ABSTRACT
The purpose of this chapter is to better understand the relationship between policy and the formation of industrial networks. There are potentially many programmes and policies from various arenas that may facilitate the formation of industrial networks. Local economic development and revitalisation programmes, employment creation programmes, and hightech promotion programmes all potentially affect the formation of industrial networks. This chapter focuses specifically on SME policy and its role in promoting inter-firm collaboration. SME policy is one of the more prominent and direct means through which governments exercise influence over industrial organisation, by supporting the survival of smaller firms in the market. In Japan, SME policy has been used to help structure industrial organisation, to promote economic benefits and sustainable business performance in both large and small firms.
