Messages from T20 Tokyo Summit


How can we overcome the many challenges that come with creating new SMEs?

SMEs have a dominant share in the number of firms and employment in all G20 countries, and so can play an important role in economic development and job creation in each country. In Japan, for example, SMEs (firms with either less than 300 employees or 300 million yen in capital in general) account for 99.7% of firms, employing approximately 70% of the workforce. In the manufacturing sector, they produce about a half of value added. The legal or statistical definitions of SMEs differ across countries and also across sectors. Moreover, SMEs are quite heterogeneous even within a single country. Therefore, it is difficult and even no use to propose one-fits-all policy proposals for all types of SMEs in each country. Nevertheless, we selected some major issues that may be common challenges for SMEs in the G20 countries and proposed some policy measures that may help SMEs to play their roles appropriately in the economy.

TF 9 for SME Policy focuses on the following six fields in providing Policy Briefs for the T20 in 2019: Promoting Support for Start-ups (lead author: Yuji Honjo, Chuo University, Japan) Promoting SME R&D and innovation (lead author: Hiroyuki Okamuro, Hitotsubashi University, Japan)Digital Innovation Can Improve Financial Access for SMEs (lead author: Naoko Nemoto, Asian Development Bank Institute and Waseda University, Japan) Promoting Investment in Human Capital and Labor Mobility: Making the Entrepreneurial Economy Work (lead author: Erik Stam, Utrecht University, the Netherlands)Fostering Greater SME Participation in a Globally Integrated Economy (lead author: Miriam Koreen, OECD) Business Transfer as an Engine for SME Growth (lead author: Miriam Koreen, OECD) Let me explain in detail the first three of these policy proposals (start-ups, innovation and financial access), which have been headed by Japanese researchers including myself, in the following sections. Because the topics on business transfers and human capital (labor mobility) are closely related to start-up support, I will briefly refer also to these subjects in the next section.

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