Small and Medium Enterprise Agency
Organization chart

Supporting entrepreneurs (Exhibition Hall, Venture Fair Japan 2005)
 There are 4.69 million Small and Medium Enterprises (SMEs) in Japan, constituting 99.7% of all enterprises, accounting for 70% of all employment. From these facts, we can easily understand that SMEs form the framework of the Japanese economy, and that real revitalization of the Japanese economy is impossible without the revitalization of SMEs.
 Japan has long suffered the damage inflicted by the collapse of the bubble economy. The task of the Small and Medium Enterprise Agency is providing strong backup to energetic SMEs that have a bold spirit of challenge because they are the driving force behind economic revitalization and job creation, poised to truly resuscitate the Japanese economy just as it emerges from a prolonged slump and prepares to leap ahead. To this end, the Agency will integrate and upgrade existing laws and regulations, and support new partnerships among SMEs, backing them in their efforts to start up new businesses or open up new markets. At the same time, the Agency will continue to do its utmost to upgrade the financial safety net and provide revitalization support so that SMEs may secure fields where they can play active roles.
> Creating a vital Japan
 Japan's SMEs come in thousands of varieties, ranging from world-leading technology firms (the micromotors needed to make mobile phones vibrate are supplied worldwide exclusively by Japanese SMEs) to the neighborhood candy stores still so popular with children; these small- and medium-sized businesses form the real foundation of the Japanese economy. After many years of recession following the collapse of the bubble, the Japanese economy is now starting to show some encouraging signs. New economic growth depends on how active a role the SMEs and entrepreneurs who support our economy can play in supporting such expansion.

> An economy where everyone can be a challenger
 Many entrepreneurs emerged from the devastation of the postwar period determined to build a new Japan. This was the beginning of Sony, Honda, and other companies which have since grown into world-leading manufacturers, and which also powered Japan's high level of economic growth. Now a new movement is needed to spur the creation of a succession of new companies to revitalize the Japanese economy. The business start-up rate in the years after the collapse of the bubble economy has been sluggish, but as economic indicators show signs of recovery the time is right to help many unsuccessful entrepreneurs rise again. For this purpose, the SME Agency has established a new start-up financing system that does not require collateral or a guarantor for loans up to a certain amount, in an effort to back those having difficulty in starting a business even if equipped with an excellent idea or technology. In addition to such financial assistance, the Agency provides HR support by organizing start-up schools aimed at the development of entrepreneurs or utilizing highly experienced business people to provide consistent support at every stage of business start-up, from developing technology to identifying markets. Through such initiatives, the SME Agency offers solid backing to those starting new businesses.

> Backing SMEs taking up the challenge of new business
 One of the strengths of Japanese manufacturing is the capability to produce outstanding products by means of advanced skills maintained by SMEs. For examples, a back-street factory with no more than 30 employees used nano-technology developed in the course of creating an astronomic observation device, to develop a camera carried on a NASA space shuttle. Another SME developed the world's first "fog-free goggles" equipped with a microfan, and these have grown into a world-class brand. Thus, many Japanese SMEs are supporting the development and commercialization of high-tech products. Furthermore, new trends are emerging among SMEs entering world markets. In recent years, progressing globalization has created an intensified competitive environment and, in some cases, it is causing major businesses to entrust SMEs with product development from the very design stage rather than treating them as mere subcontractors. This is a substantial change in the relationship between big business and SMEs. With increasing needs for sophisticated ideas and technologies, different SMEs are pooling their strengths, whether they be in technology or marketing, and, in collaboration with other businesses or universities, working together to undertake new business activities. The SME Agency supports such new collaboration among SMEs operating in different fields and sectors, and backs them in their bold efforts to venture into new business. Through such support, the Agency seeks to revitalize regional economies, which will eventually lead to greater dynamism of the whole Japanese economy.

> Restoring local vitality
SMEs underpin manufacturing
 SMEs are fulfilling a major role in the economic revitalization of the regions and ensuring employment. In the continuing severe economic situation, however, many of these enterprises are suffering under extremely difficult administrative conditions despite their great skills due to difficulty of capital procurement. METI is employing measures to revitalize SMEs in the regions and restore regional dynamism with the establishment of "SME Turnaround Support Committees" in all prefectures and the setting up of a "Regional SME Turnaround Fund" operated by the Organization for Small and Medium Enterprises and Regional Innovation, with the intention of revitalizing the SMEs that form the core of regional economies.

> Dealing with rapid change
A cutting-edge SME which manufactures molds for mobile phones
 Because of their small scale, SMEs tend to be fragile and are seriously affected by external factors such as economic globalization, financial system instability and other rapid changes in the economic environment. One of the tasks of the SME Agency is to resolve these issues. The Agency will continue working to secure a financial safety net, support the securitization initiative started by the Japan Finance Corporation for Small Business in 2004, and promote financing by governmental agencies that do not depend excessively on collateral or guarantors, ensuring diverse financial methods for smooth SME funding.

> Revitalization of shopping malls and the regions
Developing attractive shopping areas
 In recent years, the business environment has become harsher for shopping streets and downtown areas as greater use of motor vehicles has caused consumer behavior to change, large retail stores have moved into suburban areas, and competition has intensified among shopping centers. In collaboration with other ministries and agencies, the Agency will provide comprehensive support for regions proactively taking an integrated approach to vitalizing shopping malls through urban development. The support will be offered not only for physical infrastructure, such as arcade renovation, but also for intangibles, such as development of human resources to manage these shopping areas. In these ways, the Agency seeks to revitalize small and medium retail businesses, injecting dynamism into regional economies.

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