The latest government annual report on small enterprises bears out an important fact that is often overlooked amid news-breaking moves by big businesses: Small corporations continue to play a vital role in the Japanese economy. The report, submitted this week to the Cabinet by the Ministry of International Trade and Industry, says in effect that needed industrial restructuring in this country depends largely on small-business reform.
"Small and medium enterprises" make up a little over 99 percent of all enterprises and account for 60 percent of the total work force. These businesses refer to manufacturers with a capital stock of 100 million yen or less and a regular workforce of not more than 300 and nonmanufacturers (retailers and other service firms) capitalized at 10 million yen or less that employ 50 or fewer regular workers.
In the case of the construction industry, which represents about 10 percent of both the gross domestic product and the total workforce, 84 percent of its workers belong to these small businesses. This makes it difficult, politically as well as economically, to reduce the size of this traditional industry and thereby reform an industrial structure that is heavily tilted toward public investment.