SUBCONTRACTING IN JAPAN

1

• SUBCONTRACTING IN JAPAN
• 57 of Japanese manufacturing SMEs are
  subcontractors
• 80 in electronics and transportation equipment
  subcontract
• Vertical and Horizontal Division of Labor
• Vertical Relations
• 1-Reduce cost
• 2-using subcontractors special technology, skill
  concentration networks
• 3-flexible response to fluctuations in demand
• 4-organizational efficiency
• 5-developing new products
• 6-Long-term relations
• Regulation of Subcontractors Relations
• -Anti-Monopoly Law
• -The Law for Prevention of Delay in
  Subcontracting Payment
• -Subcontracting Promotion Law
• -Complaints through Fair Trade Commission and SME
  agencies

2

• Horizontal Relations
• 45,000 registered SME cooperative, trade,
  industry associations
• National Federation of SME Organization
• SME Policy Deliberation Council
• Organizational Strength of SMEs.
• Activities Carried Out
• 1-information gathering and provision
• 2-bolstering outside financial institutions and
  companies
• 3-facilitating loans for investment and operating
  costs
• 4-facilitating technical and market information
  exchange
• DATABASE (OTA Database)

3

• GOVERNMENT POLICY
• Technology Development through Science Parks
• Kanagawa Science Park (industrial RD centre)
• Toyama High Tech Mini Enterprise Estate (43
  incubation rooms)
• Vast Array of Policies designed to promote small
  firms
• encouraging start-ups, diversification and
  creative business activities.
• Extensive government support
• (Total Budget for SMEs 200-300 trillion yen and
  FILP budget 4,2 trillion yen)
• Financing
• Shoko Chukin Bank
• Peoples Finance Corporation
• Small Business Finance Corporation
• Ordinary City and Regional Banks
• Government Long Term Loans for Restructuring
• Equipment Modernization Loans
• Regional and Local Funds from Chamber of Commerce