Martin Sustrik

Local markets shrink.

Successful firms move to greener pastures.

And then there are the small firms that simply shut down.

In Japan, over half of small and medium-sized businesses report having no successor.

38% of owners above 60 don't even try.

They report planning to close the firm during their generation.

But even if they do not, the owner turns 70, then 75.

Worried clients want a guarantee of continued service and pressure him to devise a succession plan.

He designates a successor, maybe a nephew or a son-in-law, but the young man keeps working an office job in Tokyo or Osaka.

No transfer of knowledge happens.

Finally, the owner gets seriously ill or dies.

The successor is bewildered.

He doesn't know what to do.

He doesn't even know whether it's worth it.

In fact, he doesn't really want to take over.

Often, the firm just falls apart.

So what is being done about these problems?

Take the case of infrastructure and services degradation.

The solution is obvious.

manage the decline by concentrating the population.