The Japanese government is taking unprecedented steps to nurture its nation's small- and medium-sized enterprises (SMEs) -- and their potential to sustain economic reform through labor flexibility, technological innovation, and new employment. In late October the Japanese Diet convened a session to strengthen SMEs and make venture capital more available to them. Under current basic law on SME, policies were focused on transforming small companies into large corporations rather than capitalizing on their potential as SMEs. Objectives of proposed new SME legislation:
Self-support of business management, assuming small firms will do their best when exposed to market forces.
Enhanced competition. Government programs will facilitate access to capital, human resources, and information, and resolve contractual-relationship problems with large firms.
Safety net for emergency situations -- including legislation similar to U.S. Chapter 11 bankruptcy law. Also, the government seeks to establish a network similar to the U.S.'s Small Business Development Center program. A Japan External Trade Organization newsletter about the changes is at http://www.jetro.org/newyork/focusnewsletter/focus8.html.