Japan. Government Support Measures for Digital Transformation of Small and Medium-Sized Enterprises

Abstract

The digital transformation of small and medium-sized enterprises (SMEs) is becoming an important challenge and an aim for economic growth and development in different countries. Digital transformation enhances competitive advantage, improves business efficiency and ensures economic growth of companies worldwide. Considering that the SMEs in Japan account for over 99,7% of the total number of enterprises, the digital transformation of SMEs is becoming an important instrument for the Government of Japan to ensure economic growth of the national economy. SMEs have limited resources and capabilities and this fact creates a number of barriers to implement the digital transformation. These barriers include the limited financial resources, companies’ management, technological, digital security barriers, and others. In the case of small and medium-sized companies in Japan, most of the barriers are related to management and business culture of SMEs. Since the Japanese government has high expectations for SME productivity, competitiveness and economic contribution as drivers of economic growth and national competitiveness, in such an environment, the support of the government is becoming the basis and an essential condition for SMEs to advance along the path of digital transformation. The government support measures are aimed at training SME personnel, upgrading the skills of managers and owners, and providing consulting services to implement the digital transformation. In addition, the Government of Japan provides tax deductions for companies to implement the digital transformation, encourages companies to employ the electronic document management systems, and ensures the cybersecurity improvements for business community