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CHAPTER 7 BUSINESS ACTIVITIES
This chapter contains statistics on business operation, such as the geographical distribution of enterprises and establishments, characteristics of business organisation and industrial category, employees, conditions of assets, liabilities and capital, profit and loss, bankruptcy, etc. of incorporated and unincorporated enterprises. Data sources are "Economic Census for Business Frame" and "Establishment and Enterprise Census" and "Unincorporated Enterprise Survey" compiled by the Statistics Bureau, Ministry of Internal Affairs and Communications, "Economic Census for Business Activity" by the Statistics Bureau, Ministry of Internal Affairs and Communications and Ministry of Economy, Trade and Industry, "Financial Statements Statistics of Corporations by Industry" by the Ministry of Finance, "Ministry of Economy, Trade and Industry Basic Survey of Japanese Business Structure and Activities" by the Ministry of Economy, Trade and Industry, "Basic survey on small and medium enterprises" by the Small and Medium Enterprise Agency. In addition, for investment, "Business Outlook Survey" by the Economic and Social Research Institute, Cabinet Office and Policy Research Institute, Ministry of Finance; for suspension of business transactions with banks, "Annual Statistics of Clearings in Japan" by the Japanese Bankers Association, for bankruptcy, "Enterprise Bankruptcy Record" by the Teikoku Databank, Ltd. For the number of farm, forestry and fishery households and their operation, see "8 Agriculture, Forestry and Fisheries", for bills cleared and dishonoured bills, see "16 Finance and Insurance" and for business registrations, see "28 Justice and Police".
Economic Census (Fundamental Statistical Survey)
(Fundamental Statistical Survey) The Economic Census is conducted to grasp the economic activity of establishments and enterprises, to clarify the overall industrial structure of Japan, and to provide a basic statistical framework for other sample surveys on establishments or enterprises. The Economic Census consists of Economic Census for Business Frame which clarifies the basic structure of establishments and enterprises, and Economic Census for Business Activity which clarifies the situation of the economic activity of establishments and enterprises.
Economic Census for Business Frame
The objectives of the Economic Census for Business Frame are, by investigating the economic activity of establishments and enterprises, to clarify the basic structure of establishments and enterprises (e.g. the number of persons engaged) of all industries on a national and regional level, and to obtain basic information for conducting various statistical surveys, the Census covered all the establishments and enterprises in Japan, except for privately-managed establishments engaged in agriculture, forestry and fisheries and establishments for domestic services, foreign governments and international agencies in Japan.
The 2009 Census was conducted in Part A and Part B, as of 1 July. Part A of the Census was addressed to all the privately-managed establishments, and the survey was conducted in the following ways; survey by enumerators-delivery and collection of questionnaires by enumerators and through the channel of Ministry of Internal Affairs and Communications, prefectures, municipalities (shi, machi and mura), Census supervisors, and Census enumerators; survey by municipalities-delivery and collection by mail or via the Internet through Ministry of Internal Affairs and Communications, prefectures, and municipalities; survey by prefectures-delivery and collection by mail or via the Internet through Ministry of Internal Affairs and Communications, and prefectures; survey by the Ministry of Internal Affairs and Communications-delivery and collection by mail or via the Internet directly by the Ministry. Part B of the Census was addressed to the establishments of the central and local governments, and the questionnaires were delivered and collected to/from establishments through the following channels; survey by the central government-Ministry of Internal Affairs and Communications, and Cabinet Office or Ministries; survey by prefectures-Ministry of Internal Affairs and Communications, and prefectures; survey by municipalities-Ministry of Internal Affairs and Communications, prefectures, municipalities.
Economic Census for Business Activity
The objectives of the Economic Census for Business Activity are to clarify the situation of economic activities of establishments and enterprises of all industries on a national and regional level, and to obtain basic information for improving the accuracy of various statistical surveys.
The 2012 Census was conducted in two ways, namely, enumerator survey and direct (mail or online) survey, as of 1 February . The enumerator survey was conducted on single-unit establishments and new establishments in the way that questionnaires are delivered and collected by enumerators through the channel of Ministry of Internal Affairs and Communications, prefectures, municipalities (shi, machi and mura), Census supervisors, and Census enumerators, or delivered by enumerators and mailed back to municipalities. The direct survey was conducted by mail, or via online if desired so, to the head office in the following way; for enterprises with 29 employees or less, and having all establishments in the same municipality, questionnaires are sent and collected by the municipality; for enterprises with 29 employees or less, and having most establishments in the same prefecture, questionnaires are sent and collected by the prefecture; for enterprises having establishments in two or more prefectures, enterprises with 30 or more employees, for enterprises designated by the Minister for Internal Affairs and Communications or by the Minister for Economy, Trade and Industry, and for those single-unit establishments and new establishments which are located in the area designated as the enumerator survey is impossible due to the Great East Japan Earthquake, questionnaires are sent and collected by the Ministry of Internal Affairs and Communications or by the Ministry of Economy, Trade and Industry.
An establishment is a unit of location (a demarcated area) with proper equipment and personnel to produce goods or to render services continuously under a single management.
An enterprise is a legal person (excluding foreign companies) or a privately-managed establishment operating business. If two or more privately-managed establishments are operated under a single management, these establishments compose one enterprise. To be concrete, enterprises are incorporate enterprises, legal persons other than incorporated enterprise, or privately-managed enterprises including the head office and branches. If there is only one establishment under single management the establishment forms one enterprise.
An incorporated enterprise is defined as an entity composed of the head office and branch establishments, if any, whose legal organisation is stock company, limited company, limited or unlimited partnership, limited liability company, or mutual insurance company. If there is only one establishment under single management the establishment forms one incorporated enterprise.
Employees are defined as those who belonged to an establishment as of the Census date, including those loaned or dispatched to establishments under separate management. On the other hand, excluded are those who work at the establishment but receive no pay (including pay in kind) from the establishment, such as workers loaned or dispatched from establishments under separate management. Family workers of privately-managed establishments are considered employees even if they receive no pay.
Amounts of sales (income)
Sales (income) refers to total sales value of goods, total receipts for provision of services, operating profit, total value of completed construction, etc. Receipts for sales of assets, such as securities, land, buildings, machinery or apparatus, are not included. For companies of finance or insurance, juridical persons other than companies, and non-juridical bodies, ordinary income is used.
Added value is newly created value by the production process of enterprises, and is obtained by subtracting intermediate input such as raw materials from the value of output. For this Census, following formulas are used;
Added value = total sales - total cost + total wage and salary + imposed tax
Total cost = prime cost + sales promotion and general administration expenses
Establishment and Enterprise Census (former Designated Statistical Survey)
The Establishment and Enterprise Census was conducted to grasp the actual state of business activities by all the establishments and enterprises in Japan, to clarify the industrial structure of the country, and to provide a basic statistical framework for other sample surveys on economic activities. This Census started in 1947 with the name of Establishment Census, followed by the second Census in 1948. Thereafter, it had been conducted every three years until 1981. The interval became five years thereafter and the 14th Census was taken in 1986. At the 16th Census that was conducted in 1996, the name was changed to Establishment and Enterprise Census as more survey items were added concerning the enterprise activities.
The 2006 Census covered all the establishments in Japan that existed as of 1 October, excluding privately-managed establishments engaged in agriculture, forestry and fisheries and establishments for domestic services, foreign governments and international agencies in Japan. The Census was composed of Part A and Part B. Part A of the Census was addressed to all the privately-managed establishments. These establishments, which filled in the questionnaires mostly themselves, were reached through the administrative route starting from the Statistics Bureau, Ministry of Internal Affairs and Communications, to the prefectures, to the municipalities (shi, machi and mura), to the Census supervisors and finally to the Census enumerators. Part B of the Census was addressed to all the central and local government establishments, to which Census questionnaires were distributed and collected through the head of each organisation. In the 1991 Census, due to the disastrous volcanic eruptions in Unzen-Fugendake, all the establishments located in Shimabara-shi and Fukae-cho, of Nagasaki Prefecture and their branch establishments in the neighboring municipalities were excluded from the Census.
The 1999 Census was conducted as of 1 July as the first Simplified Establishment and Enterprise Census, since it was so decided three years ago at the time of the 1996 Establishment and Enterprise Census. The Simplified Census covered privately owned establishments and enterprises only.
The 2004 Census was conducted jointly with the Survey on Service Industries (Ministry of Internal Affairs and Communications) and the Census of Commerce (Ministry of Economy, Trade and Industry), as of 1 June in order to minimise response burden and maximise cost-effectiveness.
The Establishment and Enterprise Census was concluded by the 2006 Census, and integrated into the Economic Census in 2009.
Financial Statements Statistics of Corporations by Industry (Fundamental Statistical Survey)
The survey has been conducted every year since 1948 by the Ministry of Finance with the purpose of clarifying the business activities of profit-making corporations.
This survey is composed of annual survey and quarterly survey. The annual survey collects data on the basis of the final closing accounts of the fiscal year from all profit-making corporations. On the other hand, the quarterly survey collects data on the basis of provisional closing accounts of the quarter from profit-making corporations with a capital, investment or fund of 10 million yen or over. From fiscal 2008, finance and insurance industry, which was excluded from the survey in the past, is also covered.
All the corporations with a capital of 500 million yen or more (for finance and insurance, 100 million yen or more) are surveyed, while corporations with capital of less than 500 million yen (for finance and insurance, less than 100 million yen) are selected by the stratified random sampling method (equal probability systematic sampling). Questionnaires are sent and collected by mail through regional Finance Bureaus and Finance Offices, and since fiscal 2003, online reporting via Internet is also admitted. The annual survey is carried out in the first half of the fiscal year (from April to September) and the second half of the fiscal year (from October to next March), where final closing accounts which were settled during each half year are reported. However, for the corporations having biannual closing accounts, data on assets, liabilities and net assets are obtained from the closing accounts for the second half year, and data on profit and loss are obtained as the sum of the closing accounts for the first and second half year.
Basic Survey on Small and Medium Enterprises
The survey has been conducted annually since fiscal 2004, based on the Article 10 of the Basic Act for Small and Medium Enterprises. The purpose of the survey is to clarify the business conditions of small and medium enterprises and to obtain basic data for policy-making for small and medium enterprises and for the use by the public, by surveying financial information, management information, plant and equipment investment activities, etc.
The survey was conducted at the enterprises (including unincorporated enterprises) sampled from those in the following industries (based on Japan Standard Industrial Classification Rev. 13) : D-Construction; E-Manufacturing; G-Information and Communications; H-Transport and Postal Activities; I-Wholesale and Retail Trade; K-Real Estate and Goods Rental and Leasing; M-Accommodations, Eating and Drinking Services; N-Living-related and Personal Services and Amusement Services; R-Services, n. e. c.
Business Outlook Survey
The purpose of the Survey is to obtain basic information on present situation and outlook of the economy by analysing the business activities of enterprises which play major part of the national economy. The survey was established in fiscal 2004 by consolidating the Business and Investment Survey of Incorporated Enterprises and the Business Economic Survey of the Ministry of Finance, and has been conducted jointly by the Economic and Social Research Institute of the Cabinet Office and the Policy Research Institute of the Ministry of Finance quarterly.
Approximately 16,000 enterprises with capital 10 million yen or over (100 million yen or over for electricity, gas, water supply, finance, and insurance industries) are surveyed quarterly by the self-enumeration method by mail or through the Internet.
Unincorporated Enterprise Survey (Fundamental Statistical Survey)
The survey is conducted quarterly by the Statistics Bureau, Ministry of Internal Affairs and Communications, with a purpose to clarify business activities of individually operated establishments engaged in manufacturing, wholesale and retail trade, accommodations, eating and drinking services or services. It originated from the survey of the same name taken in 1947 by the Economic Stabilization Board (the present Economic and Social Research Institute, Cabinet Office). Later in 1952, the jurisdiction of the part concerning wholesale and retail trade and manufacturing of the survey was transferred to the Statistics Bureau, Prime Minister's Office (the present Statistics Bureau, Ministry of Internal Affairs and Communications), and a new survey started under the name of the Unincorporated Commercial and Manufacturing Enterprises Survey. In 1961, the name of the survey was again changed to the present Unincorporated Enterprise Survey, taking the opportunity of including enterprises engaged in services in the coverage of the survey. Since 1966, the survey area has been enlarged to cover towns (machi) and villages (mura). In addition, a substantial review of survey methods was done by sorting and consolidating questionnaires, etc. in 2002. New items such as business sentiment and the age of the business proprietors were also added.
The survey based on the Trend Survey Questionnaire is conducted quarterly, and the survey based on the Structural Survey Questionnaire is conducted in March every year by the self-entry method with the aid of enumerators on about 4,000 establishments, which are selected by a stratified three-stage sampling method from all the individually operated establishments throughout the country. The survey period is one year, and one fourth of the sample enterprises are rotated every quarter.
Suspension of business transactions with banks
Data are based on "Annual Statistics of Clearings in Japan" compiled annually by the Japanese Bankers Association. Official publication of the statistics on the suspension of business transactions with banks was initiated in 1965. Before that, data were available only from surveys by private credit agencies.
Data on the clearing of bills such as the amount of bank clearings, dishonoured bills and suspensions of business transactions with banks are commonly used as indicators for judging business trends. The suspension of business transactions with banks is a sanction procedure for the person under obligation to settle dishonoured bills, and the procedure is executed by a clearing house according to the notice of dishonour from the bank which is notified of the dishonour by the payable bank. The person against whom sanction was taken by this procedure is prohibited to have current accounts and loan transactions with participating banks during two years from the date of notification.
Data are obtained from the "Enterprise Bankruptcy Record" compiled by the Teikoku Databank, Ltd. The statistics have been published monthly since June 1964. In addition, data derived from a survey by Tokyo Shoko Research, Ltd. have been published every month since 1952.
Bankruptcy refers to the following cases in which default or excessive debts due to business failures as well as difficulty in operating business came up to the surface: <1> suspension of business transactions with banks was executed, <2> voluntary dissolution was made public by means of a meeting of creditors because of default or excessive debts, <3> protection under the Corporate Reorganization Act was filed, <4> protection under the Civil Rehabilitation Act was filed, <5> commencement of liquidation under the provision of Article 381 of the Commercial Code was filed, <6> special liquidation under the provision of the Companies Act was declared, and <7> voluntary petition for bankruptcy was filed based on the Bankruptcy Act.
Bankruptcies covered here are limited to legal liquidations with liabilities of 10 million yen or more. The amount of liabilities is the sum of the total of liabilities excluding capital in the credit side of the balance sheet, plus the amount of bills discounted and the amount of transfers by endorsement, and does not refer to the amount of net liabilities. The amount of net liabilities refers to that of total liabilities minus the amount of assets not hypothecated. However, it is not tabulated because of difficulty to obtain information at the stage where bankruptcy came out.
Ministry of Economy, Trade and Industry Basic Survey of Japanese Business Structure and Activities (Fundamental Statistical Survey)
The Survey was conducted for the first time in 1992, followed by the second survey in 1995, and after 1995, it has been conducted every year, with a purpose to obtain the basic business information needed for the government to formulate policies and programmes related to Japanese business enterprises.
The survey covers all the companies with 50 or more employees and a capital or an investment of 30 million yen or more, which have establishments coming under the following categories of the Japan Standard Industrial Classification (Rev. 12): Major group C-Mining and Quarrying of stone and Gravel, E-Manufacturing, F-Electricity, Gas, Heat supply and Water (excluding medium group 35-Heat supply and 36-Colletion, Purification and Distribution of Water, and Sewage Collection, Processing and Disposal), a part of G-Information and Communications shown in the table, I-Wholesale and Retail Trade, a part of J-Finance and Insurance shown in the table, a part of K-Real Estate and Goods Rental and Leasing shown in the table, a part of L-Scientific Research, Professional and Technical Services shown in the table, a part of M-Accommodations, Eating and Drinking Services in the table, a part of N-Living-related and Personal Services and Amusement Services shown in the table, a part of O-Education, Learning Support in the table, a part of R-Services, n.e.c. (not elsewhere classified) in the table.
|G-Information and Communications||Minor Group 391-Computer programming and other software services, 392-Data processing and information services, Medium Group 40-Internet based services, Detailed Group 4111-Motion picture and video production, except television program and animation production, 4112-Television program production, 4113-Animation production, Minor Group 413-Newspaper publishers, 414-Publishers, except newspapers|
|J-Finance and Insurance||Minor Group 643-Credit card and installment finance businesses|
|K-Real Estate and Goods Rental and Leasing||Minor Group 704-Automobile rental, Detailed Group 7092-Audio and visual recordings rental, 7099-Goods rental and leasing (excluding rental)|
|L-Scientific Research, Professional and Technical Services||Medium Group 71-Scientific and development research institutes, Minor Group 726-Design services, Medium Group 73-Advertising, Minor Group 743-Mechanical design services, 744-Commodity inspection and non-destructive testing services, 745-Surveyor certification, 746-Photoraphic studios, and 749-Miscellaneous technical services (of Medium Group 74-Technical services, n.e.c.)|
|M-Accommodations, Eating and Drinking Services||Medium Group 76-Eating and drinking places (excluding Detailed Group 7622-Ryotei (special Japanese restaurant), Minor Group 765-Drinking houses and beer halls, 766-Bars, cabarets and night clubs), 77-Food take out and delivery services|
|N-Living-related and Personal Services and Amusement Services||Medium Group 78-Laundry, beauty and bath services (excluding Minor Group 785-Miscellaneous public bathhouses), 79-Miscellaneous living-related and personal services (excluding Minor Group 791-Travel agency, Detailed Group 7999-Miscellaneous living-related and personal services, n.e.c.), Minor Group 801-Cinemas, 804-Sports facilities (excluding Detailed Group 8041-Sports facilities, except otherwise classified), 805-Public gardens and amusement parks|
|O-Education, Learning Support||Detailed Group 8245-Foreign language instructions, 8249-Miscellaneous instruction services for arts|
|R-Services, n.e.c.||Medium Group 88-Waste disposal business, 90-Machine, etc. repair services, except otherwise classified, 91-Employment and worker dispatching services, 92-Miscellaneous business services (excluding Minor Group 922-Building maintenance services, 923-Guard services)|
A company more than 50 percent of whose voting right are owned by another company (parent company). This share of voting right may include that of the subsidiary company itself.
A company 20 to 50 percent of whose voting right are owned by another company.