In Japan, small enterprises account for nearly 90% of small- and medium-sized enterprises (SMEs). The number of such small enterprises, as well as the number of their employees, has seen a decreasing trend compared with enterprises of other scales, often due to the fact that that they face difficulties in securing management resources in particular.

However, small enterprises have great significance for Japan from the viewpoint that they contribute to stable regional economies and the development of Japan’s economic society.

To tackle these challenges, there is an urgent need for Japan to re-engineer the current policies on SMEs to focus on small enterprises, recognizing their significance, and to implement intensive measures to stimulate the business activities of these small enterprises.

The outline of the Bill for the Small Enterprises Revitalization Act, which has been approved by the Cabinet, is as follows:

1. Revision of the Basic Act for Small and Medium Sized Enterprises

   With the basic purpose of stimulating the business activities of small enterprises, the Bill is to clarify the “basic principles” and the “policies for conducting the measures” that are provided in the Basic Act, and it also stipulates new provisions that are essential for SMEs, including promotional support for the purpose of overseas business expansion and others.

2. Revision of the Small and Medium-Sized Enterprise Credit Insurance Act, the Small Enterprise Mutual Relief Projects Act, and the Act on Supporting Small Business by Commerce and Industry Association and Chamber of Commerce and Industry

   Focusing on the diversity of small enterprises, these Acts are to be revised, allowing the definition of small enterprise to be modified by Cabinet Order.

3. Revision of the Small and Medium-Sized Enterprise Credit Insurance Act

   Aiming to facilitate capital-raising efforts by small enterprises, the Act is be revised to additionally include efforts that make use of electronically recorded monetary claims as a subject covered by credit guarantees, such as discounts of electronically recorded monetary claims.

4. Revision of the Small and Medium-sized Enterprise Support Act

   The Act is to be revised to have the Government of Japan authorize entities who utilize IT to introduce experts and business partners to small enterprises, and to provide support measures to such entities, such as cooperation from the Organization for Small & Medium Enterprises and Regional Innovation, Japan.

5. Revision of the Act on the Promotion of Subcontracting Small and Medium-sized Enterprises

   The Act is to be revised to have the Government of Japan authorize the plans submitted by subcontracting SMEs under which such SMEs cooperate and autonomously cultivate customers, and to provide support measures to such SMEs, such as the special provisions of the Small and Medium-Sized Enterprise Credit Insurance Act.

6. Revision of the Japan Finance Corporation Act and the Okinawa Development Finance Corporation Act

   The Acts are to be revised to additionally include services involving the Debt Equity Swap (DES) into the services of the Japan Finance Corporation and the Okinawa Development Finance Corporation, aiming to promote the revitalization of small enterprises’ businesses.

7. Abolition of the Act on Equipment Installation Support for Small Enterprises

   The system for equipment installation support for small enterprises is to be abolished in line with the drastic improvement of financial measures for small enterprises.

April 16, 2013

Policy Planning Division, Small and Medium Enterprise Agency, Ministry of Economy, Trade and Industry