Overview of Small- and Medium-size Companies of Commerce and Industry of Japan (POINTS)

Transcription

1 Preliminary Report of the Basic Survey on Commercial and Structure and Activity in 1998 Overview of Small- and Medium-size Companies of Commerce and Industry of Japan (POINTS) June 30, 1999 Small and Medium Enterprise Agency Research and Statistics Department, Minister's Secretariat, Ministry of International Trade and Industry 1. Purpose of the survey The purpose of the Basic Survey on Commercial and Structure and Activity (Designated Statistics No. 120) is to give a clear picture of business activities of commerce and industry of Japan and to obtain basic materials for formulating policies on small-and. 2. Date of conducting the survey The survey was conducted based on data as of June 30, Scope of the survey The survey was conducted by sampling method on that are classified as Category F-manufacturing industries-and Category I-wholesale and retail industries and eating and drinking places (excluding other eating and drinking places)-based on the Standard Industrial Classification for Japan (JSIC). Results of the Basic Survey of Business Structure and Activity (Designated Statistics No. 118) concerning with 50 employees or more and capitalized at 30 million yen or more were also used for compiling the survey results since these are also the subject of this survey. 4. Method of the survey The survey was conducted based on the findings collected by fact-finding members of the survey, who distributed questionnaires to respondents, in cooperation with governments of prefectures and cities, towns, and villages (in the case of Tokyo's 23 wards, each ward). 5. Method of sampling and calculating The statistical population is company head offices or individual stores that are classified as manufacturing, wholesale, and retail industries and eating and drinking places (excluding other eating and drinking places) in the 1996 Establishment and Enterprise Census (Designated Statistics No. 2). Calculation was done by simple unbiased estimation method for each cell that is divided by type of industry and scale of the number of employees. 6. Announcement of the survey Detailed statistical charts will be published by the end of March

2 1. Position of small-and In a survey conducted in 1998, the number of small-and was 659,000 in the manufacturing industry, 298,000 in the wholesale industry, 1,108,000 in the retail industry, and 381,000 concerning eating and drinking places. As for the transition of the number of small- and of commerce and industry in Japan, the number has been on the decline in recent years. The percentage of small- and in the whole manufacturing industry is 99.5% concerning the number of, 59.7% concerning the number of employees, and 34.1% concerning sales volume. The percentage of small- and in the whole wholesale industry is 98.3% concerning the number of, 59.2% concerning the number of employees, and 36.6% concerning sales volume. The percentage of small- and in the whole retail industry is 99.0% concerning the number of, 60.4% concerning the number of employees, and 43.4% concerning sales volume. The percentage of small- and in the whole restaurant industry is 99.4% concerning the number of, 66.4% concerning the number of employees, and 65.6% concerning sales volume. Category Weight of small- and Total of Small- and Large Proportion of small- and Number of Wholesalers Retailers (10 thousand) Restaurant and food service 1, Number of Wholesalers employees Retailers (10 thousand) Restaurant and food service Sales volume Wholesalers (trillion yen) Retailers Restaurant and food service (Note) "Small- and " here means manufacturing with less than 300 employees, wholesalers with less than 100 employees, and retailers and restaurant and food service with less than 50 employees. 2

3 The number of small- and in the manufacturing industry had continued to increase since 1971 until 1981, when the number topped 710,000 and took a downward turn. Since then the number continued to decrease to 676,000 in 1987 and to 659,000 in 1998, decreasing by 17,000 or by 2.5% between 1987 and On the other hand, the proportion of small- and in the whole manufacturing industry has maintained 99.5% since Ten Thousand Transition of the number of in the manufacturing industry Small- and Proportion of small- and mediumsize mfg The number of employees of small- and in the manufacturing industry had continued to increase since 1971 until 1987, when the number topped 7,254,000 and took a downward turn and decreased to 6,612,000 in 1998, decreasing by 642,000 or by 8.8% between 1987 and On the other hand, the proportion of employees of small- and in the whole manufacturing industry has maintained around 60% since Ten Thousand people Transition of the number of employees in the manufacturing industry Mfg. Small- and Proportion of small- and mediumsize mfg

4 2. Profit situation of small- and The ratio of operating profit to sales of small- and is 3.9% for manufacturing, 1.5% for wholesalers, 3.4% for retailers, and 10.9% for restaurant and food service. Small- and enjoy higher figures of the ratio than large in the fields of their forte. In the manufacturing industry, the ratio of operating profit to sales is 3.9% for smalland and 4.0% for large, with a gap of -0.1 point between small- and and large. In the wholesale industry, the ratio of operating profit to sales is 1.5% for small- and and 0.9% for large, with a gap of 0.6 points between small- and and large. In the retail industry, the ratio of operating profit to sales is 3.4% for small- and and 0.9% for large, with a gap of 2.5 points between small- and and large. Concerning restaurant and food service, the ratio of operating profit to sales is 10.9% for small- and and 3.6% for large, with a gap of 7.3 points between small- and and large. Figures of operating profit and loss Category Total of Small- and Large Gap (points) 4.0% 3.9% 4.0% -0.1 Ratio of Wholesalers operating Retailers profit to sales Restaurant and food service Gross profit Wholesalers margin Retailers Restaurant and food service Ratio of selling and Wholesalers administrative Retailers expenses to sales Restaurant and food service (Note) Ratio of operating profit to sales (%) = operating profit / sales x 100 Gross profit margin (%) = gross profit / sales x 100 Ratio of selling and administrative expenses to sales (%) = selling and administrative expenses (selling expenses - general administrative expenses) / sales x 100 4

5 3. Diversity of small- and in the manufacturing industry About a quarter of small- and manufacturing posted a loss in their operating profit and loss, which is supposed to indicate the profitability of their core businesses. On the other hand, among with positive ratio of operating profit to sales, some small- and show outstandingly higher figures of the ratio, which means there is a diversified situation concerning the profitability of small- and. Distribution rate (%) For instance, the distribution chart of the ratio of operating profit to sales of manufacturing small- and shows that with negative figures of the ratio ( that posted a loss in their operating profit and loss) accounts for 25.9% and with positive figures of the ratio ( that posted a profit in their operating profit and loss) accounts for 74.1%. This means that about a quarter of posted a loss in their operating profit and loss, which is supposed to indicate the profitability of their core businesses. On the other hand, the percentage of large with negative figures of the ratio is 15.7% and the percentage of those with positive figures is 84.3%. This means that about one-sixth of large posted a loss in their operating profit and loss. Distribution of small- and that have positive figures of the ratio shows that a high of 12.9% of are in the 0-2% scope section and one-third of are in the scope sections up to the 0-10% scope section. At the same time, there are that enjoy 10% or higher ratio of operating profit to sales. This means that there is a diversified situation concerning the profitability of small- and. On the other hand, distribution of large that have positive figures of the ratio shows that a high of 28.4% of are in the 0-2% scope section and about a half are in the scope sections up to the 0-4% scope section, meaning that the ratio of large tends to be lower than smaller. Distribution of the ratio of operating profit to sales of manufacturing Small- and Large 50~ 48~50 46~48 44~46 42~44 40~42 38~40 36~38 34~36 32~34 30~32 28~30 26~28 24~26 22~24 20~22 18~20 16~18 14~16 12~14 10~12 8~10 6~8 4~6 2~4 0~2-2~0-4~-2-6~-4-8~-6-10~-8-12~-10-14~-12-16~-14-18~-16-20~-18-22~-20-24~-22-26~-24-28~-26-30~-28 ~-30 (Note) Most of the small- and of which the ratio of operating profit to sales is 50% or more are small-scale with 1-4 employees. 5

6 4. Financial conditions of small- and (corporate enterprises) The capital adequacy ratio of small- and is 24.9% for manufacturing, 18.8% for wholesalers, and 16.0% for retailers. These figures indicate the vulnerability of small- and when compared to large. In regard to manufacturing, the capital adequacy ratio is 24.9% for smalland and 40.3% for large, with a gap of points between small- and and large. In regard to wholesalers, the capital adequacy ratio is 18.8% for small- and and 22.6% for large, with a gap of -3.8 points between small- and and large. In regard to retailers, the capital adequacy ratio is 16.0% for small- and and 21.9% for large, with a gap of -5.9 points between small- and and large. Figures of financial situation (corporate enterprises) Category Total of Small- and Large Gap (points) 35.8% 24.9% 40.3% Capital adequacy ratio Wholesalers Retailers Ratio of fixed assets to Wholesalers equity capital Retailers Current ratio Wholesalers Retailers (Note) Capital adequacy ratio (%) = equity capital (shareholders' equity) / total capital (total assets) x 100 Ratio of fixed assets to equity capital (%) = tangible fixed assets / equity capital x 100 Current ratio (%) = current assets / current liabilities x 100 6

7 5. Balance sheets of small- and About one-sixth of small- and manufacturing have negative net worth on the balance sheets. The percentage of small- and manufacturing whose capital adequacy ratio is negative (total assets are smaller than total liabilities on the balance sheets) is 17.4% and the percentage of those whose capital adequacy is positive (total assets are larger than total liabilities on the balance sheets) is 82.6%. This means that about one-sixth of small- and manufacturing have negative net worth on the balance sheets. On the other hand, the percentage of large with negative capital adequacy ratio is 3.8% and the percentage of those with positive figures of the ratio is 96.2%. This indicates the fact that the proportion of with negative net worth on the balance sheets is smaller for larger than small- and. In regard to with positive capital adequacy ratio, a high of 8.7% of smalland are in the 5-10% and 10-15% scope sections and about half of small- and belong to scope sections below the 0-30% scope section. On the other hand, a high of 8.2% of large are in the 10-15% scope section and the rest of large spread over a wide range of scope sections, which means that large are generally well-capitalized. 7

8 6. Situation of distribution structure With a drop of the W/R ratio to 2.26, it can be said that the multi-stage distribution structure of Japan is now changing (see note). The wholesaler/retailer [W/R] sales ratio, which is an indicator of the length of distribution channels, dropped by 0.55 points to 2.26 from This means that the multi-stage distribution structure, which is typical of Japan's distribution structure, is now changing. As for the proportion of small- and in terms of sales of commodities, manufacturing account for 31.4%, wholesalers account for 36.8%, and retailers account for 43.9%. This means that small- and play an important role in the distribution system. Category Distribution structure of sales of commodities Total of (Unit: trillion yen; parentheses indicate percentage distribution) Proportion of Small- and small- and Large (100.0) (100.0) (100.0) % Industrial users (39.4) (44.2) 45.0 (37.1) Wholesale traders (36.8) (42.1) 42.9 (32.2) Direct exports (11.9) 38.6 (2.0) 2.0 (16.4) Retail traders (10.2) 32.9 (9.0) 9.2 (10.7) General consumers (1.7) 5.6 (2.7) 2.7 (1.3) Wholesalers (100.0) (100.0) (100.0) Wholesale traders (34.5) (34.1) 46.1 (34.6) Retail traders (27.3) (30.5) 41.2 (25.4) Industrial users (27.2) 99.9 (29.3) 39.6 (25.9) Direct exports (7.7) 28.4 (3.0) 4.1 (10.5) General consumers (3.3) 12.1 (3.0) 4.0 (3.5) Retailers (100.0) (100.0) 60.2 (100.0) General consumers (86.9) (92.5) 55.7 (82.4) Retail traders (8.8) 12.0 (3.8) 2.3 (12.6) Industrial users (2.2) 3.0 (2.0) 1.2 (2.3) Wholesale traders (2.0) 2.8 (1.7) 1.0 (2.3) Direct exports (0.2) 0.3 (0.2) 0.1 (0.3) (Note) The wholesaler/retailer [W/R] sales ratio here is calculated by the following formula. Wholesale tradersof wholesalers + retail tradersof wholesalers W/R sales ratio = = Retail tradersof wholesalers 8

9 7. Overseas business operations of small- and Of Japanese set up in foreign countries, one out of four overseas subsidiaries and four out of ten overseas affiliates are those of small- and. (1) Situation of overseas subsidiaries The number of overseas subsidiaries of Japanese is 15,000. By company size, small- and own 3,400 overseas subsidiaries (22.9%) and large own 11,600 (77.1%). So nearly a quarter of overseas subsidiaries are owned by small- and. Of the overseas subsidiaries owned by small- and, seven out of ten subsidiaries are set up in Asia. Ratio of Japanese parent that own overseas subsidiaries Large 11.6 thousand 77.1% Small- and 3.4 thousand 22.9% (2) Situation of overseas affiliates The number of overseas affiliates of Japanese is 9,200[sic]. Of these overseas affiliates, 4,000 (43.1%) are affiliated to small- and and 5,300 (56.9%) are affiliated to large. So four out of ten are affiliated to small- and. Of the overseas affiliates owned by small- and, three out of four are set up in Asia. Ratio of Japanese that own overseas affiliates Large 5.3 thousand 56.9% Small- and 4.0 thousand 43.1% (Note) "Overseas subsidiaries" here means of which more than half the outstanding shares or the equity are directly owned by Japanese. And "overseas affiliates" here means of which 20% (included)-50% (included) of the outstanding shares or the equity are owned by Japanese. 9

10 8. Employment patterns of small- and The percentage of female workers in small- and is about 43% for manufacturing, 38% for wholesalers, 55% for retailers, and 64% for restaurant and food service. Female workers surpass male workers in number for retailers and restaurant and food service. The percentage of part-time workers in small- and is about 16% for manufacturing, 13% for wholesalers, 29% for retailers, and 38% for restaurant and food service. In regard to retailers and restaurant and food service, one out of three workers are part-timers. (1) Proportion of female workers As for manufacturing, the percentage of female workers is 42.5% for smalland and 22.9% for large, with the percentage for small- and exceeding that for large by 19.6 points. As for wholesalers, the percentage of female workers is 37.7% for small- and mediumsize and 31.6% for large, with the percentage for small- and exceeding that for large by 6.1 points. As for retailers, the percentage of female workers is 55.4% for small- and and 55.7% for large, with the percentage for small- and mediumsize less than that for large by 0.3 points. As for restaurant and food service, the percentage of female workers is 63.9% for small- and and 62.9% for large, with the percentage for smalland exceeding that for large by 1.0 points. (2) Proportion of part-time workers As for manufacturing, the percentage of part-time workers is 16.3% for small- and and 6.7% for large, with the percentage for small- and exceeding that for large by 9.6 points. As for wholesalers, the percentage of part-time workers is 12.9% for small- and and 11.5% for large, with the percentage for smalland exceeding that for large by 1.4 points. As for retailers, the percentage of female workers is 28.9% for small- and and 44.7% for large, with the percentage for small- and mediumsize less than that for large by 15.8 points. As for restaurant and food service, the percentage of female workers is 37.9% for small- and and 74.0% for large, with the percentage for smalland less than that for large by 36.1 points. 10

11 Situation of employment patterns Proportion of female workers Proportion of part-time workers Category Total of Small- and Large Gap (points) 34.6% 42.5% 22.9% 19.6 Wholesalers Retailers Restaurant and food service Wholesalers Retailers Restaurant and food service 11

12 9. Situation of research and development (R&D) in small- and The percentage of manufacturing that carried out R&D activities is 11% for small- and and 70% for large. On the whole, the proportion of small- and carrying out R&D activities remained low. In regard to that performed R&D activities, the proportion of research on sales is 1.7% for small- and and 4.4% for large. The percentage of manufacturing that carried out R&D activities is 11.2% for small- and and 69.6% for large, with a gap of points between small- and and large. In regard to that performed R&D activities, the proportion of research on sales is 1.7% for small- and and 4.4% for large, with a gap of -2.7 points between small- and and large. In terms of distribution of the proportion of research on sales, a high of 34.8% of smalland are in the 0-1% scope section, followed by the 1-2% scope section to which 19.5% of belong and the 2-3% scope section to which 11.4% belong. So nearly 70% of belong to the scope sections up to the 0-3% scope section. At the same time, a high of 42.1% of large are in the 0-1% scope section, followed by the 1-2% scope section to which 17.9% of belong and the 0-3% scope section to which 11.4% belong. So like small- and, nearly 70% of belong to the scope sections up to the 2-3% scope sections. Therefore, in light of the distribution of the proportion of research on sales, there is no outstanding difference between small- and and large. 12

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