employees

Do not have regularemployees

Source: Recompiled data from 2012 Economic Census – for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

(*) Paid officers of corporations, sole proprietorships, and unpaid family employees are not included in the scope of regular employees.

Number of micro businesses 3.34 million

Existence or Nonexistence of Regular Employees (*) in Micro Businesses

35.7 23.0

13.2 10.4 21.3 21.0

5.0 2.0

39.4

24.5 31.6

27.0 14.5 10.9

9.0 3.5

0

10

20

30

40

50

60

70

80

Wholesale trade, retail trade Accommodations, eating anddrinking services

Construction Manufacturing Living-related and personal servicesand amusement services

Real estate and goods rental andleasing

Medical, health care, and welfare Transport and postal services

Micro businesses that do not have regular employees Micro businesses that have regular employees

(ten thousand business operators)

Reference: Number of Business Operators by Business Type among Micro Businesses (by Existence or Nonexistence of Regular Employment) ◆ Business types in the figure below are based on the Japan Standard Industrial Classification (industry divisions)


Wholesale trade, retail trade 751,845(22.5%)

Wholesale trade 163,713( 4.9%) Retail trade 588,132(17.6%)

Accommodations, eating and drinking services 475,183(14.2%)

Construction 448,293(13.4%) Manufacturing

373,766(11.2%)

Living-related and personal services and amusement services

357,806(10.7%)

Real estate and goods rental and leasing

318,962(9.5%)

Scientific research, professional and technical services

159,400(4.8%)

Medical, health care, and welfare 140,484(4.2%)

Services (not otherwise categorized) 105,064(3.1%)

Education, learning support 92,619(2.8%)

Transport and postal services 55,287(1.7%)

Information and communications 29,558(0.9%)

Finance and insurance 29,187(0.9%)

Compound services 3,461(0.1%) Mining and quarrying of stone and

gravel 1,489(0.04%)

Electricity, gas, heat supply, and water

410(0.01%)


Breakdown of Number of Micro Businesses by Business Type

27

3.9

1.7 1.8 1.4 2.0 0.5 0.6 0.8 0.6 0.9 0.6 0.6 0.4

3.8 5.0 4.9

3.4 1.2 0.7 0.7 1.1 0.9 1.4 0.8 0.9 0.3 0.7

2.9 3.0 1.7

2.0 1.3 1.4 1.2 0.9 1.0 0.8

0.6 0.5 0.5

6.6 4.0 4.1 2.3

1.8 1.4 1.1 0.6 5.6 3.2 1.4 1.2 1.3 0.6

0

5

10

15

Misc

ellan

eous

food

and b

ever

age s

tores

(such

as ric

e sho

ps an

d con

venie

nce s

tores

)

Motor

vehic

les

Confe

ction

eries

and b

aker

ies

Medic

ine an

d toil

etry s

tores

Liquo

r stor

es

Agric

ultur

al, liv

estoc

k, an

d aqu

atic p

rodu

cts

Build

ing m

ateria

ls (lu

mber

, cem

ent, s

heet

glass

, etc.

)

Book

and s

tation

ery s

tores

Food

s and

beve

rage

s

Vege

table

and f

ruit s

tores

Fres

h fish

stor

es

Came

ra, w

atch,

and s

pecta

cles s

tores

Meat

and p

oultry

stor

es

Spec

ialty

resta

uran

ts (ra

men r

estau

rants

,ya

kiniku

(grill

ed m

eat)

resta

uran

ts, et

c.)

Drink

ing ho

uses

and b

eer h

alls

Bars,

caba

rets,

and n

ight c

lubs

Coffe

e sho

ps

Hotel

s

Soba

and u

don r

estau

rants

Sush

i bar

s

Misc

ellan

eous

eatin

g and

drink

ing pl

aces

(ham

burg

er sh

ops,

takoy

aki (J

apan

ese

snac

k) sh

ops,

etc.)

Civil

engin

eerin

g wor

k, ex

cept

pavin

g wor

k

Elec

trical

work

Floor

ing an

d inte

rior f

inish

wor

k

Build

ing re

nova

tion w

ork

Scaff

olding

wor

k, ea

rth w

ork,

and c

oncre

te wo

rk

Plas

ter w

ork

卸売業，小売業宿泊業，飲食サービス業建設業

Micro businesses that do not have regular employees Micro businesses that have regular employees(ten thousand business operators)

Number of Business Operators by Business Type among Local Micro Businesses (by Existence or Nonexistence of Regular Employment) Business types in the figure below are based on the Japan Standard Industrial Classification (minor industry groups)

10.4 9.0 9.0

5.6 3.1

2.1 1.8 1.7

6.6 4.6

2.2 2.2 1.5 1.3

0.6 0.2 0.2

9.2 6.2

2.4 0.7 0.1 0.1

12.1

1.7 2.3 2.5

4.0

1.9

4.9

0.2 0.8

1.6 0.5 0.3

5.5

3.8

1.4 0.6 0.3 0.2

3.7

2.3 1.4 0.5 2.7

3.0

1.1

0.2 1.5

0

5

10

15

Print

ing

Bake

ries a

nd co

nfecti

oner

y pro

ducts

Table

ware

(occ

identa

l type

),cu

tlery,

hand

tools

, and

hard

ware

Hair-

dres

sing a

nd be

auty

salon

s

Barb

ersh

ops

Laun

dries

Misc

ellan

eous

laun

dry,

beau

ty,

and b

ath se

rvice

s (a

esthe

tic sa

lon

servi

ces,

nail s

alon s

ervic

es, e

tc.)

Trav

el ag

ency

Publi

c bath

hous

es

Hous

e and

room

less

ors

Real

estat

e age

nts an

d bro

kers

Real

estat

e les

sors,

exce

pt ho

use

and r

oom

lesso

rs

Autom

obile

parki

ng

Othe

r hea

lth pr

actiti

oner

s

Autom

obile

main

tenan

ce se

rvice

s

Instru

ction

servi

ces f

or ar

ts,cu

lture

, and

tech

nical

skills

Mini-

sized

vehic

le fre

ight tr

ansp

ort

Insur

ance

agen

ts an

d bro

kers

製造業生活関連サービス業，娯楽業不動産業，物品賃貸業医療,福祉サービス業（他に分

類されないもの）教育，学習支援業運輸業，郵便業金融業，保険業


2.2 0.7 0.5

14.6

3.8 1.3 0.4 0.3

Source: Recompiled data from 2012 Economic Census – for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry Note 1: The business types in the figure above are based on the Japan Standard Industrial Classification (minor industry groups). Note 2: The term “real estate agents and brokers” refers to establishments that mainly carry out agency work or brokerage activities for the sale, lease, or exchange of immovable properties.

Establishments that carry out brokerage activities for parking lots are also included within the scope of this term. The term “real estate lessors, except house and room lessors” comprises office lessors, land lessors, and lessors of other types of real estate (such as meeting rooms). The term “house lessors” refers to establishments that mainly lease housing (including housing that is also used for shops) (such as housing lessors and apartment lessors). The term “room lessors” refers to businesses for leasing residential rooms that do not have exclusive or common drainage equipment for cooking and in which persons cannot lead family lives without using other rooms. The term “instruction services for arts, culture, and technical skills” includes musical instruction, calligraphy instruction, flower arrangement and tea ceremony instruction, abacus instruction, and foreign language instruction. The term “insurance agents and brokers” includes life insurance agents and brokers (life insurance agencies) and non-life insurance agents and brokers (non-life insurance agencies).

Overview - Diversity of Micro Businesses (2) Overview Based on Minor Industry Groups

The current environment for micro businesses is overviewed by business type and existence or nonexistence of regular employment.

Main business types among 750 thousand business operators in wholesale trade, retail trade Main business types among 480 thousand business operators in accommodations, eating and drinking services

Main business types among 450 thousand business operators in construction

Main business types among 370 thousand business operators in manufacturing

Main business types among 360 thousand business operators in living-related and personal services and amusement services

Main business types among 320 thousand business operators in real estate and goods rental and leasing

Main business types among 140 thousand business operators in

medicine, health care, and welfare

Main business types among 110 thousand business

operators in miscellaneous services

Main business types among 90 thousand business operators in education,

learning support

Main business types among 60 thousand business operators in

transport and postal services

Main business types among 30 thousand business

operators in finance and insurance

6.8 4.7 3.5 3.4 3.3 1.9 1.8 1.7 1.6 1.6 1.2 1.2 0.9

１5.9

4.0 3.8 3.0 6.7 4.8 6.1

0.4 2.3

10.0

Note 3: The figures in blue font indicate the total numbers of businesses.

28

Micro Enterprises (1) Percentages of Micro Enterprises among Micro Businesses

Among 3.34 million micro businesses, 3.12 million (93%) are micro enterprises. Among 2.06 million sole proprietorships, 2.05 million (99%) are micro enterprises.(*) Among 1.28 million corporations, 1.07 million (84%) are micro enterprises. When examining the percentage of micro enterprises by business type, it can be seen that almost all micro businesses are micro enterprises regardless of business type except in some industry types such as the electricity, gas, heat supply, and water industries. (*) The term “micro enterprises” is defined as business operators whose number of regular employees is not more than about five based on Article 2, Paragraph (2) of the Basic Act for Promoting Small Enterprises.

93%

57%

64%

64%

76%

81%

90%

93%

98%

98%

99%

100%

100%

100%

100%

100%

100%

100%

7%

43%

36%

36%

24%

19%

10%

7%

2%

2%

1%

0% 100%

Total

Electricity, gas, heat supply, and water

Transport and postal services

Mining and quarrying of stone and gravel

Manufacturing

Construction

Finance and insurance

Information and communications

Real estate and goods rental and leasing

Living-related and personal services and amusement services

Accommodations, eating and drinking services

Wholesale trade

Retail trade

Scientific research, professional and technical services

Education, learning support

Medical, health care, and welfare

Combined services

Services (not otherwise categorized)

小企業

(常雇5人以下)

除く、小企業

(常雇6～20人)

小企業以外の小規模事業者（常雇6～20人）

2. Percentages that Micro Enterprises Account for among Micro Businesses (by Business Type)

The definition of micro enterprises for these business types is

the same as that of m

icro businesses for these business types.

312

22

93%

7% 小企業

(常雇5人以下)

除く、小企業

(常雇6～20人)

Micro businesses 3.34 million

1. Percentages That Micro Enterprises Account for among 3.34 Million Micro Businesses

Micro enterprises (whose number of regular employees

205

1

99%

1%

Sole proprietorships

2.06 million

Sole proprietorships

107

21

84%

16%

Corporations 1.28 million

Corporations

Micro businesses other than micro enterprises (whose number of regular employees is from six to twenty)

Micro businesses other than micro enterprises (whose number of regular employees is from six to twenty persons)

Micro enterprises (whose number of regular employees is not more than five persons)

29


30

10%

13%

14%

6%

8%

12%

8%

9%

9%

15%

12%

8%

5%

6%

8%

2%

3%

7%

7%

6%

4%

4%

5%

4%

2%

3%

3%

4%

4%

3%

6%

5%

3%

6%

4%

3%

26%

22%

22%

0% 100%

[Medium enterprises]More than twenty regular

employees(n=55,702 business operators)

[Micro businesses]From six to twenty regular


[Micro enterprises]Not more than five regular


Manufacture of fabricated metal products Manufacture of textile products Manufacture of production machinery

Manufacture of food Printing and allied industries Manufacture of furniture and fixtures

Manufacture of plastic products, except those otherwise classified Manufacture of ceramic, stone, and clay products Manufacture of lumber and wood products, except furniture

Manufacture of general-purpose machinery Manufacture of transportation equipment Manufacture of electrical machinery, equipment, and supplies

Other eleven industries

Source: Recompiled data from 2012 Economic Census – for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry Note: The breakdown of the “other eleven industries” mentioned above is as follows: manufacture of pulp, paper, and paper products, manufacture of business-oriented machinery, manufacture of iron and steel, manufacture of tanned leather, leather

products, and fur skins, manufacture of beverages, tobacco, and feed, manufacture of electronic parts and devices and electronic circuits, manufacture of non-ferrous metals and products, manufacture of rubber products, manufacture of chemical and allied products, manufacture of information and communications electronics equipment, manufacture of petroleum and coal products, and miscellaneous manufacturing industries.

Breakdown of Business Types in the Manufacturing Industry by Enterprise Size (Major Industry Groups)

Micro Enterprises (2) Characteristics by Business Type

When examining the shares of the number of business operators in the manufacturing industry by enterprise size and business type (major industry group), the main business types in which micro enterprises show higher shares than micro businesses (excluding micro enterprises) and medium enterprises are the fabricated metals industry, textile industry, printing and allied industries, and furniture and fixture industry.

Meanwhile, the main business types in which micro enterprises show lower shares than micro businesses (excluding micro enterprises) and medium enterprises are the manufacture of food, manufacture of plastic products, manufacture of transportation equipment, and manufacture of electrical machinery, equipment, and supplies.

18.8

6.8

21.0

10.8

21.3

15.2

15.7

18.0

8.0

15.8

3.8

11.2

2.4

6.8

0.9

4.7

0.5

2.4

0.3

2.1

0.9

3.2

6.5

2.9

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

SoleProprietorships

(n=3121)

Corporations(n=2741)

Less than 1 million yen 1 million or more but less than 2 million yen 2 million or more but less than 3 million yen 3 million or more but less than 4 million yen 4 million or more but less than 5 million yen 5 million or more but less than 6 million yen

6 million or more but less than 7 million yen 7 million or more but less than 8 million yen 8 million or more but less than 9 million yen 9 million or more but less than 10 million yen 10 million yen or more Don’t know

Net Annual Income after Taxes of Business Owners (Sole Proprietorships, Corporations)

Source: Survey for Ascertaining Current Status of Business Activities of Small Enterprises, Applied Research Institute, Inc., under contract from SMEA, January 2015

Underpinnings - Business Foundations (1) Breakdown of Employees and Annual Net Income after Taxes

Micro businesses depend heavily on the owners’ relatives as employees; a little less than 70% of employees of sole proprietorships are relatives. The net annual income after taxes of a little more than 60% of sole proprietorships is not more than three million yen. The total income earned by their families or

relatives is supporting their family budgets.

29.6% 7.7% 30.1% 0.9% 0.03% 22.4% 9.0% 0.3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

SoleProprietorships

(n=10532)

Business owners Unpaid employees who are also business owners’ relatives Regular employees (relatives) Temporary employees (relatives) Workers dispatched by other enterprises (relatives) Regular employees Temporary employees Workers dispatched by other enterprises

Breakdown of Employees Who Are Also Business Owners’ Relatives (Sole Proprietorships) Proportion of business owners and owners’ relatives

3.7% 26.6% 10.3% 0.6%

0.1% 51.4% 6.5% 0.9%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Corporations(n=20335)

Paid officers Paid officers (relatives) Regular employees (relatives) Temporary employees (relatives) Workers dispatched by other enterprises (relatives) Regular employees Temporary employees Workers dispatched by other enterprises

Breakdown of Employees Who Are Also Business Owners’ Relatives (Corporations) Proportion of business owners and owners’ relatives

31

Underpinnings - Business Foundations (2) Birthplace and Latest Degree Attained, etc.

The birthplaces of many employees (including business owners) are the same municipalities as the location of their head offices, and the latest degrees attained by many employees are upper secondary school degrees.

As for the assessment of employees by business owners, more than 90% of business owners answered that their employees are contributing to their companies and businesses. More than 30% of business owners answered that their means for recruitment was introductions by acquaintances or personal solicitations.

7870

1707 590 34 331

13199

4836 1426 180 694

0

5000

10000

15000

20000

25000

From the samemunicipalities as the

locations of their headoffices

From the sameprefectures as the


From prefectures that aredifferent from the


From overseas countries Can’t tell or don’t know

Sole Proprietorships (n=10532) Corporations (n=20335)

Birthplaces of Employees (Persons)


Note: The figures above were calculated by totaling the numbers of employees of the enterprises that answered this Survey.

Significantly contributing

40%

Contributing 52%

No opinion 7%

Not significantly contributing 1% Hardly contributing

0.2%

Whether or Not Employees Are Contributing to Companies and Businesses from The Viewpoints of Business Owners.

（n=5,874）

0.4

1.6

2.1

3.0

3.5

3.5

3.8

4.8

27.7

31.0

33.8

37.6

0 10 20 30 40

Use of measures by the national government and local governments

Use of temporary staffing agencies

Introductions by commerce and industry associations and chambers ofcommerce and industry

Utilization of the Internet

Job information magazines

Calls for applications at job hunting support departments of upper secondaryschools and universities

Use of newspaper flyers, etc.

Introductions by other enterprises (including business partners)

Other

Calls for applications at Public Employment Security Offices

Personal solicitations

Personal introductions by acquaintances

Means for Recruitment of Human Resources (Multiple Answers)

(%)

(n=5,874)

772

5944

1045 446 1122 17 209

977

1397

11408

1527 970

2931

49 162

1891

0

5000

10000

15000

20000

Lower secondaryschool

Upper secondaryschool

Upper secondaryspecialized trainingschool or college of

technology

Junior collegegraduates

University Graduate school Other Can’t tell or don’t know

Sole Proprietorships (n=10532) Corporations (n=20335)

Employees’ Latest Degree Attained (Persons)

32

57.5

7.6 6.5 12.2 13.6

38.4

65.7

10.1 22.3

66.1

010203040506070

Feel

anxie

ty in

terms

of ou

r own

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after

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ess s

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succ

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ehav

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ward

us

after

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ucce

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May l

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n loc

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after

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Comp

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epu

rpos

e of o

ur liv

es (a

nxiet

yab

out lo

sing o

ur pl

aces

after

busin

ess s

ucce

ssion

)

Have

a fee

ling o

f atta

chme

nt to

comp

anies

that

we ou

rselve

sar

e man

aging

Feel

anxie

ty ov

er th

e man

agem

ent

abilit

ies of

our s

ucce

ssor

s

Hesit

ate to

hand

over

busin

ess

in a t

ough

busin

ess e

nviro

nmen

t(co

ncer

ned a

bout

the liv

es of

cand

idates

for s

ucce

ssor

s)

Don’t

know

the p

roce

dure

s for

bu

sines

s suc

cess

ion

Have

no he

sitati

on or

anxie

tyin

hand

ing ov

er ou

r bus

iness

es

Othe

r

(%) Personal Reasons Why Current Business Owners Hesitate to Hand Over Their Businesses

Underpinnings - Business Foundations (3) Attitudes toward Business Succession, etc. As for the reasons why current business owners hesitate to hand over their businesses, in addition to the fact that they are concerned about their successors’ lives (they hesitate to hand over

their businesses in a tough management environment), a remarkably large number of business owners listed as a reason the fact that they feel anxiety in terms of their own income and livelihood after business succession.

Meanwhile, more than half of current business owners do not support previous business owners. Conversely, 20% of current business owners receive financial assistance from previous business owners.


Note: Business owners chose the top three reasons in the questionnaire survey, and the percentages for the graph above were calculated based on the total number of business owners.

Current business owners are paying the total amount of the

living expenses of the previous business owners.

18%

Current business owners are paying some of the living expenses of the previous

business owners. 28%

Current business owners are paying none of the living expenses of the previous

business owners. 54%

Support for Previous Business Owners after Business Succession

(n=3,256)

Receiving financial assistance from previous

business owners 22%

Receiving no financial assistance from previous

business owners 78%

グラフタイトル Financial Assistance from Previous Business Owners to Current Business Owners after Business Succession

(n=3,256)

(n=5,874)

33

26.3

3.8

11.3

39.8

20.7 15.9

50.1

14.7

64.1

23.2

8.2

22.1

0

20

40

60

80

Web

sites

E-ma

il new

slette

rs

Expla

nator

y mee

tings

on m

easu

res

Flyer

s and

pamp

hlets

on m

easu

res

Exhib

itions

and s

emina

rs

Exch

ange

s at s

ocial

gathe

rings

(held

after

semi

nars,

expla

nator

y mee

tings

, etc.

)

Meeti

ngs w

ith bu

sines

s own

ers i

n the

indu

strial

wor

ld an

d loc

al co

mmun

ities,

etc.

Stud

y gro

ups

Daily

exch

ange

s (Co

nver

satio

ns w

ith su

pplie

rs,pu

rchas

ers,

custo

mers,

etc.)

Disc

ussio

ns an

d com

munic

ation

s at

oppo

rtunit

ies to

eat a

nd dr

ink w

ith th

ose

who h

ave i

nform

ation

on m

easu

res

Disc

ussio

ns an

d com

munic

ation

s at

oppo

rtunit

ies fo

r rec

reati

on, e

vents

, etc. Ot

her

(%) Means for Obtaining Information on the Management of Business and Measures for SMEs (Multiple Answers)

Underpinnings – Business Foundations (4) Means for Obtaining Information on Measures

Micro businesses obtain information on the management of business and support measures through daily and diverse communications such as conversations with clients and meetings with the industrial world and local communities.

It is important for supporting institutions such as the national government, local governments, commerce and industry associations, and chambers of commerce and industry to disseminate information on measures and the like during such daily and diverse communications.

Source: Survey for Ascertaining Current Status of Business Activities of Micro Businesses, Applied Research Institute, Inc., under contract from SMEA, January 2015 34


Chapter II

Trends in Micro Businesses

35

Trends in Micro Businesses (1) Changes in the Number of Businesses and Establishments, etc.

The number of businesses and establishments in Japan had been on the rise until 1986 but began to decrease in 1987. Meanwhile, among the micro businesses that are currently in operation, a little less than 50% of them were established before 1984.

Until 1984 45.2%

From 1985 to 1994

20.2%

From 1995 to 2004

20.1%

Since 2005 14.4%

Distribution of Number of Micro Businesses by Year of Establishment

Source: 2012 Economic Census – for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

Note 1: The pie graph above was prepared based on data for year and location of business launch, out of the data on business establishments. Therefore, in cases where business establishments were relocated, the year of the was counted rather than the year when the business were started.

2. The pie graph above shows the breakdown of the approximately 3.26 million micro businesses whose data is available out of the 3.34 million micro businesses.

Source: Recompiled data from Establishment and Enterprise Census and 2009 Economic Census – for Business Foundations, Ministry of Internal Affairs and Communications; 2012 Economic Census – for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

Note 1. Number of enterprises = Number of companies + Business establishments of sole proprietors (independent establishments and head offices) 2. The numbers of enterprises for the business types designated by special provisions of a Cabinet Order are reflected in the values for the numbers of SMEs and small

enterprises after 2012.

36

Changes in Number of Businesses and Establishments in Japan Number of all businesses

Number of all business establishments

Number of small and medium enterprises Number of small and medium business establishments

Number of micro businesses

Number of micro business establishments

Statistical survey on business establishments and enterprises Economic census Basic survey

Survey on business activity

(ten thousand businesses or establishments)

Trends in Micro Businesses (2) Changes in the Number of Establishments by Business Type When examining the long-term changes in the number of micro business establishments, it can be seen that the number in the retail trade industry decreased by 50% from its peak, and by

46% in the manufacturing industry. The numbers of business establishments in the service industry and real estate industry have been slightly on the increase. Those in other business types have remained more or less flat. Although the number of business establishments in the service industry itself has remained flat for the past twenty years, the share of such establishments among all business types has been

increasing.

37

145 150

180 186

200 207

202

182

170

157 151

133 130

118

104

69 73 83 88

93 101

108 110 112 111 108 105

107 109 103

22 26 37 40

45 50 53 55 59 56

56 52 51 55 49

53 57

68 71

73 76 76 73 65

58

54 48 46 45

41

12 15

19 22 26 29 32 36 37 36 40 38 38 44 41

16 16 17 19 20

22 23 22 20 20 18 18 17 20 18

6 7 7 8 9 10 11 12 12 12 14 13 14 17 15

2 1 1 1 1 1 1 1 1 1 0.5 0.4 0.4 0.5 0.4 0

50

100

150

200

250

63 66 72 75 78 81 86 91 96 99 01 04 06 09 12

Retail trade industry (including eating and drinking places) Service industryConstruction industry Manufacturing industryReal estate industry and finance and insurance industry Wholesale trade industryTransport and communications industries Mining industry and electricity, gas, heat supply, and water industries

(ten thousand business establishments)

Changes in Number of Business Establishments of Micro Businesses (by Business Type)

Source: Recompiled data from Establishment and Enterprise Census (from 1963 through 2006) and 2009 Economic Census – for Business Foundations (2009), Ministry of Internal Affairs and Communications; 2012 Economic Census – for Business Activity (2012), Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

Note 1: Survey conducted as the Establishment Census up until 1991 (as the Establishment Directory Maintenance Survey in 1989) and as the Establishment Directory Maintenance Survey in 1994 2. Survey conducted based on business establishments, not based on enterprises whose multinominal establishments were integrated 3. In the figure above, the published values from surveys on establishments, which are based on the criteria “the total number of employees of a business establishment is no more than nineteen persons or four persons,” rather than the criteria for specifying an enterprise as a small enterprise prescribed by the Small and

Medium-sized Enterprise Act (number of regular employees is not more than twenty, or five or less for some business types), are employed. 4. Eating and drinking places had been classified as part of the retail trade industry until 2001. In order to enable comparisons, the number of eating and drinking places, which was included in the service industry from 2004 through 2012, is counted as being included in the retail trade industry.

(Year)

Trends in Micro Businesses (3) Changes in the Number of Establishments (Breakdown of Retail Trade Industry)

When examining the breakdown of the retail trade industry (including eating and drinking places), which has the largest number of business establishments among all industries, according to major industry groups, it can be seen that the number of business establishments of all business types such as shops including restaurants and the food and beverage retail trade industry has decreased since 1986.

38

20 24

41

46

54

63

66 63

60 57

55

50 49

44 42

65 66 69

67 68 66

59

48

42

34 34

29 28

24

19

25 25

31 33

35 36 37 34

32 33

30

26 26 24

20

17 17 19 19 20 20 20 19

17 16 15 14 13 11 10 14 14 15

16 16 16 14 12 12 11 10 9 9 8 7

4 4 5 5 6 6 7 6 6 6 6 5 6 6 5

0.2 0.1 0.2 0.3 0.2 0.2 0.3 0.1 0.2 0.3 0.2 0.2 0.2 0.05 0.07 0

10

20

30

40

50

60

70

80

63 66 72 75 78 81 86 91 96 99 01 04 06 09 12

Eating and drinking places, etc. Retail trade (food and beverage)

Miscellaneous retail trade Retail trade (woven fabrics, apparel, and accessories)

Retail trade (furniture, home furnishings, and machinery and equipment for households) Motor vehicles and bicycle retail trade

Retail trade, general merchandise

Source: Recompiled data from Establishment and Enterprise Census (from 1963 through 2006) and 2009 Economic Census – for Business Foundations (2009), Ministry of Internal Affairs and Communications; 2012 Economic Census – for Business Activity (2012), Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

Note 1: Survey conducted as the Establishment Census up until 1991 (as the Establishment Directory Maintenance Survey in 1989) and as the Establishment Directory Maintenance Survey in 1994 2. Survey conducted based on business establishments, not based on enterprises whose multinominal establishments were integrated 3. In the figure above, the published values from surveys on establishments, which are based on the criteria “the total number of employees of a business establishment is no more than nineteen persons or four persons,” rather than the criteria for specifying an enterprise as a small enterprise prescribed by the Small and

Medium-sized Enterprise Act (number of regular employees is not more than twenty, or five or less for some business types), are employed. 4. Eating and drinking places had been classified as part of the retail trade industry until 2001. In order to enable comparisons, the number of eating and drinking places, which was included in the service industry from 2004 through 2012, is counted as being included in the retail trade industry.

(ten thousand establishments)

Changes in Number of Micro Business Establishments in the Retail Trade Industry (Including Eating and Drinking Places) (Major Industry Groups)

(Year)

20.2 11.2 15.7

59.3

38.8

8.4 3.0

28.7

3.1 3.7 5.2

25.1

1.5 5.1 11.1

6.1 9.9 14.5 15.0 14.8

0102030405060

The p

opula

tion

bega

n to

decre

ase.

The p

opula

tion

of ch

ildre

n and

youn

g peo

ple de

creas

ed.

The a

ging o

f soc

iety p

roce

eded

.

The w

hole

econ

omy w

as sl

uggis

han

d dete

riora

ted.

Cons

umer

s’ wi

llingn

ess t

o buy

go

ods a

nd se

rvice

s dec

lined

.

Larg

e ente

rpris

es lo

st the

ir vigo

r.

It bec

ame

more

diffic

ult to

proc

ure

funds

.

Unit s

elling

price

s beg

an a

down

ward

trend

.

The p

eriod

for t

he cy

cle fr

omde

velop

ment

of tec

hnolo

gy an

d goo

ds to

their

obso

lesce

nce b

ecam

e sh

orte

r.

It bec

ame

diffic

ult to

recru

it hum

anre

sour

ces.

Com

petiti

on w

ith ov

erse

as go

ods

and s

ervic

es be

cam

e inte

nse.

Com

petiti

on w

ith la

rge e

nterp

rises

and o

ther e

nter

prise

s of th

e sam

ebu

sines

s typ

e bec

ame i

ntens

e.

IT w

as no

t adv

ance

d yet

(for e

xamp

le,it w

as im

poss

ible t

o sell

good

s on t

heInt

erne

t, and

man

agem

ent w

asine

fficien

tlyca

rried

out)

.

IT w

as ad

vanc

ed (f

or ex

ample

,co

mpeti

tion

with

Inter

net s

ales b

ecam

e int

ense

).

Busin

ess o

wner

s and

emplo

yees

age

dan

d los

t their

vigo

r.

The n

umbe

r of e

mploy

ees b

ecam

e sma

ll.

We b

ecam

e unw

illing

to m

ake n

ew e

fforts

(such

as th

e dev

elopm

ent o

f new

good

san

dse

rvice

s and

expa

nsion

of n

ew bu

sines

s).

We f

ailed

to pr

ovide

goo

ds an

d ser

vices

that m

eet th

e nee

ds of

cons

umer

s and

busin

ess p

artn

ers.

Othe

r

Noth

ing in

partic

ular

(%)

Reasons Why Businesses Were Weak (Multiple Answers)

10.2 11.7 2.1

47.5 44.8

8.6 9.4

25.6

4.1 3.7 3.2

18

4.2 2.2

26.4

7.6 8.0 15.0

22.3

10.2 15.0

01020304050

The p

opula

tion w

as in

creas

ing.

Ther

e was

a lar

ger p

opula

tion o

fch

ildre

n and

youn

g peo

ple.

The a

ging o

f soc

iety p

roce

eded

.

The w

hole

econ

omy w

asco

ntinu

ously

grow

ing.

Cons

umer

s’ wi

llingn

ess t

o buy

go

ods a

nd se

rvice

s wa

s high

ly sti

mulat

ed.

Larg

e ente

rpris

es w

ere v

igoro

us.

It was

easy

to pr

ocur

e fun

ds(w

orkin

g cap

ital).

Unit s

elling

price

s con

tinue

d to

show

an up

ward

tren

d.

The p

eriod

for t

he cy

cle fr

om th

ede

velop

ment

of tec

hnolo

gyan

d goo

ds to

their

obso

lesce

nce

was l

onge

r.

It was

easy

to re

cruit h

uman

reso

urce

s.

Comp

etitio

n with

over

seas

good

san

d ser

vices

was

not in

tense

.

Comp

etitio

n with

larg

een

terpr

ises a

nd ot

her e

nterp

rises

of the

same

busin

ess t

ype w

as no

t…Inf

orma

tion t

echn

ology

(IT)

was

not a

dvan

ced y

et (fo

r exa

mple,

there

was

no co

mpeti

tion w

ithInt

erne

t sale

s).IT

was

adva

nced

(for

exam

ple, it

beca

me ea

sier t

o enh

ance

effici

ency

in m

anag

emen

t and

deve

lop sa

les ch

anne

ls).

Busin

ess o

wner

s and

emplo

yees

were

youn

g and

vigo

rous

.

The n

umbe

r of e

mploy

ees w

aslar

ge.

We w

ere p

roac

tively

expa

nding

our s

hops

and f

actor

ies.

We w

ere p

roac

tively

mak

ing ne

weff

orts

(such

as th

e dev

elopm

ent

of ne

w go

ods a

nd se

rvice

s and

expa

nsion

of ne

w bu

sines

s).W

e wer

e pro

viding

good

s and

servi

ces t

hat m

et the

need

s of

cons

umer

s and

busin

ess

partn

ers.

Othe

r

Nothi

ng in

partic

ular

(%) Reasons Why Businesses Have Been Strong (Multiple Answers)

(n=4,868)

Trends in Micro Businesses (4) Main Causes for Ups and Downs for Businesses

As for macroeconomic reasons for ups and downs for businesses, many business owners believe that businesses performance depends on the state of growth or sluggishness of the economy, consumer willingness to buy goods and services, and unit selling prices.

As for other reasons, whether or not goods and services are able to be provided that meet needs is also believed to play an important role.

We managed our businesses without definite plans. In the coming era, proactive efforts (management) will be necessary. (n=4,665)

Source: Survey for Ascertaining Current Status of Business Activities of Small Enterprises, Applied Research Institute. Inc., under contract from SMEA, January 2015 Note: Business owners chose the top three reasons in the questionnaire survey, and the percentages for the graph above were calculated based on the total number of business owners.

39

Trends in Micro Businesses (5) Changes in Means of Livelihood during Business Ups and Downs

Source: Survey for Ascertaining Current Status of Business Activities of Micro Businesses, Applied Research Institute. Inc., under contract from SMEA, January 2015

Earned my livelihood only from income from my business

84%

Earned my livelihood from income from other sources in

addition to income from my business

16%

Business Owners’ Livelihoods at Times When Businesses Were Strongest

(n=4,868)

Business Owners’ Livelihoods at Times

When Businesses Were Strongest

64%

Earned my livelihood only from income from

my business 36%

グラフタイトル Business Owners’ Livelihoods at Times When Businesses Were Weakest

(n=4,665)

When comparing business owners’ means of livelihood during up periods for their businesses with those during down periods for their businesses, it can be seen that the percentage of business owners who earn their living from income from their businesses in addition to income from other sources during up periods is about 20% higher than that during down periods.

When examining the breakdown of income from sources other than their businesses, it can be seen that during down periods when trends in the whole economy also become severe, salaries that business owners’ families earn through working at other companies and rent from immovable properties owned by them also decrease. Instead, pensions and the disposition of savings come to account for a larger part of their means of livelihood.

Therefore, a safety net, including pensions and the disposition of savings, is important.

40

40.1

38.6

15.8

3.6

17.9

33.0

25.3

37.0

25.7

15.5

0 10 20 30 40 50

Income earned through working other than income sourced from our businesses

(salaries that business owners’ families earned through working at other companies, etc.)

Rent from immovable properties owned by us

Pensions

Disposition of savings

Other

Income that was earned during times of ups for businesses (n=783) Income that was earned during times of downs for businesses (n=1,699)

Source: Survey for Ascertaining Current Status of Business Activities of Micro Businesses, Applied Research Institute. Inc., under contract from SMEA, January 2015

(%)

Income That Was Earned from Sources Other Than Businesses at Times When Businesses Were Strongest or Weakest (Multiple Answers)


Chapter III

The Future of Micro Businesses

41

7.9

25.8 23.7

15

22.4 24.4

11.8 10.7

31.7

18.1 21.3

31.3

49.5

6.7

0

10

20

30

40

50

New

recru

itmen

t of h

uman

reso

urce

swi

th a

high l

evel

of sa

les sk

ills

Deve

lopme

nt an

d intr

oduc

tion o

f new

good

s and

se

rvice

s by l

ever

aging

micr

o bus

iness

es’ o

wn

techn

ologie

s and

know

-how

Deve

lopme

nt an

d intr

oduc

tion o

f new

good

s and

se

rvice

s bas

ed on

custo

mers

’ and

mar

kets’

need

s

Mark

et an

alysis

on m

icro b

usine

sses

’ own

prod

ucts

and g

oods

Impr

ovem

ent in

sales

skills

of ex

isting

emplo

yees

Diss

emina

tion o

f info

rmati

on b

y utili

zing w

ebsit

es an

d e-m

ail

Deve

lopm

ent a

nd p

rovis

ion of

goo

ds ba

sed

on th

e res

ults o

f mar

ket a

nalys

is

Onlin

e reta

iling

Visit

ing in

perso

n and

mar

ketin

g to

poten

tial c

ustom

ers

Othe

r effo

rts

Prom

otion

and a

dver

tisem

ent o

utside

the c

urre

nt pr

imar

ysa

les ar

eas (

throu

gh pu

tting f

lyers

in ma

ilbox

es, fl

yers

in ne

wspa

pers/

maga

zines

, etc.

)

Impr

ovem

ent o

f exp

lanati

ons a

nd co

mmun

icatio

nswi

th cu

stom

ers i

n sell

ing fa

ce-to

-face

None

in p

artic

ular

Door

-to-d

oor s

ales

(%)

Toward the Future of Micro Businesses (Effective Development of Sales Channels)

Micro businesses that have been making efforts to recruit human resources with a high level of sales skills for the sake of the development of sales channels currently tend to be increasing their sales, but the number of such micro businesses is comparatively small.

Meanwhile, many micro businesses have been making efforts to market to customers, but the percentage of the efforts that are leading to sales increases is not high.

Source: Survey on the Conditions of Business Activities of Micro Businesses, Applied Research Institute, Inc., under contract from SMEA, January 2015 Note: Figures are calculated from the top three responses that micro businesses selected in the questionnaire.

29.6

23.5

23.5

23.4

22.9

22.6

21.2

20.2

19

19

17.6

17

15.7

15.4

40.2

40.8

39.2

41

43.4

40.2

40.8

41.8

40.2

40.1

39

39.7

33.3

38.5

30.1

35.7

37.2

35.6

33.7

37.2

38

38

40.9

40.9

43.4

43.3

51

46.1

0% 20% 40% 60% 80% 100%

New recruitment of human resources with ahigh level of sales skills (n=614)

Development and introduction of new goods and services by leveraging micro businesses’ own technologies and know-how (n=1849)

Development and introduction of new goods and services based on customers’ and markets’ needs (n=1721)

Market analysis on micro businesses’ own products and goods (through exchange of information in regions, active participation in business seminars, etc.) (n=1307)

Improvement in sales skills of existing employees (n=1678)

Dissemination of information by utilizingwebsites and e-mail (n=1784)

Development and provision of goods basedon the results of market analysis (n=1005)

Online retailing (n=835)

Visiting in person and marketing to potential customers (including both companies and consumers) (n=2151)

Other efforts (n=958)

Promotion and advertisement outside the currentprimary sales areas (through putting flyers in mailboxes,

flyers in newspapers/magazines, etc.) (n=1525)

Improvement of explanations and communicationswith customers in selling face-to-face (n=2217)

None in particular (n=833)

Door-to-door sales (n=577)

Sales have been on the increase. Sales have been remaining flat. Sales have been on the decrease.

(n=5,872)

42

Relation between Efforts toward Development of Sales Channels (Multiple Answers) and Sales Trends in Recent Years Efforts for Development of Sales Channels (Multiple Answers)

For the Future of Micro Businesses (Formulation of Business Plans and Changes in Their Awareness (1))

43

No, this was our first time

preparing them, in order to apply

for subsidies. 59.4%

Yes, we have prepared them

in the past, too.

40.6%

(n=5,266)

Experience in the Preparation of Business Plans?

51.7% 50.8% 50.3%

43.3%

31.3%

0.4% 2.4% 0%

20%

40%

60%

We have becomeinterested in other

subsidies.

Our company’s strengths and

weaknesses have become clear.

We were able tocreate plans fornew business.

It provided a goodopportunity to

review ourbusiness.

It enabled us togive priority to our

business.

None in particular Other

Changes in the Awareness of Micro Businesses after Preparing their Business Plans (Multiple Answers)

Source: Impacts of the Previous Measures for SMEs and Micro Businesses, SMEA, November 2014

(n=5,266)

According to the questionnaire results from the micro businesses that received “Subsidies for Sustainable Micro Businesses,”(*) which was adopted as a measure in the FY 2013 supplementary budget, approximately 60% of all micro businesses answered that they prepared their business plans for the first time due to the use of the subsidies.

As for the micro businesses’ awareness after formulating their business plans, they raised their awareness to try to address management challenges, as indicated by the results, such that over 50% of micro businesses answered, “Our company’s strengths and weaknesses have become clear,” or “We were able to create plans for new business,” and approximately 40% answered, “It was a good opportunity to review our business.”

The business plans, which the subsidies require, are typically not unduly burdensome, often only being 1 page in length. Thus, it is thought that a sufficiently positive effect will be obtained from even a modest effort to formulate a business plan.

* Subsidies for Sustainable Micro Businesses support micro businesses with expenses related to the development of sales channels with commerce and

industry associations, chambers of commerce, and industry (preparation costs for flyers, travel expenses for attending business fairs, etc.). (Upper limit of subsidy: 500,000 yen, subsidy rate: two-thirds, results in supplementary budget for FY 2013: 27,409 applications → 13,327 acceptances)

For the Future of Micro Businesses (Formulation of Business Plans and Changes in their Awareness (2))

When asked about the status of acquisition of new business partners or customers, 51% of business operators that had already prepared their new business plans and received the subsidies for sustainable micro businesses answered, “having acquired.” Including the answer “expecting to acquire,” 97% of business operators that had received subsidies answered, “acquiring new business partners or customers.”

Meanwhile, as for increases in sales, 35% of micro businesses answered, “having increased.” Including “expecting to increase,” approximately 90% of business operators that had received subsidies answered, “increasing sales.”

51.3% 45.6%

3.1%

Status of Acquisition of New Business Partners or Customers by Utilizing the Subsidies for Sustainable Businesses

Having acquired newbusiness partners orcustomers

Expecting to acquire newbusiness partners orcustomers

Having failed to acquirenew business partnersand customers

(n=5,442)

35.0%

54.5%

10.5%

Status of Increase in Sales by Utilizing the Subsidies for Sustainable Businesses

Having increased sales

Expecting to increasesales

Not having increasedsales

(n=5,443)

Source: Impacts of the Previous Measures for SMEs and Micro Businesses, SMEA, November 2014 44

For the Future of Micro Businesses (New Working Style: Freelancers (1))

Those who do not belong to any organization and act as individuals based on their own experience and expertise, for example, designing and developing software (or, system engineering), performing web design, writing, translating, or interpreting, are so-called “freelancers.” This is also one of new working styles, and they are micro businesses.

Freelancers are also expected to act as external human resources for micro businesses.

In terms of the previous jobs of freelancers, directors and full-time employees of SMEs account for the majority. They are mainly in their 40s and 50s with experience, expertise, and connections.

Source: Survey on the Conditions of Business Activities of Micro Businesses –Freelancers–, Applied Research Institute, Inc., under contract from SMEA, February 2015

Directors or full-time employees of large

enterprises 15.3%

Directors or full-time employees of SMEs

56.4%

Part-time employees 9.1%

Contract employees or dispatched employees

8.3%

Other 3.6%

Students 2.0%

Full-time housewives and househusbands

1.4%

Teachers (excluding university teachers)

1.1%

Family workers (workers at one’s family’s business)

1.0%

Public officers 0.9%

Unemployed (excluding full-time housewives and househusbands)

0.8%

University teachers (professors, associate professors, assistant

professors, etc.) 0.1%

Previous Jobs before Becoming Freelancers

(n=800)

1.1%

10.9%

36.3% 38.3%

13.5%

0%

10%

20%

30%

40%

50%

20s or younger 30s 40s 50s 60s or older

Breakdown of Freelancers by Age

(n=800)

45


Freelancers tend to be satisfied with their working styles in terms of “flexibility and discretion,” “duties and rewards,” and “work-life balance.” These responses exceed 60 %.

On the other hand, fewer tend to be satisfied with the “evaluation by society” and “income.”


19.8

16.6

16.4

3.6

1.4

52.8

48.1

45.9

15.6

13.1

22.4

29.0

30.0

58.8

34.3

3.6

4.5

6.0

15.9

32.6

1.5

1.8

1.8

6.1

18.6

0% 20% 40% 60% 80% 100%

Degree of flexibility anddiscretion in their work

Duties and rewards in their work

Work-life balance (private life)

Evaluation by society

Income

Very satisfied Satisfied Neither satisfied nor dissatisfied Dissatisfied Very dissatisfied

Satisfaction of Freelancers concerning Their Working Styles

(n=800)

46


As for the disadvantages of freelancing, most freelancers have anxieties and worries about the instability of their income when operating their businesses. As for the net income after taxes of freelancers, the ratio of those who answered “having anxiety and worry” shows an upward trend mainly among respondents whose

income is less than four million yen.

77.6

5.5 8.8 3 1.1 1.3 0.9 0.4 0.1 0.3 0.7 0.3

9.6

36.9 17.4

11.3 7.2

4.7 4 2.3 2.6 3 0.7 0.3

5.2

11.2

20.9

12.2 17.9

8.4 9.1

5.1 4 3.3 1.4 1.4

0

20

40

60

80

100

Instability of income Social security (medicalinsurance, pension,

etc.)

Own health and lastingmotivation

Success or failure ofthe business

Lack or obsolescenceof ability, knowledge, or

experience

Low level of socialcredibility and

recognition of freelancestyle

Re-employment afterpossible business

failure

Unable to have privatetime

Repayment of loans ifbusiness fails

(repayment of borrowedfunds and personal

guarantees)

Feeling of anxiety andloneliness due to

working in a differentstyle in comparison with

those of others

Other Severe criticism fromthe public and family if

the business fails

Anxieties and worries chosen as the worst (n=705)

Anxieties and worries chosen as the second worst (n=705)

Anxieties and worries chosen as the third worst (n=705)

Breakdown of Freelancers’ Anxieties and Worries When Operating Their Businesses (%)


130

111 121

78

47

31 22

10 5 5 12

55

21

41

27 30

14 13 8 3 6 9

70.3%

84.1%

74.7% 74.3% 61.0%

68.9%

62.9%

55.6%

62.5%

45.5%

57.1%

40%

50%

60%

70%

80%

90%

100%

0

20

40

60

80

100

120

140

Less than 1 millionyen

1 million or morebut less than 2

million yen


million yen


million yen


million yen


million yen


million yen


million yen


million yen


million yen


million yen

Having anxiety and worry (n=572)

No anxiety or worry (n=227)

Ratio of Those Who Answered, “Having anxiety and worry” among Respondents

(persons) Relation between Freelancers’ Net Income after Taxes and Their Anxieties and Worries

47

Hope to expand the businesses (sales,

customers, etc.), while working as freelancers

37.0%

Hope to maintain the businesses (sales,

customers, etc.) while working as freelancers

35.8%

Don’t know 9.0%

Hope to quit working 6.0%

Hope to quit as freelancers and become office workers or public officials 5.0%

Hope to expand the businesses, aiming to be

incorporated 3.5%

Other 2.0%

Hope to downsize the businesses (sales,

customers, etc.), while working as freelancers

1.3%

Hope to employ personnel to expand the businesses

0.5%

Freelancers’ Own Perspectives on the Future of Their Businesses and Working Style


Regarding freelancers’ future prospects, answers that indicate that they hope to expand or maintain their businesses account for approximately 70% of responses.

Meanwhile, regarding the lifestyles and working styles of freelancers, the answers that indicate that they “feel that such styles will be widespread” or “will spread” in the future account for approximately 40% altogether.


(n=800)

48

Feel that such styles will be widespread

10.4%

Feel that such styles will spread 29.8%

Feel that such styles will not significantly change from the

current situation 34.6%

Do not feel that such styles will spread 12.6%

Do not feel that such styles will spread at all

2.5%

Don’t know 10.1%

(n=800)

Future Prospects of Lifestyles And Working Styles as Freelancers

63.0

11.4 6.9

4.0 3.5 3.1 1.8 1.8 0.9 0.8 0.6 0.6 0.5 0.5 0.3 0.1 0.1 0.1 0.1 0.0 0

20

40

60

80

特に支援を受けたことはない

知人

同業種の経営者

税理士・会計士

家族・親族（非利害関係者）

商工会・商工会議所

取引先

家族・親族（利害関係者）

市区町村

その他

都道府県

（独）中小企業基盤整備機構

異業種の経営者

国その他金融機関

出資者・株主

中小企業診断士

メインバンク

経営コンサルタント

保証人

(%) Advisors and Supporters from Whom Freelancers Have Actually Received Advice and Support

(n=800)

Have

not r

eceiv

ed an

y sup

port i

n pa

rticula

r

Acqu

aintan

ces

Busin

ess o

wner

s in t

he sa

me in

dustr

y

Tax a

ccou

ntants

and a

ccou

ntants

Fami

ly me

mber

s and

relat

ives (

those

not

inter

ested

)

Comm

erce

and

indu

stry a

ssoc

iation

s an

d ch

ambe

rs of

comm

erce

and

indu

stry

Busin

ess p

artne

rs

Fami

ly me

mber

s and

relat

ives (

those

inter

ested

)

Munic

ipaliti

es

Othe

r

Prefe

cture

s Or

ganiz

ation

for S

mall &

Med

ium E

nterp

rises

and

Re

giona

l Inn

ovati

on, J

apan

(SMR

J)

Busin

ess o

wner

s in o

ther in

dustr

ies

Natio

nal g

over

nmen

t

Othe

r fina

ncial

insti

tution

s

Capit

al inv

estor

s and

shar

ehold

ers

SME

mana

geme

nt co

nsult

ants

Main

bank

Mana

geme

nt co

nsult

ants

Guar

antor

s


Freelancers have tended not to expect any support from outside parties and not to have thought about relying on such support in the future either.

They can be regarded as business operators who are filled with can-do spirit and operate their businesses based on their own experience and expertise .

68.0

7.0 6.3 3.3 2.9 1.9 1.9 1.5 1.4 1.4 1.3 0.8 0.6 0.6 0.6 0.4 0.1 0.1 0.1 0.0

0

20

40

60

80

特に支援を受けたいと思わない

同業種の経営者

知人

税理士・会計士

商工会・商工会議所

市区町村

国取引先

その他

家族・親族（非利害関係者）

（独）中小企業基盤整備機構

メインバンク

異業種の経営者

家族・親族（利害関係者）

経営コンサルタント

都道府県

中小企業診断士

その他金融機関

保証人

出資者・株主

(%) Advisors and Supporters from Whom Freelancers Would Like to Receive Advice and Support in the Future

Do no

t exp

ect a

ny su

ppor

t in pa

rticula

r

Acqu

aintan

ces

Busin

ess o

wner

s in t

he sa

me in

dustr

y

Tax a

ccou

ntants

and

acco

untan

ts

Fami

ly me

mber

s and

relat

ives (

those

not

inter

ested

)

Comm

erce

and

indu

stry a

ssoc

iation

s an

d ch

ambe

rs of

comm

erce

and

indu

stry

Busin

ess p

artne

rs

Fami

ly me

mber

s and

relat

ives (

those

inter

ested

)

Munic

ipaliti

es

Othe

r

Prefe

cture

s

Orga

nizati

on fo

r Sma

ll & M

edium

Ente

rpris

es a

nd

Regio

nal I

nnov

ation

, Jap

an (S

MRJ)

Busin

ess o

wner

s in o

ther in

dustr

ies

Natio

nal g

over

nmen

t

Othe

r fina

ncial

insti

tution

s

Capit

al inv

estor

s and

shar

ehold

ers

SME

mana

geme

nt co

nsult

ants

Main

bank

Mana

geme

nt co

nsult

ants

Guar

antor

s

(n=800)

Source: Survey on the Conditions of Business Activities of Micro Businesses –Freelancers–, Applied Research Institute, Inc., under contract from SMEA, February 2015 49

For the Future of Micro Businesses (New Efforts Involved in Business Succession) When examining trends in business performance after succession of business owners by age, it can be seen that the younger the

successor is, the better the business performance after succession tends to be. After business succession, a little less than 50% of micro businesses that made efforts for business renovation have improved their

business performance.

Source: Questionnaire Survey on Business Succession for Small and Medium Enterprises, Nomura Research Institute, Ltd., under contract from SMEA, November 2012

Note 1: The figures in Trends in Business Performance after Business Succession are based on survey responses on actual business results for around five years after succession (or for the period until the survey in cases where five years had not yet passed since business succession).

2. “Having improved” includes “having slightly improved,” and “having worsened” includes “having slightly worsened.”

54.5%

40.9%

33.6%

31.3%

22.3%

29.2%

28.0%

31.3%

23.1%

29.9%

38.5%

37.3%

0% 20% 40% 60% 80% 100%

Under 40 (n=264)

40-49 (n=264)

50-59 (n=143)

60 or older (n=83)

Having improved Not much changed Having worsened

Trends in Business Performance of Micro Businesses after Business Succession (by Business Owner’s Age at Succession) (Example) An example of making new efforts after business succession

Sato Shoji Co., Ltd. President: Keita Sato (employees: 11 persons; capital: 6 million yen) (Yuzawa City, Akita Prefecture) [Main business] Manufacture and marketing of traditional handicrafts – Kawatsura lacquerware [Motive for business succession] Originally having no intention of taking over the family business, Mr. Sato took a job as a

salesperson at an IT company in Tokyo. While working in IT, he happened to have the opportunity to creat a website for his family’s company. In making the website, he became increasingly interested in the company, and as such, along with his grandmother’s urging, decided to take over the business in 2012 when the then-president was 59 years old and he was 35 years old.

[Details of new efforts] He adheres to keeping the traditions of making lacquerware using craftsmen’s hand-coating

techniques. Thinking that it is important not only to emphasize how many layers of coating are applied to

the products, but also to generate selling points that strongly appeal to the customers, he has developed products for children such as plates and spoons with grooves for a better grip as well as products through collaboration using the characters of major toy makers.

His efforts include offering the company’s lacquerware to a famous local Inaniwa udon restaurant so that customers can feel the good quality of the company’s products.

Due to changing demographics, with an aging craftsmen population and declining number of younger craftsmen to succeed them, he is promoting training for younger generations in collaboration with universities and vocational colleges that specialize in arts and crafts.

[Outcomes of the efforts] The number of clients and the sales figures for the company have been on a steady

increase. There are also increasing inquiries from other industries with which the company had no previous connection, saying that they want to put the company’s products on display.

Regarding human resources, there have been many inquiries from people including young students who want to work for the company as well as wanting to learn the techniques.

As opportunities have arisen where the people in the traditional crafts-producing regions in Akita Prefecture and the younger generation of proprietors gather to work on initiatives such as promoting branding and disseminating regional products, they are now engaged in proactive discussions. 43.8

17.5

18.0

25.5

38.2

57.0

0% 20% 40% 60% 80% 100%

取組企業(n=2,064)

非取組企業(n=251)

改善不変悪化

Changes in Business Performance after Business Succession (by State of Efforts for Business Renovation)

Enterprises which have not made any efforts (n=251)

Enterprises which have made efforts (n=2,064)

Improved Not changed Worsened

Source: Questionnaire on Business Succession for Small and Medium Enterprises, Japan Finance Corporation, July 2009 Note: Figures are based on the responses from small enterprises. The term “small enterprise” is defined in the questionnaire as an enterprise

which employs less than 19 employees. 50

Micro Businesses in Regions (Current Situation of Retail Trade in Regions) While the population has been concentrated in three major metropolitan areas, particularly in the Tokyo Metropolitan area, the population has

significantly declined in other regions (Japan has entered into a serious population decline (2014 White Paper on Small and Medium Enterprises in Japan)).

The population decline is a factor leading to a fall in demand in certain regions. For example, the number of small-sized shops (on shopping streets, etc.) has significantly decreased in the retail trade industry. On the other hand, cases where a small company continues to expand its sustainable business, while responding to local issues and demand, can be seen.

Change of Population by Municipality (1980-2010)

Source: Prepared based on Regional Statistics Database, Ministry of Internal Affairs and Communications Note: The map of Japan above was colored according to the changes in population by municipality.

1980 2010 Rate of change (as a whole)

Number of municipalities in which

population declined

Population (across Japan) 117,058,537 128,057,352 9.4% 1,038 municipalities

40% or more 20 or more but less than 30% 10 or more but less than 20% 1 or more but less than 10% -1 or more but less than 1% -1 or less but more than -10% -10 or less but more than -20% -20 or less but more than -30% -30% or less Other

(Percentage change)

Osaka area Nagoya area

Tokyo area

-50.0 -40.0 -30.0 -20.0 -10.0 0.0 10.0 20.0 30.0 40.0

10㎡未満

10㎡以上 20㎡未満

20㎡以上 30㎡未満

30㎡以上 50㎡未満

50㎡以上 100㎡未満

100㎡以上 500㎡未満

500㎡以上 1000㎡未満

1000㎡以上 1500㎡未満

1500㎡以上 3000㎡未満

3000㎡以上

全体

02年～07年 07年～12年

Source: Census of Commerce, Ministry of Economy, Trade and Industry; 2012 Economic Census – for Business Activity, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry

(%)

Changes in Number of Establishments by Sales Floor Space in Retail Trade Industry

2002 through 2007 2007 through 2012

All retailers

The number of small-sized establishments decreased.

The number of large-sized establishments increased.

Example: Regional efforts for solving regional issues (Omiya Sangyo Co., Ltd. / Omiya District, Shimanto City, Kochi Prefecture) [Outline of the region] There is a population of 286 (130 households). The proportion of elderly people has risen to 49.7% in this district, where residents find it difficult to purchase daily necessities and other items. [Details of the efforts made in the district] The sole store in the district that sold daily necessities, gasoline, and other commodities was closed. Feeling a

sense of crisis, 108 households, which accounted for about 80% of all the residents, invested a total of 7 million yen and founded Omiya Sangyo Co., Ltd (a micro business) in May 2006.

With the aim of protecting the daily lives of the residents, the store sells goods ranging from foods (excluding fresh foods) to daily sundry goods and agricultural goods, staying in touch with the community’s needs.

In addition, by strengthening the system of “local production for outside consumption,” which is to sell locally grown rice to consumers outside the region, the company is developing sustainable operations as well as exercising its responsibility to meet regional demand.

[Outcomes from the efforts] Sales: 35 million yen in FY 2006, 62 million yen in FY 2011

The company has operated in the black for six consecutive quarters.

(A scene in the store run by Omiya Sangyo)

51

less than 10 m2 10 m2 or more and less than 20 m2 20 m2 or more and less than 30 m2 30 m2 or more and less than 50 m2 50 m2 or more and less than 100 m2

100 m2 or more and less than 500 m2 500 m2 or more and less than 1,000 m2

1,000 m2 or more and less than 1,500 m2 1,500 m2 or more and less than 3,000 m2

3,000 m2 or more

Micro Businesses in Regions (Places of Purchase for Local Residents by Goods / Level of Satisfaction with Goods and Services Provided by Micro Businesses)

As for the kinds of goods local residents often purchase from micro businesses, daily necessities (food, daily goods, etc.) account for approximately 14%, clothes for 3.4%, and household durable goods (furniture, household electric appliances, etc.) for 4.7%. Thus, more frequently purchased everyday goods such as daily necessities tend to be more frequently purchased from micro businesses than less frequently purchased goods such as household durable goods.

Some reasons why local residents seldom go to shopping streets are that “there are no attractive individual shops,” accounting for 48%, “the prices are not inexpensive,” for 18%, “the shops do not have variety,” for 8%, “access from residents’ homes is not convenient,” or “there are no (or few) parking spaces for cars and bicycles,” for 12%, and “the atmosphere of the entire shopping street is not comfortable,” for 4%.

In terms of the level of satisfaction with the goods and services provided by micro businesses, there tends to be more satisfaction with the “owners’ and staffs’ responses,” “relationships,” and “convenience (e.g. taking care of everything with one call),” than the “prices” and “assortment of goods.”

4.7

3.4

13.8

13.0

13.6

11.1

60.2

50.6

66.1

1.9

8.4

1.2

19.2

22.5

3.0

0.3

0.8

3.9

0.8

0.7

0.8

0% 100%

Household durablegoods (furniture,

household electricappliances, etc.)

Clothes

Daily necessities(food, daily goods,

etc.)

Local micro businessesMajor franchise chain stores (purchases at convenience stores, well-known chain stores, etc.)Major supermarkets and mass retailersDepartment storesMail orderHome delivery (purchases at cooperative stores, etc.)Mobile sales (purchases at mobile sales vehicles, etc.)

Source: Questionnaire on Relations between You and the Region, Land Brains Co., LTD., under contract from SMEA, January 2015

Places of Purchase for Local Residents by Goods

(n=3,000)

1.3 0.6 1.4 2.4 2.6 2.2

12.2 9.3 15.4

22.7 22.6 21.2

42.9

33.3

42.8

44.8 48.9 45.8

24.9

35.2

22.2

13.9 8.2 11.2

7.7 12.1 7.9 5.7 4.2 5.2

11.1 9.6 10.2 10.5 13.5 14.3

0

10

20

30

40

50

60

70

80

90

100

Prices Assortment ofgoods andservices

Quality of goodsand services

provided

Owners’ and staffs’ responses

Relationships Convenience(e.g. taking care

of everythingwith one call)

Very satisfied Satisfied Neither satisfied nor dissatisfiedDissatisfied Very dissatisfied Don’t know

Level of Satisfaction with Goods and Services Provided by Micro Businesses (n=3,000)

(%)

52 Source: Questionnaire on Relations between You and the Region, Land Brains Co., LTD., under contract from SMEA, 2015

Source: Questionnaire on Relations between You and the Region, Land Brains Co., LTD., under contract from SMEA, January 2015

Reasons Why Local Residents Seldom Go to Shopping Streets

47.9

17.9

8.3

6.1

6.1

3.5

2.7

1.5 0.7 0.5

4.8 There are no attractive individual shops.The prices are not inexpensive.The shops do not have variety.Access from residents’ homes is not convenient. There are no (or few) parking spaces for cars and bicycles.The atmosphere of the entire shopping street is not comfortable.The quality of their goods and services is not good.There are no attractive events or entertainment.Owners’ (or staffs’) responses are not helpful. There is no opportunity to communicate with people.Other

(n=866)

(%)

Popular and charismatic personalities

26.4 %

Having many personal networks

16.3% Having an

accumulation of knowledge and

know-how 15.6%

Easily being able to obtain support due to their long residence in the

region 14.3%

Having a wealth of experience

14.0%

Having the ability to coordinate with

governments and other organizations

12.9%

Other 0.5%

Elements Necessary for Regional Leaders

(n=435)

Students 0.2% Office workers and

directors 12.6% Business owners

(representatives of corporations)

4.4%

Self-employed persons (sole

proprietorships) 17.2%

Public officers 4.1%

Staff of commerce and industry associations

and chambers of commerce and

industry 3.2% Organizational staff

(excluding the staff of commerce and industry

associations and chambers of commerce and industry)

2.8%

Part-time employees

1.8%

Those unemployed or retired 26.7% Full-time

housewives and househusbands

2.8%

Other 7.6%

Don’t know 16.6%

(n=435)

Micro Businesses in Regions (Roles as Regional Leaders)

As regional leaders, the elements of having “popular and charismatic personalities” (26.4%) and “personal networks” (16.3%) are expected, and the percentage of micro businesses that take responsibility for fulfilling these roles is high.

Also, micro businesses (business owners and self-employed persons) contribute to their local communities through activities other than in the business arena, including such initiatives as local festivals and other events. Therefore, local residents also appreciated their local community activities to a certain extent.

11.1

17.9

38.4

15.7

20.1

35.5

10.8

13.6

12.4

62.4

48.5

13.6

0% 20% 40% 60% 80% 100%

PTA活動

消防団､防犯活動

地域のお祭り､イベント

積極的に参加している参加しているあまり参加していない参加していない Actively participating

(n=5,874)

Local festivals and events

Firefighting corps and crime prevention activities

Activities of Parent Teacher Associations (PTAs)

Not actively participating

Participating Not participating

Source: Survey on the Conditions of Business Activities of Micro Businesses, Applied Research Institute, Inc., under contract from SMEA, January 2015

Status of Participation in Local Community Activities of Business Owners (Micro Businesses)

3.7%

4.4%

9.1%

9.0%

21.9%

22.5%

34.1%

37.5%

59.2%

56.9%

45.5%

40.1%

10.0%

10.6%

7.3%

8.4%

5.2%

5.7%

4.0%

4.9%

0% 20% 40% 60% 80% 100%

PTA活動

ボランティア活動

消防団・防犯活動

地域のお祭り、イベント

高く評価しているある程度評価しているどちらとも言えない

あまり評価していない全く評価していない

Local festivals and events

Firefighting corps and crime prevention activities

Volunteer activities

Activities of Parent Teacher Associations (PTAs)

Highly regarded by residents

Not well regarded by residents

Regarded somewhat highly by residents

Not valued at all by residents

Regarded neither well nor poorly

Evaluation of Status of Participation in Local Community Activities of Business Owners (Micro Businesses) by Residents

(n=3,000)

Source: Questionnaire on Relations between You and the Region, Land Brains Co., LTD., under contract from SMEA, January 2015 Source: Questionnaire on Relations between You and the Region, Land Brains Co., LTD., under contract from SMEA, January 2015

Occupation of Regional Leaders

53

Part II Challenges of Running Micro Businesses

–Opening up the Future–

54

Four Pillars for Promoting Small Enterprises

The Basic Act for Promoting Small Enterprises, enacted on June 20, 2014, stipulates four basic policies for taking measures regarding the promotion of small enterprises based on basic principles for the sustainable development of micro businesses, and four goals are set in the Basic Plan for the Promotion of Small Enterprises in order to realize these policies (approved by the Cabinet on October 3, 2014).

Micro businesses and supporting organizations operating businesses closely tied to the demands of local communities have

been making efforts to demonstrate their originality and ingenuity in response to the changing times. With a view to the four goals, Part II introduces 42 examples of various efforts, including human stories regarding the actual situations of micro businesses and supporting organizations, that are vigorously working with local communities while being buffeted by the changing of the times.

Basic Act for Promoting Small Enterprises

Formulation of the Basic Plan to facilitate the promotion of measures in a comprehensive and systematic manner

Basic Plan for the Promotion of Small Enterprises (Article 13)

(i) Selling products corresponding to demand, promoting the development of new businesses

(ii) Effectively utilizing management resources, developing and securing human resources

(iii) Promoting business activities contributing to the revitalization of regional economies

(iv) Developing appropriate support systems

Basic policies (Article 6)

Four goals of the Basic Plan 1. Promoting business management that should be implemented

for future demand: Creating and discovering demand for micro businesses by more proactively taking advantage of their conventional face-to-face relationships with customers

2. Promoting business renovation: Developing and creating

business by providing diverse and new human resources with opportunities for success in the workplace

3. Facilitating business activities contributing to regional

economies: Increasing the public awareness of certain regions to create brands so as to invigorate regional economies

4. Developing a system for supporting micro businesses through

community-wide collective efforts: Providing meticulous measures to address challenges that business operators are facing

55

Introduction of 42 examples (1)

56

With a view to promoting management which has an eye toward future demand, a number of examples are introduced, including “cases in which demand is created or discovered by recognizing businesses’ own strengths,” “cases in which specific effects are produced by formulating business plans,” and “cases in which the discovery of regional demand is being carried out by leveraging relationships of mutual trust.” (11 examples in total)

With a view to promoting regeneration, a number of examples are introduced, including “cases of success in starting up businesses or founding companies,” “cases of working on product development through agriculture-commerce-industry collaboration and/or industry-academia-government collaboration,” and “cases of making efforts to open up new markets by switching to different industries or developing new businesses.” (10 examples in total)

(Example) Green Mouse Inc. (Kamagaya City, Chiba Prefecture) / Manufacturer and seller of hairdressing scissors for barbers and beauty salons

(Example) Wealthylifelab Inc. (Utsunomiya City, Tochigi Prefecture) / Manufacturer of additive-free cosmetics

Atsushi Hiwasa, president of the company

Kanae Sato, president of the company

Repair and maintenance of barber and beauty salon hairdressing scissors

Providing clients with written records of detailed information on the scissors such as the condition of the scissors before the repair, the problems, characteristic tendencies of the scissors, and daily maintenance procedures

In response to the increasingly competitive market environment, the company has expanded into the market for repair and maintenance of grooming scissors for pets.

Starting up a company that develops, manufactures, and sells additive-free cosmetics without preservatives

Developing cosmetics made from a local specialty (Kanumatsuchi, or Kanuma clay: clay minerals) as well as products in cooperation with local enterprises and hospitals

“Foaming facial cleanser” made from “Kanumatsuchi”

A pair of scissors and its written record, on completion

(Reference) A winner of the Encouragement Prize in the “Start-up Division,” for the 13th Grand Awards for Female Entrepreneurs granted by the Japan Chamber of Commerce and Industry

With a view to promoting business activities which contribute to the vitalization of local economies, a number of examples are introduced, including “cases in which contributions to local communities are regarded as significant and valuable,” “cases in which branding strategies for regions are worked on,” and “cases in which the creation of bustle is focused on.” (11 examples in total)

With a view to the development of a support system through community-wide collective efforts, a number of examples are introduced, including “cases in which support was provided by instructors on management” and “cases in which support was provided by general-purpose coordinators.” (10 examples in total)

(Example) An example of the revitalization of shopping streets in Ichinomiya-machi in Aso City / Revitalization of ailing shopping streets

(Example) An example of instruction given by the Nakatsugawakita Society of Commerce and Industry in Gifu Prefecture / Instruction on management was conducted for the town’s photography shops, whose sales had been declining.

Introduction of 42 examples (2)

Having a sense of crisis coming from ailing shopping streets, young successors gathered and struggled for the revitalization of the shopping streets.

Attracting 350,000 tourists a year to shopping streets for which there only used to be local demand

Providing instruction on management to the town’s photography shops, whose sales had declined due to the spread of digital cameras and other reasons

Conducting precise instruction on management and proposing the commercialization of aerial shots by radio-controlled helicopters and drones

A radio-controlled helicopter A drone

A scene at an “Ozashiki, or tatami-matted, shopping street” organized by the shopping street community

A scene at a “Friday night market” organized by the shopping street community

(Reference) First Prize winner at the FY 2014 Meeting for Presentations on Management Support Cases, hosted by the Central Federation of Societies of Commerce and Industry

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