Small Businesses Are Endangered in Japan

In Japan, most of the small and medium enterprises (SME) like us may disappear in the near future. According to the definition of the SME Basic Act, SME are companies of which capital is less than 300 million JPY or of which number of employees is less than 300. In terms of number, 99.7% of the companies in Japan are SME. Soon after the change of government last year, the current prime minister organized an advisory board, and has implemented economic policies based on the advice of the board. The board members always treat SME like an enemy, on the ground that SME is the main cause of low productivity, though I strongly object to it.

They always bring up a gap in wages in order to substantiate the low productivity of SME. I admit there’s a wage gap by company size, but I think the cause and effect are reversed in their argument. Large companies in a better position in competition earn more money and pay more salaries to their employees, which makes them look better in productivity. I’ve worked before for large companies, and am sure SME are more desperate to increase productivity because it’s a more serious life-or-death issue for SME.

The same as many other Japanese makers, CondeHouse has an improvement proposal scheme where more than 1000 improvement proposals are submitted by employees annually. The white holders for electric drills in the above image are hair dryer holders sold at one-dollar stores. The woman in charge of upholstery came up with this idea during shopping. Indeed, some incentives are offered for good proposals, but this case tells us proposing improvement is something more primitive or voluntary for them. She always placed electric drills on the platform on her left side. The improvement has reduced time and labor of switching hands. I know the case is not a big one, but you can see how serious we are about improving productivity. Such continuous efforts by our craftspeople to reduce costs without reducing quality have made what we are, but SME including us are flickering in the wind of unjust criticism by the government advisory board.

Shungo Ijima

He is travelling around the world. His passion is to explain Japan to the world, from the unique viewpoint accumulated through his career: overseas posting, MBA holder, former official of the Ministry of Finance.

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