The Journal The Authority on Global Business in Japan

Small and medium-sized enterprises (SMEs) play a critical role in our business community, and this month marks the second full year of the SME CEO Advisory Council’s work for the American Chamber of Commerce in Japan (ACCJ). How have we done so far? What have we achieved? What issues remain to be resolved? What comes next?

Let’s start with the mission of this council. Unlike a committee, a council is a standing body that exists to provide advice and counsel to the president and the board. The chair and members serve one-year terms, which the president may renew at his or her discretion.

In early 2018, the board of governors esta­blished the SME CEO Advisory Council to strategically evaluate the value proposition of the ACCJ to small and medium-sized member companies, and to make recommendations for increasing relevancy and energy. The council was encouraged to propose new methods of fostering interaction among member businesses, to listen and to reflect the needs and desires of SMEs, and to propose concrete suggestions to the board of governors on how to meet those needs.

To be clear, this council is intended to be a source of strategic support for the chamber. It does not compete with the existing activities of the chamber’s various committees, which organize for ACCJ members a wide variety of speaker events, workshops, and activities focused on entrepreneurs, independent com­panies, and various aspects of business.

From left: Danny Meza, chief of staff to Representative Joaquin Castro;
SME CEO Advisory Council Chair Harry Hill; and council member Frank Packard

Grading Ourselves
For most of 2018, we focused on the implications of the changes to US tax policy enacted in December 2017 and the Global Intangible Low Tax Income (GILTI) provisions for American owners of SMEs outside the United States. We recommended an SME-led, GILTI-focused DC Doorknock mission, and this was successfully carried out, with high impact, in September 2018. In June of this year, the IRS issued clarifying regulations that address many of the concerns for American owners of SMEs in Japan.

Toward the end of 2018, we reported our activities in a meeting with then-President Sachin N. Shah and, later, the board of governors. In the success column, in addition to the GILTI tax advocacy, we are pleased that the board has provided staff and budget support for the Business & Services Directory as part of the Membership Value Project implementation plan. At the Leadership Forum meetings, SMEs now have more visibility when new company memberships are announced, and the council has adopted a tagline for all SME-related chamber activities: “Where SMEs network and create business.”

To be sure, challenges remain. Topics that we would like to see discussed further include: our requests for a more balanced SME representation in nominations for the board; observer rights for members of the Leadership Forum at board meetings; and more participation by SME members in the DC and Diet Doorknocks.

While not all our recommendations have been implemented, we have seen great engagement and opportunities for SMEs in the DC Doorknock, on the Nominations Committee, and at Leadership Forum.

Over the past two years, the council has considered deeply how best to define an SME. As a starting point, we looked at the ACCJ Small Company Membership Package, which offers financial considerations for companies, organizations, or entities with fewer than 30 employees globally. At the same time, we felt that this council should embrace a larger group of members. Thus, the council is recommending that we define an SME in the ACCJ as a “non-subsidiary, an independent and privately owned enterprise with annual revenues of ¥1 billion or less.” It is this group of members which the council seeks to champion.

Business & Services Directory
The most valuable contribution of the council so far has been the launch of an exciting new member benefit: the ACCJ Business & Services Directory. However, this new offering will only be successful if it is relevant and useful not only to SMEs, but to all ACCJ members as well as outside companies seeking to do business with an ACCJ member company.

While conceived as a tool to support the ACCJ’s SMEs, this benefit is broader than a SME service. It can become a vehicle for more targeted marketing for large companies that serve the needs of entrepreneurs. For example, larger ACCJ members may be able to expand their sales with entrepreneurs across areas such as:

  • The digital economy
  • Financial services
  • Internet and e-commerce security

The ACCJ Business & Services Directory will also serve as a place where we can highlight our member companies’ accomplishments, announcements, and business developments, with a focus on helping us know our fellow members better to foster more business.

Update Your Profile
To succeed, we need your help. Please take this opportunity to update your company descriptions for the annual membership direc­tory—and those updates will be applied directly to the Business & Services Directory. And then, differentiate your company by optimizing the keywords in your description. This directory can be different, game changing, and relevant—but only if we all make a commitment to adding content and using it.

Please follow the rollout of the Business & Services Directory and help us by making your own information richer, accurate, and more visible. The ACCJ network is large and our reach is broad and deep. With connections to international business organizations, the Embassy of the United States, Tokyo, and educational institutions, it is a valuable place to highlight company services and activities. You can get in front of this wide, global audience by updating your company’s activities in the Business & Services Directory. This will help both ACCJ members and outside parties find you and, hopefully, do business with you.

Packard and Hill with Nathalie Kamphons, legislative director and council to Representative Dave Reichert

Future Focus
Having addressed significant internal issues of building relevancy for SMEs, we look forward to opening up more engagement opportunities for SMEs with organizations outside the ACCJ. We plan to explore outreach to both Japanese and international organizations across Japan—especially with relevant organizations in the Chubu and Kansai regions.

Also, we want to make sure that the council is tapping the thoughts and energy of all members with ideas for increasing the relevancy of your own companies and the ACCJ to SMEs. Please reach out to us at sme@accj.or.jp