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METI has Developed Guidelines for Small and Medium-sized Service Businesses to Improve the Productivity

The Ministry of Economy, Trade and Industry (METI) has newly developed guidelines describing ten approaches and case examples, aiming to improve the productivity of Japan's small and medium-sized service businesses, which account for nearly 80% of all the 3.85 million SMEs in Japan.

1. Outline of the guidelines

The guidelines aim to help small and medium-sized service businesses, accounting for nearly 80% of all the 3.85 million SMEs in Japan, to endeavor to improve their productivity. In the guidelines, the goal to be achieved by such SMEs, namely, improving productivity, is largely categorized into two targets: [i] improving added value and creating innovative business, and [ii] improving efficiency. To achieve the targets, the guidelines present eight approaches for the former and two approaches for the latter. They also introduce 45 case examples of specific initiatives by companies in the 15 types of businesses as additional references for helping SMEs in a variety of types of businesses.

2. Collaborating with METI’s subsidy projects

When SMEs and small enterprises endeavor to tackle business innovation using the approaches described in the guidelines, such as developing new products and services, improving a process for providing services, and introducing new sales approaches, they are able to receive support provided by the following two subsidy projects:

  • Project to support innovation of monodzukuri, commerce, and service businesses
    (FY2014 METI Supplementary Budget)
  • Project to support collaboration among companies for improving competitiveness in commerce and service businesses
    (FY2015 METI Initial Budget Draft)

Reference: Background of formulating the guidelines

The service industry accounts for about 70% in terms of GDP as well as the number of employed persons in Japan, and the impact that it makes on the Japanese economy as a whole is huge. In addition, small and medium-sized service businesses account for nearly 80% of all the 3.85 million SMEs in Japan.

However, it has also been pointed out that labor productivity in the industry is low in Japan. Comparing the level of labor productivity in Japan with that in the U.S. reveals that the productivity in a variety of businesses in the industry is much lower than that in the U.S.

Moreover, the fact that Japan is facing emerging challenges of a declining population and growing labor shortages has brought about increased expectation toward the improvement of productivity in the service industry.

Considering the background, the Japan Revitalization Strategy Revised in 2014, which was publicized in June 2014, explicitly describes the importance of formulating the guidelines. Based on the strategy, METI decided to develop the guidelines and hereby announces them.

Reference:

Japan Revitalization Strategy Revised in 2014 (publicized on June 24, 2014) (excerpts)

I. Industry Revitalization Plan

1. Accelerating structural reform program (Vitalizing industries)

(3) Specific new measures to be taken
iii) Improving the productivity of service industries

  • Formulate guidelines for specific methods and procedures that will enable small and medium-sized service businesses to improve productivity.

Release date

February 4, 2015

Divisions in charge

Service Affairs Policy Division, Commerce and Information Policy Bureau

Related Information

Service Industries Policy
Ministry of Economy, Trade and Industry
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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