23. Japan

23.1. SMEs in the national economy

Only a very small fraction of Japanese enterprises are large. Within the SME sector micro-enterprises predominate, in both number of firms and number of employees.

Table ‎23.1. Number of business establishments and enterprises by industry and size in Japan, 2014
(Private, non-primary industry)

 

SMEs

Large enterprises

Total

 

Of which micro

Industry

No.

% of total

No.

% of total

No.

% of total

No.

% of total

Mining and quarrying of stone and gravel

1 454

99.7

1 284

88.1

4

0.3

1 458

100

Construction

455 269

99.9

435 110

95.5

284

0.1

455 553

100

Manufacturing

413 339

99.5

358 769

86.4

1 957

0.5

415 296

100

Electricity, gas, heat supply and water

1 000

97.2

708

68.8

29

2.8

1 029

100

Information and communications

45 254

98.8

29 993

65.5

533

1.2

45 787

100

Transportation and postal services

73 136

99.7

53 255

72.6

251

0.3

73 387

100

Wholesaling/ retailing

896 102

99.5

712 939

79.2

4 182

0.5

900 284

100

Finance and insurance

29 959

99.1

28 821

95.4

259

0.9

30 218

100

Real estate and goods rental and leasing

319 221

99.9

311 568

97.5

296

0.1

319 517

100

Scientific research and professional and technical services

188 455

99.7

160 861

85.1

622

0.3

189 077

100

Accommodations and food services

544 281

99.9

464 989

85.3

759

0.1

545 040

100

Life-related, entertainment and recreation services

382 304

99.9

353 250

92.3

542

0.1

382 846

100

Education and learning support

107 479

99.9

94 409

87.7

129

0.1

107 608

100

Medical, healthcare and welfare

210 326

99.9

146 427

69.5

258

0.1

210 584

100

Compound services

3 492

100

3 478

99.6

1

0

3 493

100

Services (not otherwise classified)

138 157

99.3

96 393

69.3

1 004

0.7

139 161

100

Non-primary industry, total

3 809 228

99.7

3 252 254

85.1

11 110

0.3

3 820 338

100

Note: Number of enterprises = Number of companies + Business establishments of sole proprietors (independent establishments and head offices).

Source: (OECD, 2017[1]).

23.2. National policy framework to support SMEs in public procurement

The objective of supporting SMEs in public procurement is elaborated in the Act on Ensuring the Receipt of Orders from the Government and Other Public Agencies by Small and Medium-sized Enterprises, and the Basic Policy on State Contracts with Small and Medium Enterprises. This Basic Policy sets the goal for each fiscal year, including the target amount and the ratio of contracts with SMEs and micro-enterprises to the total budget of state contracts. Cabinet approval was given on 28 August 2015 for setting 54.7% as the target contract ratio among SMEs and micro-enterprises in fiscal 2015, and for roughly doubling the ratio of state contracts with new SMEs over the three years from fiscal 2015 to 2017, compared to fiscal 2014 (estimated at around 1%).

23.3. Implementation mechanisms

As a follow-up to the Basic Policy, a white paper1 was produced that included the following:

  • The Minister for Economy, Trade and Industry issued a request regarding the Cabinet approval of the Basic Policy on State Contracts with Small and Medium Enterprises to the heads of each agency and ministry, prefectural governors, all municipal mayors, and mayors of the Tokyo special wards (1 805 organisations), and also requested that they make efforts to increase opportunities for SMEs and micro-enterprises to receive orders.

  • From August to September, 50 information sessions (Councils to Promote Local Access to Public Sector Demand) were held throughout Japan to actively raise awareness of the Basic Policy in regional areas.

  • A conference was organised to discuss policies for information sharing and co-operation regarding initiatives to promote procurement from new SMEs in regional areas.

  • A “Guide to contracts in the public sector” was produced and distributed to central and local government agencies and other commerce and industry-related organisations.

23.4. Monitoring performance

The Small and Medium Enterprises Agency measures the share of contracts awarded to SMEs.

Reference

[1] OECD (2017), Financing SMEs and Entrepreneurs 2017: An OECD Scoreboard, OECD Publishing, Paris, http://dx.doi.org/10.1787/fin_sme_ent-2017-en.

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