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Japan Small Business
Japan's streets are lined with small shops, grocery
stores,
restaurants, and coffeehouses. Although supermarkets and
large
discount department stores are more common than in the
1980s, the
political muscle of small business associations was
reflected in
the success with which they blocked the rationalization of
the
country's distribution system. The Large-Scale Retail
Store Law of
1973, amended in 1978, made it very difficult in the late
1980s for
either Japanese or foreign retailers to establish large,
economically efficient outlets in local communities.
Many light industrial goods, such as toys, footwear,
pencils,
and kitchen utensils, were still manufactured by small
local
companies rather than imported from the Republic of Korea
(South
Korea), Taiwan, or Hong Kong. Traditional handicrafts,
such as
pottery, silk weaving, and lacquerware, produced using
centuriesold methods in small workshops, flourished in every part
of the
country. Apart from protectionism of the "nontariff
barrier"
variety, the government ensured the economic viability of
small
enterprises through lenient tax policies and access to
credit on
especially favorable terms.
Major associations representing small and medium-sized
enterprises included the generally pro-LDP Japan Chamber
of
Commerce and Industry (Nihon Shoko Kaigisho, or Nissho for
short),
which was established in 1922 but whose origins are traced
to the
establishment of the Tokyo Chamber of Commerce and
Industry in
1878, the National Central Association of Medium and Small
Enterprise Associations, the Japan League of Medium and
Small
Enterprise Organizations, and the Japan Communist
Party-sponsored
Democratic Merchants and Manufacturers Association.
Although small enterprises in services and
manufacturing
preserved cultural traditions and enlivened urban areas, a
major
motivation for government nurturing of small business was
social
welfare. In Calder's words, "Much of small business,
particularly
in the distribution sector, serves as a labor reservoir.
Its
inefficiencies help absorb surplus workers who would be
unemployed
if distribution, services, and traditional manufacturing
were
uniformly as efficient as the highly competitive and
modernized
export sectors."
Data as of January 1994
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