Association for Public Policy Analysis & Management

Small- and medium-scale enterprises (SMEs) in metropolitan areas do not always have enough resources such as personnel, supply lines, capital, and information, and it is difficult for them to create and develop new business. It is an urgent challenge for them to identify and nurture persons who are willing to create and / or to develop their business. Construction of human network for business creation and development is crucial so that businesspersons in different industries can cooperate for new projects and they can receive new effective advice from non-business sectors. Business innovation germinates in an ecosystem where motivated persons in different business can cooperate, and where business owners and supporters can closely work together. Creation of innovative and business-friendly ecosystem is the key for local economic development.

This paper examines strategic training programs to help SMEs promote business innovation in Sendai, Japan. They have been initiated and developed by a research center of Tohoku University: Regional Innovation Producers School (RIPS) and Regional Innovation Advisors School (RIAS). The former intends to train local SME management, and the latter aims to educate local bank officials so that they can support local businesses. This paper explains how the RIPS and the RIAS have promoted local business without spending large amount of public budget.