Manufacturing Sectoral Growth in the USA and Japan: Relevance to SMEs, Organizational Innovations, and Recent Economic Growth

Although economic growth is inherently linked with the structure and nature of SMEs (e.g. their number, industry concentration, size, degree of outsourcing, etc), as this has been shown in the existing literature, OIs 1, more generally, are the context in which SMEs operate and hence OIs ought to be more closely examined in order to further understand the complex process of economic growth and the particular impact of SMEs on the latter. In this paper, a detailed comparison of the growth of manufacturing sectors in the USA and Japan is used as an indirect way to demonstrate the following proposition. Although SMEs have played a positive role in the postwar economic Japanese miracle, they are not a sufficient force for a sustainable economic growth, as the recent protracted recession in Japan shows. It is only when technological innovations and in particular OIs take place in the economy that this type of growth is possible, as this is also demonstrated in the recent American prolonged economic growth.