Japan The Development Of Smes And Sme Policy

Small and medium enterprises (SMEs) play an important role in the economy, which can neither be substituted nor ignored both in developed countries and developing countries. The significance of SMEs is not only embodied in the incomparable quantity, but also in the job opportunities and national wealth created by SMEs. The approaching knowledge-based economy provides SMEs with a stage for full exertion of their creativity, flexibility and growing. Compared with big enterprises, SMEs have limited resources and low market share; therefore, it is very difficult for them to switch the adverse position in the market with their own efforts even though they have flexible mechanism and tenacious vitality. Thus, fostering SMEs has become a part of national development strategy and supporting SMEs an important economic policy all over the world.During the postwar economic development in Japan, SMEs had played an irreplaceable role. Japan is one of the developed countries with the most complete SME policy system. Since 1990s, however, with the economic development domestically and abroad, SMEs have been confronted with kinds of challenges, meanwhile, the theoretical study of SMEs has lagged behind practice and problems of SME policies also gradually emerge, unable to satisfy the developing needs. Taking Japan as a research object, combing theoretical analysis with empirical study, this dissertation devotes to theoretical reflection on SMEs and SME policies based on an overall and systematic summary and analysis of Japanese SMEs and SME policy development supported by plentiful materials and data, creatively proposing the SMEs advantage theory accounting for the development of SMEs in knowledge-based economy, demonstrating the development inevitability of SMEs in knowledge-based economy, summarizing six principles that should be followed by SMEs in policy formulation and implementation and expecting the developing trends of SME policy in knowledge-based economy.The dissertation is composed of eight chapters.The first chapter recalls the study summarizations on the theories of SMEs and the policies of SMEs.The second chapter discusses the development as well as the status and functions of SMEs in Japan. Since the Industrial Revolution, the research on the causes for the existence of SMEs have given birth to various SME theories, which have explained the reasons for the co-existence of SMEs and big enterprises from different aspects. In the course of postwar development Japanese SMEs have constituted the foundation of all industries and played a positive role in the specialized production and division system as well as the employment stabilization, which have made a substantial contribution to the rapid economic development and enhancement of international competitiveness of Japan.The third chapter is devoted to the new changes of Japanese SMEs' managing environment since 1990s. Globalization and informatization are the two characteristics and trends of world economy since 1990s, whose development has been changing the living environment which SMEs have long been relying on while changing the basic features of world economy. The aftermath of bubble economy—long stagnancy and instability of financial environment—compels SMEs to search for new developing methods. The loosening of series manufacture and trade relations foster the SMEs to grope for the new developing direction.The fourth chapter involves the new developments of Japanese SMEs since 1990s. The changes of economic and social environment at home and abroad have subjected SMEs to kinds of challenges concerning management and development. Facing challenges, depending on their advantages in terms of informatization, internalization and technical innovation, SMEs have realized new developments. The fifth chapter includes the formation of SME policies and contents of policy system in Japan. Since the establishment of Small and Medium Enterprise Agency in 1948, Japanese SME policies have gone through four developing phases—economic recovery, rapid growth, steady growth and the forming and collapse of bubble economy. Each phase places weight on different policies. Perfect legislation concerning SMEs is one of the characteristics of Japanese SME policies. SME Basic Law in 1963 and in 1999 lie at the core of SME legislation in Japan. White Paper on SEMs in Japan, a policy document, issued annually based on SME Basic Law, reflects the new developments of Japanese SMEs as well as the contents and implementation effects of SME policies.The sixth chapter discusses the new development of Japanese SME policies since 1990s. Facing the totally new economic situation domestically and abroad, SME policies develop further in supporting finance, business creation, informatization, technical innovation, workforce as well as internationalization. Moreover, SME policies also establish economic and social safety nets and policies helping SMEs adapt to the changes of economy and society.The seventh chapter evaluates the implementation effects of SME policies in Japan. Japan and the US are the representatives in terms of SMEs policies characterized respectively by government intervention and free competition. By comparing the SME policies in Japan and those in the US, the main characteristics of Japanese SME policies are summarized, that is, the complete SME legislation and all-around government intervention. From the perspective of economic accomplishments, SME policies in Japan have attained the expected goal on the whole. Production factors needed by SMEs have been offered, management modernization and scientification fostered, technical innovation in SMEs promoted, trade terms improved and social and economic status enhanced. The problems in Japanese SME polices, however, are apparent. For example, independent efforts of SMEs are ignored, adaptable changes are lacked and theoretical studies lag behind.The last chapter is the conclusion and the pith of the dissertation, reflecting on and concluding the development and policies of SMEs in the age of knowledge-based economy. The development of outsourcing and utilization of external resources have obscured the border of enterprises. The vagueness of the enterprise border lessens the importance of enterprise scale; therefore, the inevitable relationship between the enterprises' scale and their competitiveness disappear. In the age of knowledge-based economy, knowledge substitutes land and capital as the major power and growth source of economic growth. Anyone, no matter who it is, an individual, an enterprise or a nation, can realize new development as long as it can acquire and employ knowledge. Such developments have greatly changed the world, reduced the importance of tangible assets of enterprises and also created new space for the SMEs' development and advantage exertion. A good policy environment is needed for the SMEs to fully exert their advantages and functions. Practice demonstrates that SME policies have played an active role in fostering the development of SMEs. Facing the new development of SMEs, SME policies also experience adjustments and changes, presenting some new development trends.The originality of this dissertation lies in the following aspects:Firstly, the development inevitability of SMEs in the knowledge-based economy is discussed. The popularity of informatization and network techniques has induced changes in enterprise organization and enterprises tend to become smaller in some fields. The progress of knowledge-based economy fosters the development of service industry, which offers SMEs the opportunity for developing. In the information economy, competition between enterprises shifts from scale to speed and from cost and price to knowledge. The changes of market competition pose higher requirements for the enterprises in flexibility. The progress of diversification and individualization of consuming needs has a huge impact on traditional mass production, however, SMEs, depending on their diversified developments, are able to fulfill consumers' diverse and individualized needs and fully exert their advantages. In the age of knowledge-based economy, enterprises have to base their survival and development on technical innovation. Only the constant technical innovation can guarantee their success in market competition. Compared with big enterprises, SMEs have more effective innovation driving mechanism and lower innovation cost so that they are able to further their development in the competition. With the development of knowledge-based economy, people's employment concepts and employment patterns are changing. With more diverse human resource management patterns and more flexible mechanism, SMEs can satisfy the needs of diversified employment patterns.Secondly, SMEs advantage theory is proposed. Human society experienced tremendous changes in 1990s. SMEs, the overwhelming majority of enterprises in each country, also entered into a totally new development stage. Theoretical studies concerning SMEs, however, came to a halt. Thus, the functions of SMEs are unable to be oriented scientifically in the new economic pattern and their development is also lack of theoretical support. Therefore, the traditional SMEs disadvantage theory should be discarded and new SMEs theory should be built in the knowledge-based economy with the keeping-pace-with-the-times SMEs advantage theory.Knowledge-based economy is attention economy, diversified economy and growth economy. These new developments of knowledge-based economy give prominence to the creativity, flexibility and the growing of SMEs and also provide SMEs with a stage to exert their advantages.Thirdly, six principles that SME policies should follow are put forward. These are adaptability principle, diversification principle, selectivity principle, foreseeability principle, moderation principle and harmony principle.Fourthly, from the basis of SMEs advantage theory, the development trends of SME policies in knowledge-based economy are expected. To satisfy the practical development needs of SMEs in knowledge-based economy, SME policies should strengthen the support for SMEs business creation and innovation, establish enterprise need-oriented policy system and decentralize their supports.The dissertation also has some defects. Due to the limited time and conditions, data are neither sufficiently employed nor quantitatively analyzed. Some issues, such as the development of SMEs management, are inadequately studied. Therefore, the studies of SMEs and SME policies in this dissertation are trial analyses and discussions. The untouched areas will be left for a further study in the future.