We handled 23,540 consultations on business succession for Japanese small and mid-sized corporations last year alone and completed 3,827 cases. This is the result of operating the Business Succession and Handover Support Center since 2011, but small and mid-sized corporations suspending or closing operations are still increasing due to aging managers and the absence of successors.
Tateishi Miwako, Director of the Business Succession and Revitalization Support Department at the Organization for Small and Medium Enterprises and Regional Innovation, Japan, said this in a video lecture at the SME AX Leaders Forum held at The Shilla Seoul in Jangchung-dong on the 26th. The SME AX Leaders Forum, hosted by ChosunBiz, was organized to find a new breakthrough for domestic small and mid-sized corporations facing crises such as rapid technological change and a shortage of talent.
The Organization for Small and Medium Enterprises and Regional Innovation, Japan, is an entity under the jurisdiction of Japan's Ministry of Economy, Trade and Industry and implements and operates support policies for small and mid-sized corporations. Director Tateishi gave a lecture on the current state and policies of small and mid-sized corporation business succession in Japan, which is experiencing succession issues ahead of Korea.
Director Tateishi compared the age groups of managers at small and mid-sized corporations in Korea and Japan. Tateishi said, In Japan, the proportion of managers in their 60s and older is high, and in Korea, there are more managers in their 50s and younger than in Japan, with the share of those in their 30s and younger at 19%, considerably higher than Japan's 3%. Tateishi added, There are about 3.36 million small and mid-sized corporation managers in Japan, of whom 1 million are in their 70s and older, and 1.85 million are in their 60s and older, accounting for half of all small and mid-sized corporations, indicating that a substantial number of corporations need to consider business succession.
Director Tateishi also noted, In Japan, suspensions and closures have steadily increased in line with the aging of managers, pointing out, During 2024 alone, 63,000 corporations suspended or closed operations, and half of them were in the black. Tateishi said, In a survey of corporations scheduled to close, about 30% cited the absence of a successor as the reason. The explanation was that despite sufficient revenue, corporations have no choice but to opt for closure or suspension because they delayed reviewing business succession or lacked successors.
Director Tateishi said, To solve these problems, Japan established and expanded the Business Succession and Handover Support Center starting in 2011, and We are currently operating centers in 48 regions nationwide.
The Business Succession and Handover Support Center supports family successions and third-party successions in cooperation with private brokers, financial advisors, financial institutions, attorneys, certified public accountants, and tax accountants, according to the intentions of those seeking consultations. Director Tateishi said, During 2024 alone, we conducted 23,540 consultations nationwide, adding, Of those, we completed 2,132 third-party successions and supported 1,695 family successions. Tateishi further explained, Third-party succession completions have exceeded 2,000 for two consecutive years, showing a strong upward trend.
Director Tateishi also said, In the past, many managers in Japan were reluctant to sell their companies, but through publicity and support activities by the government and the center, M&A has now taken root as a common method of business succession.
Director Tateishi also emphasized developing successor talent. Tateishi said, One of the core tasks in business succession cited by current managers is strengthening the management capabilities of successors, adding, The Organization for Small and Medium Enterprises and Regional Innovation, Japan, operates the Small and Medium Enterprise University, a training facility for small and mid-sized corporations. Tateishi continued, We have run a 10-month successor training program for the past 40 years, and to date we have produced more than 1,300 graduates.
Director Tateishi also mentioned support from the Japanese government for small and mid-sized corporation business succession. Tateishi said, At the government level, Japan is promoting business succession by reducing the tax burden on successors when transferring shares through gifts and inheritance, and The Small and Medium Enterprise Agency has established a registration system for M&A brokerages and financial advisors so that small and mid-sized corporations can conduct M&A safely, and more than 2,800 brokerages are currently active.