Small and Medium Enterprises (SMEs) Are the Backbone of Japan's Economy and Industry: Who We Are and What We Do
What comes to mind when you think of Japan's globally recognized corporations? You will most likely think of the gbiggiesh such as Toyota, Canon, Panasonic and Mitsubishi. Yet, these are just a small few of the major corporations flourishing in Japan today. To take it even further, business entities labeled gbig businessh make up approximately only 0.3% of all the four million companies in Japan today. In other words, 99.7% of all Japanese industries are small to midsize businesses. These businesses are the true backbone of the Japanese economy and industry.Noted British economist Alfred Marshall (1842|1924) compared the ebb and flow of companies to a forest. At whatever instant you look at the forest, the young trees are hidden in the shadows of the giant trees and seem to lead a feeble existence. Yet, if you observe the forest in different timeframes, those young trees no longer appear identical. Ten years later, you will find those young trees in the maturing stage with little saplings sprouting up below them. Thirty more years later will present you with those young trees as stout, towering giants, acting as major forest players. Below those giants, the former saplings are now young trees and a fresh crop of saplings is pushing through. Eventually, all these players become new stars of the forest, replacing the aging giants.
Of course, in reality, not all of those young trees grow into giants. Some remain small trees forever. Indeed, the forest cannot exist on giant trees alone. To survive, it needs a vast range of living things, such as bushes, grass and even microscopic plants, to work as one entity and become the interconnected ecosystem that a forest must be. In the same way, industry functions as a single system, composed of a few large companies and a multitude of small and midsize companies of varying shapes and sizes.
The Japanese economy is often mistakenly discussed as an entity composed of only a few large corporations. The reality is that SMEs form the base of the economy, and the magnitude of the support they provide is immeasurable. This support differs greatly from the role of small businesses in the USA and is, aside from Germany, poles apart from the characteristics of the European business community. Let us take a closer look at the overall qualities and shape of Japanfs SMEs.