Prime Minister Keizo Obuchi instructed his Cabinet Monday to start working out industrial "millennium projects" that will enable the government and private sector to concentrate joint efforts on growth industries such as information technology.

During the fifth meeting of the state Competitiveness Commission, Obuchi said the government offices concerned will devote themselves to the materialization of the joint project by making cross-territorial efforts within the government and closely cooperating with industry and academia.

Monday's meeting of the commission focused on the problems concerning venture businesses as well as small and midsize enterprises.

On smaller businesses, Obuchi expressed his intention to drastically review the Small and Medium Enterprise Basic Law 1963 so that government policy will shift toward business creation and innovations rather than financially backing general smaller companies vis-a-vis big ones.

Obuchi also underscored the importance of venture businesses in revitalizing the nation's economy, and pledged that the government will create an environment to implement feasible measures.

Promotion of venture businesses will be one pillar of the legislation on industrial competitiveness to be submitted to the current Diet session later this month, an official of the Ministry of Trade and Industry added.

The legislation is expected to include measures to boost the amount of the interest-free loans provided by the government to startup businesses.

The millennium projects are based on proposals submitted last week to Obuchi by the Japan Federation of Economic Organizations (Keidanren) consisting of three parts: information technology, medical and social measures for Japan's aging society, and environmental measures.

To implement the projects, Keidanren Chairman Takashi Imai said the government must compile a multiple-year budget beyond its inner jurisdictions and give priority to relevant sectors in drawing up the fiscal 2000 budget, according to government officials.

Meanwhile, trade chief Kaoru Yosano told a press briefing that the government will seek a "soft landing" approach toward employment while the competitive commission is dealing with the problems of overcapacity, excessive debts and workforce at companies of all sizes.

To create new industries and employment opportunities, Yosano said the commission must come up with specific types of projects designed to promote science and technology and rebuild national strength.

While some participants urged the government to give tax incentives to small businesses as well as to startups and "angel" investors, others expressed the need for allowing new businesses to seek direct finances through the securities market.

In response to criticism that the government panel is focusing attention on relief for heavy industry rather than creation of new businesses, the commission on Monday added representatives from the service industry to its fold.

New to the commission are Toshifumi Suzuki, president of Ito-Yokado Co., Masayoshi Son, president of SoftBank Corp., and Soichiro Fukutake of Benesse Corp.