Growth mechanism to the "Global Niche Leader": Comparison study of Japanese and German companies

Small and medium-sized enterprises ("SMEs") around the world are attracting attention as sources of employment and economic growth because, amid the economic downturn after the recession stemming from the financial crisis of 2008, SMEs - medium-sized companies in particular-revealed their resistance to economic shocks. Among SMEs, there is a group of companies that has maintained the top position in a specific global market for many years. They are called “Hidden Champions”, “Global Niche Top” and “Born Global Companies”. In this article, I define them as "Global Niche Leaders". Among these companies, Germany's "Hidden Champions”, have been making significant contributions to that country's economic growth by expanding exports much like their larger counterparts. The value of German exports in 2012 reached nearly twice that of Japan's, placing third in the world behind China and the United States. However, although the existence of Hidden Champions and GNT companies attracts attention, their growth mechanisms are not fully understood. In this paper, I aim to clarify the growth mechanisms of Japan's GNT companies and Germany's Hidden Champions.