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2019 White Papers on Small and Medium Enterprises and Small Enterprises Released

April 26, 2019

The Small and Medium Enterprise Agency (SMEA) compiled and hereby releases reports titled “Trends among Small and Medium Enterprises (SMEs) in FY2018” and “SME Policies in FY2019” (“2019 White Paper on Small and Medium Enterprises in Japan”), as well as “Trends among Small Enterprises in FY2018” and “Small Enterprise Policies in FY2019” (“2019 White Paper on Small Enterprises in Japan”), which were approved by the Cabinet on April 26, 2019.

Characteristics of the 2019 White Paper on Small and Medium Enterprises in Japan and 2018 White Paper on Small Enterprises in Japan

These 2019 White Papers (hereinafter refers to as the “reports”) focus on the following key points and analyze smooth transition of business owners between generations and efforts for self-transformation to meet changes in economic and social structures, which are elements required for businesses in the new Reiwa era.113 case examples from the 2018 White Papers were used.

Key Points of the 2019 White Paper on Small and Medium Enterprises in Japan

Part I of the report describes the recent trends in SMEs activities and shows that operating profits of SMEs reached a record high level following on from 2018 and that economic sentiment has tended to improve. In addition, it analyzes SMEs’ financial situations, starting and closing businesses, labor shortages and other issues.

Part II of the report takes into consideration aging business owners and, based on this, analyzes the current situations and challenges that business owners who intend to retire and people who intend to become new business owners are facing.

  1. This part analyzes business succession and succession of business resources along with business closing, in particular, focusing on business owners who intend to retire. Specifically, this part uncovers that business succession to younger generations will make a positive impact on business achievements and that early preparation is necessary for business succession and succession of business resources.
  2. This part focuses on and analyzes people who intend to become new business owners by starting businesses or through business succession. Specifically, it explains challenges and efforts seen in starting a business through as well as trends in companies orienting themselves to sales growth and an expanded scale of employment.

Part III of the report provides materials to be discussed concerning: self-transformation expected of business owners of SMEs and small enterprises; and reconstruction of relationships with stakeholders surrounding such business owners. As a typical case of such materials, this part analyzes countermeasures against disasters.

  1. Providing data and case examples as references, this part presents tips for encouraging business owners of SMEs and small enterprises to find approaches to changing their actions and to reconstructing relationships with stakeholders or a variety of people surrounding SMEs or small enterprises, as business owners are facing changes in economic and social structures, such as declining population, digitalization and globalization.
  2. This part analyzes the situations that SMEs suffered after the occurrence of natural disasters, the number of which has been increasing recently, and the progress in reconstruction from the impact of such disasters. Following this, it presents the progress in preparatory measures taken by SMEs, including ascertaining of potential risks caused by disasters and purchasing damage insurance, and shows challenges in conducting such preparatory measures and other issues.

Key points of the 2019 White Paper on Small Enterprises in Japan

Part I of the report describes the recent trends in small enterprises activities and shows their operating profits on a track towards moderate improvement.

Part II of the report takes into consideration aging business owners and, based on this, analyzes the current situations and challenges that business owners who intend to retire and people who intend to become business owners as freelancers or as side jobs are facing.

  1. This part analyzes business succession and succession of business resources along with business closing, focusing on business owners who intend to retire. In particular, it uncovers challenges that private business owners are facing in business succession by comparing cases of business succession between private business owners and small enterprises.
  2. This parts analyzes advantages of starting a business as a freelancer or as a side job and challenges therein. It uncovers that such business startups requires less costs in establishing business compared to those establishing business in an ordinary form, and that there are a certain number of people who have started businesses as freelancers which resulted in hiring employees or who have started businesses as side jobs and shifted the businesses to their main jobs.

Part III of the report analyzes the situations that small enterprises suffered after the occurrence of natural disasters, the number of which has been increasing recently, and the progress in reconstruction from the impact of such disasters. Following this, it presents the progress in preparatory measures taken by SMEs, including ascertaining of potential risks caused by disasters and purchasing damage insurance, and shows challenges in conducting such preparatory measures.

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Division in Charge

Research Office, Policy Planning Division, Business Environment Department, Small and Medium Enterprise Agency