Why small companies are big in Japan

In this episode of Short Briefings on Long Term Thinking, Malcolm Borthwick interviews Praveen Kumar, manager of Baillie Gifford Shin Nippon, about small and medium-sized enterprises (SMEs) in Japan. They discuss the definition and significance of SMEs, the shift in Japan towards these businesses, and comparisons to Germany's Mittelstand. Praveen provides examples of successful Japanese SMEs like Shoei (high-end helmets), Shimoseki (automated knitting machines), and Descente (sports brands), highlighting their innovation and global reach. He also shares insights from his recent trip to Japan, noting the optimism of businesses and the impact of regulatory changes, particularly in the real estate sector. Praveen emphasizes Shin Nippon's focus on investing in small businesses with the potential for significant long-term growth, rather than being concerned about when these businesses become too big.