Use of plant level micro-data for SME innovation policy evaluation in Japan

Japan's SME policies have reached a major turning point. They used to be aiming at lifting up SMEs as a whole, focusing on the gap in productivity and wages between SMEs and large corporations, during the 30 years since the end of the Second World War. Now they are in the process of transformation to a policy that sees SMEs as the source of entrepreneurship and innovation which leads to economic dynamism and supports individual high growth SMEs. Based on this fundamental idea, METI is undertaking drastic reform of SME policy by various means, including the amendment of the SME Basic Law that took place in 1999.