2023 White Papers on Small and Medium Enterprises and Small Enterprises Released

1. Characteristics of the 2023 White Paper on Small and Medium Enterprises in Japan and the 2023 White Paper on Small Enterprises in Japan

The 2023 White Papers analyze not only trends among SMEs and small businesses but also the efforts that are necessary to enable SMEs to gain a good opportunity for change and achieve growth and those that are necessary to enable small businesses to solve local issues and achieve sustainable development, while referring to the case examples of leading companies.

2. Key points in the reports

Overview

• SMEs and small businesses continue to face difficult situations, such as COVID-19, price hikes, and a serious labor shortage as recent factors.
• For overcoming this time when the business environment surrounding SMEs and small businesses is changing drastically, it is important for companies to promote productivity improvement and wage increase not only by promoting the appropriate passing on of costs to product/service prices but also by tackling further investment based on the idea that companies consider structural changes, e.g., green transformation (GX), as a new opportunity for taking on new effort.

Achieving creation of value for growth and creating new leadership

• The reports focus on “strategies” that companies should take for creating value that is different from competitors’ value and on “managers” as a core for designing and executing the strategies, for the purpose of mid-to-long term corporate growth.
• Concerning the strategies, it is important for companies to differentiate themselves from competitors through designing and executing strategies in which ideal approaches to creating value different from competitors’ value are reflected.
• Concerning the managers, the reports explain some case examples of companies whose external players play important roles in supporting the companies in designing and executing strategies and facilitating growth. Moreover, it is also important for companies to increase managers’ motivation for growth through proactive networking among fellow managers.
• The enhancement of internal resources and systems to support managers is a significant element for achieving strategies for creating value, and the formulation of strategies for human resource development and the establishment and strengthening of governance to make use of equity finance are means for further obtaining human resources and funds that contribute to achieving such strategies.
• Business succession and M&A are not only ways for companies to prevent the dissipation of management resources but are also good opportunities for companies to conduct corporate reform through generational changes in managers, and the younger the successors are, the more likely they are to tackle business restructuring, e.g., by providing new products or services.

Solving local issues by small businesses

• The number of companies that are involved in solving regional social issues as part of their business is expected to increase continuously, and local governments have higher expectations for such companies.
• In sustainably working on efforts for solving regional issues, it is important for companies to consider and present the social significance (social impact) of the business and to expand the business to multiple areas from the perspectives of securing income and expenditures and smooth fund raising.
• With regard to resolving regional issues, companies and local governments face their own issues, respectively. Some organizations and associations that connect the two sides may play an important role in solving these issues.

Shared foundation between SMEs and small businesses

• In further enhancing fair trade for SMEs and small businesses, it is necessary to deploy a campaign “Price Negotiation Promotion Month” and publicize information based on the results of the campaign and to provide guidance and advice to the management of the large procuring enterprises of the SMEs and small businesses.
• Concerning SMEs’ approaches to digitalization, companies are more likely to make progress if not only their managers are proactively involved with digitalization but also the companies strategically set visions and goals and organize their daily works. In addition, it is possible for companies to make progress in digitization even if the companies have no highly skilled experts in the digital field.
• It is important for SME support organizations to make the achievements of their support activities and other efforts more visible and to encourage collaboration and friendly competition among themselves. Although METI’s efforts for accompanying support for restructuring management capabilities have been expanding across Japan, it is necessary to accumulate know-how on support and improve the performance of these organizations’ counselors in order to further enhance the effect of the support measures.

Related Materials

• 2023 White Paper on Small and Medium Enterprises in Japan (Outline)(PDF:119KB)
• 2023 White Paper on Small Enterprises in Japan (Outline)(PDF:115KB)

Division in Charge

Research Office, Business Environment Department, Small and Medium Enterprise Agency