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  • February 2018
  • Cabinet Decision on the Bill for the Act on Special Measures for Productivity Improvement and the Bill for the Act of Partial Revision of the Industrial Competitiveness Enhancement Act, etc.

Cabinet Decision on the Bill for the Act on Special Measures for Productivity Improvement and the Bill for the Act of Partial Revision of the Industrial Competitiveness Enhancement Act, etc.

The Cabinet approved the Bill for the Act on Special Measures for Productivity Improvement and the Bill for the Act of Partial Revision of the Industrial Competitiveness Enhancement Act, etc. The bills will be submitted to the current 196th ordinary session of the Diet.

1. Purpose of the bills

As information technologies (e.g., IoT, big data and artificial intelligence) have rapidly generated innovations in the last few years, industrial structures and international competition are experiencing disruptive changes. To address these changes and lead global economies by realizing a productivity revolution, the cabinet approved a New Economic Policy Package in December 2017.

In this policy package, the government decided to make all the necessary efforts to implement necessary policies during the period up to FY2020, “A period for productivity revolution and intensive investment”. In light of this, the cabinet approved the Bill for the Act on Special Measures for Productivity
Improvement to take measures to help Japanese industries improve their productivity dramatically.

In addition, the cabinet approved the Bill for the Act of Partial Revision of the Industrial Competitiveness Enhancement Act, etc., to enhance the competitiveness and expertise of companies. This act aims to secure the growth of the Japanese economy and continuously enhance industrial development.

2. Outline of the bills

The major measures stipulated under the bills are as follows:

(1) Bill for the Act of Special Measures for Productivity Improvement

[ⅰ] Establishment of a project-based system called a “Regulatory Sandbox”
The Act on Special Measures for Productivity Improvement is to develop an environment in which businesses are able to conduct demonstration tests and pilot projects for new technologies and business models that are not envisaged under existing regulations within the limited number of participants and predetermined implementation periods. This environment will allow businesses to conduct pilot projects and demonstration tests quickly and collect data that may contribute to regulatory reforms.
[ⅱ] Tax breaks for encouraging IoT investment and other measures for facilitating data sharing or collaboration
The Act is to establish a certification system for business plans that aim data-sharing or data- collaboration, allowing certified business operators to take advantage of tax breaks and other measures for investing in facilities, equipment and so on used for efforts stipulated under the Act. In addition, the Act is to establish new procedures in which certified business operators are eligible to request that the government, independent administrative agencies and other public entities provide them with necessary data.
[ⅲ] Encouraging SMEs to invest in business facilities to improve their productivity
The Act is to take measures to support SMEs in introducing facilities and equipment with cutting-edge technologies under business plans certified by the municipalities where the SMEs are located, thereby accelerating regional investment in facilities and improving the productivity of local businesses.

(2) Bill for the Act of Partial Revision of the Industrial Competitiveness Enhancement Act, etc.

[ⅰ] Strengthening the organization and improving the operations of the Innovation Network Corporation of Japan (Industrial Competitiveness Enhancement Act)
The Act is to change the name of the company, strengthen its organization and improve the operations of its investment through various measures, such as formulating “investment criteria” and requiring the company to thoroughly evaluate its investment performance.
[ⅱ] Special treatments under the Companies Act (Industrial Competitiveness Enhancement Act)
The Act is to establish a certification system for business restructuring plans that include stock-for-stock merger. Under the certified plans, special treatment under the Companies Act and other supporting measures can be applied to the relevant companies in order to encourage them to reform business portfolios by utilizing various means
[ⅲ] Authentication of security measures for technological information, etc. (Industrial Competitiveness Enhancement Act)
The Act is to establish a certification system of agencies that verify security measures of companies to prevent technological information from being compromised.
[ⅳ] Acceleration of business succession by business restructurings and other measures (Small and Medium-sized Enterprises Business Enhancement Act; Act on Facilitation of Succession of Management of Small and Medium Sized Enterprises)
The Acts are to expand the scope of the management improvement plan to include business plans of SMEs that are engaging in efforts to take advantage of other SMEs’ business resources to improve their management capacity through M&As and other strategies. SMEs with certified management improvement plans are eligible to various supporting measures.
The Acts are also to expand the scope of the eligible successor of SMEs to expected successors of business who have not yet taken on their roles as head of entities Those successors are eligible for receiving financial support, which currently only includes persons who have already become heads of entities.
[ⅴ] Measures to increase the capacity of organizations to support businesses in order to enhance competitiveness and expertise (Small and Medium-sized Enterprises Business Enhancement Act)
Concerning the certification system for organizations that support business reforms, the Act is to introduce a renewal system in which certifications expire in a certain period and require authentication of capacities of the organizations for the renewal.
[ⅵ] Development of support systems and safety nets to accelerate the introduction of IT into SMEs (Small and Medium-sized Enterprises Business Enhancement Act; Act on Mutual Relief System for the Prevention of Bankruptcies of Small and Medium-sized Enterprises)
The Acts are to establish a certification system for businesses that support other businesses in utilizing IT. The Acts also add trading suspensions of electronically recorded monetary claims to the list of eligible reasons for providing mutual aid loans to prevent chain bankruptcy.

Release date

February 9, 2018

Division in Charge

Draft Law Office, Economic and Industrial Policy Bureau

Ministry of Economy, Trade and Industry1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100-8901, Japan Tel: +81-(0)3-3501-1511
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