Now in paperback, this book considers the role of small firms in the Japanese economy and challenges established views of the Japanese economy, society and political economy. Japan's giant corporations are household names, and dominate our views of the Japanese economy. But surprisingly, Japan also ranks alongside Italy as having the highest proportion of small firms - and employment in them - amongst the OECD countries. These small firms have either been ignored, or they have been treated as appendages of large firms. This book paints a balanced picture based on a unique and statistically rich survey. It looks at small firms in Japan's leading machine industries, their relations with each other as well as with large firms, and their internal management, employment and technology dynamics. Paradoxically, in contrast to the 'resurgence' of small firms in other industrialised countries, their number and employment share in Japan are now in decline.