Japan: helping small business stay afloat

By , Staff correspondent of The Christian Science Monitor

Capitalism's first line of defense in Japan is made up of 6 million small enterprises. This is the conviction of Shigeo Nagano, President of the Japanese Chamber of Commerce and one of the grand old men of Japan's industrial world.

''It's not big enterprise that gives vitality to the economy - it's small enterprise,'' said Mr. Nagano in an interview here. ''Working for a big enterprise is like working for the government. But 99 percent of small enterprises run on their own capital.''

Internationally, it is Sony and Matsushita, Nissan and Toyota that are renowned as representatives of Japanese industry. But these large corporations employ less than 20 percent of Japan's total work force. Ninety-nine percent of all business establishments in Japan are so-called small and medium-sized enterprises.

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The legal definition of a small or medium-sized enterprise is one with 300 workers or less and is captalized at 100 million yen (about $420,000) or less. Most of the 6 million such enterprises have far less than 300 workers; the average number is about seven workers per establishment.

Mr. Nagano wants the government to do more to help small businesses. Large enterprises can use slack times to improve their equipment so as to be ready for an upturn in production. Banks are always willing to lend them the necessary funds.

But even in good times, a small enterprise has its hands full keeping its head above water. Mr. Nagano thinks the government should give small enterprises tax privileges to spur investment in times of trouble.

He also wants more public-works projects to go to regional small enterprises rather than to regional branches of large enterprises. He is not as unnerved of deficit spending as the orthodox Ministry of Finance officials. Use deficit spending to stimulate business, he says, while making government itself cheaper by reducing the ever-proliferating bureaucracy. Mr. Nagano's own business career was in steelmaking. He served as president of Fuji Steel, and as chairman of Nippon Steel, Fuji Steel's new name when it merged with Yawata Steel.

Mr. Nagano also has been involved in public affairs. He was one of the founding fathers of the Japanese Committee on Economic Development in 1946. He served for two years as Deputy Director of the Economic Stabilization Board, a job which gave him an intimate knowledge of the Japanese economy during its most difficult period of postwar recovery.

In 1952 Mr. Nagano became vice-president of the Tokyo Chamber of Commerce and in 1969 he became president both of the Tokyo Chamber and of the National Chamber. This is one of the four posts at the pinnacle of economic organizations in Japan, the Chamber of Commerce being the particular representative of small and medium-sized enterprises.

Mr. Nagano has filled his role with distinction and has also represented Japan at many international forums. His latest project is to build a second Panama Canal at sea level, one which will take very large tankers and bulk carriers of up to half a million tons.

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