Japanese government SME policies The Japanese government developed its SME policies under the former SME Basic Law that was enacted in 1963.The core points of the policies were “to remedy disadvantages in business activities” as steps to modernize SMEs by each type of industry. In the past, the focus had been placed on pursuing the scale merit of SMEs while developing uniform modernization policies for each industry. The Japanese government has recognized the importance of giving attentive assistance to activities of all kinds of SMEs, from venture businesses to small enterprises, while encouraging their self-help efforts, based on a new concept of SMEs in which the merits of SMEs are positively acknowledged. To this end, the government fundamentally revised and restructured conventional SME policies including the SME Basic Law in the so-called “SMEs Diet” in December, 1999. New Key Factors in SME PoliciesThe new SME Basic Law, which is based on a new philosophy of promoting diverse and vigorous growth and the development of independent SMEs, rather than rectifying the gaps, presents three key factors for SME policies. They are: i) first, “promoting business innovation and new business start-ups” (or, promoting self-sustaining enterprises); ii) second, “strengthening the management base of SMEs” (or, enriching business resources); and iii) third, “facilitating adaptation to economic and social changes” (or, offering a safety net). 1) Promoting Business Innovation and New Business Start-ups The image of SMEs anticipated for the 21st century is “self-sustaining SMEs.” Strengthening the Management Base of SMEsWhen SMEs implement business activities, they often lack managerial resources due to their small size, and also face difficulty in procuring such resources from outside. Therefore, the government aims to strengthen the management base of SMEs through i) supplementing SMEs' vulnerable managerial resources and ii) improving their business environment. Conventionally, the basic condition for SMEs to develop business activities was to have material managerial resources, or modernized equipment and facilities. However, the government realizes that it is becoming more important to establish an environment in which SMEs can secure non-material managerial resources such as business expertise, technologies, information and human resources, by utilizing functions of the private sector. Thus, the government is planning to implement relevant measures to this end.. For more detailswww.sme.ne.jp/japane.html JETRO JETRO, or the Japan External Trade Organization , is a government-related organization that works to promote mutual trade and investment between Japan and the rest of the world. Originally established in 1958 to promote Japanese exports abroad, JETRO's core focus in the 21st century has shifted toward promoting foreign direct investment into Japan and helping small to medium size Japanese firms maximize their global export potential.Facilitating tie-ups and collaboration between Japanese and foreign firms in high-tech industries, such as biotechnology and information technology (IT) The lectures focused on the current state of Japan's SMEs and venture businesses and the measures being taken to support their growth. On the first day, Mr. Jun-ichi Abe from the National Life Finance Corporation explained the vital role of SMEs in Japan's economy, pointing out their technological strengths and varied fields of endeavor. He then described how NLFC, as a government financial institution, contributed to their development. Following Mr. Abe was Mr. Tetsuya Okuyama from the Organization for Small & Medium Enterprises and Regional Innovation, Japan, who spoke on support policies for SMEs in Japan and the part played by his organization. Next, Mr. Koji Hiraki from New Business Investment Co., Ltd., outlined trends in venture business and the public offering of stock in new companies in Japan, followed by introductions of his company's investment products and several examples of investments to venture firms. Small and Medium Industries Development Corporation The Small and Medium Industries Development Corporation (SMIDEC) was established on 2nd May 1996. The establishment of SMIDEC was in recognition of the need for a specialised agency to further promote the development of Small and Medium Industries (SMIs) in the manufacturing sector through the provision of advisory services, fiscal and financial assistance, infrastructural facilities, market access and other support programmes. SMIDEC strives to create resilient and efficient Small and Medium Enterprises (SMEs), able to compete in a liberalised market environment. The Corporation will promote SMEs to be an integral part of the country's industrial development capable of producing high value-added parts, components and finished products. SMIDEC will serve as the national focal point for the overall development of SMEs in the country. European SMEs in Japan For the past decade EU Gateway to Japan has successfully helped European SMEs from a range of specific sectors enter the Japanese market. This unique export support programme created by the European Commission organises trade missions and participation in Japanese trade fairs for groups of up to 35 EU SMEs at a time. It provides companies with financial, logistical, educational and marketing support both before departure and upon arrival in Japan.The prospects for European SMEs in Japan are excellent, as two highly successful previous campaigns have shown. The participants and the figures speak for themselves! Seminar on the SMEs Promotion and IT This program was implemented under the framework of the Forum for East Asia-Latin America Cooperation (FEALAC) at the initiative of Japan. The purpose of the programe was to enhance the economic relations between the East Asian and Latin American regions.The "Seminar on the SMEs Promotion and IT" was conducted by these participants, inviting individuals related to SMEs in Japan. The "10 Suggestions from Young Leaders" was formulated, based on the presentations and opinions exchanged among the participants, regarding specific measures to enhance the partnership between the two regions in the area of SME development as well as other issues. Japan Finance Corporation for Small and Medium Enterprise (JASME) By appropriately sharing credit risk, credit analysis and the administration of securitization and providing securitization methods that are convenient for private financial institutions to use, JASME is proactively fulfilling a pioneering role as a policy-based finance institution by not only facilitating the smooth supply of unsecured funds to SMEs and diversifying their fund raising methods but also contributing to the promotion and development of the securitization market. SME Financing in Japan Japanese financial institutions are trying to respond to the needs of SMEs by diversifying financing options. Lending based on a scoring model, securitization and asset-backed loans are some examples of new financing options for SMEs. However, these efforts are far from enough to alleviate many of the problems incurred by information asymmetry in SME financing. Facilitation of SME financing is both an old and new problem.
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