3. Strengthening of SME Management Base

(1) Securing of Management Resources

In order to contribute to the securing of necessary business resources needed to reinforce the business infrastructure of SMEs, such as improvement of business methods and development of technologies, the State shall take appropriate measures.

- Support by three types of SME Support Centers: Regional SME Support Centers, Prefectural SME Support Centers, and SME / Venture Business Support Centers

-- Regional SME Support Centers

This Center is established in each broader municipal area of the country to provide consultation services at the counter and various types of information as a supporting center that is familiar and easy to use for those who plan to start up a business and small enterprises that have issues such as business innovation.

-- Prefectural SME Support Centers

These Centers established as the core of the system of prefectural governments for support of SMEs under the Small and Medium Enterprise Support Law, implement projects for evaluating business feasibility, dispatching experts, and providing information to secure business resources such as human resources, technology, and information in response to the various needs of those who plan to start up businesses and SMEs.

-- SME / Venture Business Support Centers

These Centers offer, to SMEs considering public offering of stock, financial and technical assistance and high-level consulting services by experienced experts concerning management, finance, and legal matters. The Center also supports the Regional SME Support Center and the Prefectural SME Support Center as the core of the SME support system in regional blocks.

- Promotion of links with external management resources through support for coordination activities, expert bank projects, etc.

In order to solve management issues with SMEs, the State shall introduce external management resources such as other enterprises, universities, and research institutes; support local agents that conduct coordination activities, and dispatch experts that have the professional knowledge needed by SMEs and provide them with appropriate advice.

- Training program for human resource development provided by the Japan Small and Medium Enterprise Corporation (JASMEC), etc.

JASMEC (the Institute for Small Business Management and Technology), prefectural governments, Commerce and Industry Associations, and Chambers of Commerce and Industry organize various seminars to foster personnel in charge of support for SMEs, upgrade the capability of SMEs and their employees for management and technology, and reinforce their general management ability to respond accurately to changes in the social environment.

- Response of SMEs to the IT revolution

The State shall support SMEs so that about half of them will be able to participate in electronic commerce through the Internet by the end of FY2003 when an electronic government is going to be established.

-- Holding of IT seminars, training, and forums

The State shall implement IT seminars and training programs to improve awareness of IT utilization and develop relevant human resources, and hold forums to promote the smooth response of SMEs to the IT revolution by introducing cases of SMEs that have succeeded in business innovation through the introduction of IT systems.

-- Advice and consultation concerning IT

JASMEC and the Prefectural SME Supporting Centers dispatch experts on IT introduction such as IT coordinators and SME management consultants to SMEs that are promoting IT-based systematization.

-- Support for IT system introduction

In order to promote investment in informatization by SMEs to respond to business environment changes caused by the spread and transition in information technology, governmental SME financial institutions lend necessary funds.

-- Improvement of common basic software, etc.

The State shall support the development and introduction of network systems in which SMEs that are engaged in retail, wholesale and manufacturing businesses collaborate.

-- Provision of information for IT promotion

In order to promote IT-based systematization in SMEs, the State shall provide information of measures on SME policy through the "e-SME Agency and Network," etc.

- Support for utilization of the patent system

-- Promotion of patent distribution

In order to support SMEs in the smooth introduction of patents owned by universities, research institutions, etc., the State shall dispatch patent distribution advisors who are experts in technology transfer, and hold patent distribution fairs that enable direct communication among enterprises, universities, and research institutions. The State shall also create a database of various information on patents owned by universities, examination and research institutes, etc., and provide such information through the Internet without charge.

-- Promotion of use of patent information

In order to provide 450 billion pieces of patent information, which are a compilation of the technologies developed in the past, in a manner easy for SMEs to use, and to support efficient technical development, the State shall disclose patent information, etc. without charge through the Industrial Property Digital Library (IPDL) on the Internet, and install electronic perusal terminals in the National Center for Industrial Property Information (NCIPI), intellectual property centers of prefectural governments, etc. to provide guidance and consultation services for patent searches. The State shall also sort out and analyze data on trends in technical development to create patent maps for each technical field as a reference for technology development or patent introduction by SMEs, and provide them through the Internet without charge.

-- Support for patent acquisition

The State shall implement free prior-art searches for technologies similar to those for which SMEs, etc. are going to apply for patent, install equipment for electronic application at prefectural branch offices of the Japan Institute of Invention and Innovation to provide free guidance for procedures and operations, and exempt examination request charges and annual patent fees for corporations without sufficient funds and R&D-type SMEs.

- Reinforcement of manufacturing infrastructure

With the aim of efficient use of IT and reinforcement of industrial competitiveness in Japan's manufacturing industry, the State shall analyze high-level techniques of experienced technicians for their objectivization and digitization, as well as creating databases and shifting to reproducible techniques. Meanwhile, the State shall create an online system that covers order reception and processing work by SMEs using common 3D-CAD data. In addition, in order to ensure and develop excellent human resources for the actual work of manufacturing, the State shall establish a "Local Manufacturing Conference" consisting of a prefectural government, which plays the main role, enterprises, industrial high schools, civic groups, etc., and implement projects that provide on-site training for manufacturing. Moreover, the State shall offer guidance and training to venture companies and SMEs so they can easily develop (design, make prototypes, and evaluate) Large-scale Integration (LSI) by taking full advantage of the originality and creative ideas of venture companies and SMEs.

- Facilitation of the expansion of overseas business and support for international exchange

In order to support business innovation and new business development arising from internationalization of SMEs, the State shall provide efficient overseas development information concerning overseas development of SMEs (entry into foreign markets, tie-ups and trade with foreign enterprises, etc.) and offer consultation services, etc. concerning internationalization.

- Education and dissemination of knowledge on energy and environmental issues

JASMEC, in collaboration with the Prefectural SME Support Centers, holds seminars for SMEs to promote knowledge and education concerning energy conservation.

For SMEs that are faced with environmental issues such as compliance with the Containers and Packaging Recycling Law and the Household Appliance Recycling Law, the State shall arrange for special staff at JASMEC to provide them with consulting services, and offer information on environmental issues that SMEs need by dispatching lecturers to seminars held by the Prefectural SME Support Centers.

(2) Promotion of Exchange, Tie-Ups and Cooperatives

In order to encourage SMEs to complement each other's business resources, the State shall encourage exchanges and tie-ups among SMEs, develop organizations for furthering business cooperatives among SMEs, subsidize projects undertaken jointly by SMEs, and take any other necessary measures.

- Promotion of establishment of tie-up relationships among SMEs, establishment and managerial assistance of cooperatives, etc, (Law on the Cooperative Association of Small and Medium Enterprise, Law Concerning the Organization of Small and Medium Enterprise Organizations, and Shopping District Promotion Association Law)

-- Association system under the Law on the Cooperative Association of Small and Medium Enterprise

A system for SMEs to complement insufficient business resources of technology, information, human resources, etc. through establishment of an organization and joint approach to business based on the principle of mutual aid. The Law provides for six types of associations: business cooperative associations, small business cooperative associations, fire mutual aid associations, credit cooperative associations, federations of cooperative associations, and joint enterprise cooperatives. The Law also regards the National Federation of Small Business Associations as a guidance and communication group that aims for sound development of overall SMEs including individual enterprises and tie-up organizations among voluntary groups.

-- Association system under the Law Concerning the Organization of Small and Medium Enterprise Organizations

The Law provides for establishment of the National Federation of Small Business Associations as an association and guidance association for SMEs. The Law also provides for cooperation associations, commercial and industrial associations, and federations of commercial and industrial associations, which are somewhat different from "cooperative associations" as "mutual aid organizations for small enterprises," because they assume that large enterprises will join them.

-- Association system under the Shopping District Promotion Association Law

A system for an organization of those who conduct retail commerce, service business or other business in a shopping district to implement a joint economic project or an environmental preservation project. The Law provides for shopping district promotion associations and their federations.

- Loans for upgrading projects (Japan Small and Medium Enterprise Corporation)

Concerning SMEs that conduct projects that contribute to upgrading the structure of SMEs such as joint business of SMEs and collectivization of factories, stores, private and public corporations, and commercial/industrial associations that support the upgrading, JASMEC and prefectural governments jointly provide funds and implement consultation and finance by providing long-term, low-interest loans and giving consultation and advice on drafting a business plan.

(3) Activation of industrial Agglomeration

- Measures for activation of SME agglomeration through the Law on Temporary Measures concerning the Activation of Specific Small and Medium Enterprises

In order to activate fundamental technical industries that support "manufacturing" such as parts, metal molds, and prototypes, and agglomeration of SMEs in an area such as a producing center, the State shall draw up "guidelines" that show the concept of agglomeration of specific industries and the direction of development under the Law on Temporary Measures concerning the Activation of Specific Small and Medium Enterprises. Under the guidelines, prefectural governments shall draw up an "activation plan," which sets forth the direction of development, etc. for the agglomeration of specific SME industries, and support SMEs, etc. that are approved under an "advance plan" that complies with the "activation plan."

- Measures for promotion of local industries

In order to promote local industries, the State shall subsidize the projects of SMEs and associations that belong to local industries such as development of new products, expansion of markets, and human resource development.

(4) Activation of Commercial Agglomeration

- Measures for vitalization of city centers under the Law on Improvement and Vitalization of City Centers

The State shall support Town Management Organizations (TMO), organizations to promote activation of small and medium retail commerce approved by each municipal government under the basic plan drafted by the government, from the aspects of both hardware and software, by subsidizing project costs for improving fundamental commercial facilities and measures for vacant stores, and dispatching and fostering town managers.

(5) Vitalization of Small and Medium Commerce

- Measures for vitalization of shopping districts

The State shall support shopping-district vitalization projects of shopping district vitalization associations, etc., such as improvement of commercial fundamental facilities (hardware) and measures for vacant stores and IT-based systematization (software) under the Law on the Promotion of Small and Medium Retail Business by subsidizing project cost, dispatching experts to provide advice, and other means.

- Measures for improving physical distribution efficiency under the Law concerning the Promotion of Efficient Distribution Systems in Small and Medium Enterprises

Under the Law concerning the Promotion of Efficient Distribution Systems in Small and Medium Enterprises, the State shall support projects of business cooperative associations, etc. to improve efficiency in distribution work, such as through improvement of joint distribution facilities through non-interest loans from JASMEC, exceptions to credit guarantees, special taxation measures, etc. The State shall also support various surveys and experimental projects of business cooperative associations, etc. to develop a system for improving distribution efficiency by dispatching experts, subsidizing project costs, and other means.

(6) Measures for Labor

- Improvement of employment management for SMEs, etc.

In order to ensure the workforce for SMEs and create good employment opportunities through their entry into new business fields, the State shall support SMEs that work on improvement in the work environment and employment management including employee benefits and welfare, which are considered to lag behind large enterprises, through low-interest loans and subsidies for project costs.

(7) Improving Fairness of Transactions

In order to improve the fairness of transactions involving SMEs, the State shall prevent overdue payment of subcontracting fees, promote the clarification of terms and conditions of business, and take any other necessary measures.

- Rectifying unfair trading, improving fairness of transactions

In order to improve trading and competitive environments surrounding SMEs, the State shall conduct surveys on actual industrial conditions of trade practice issues, and promote optimization of transactions among SMEs as well as examine plans to improve trade practice. The State shall also aim to speed up solution of disputes in transactions between SMEs through promotion of the Alternative Dispute Resolution (ADR) System, a system to settle disputes out of court.

- Improving fairness of subcontracting under the Law on the Prevention of Delay in the Payment of Subcontracting Charges and Related Matters

In order to optimize subcontract transactions and protect the interests of subcontractors, the State shall regulate promptly and effectively any abuse of the parent business proprietor's rights, such as delay in payment.

(8) Promotion of Subcontracting SMEs

- Measures for promotion of subcontracting SMEs under the Law on the Promotion of Subcontracting Small and Medium Enterprises

The State shall draft guidelines for promoting subcontracting SMEs that indicate directions at which subcontracting SMEs and parent business proprietors should aim and give guidance and advice concerning the items specified in the guidelines whenever necessary.

(9) Expansion of Opportunities to Receive Orders from the State, etc.

- Measures for ensuring opportunities to receive orders from the government and other public agencies based on the Policy on Government-Related Contracts concerning Small and Medium Enterprises

In order to expand opportunities to receive orders from the government and other public agencies, the State shall determine through the Cabinet the target number of contracts from the government and other public agencies to SMEs every year, and provide various information concerning orders from the government and other public agencies.