Elderly business owners: Japan's new age problem

Japan's Prime Minister has vowed to help business startups, in his bid to regenerate industries and revive Japan's moribund economy. But Japan's small firms are facing a struggle for survival with a workforce of aging owners and workers.

TOKYO (REUTERS) - They say there's no substitute for experience.

The problem for Hitoshi Iwai, though, is that there's no one to pass it on to.

Hence why at 80, he's still working.

"If your heir is unqualified and inexperienced, you cannot ask them to take over your company. If highly skilled peers inherit your business, they would be happy as well and your business won't disappear," said Hitoshi Iwai, CEO of Iwai Seisakusho.

Many businesses like his though are disappearing. One research firm claiming over 26,000 firms have shut up shop in Japan in the last fiscal year alone as big companies turn to cheaper suppliers abroad.

"It is fine for those sub-contractors that sell their unique products to big companies. However, companies that sell products whose prices are competitive cannot survive in this industry. Firms should be running a business where they have one irreplaceable skill" said Toshiaki Funakubo, leader of OTA Industry Association.

But even then, a sure footing is not guaranteed.

This company hand-spins metal, producing things like nose cones for rockets.

But they're also one of the many firms who say the government's promise to help startups and regenerate industry hasn't come to fruition.

"Although we produce specific products, our business is still facing a hard time. The number of our orders has decreased to a third especially since the collapse of Lehman Brothers" said Takahiro Kitajima, CEO of Kitajima Shibori Seisakusho Co.

The future looks equally bleak.

In the last 26 years, the average age of company owners has risen from 54 to over 59.

And two thirds of them lack successors - a ratio that is on the rise.