Small and Medium-Sized Enterprises (SMEs) in Italy and Japan

Abstract

This chapter explains the relevance and importance of small and medium-sized enterprises (SMEs) for Italy and Japan's economies and economic structures. While SMEs continue to be the backbone of the Italian and Japanese economies and societies, technological innovations, competition from emerging economies and the recent economic and financial crisis are putting SMEs under pressure to innovate and re-adjust their business strategies and planning. While Japan has been more successful than Italy in that respect, state support—both financial and administrative—for SMEs in Japan is well organized and coordinated between local and central administrative levels. Such support in Italy on the other hand is fragmented and hampered by a lack of efficient industrial policies, both on local and national levels. The tax burden for Japanese SMEs is relatively light creating incentives and conditions to generate employment, while the tax burden for Italy’s SMEs is heavy and responsible for the fact that SMEs are not growing in size and productivity. A static labour market together with a backward education system, a lack of skills and know-how will make sure that Italian SMEs continue to struggle in the years ahead.