Interview with Mr. Shigehiro Shinozaki
Mr. Shigehiro Shinozaki
Joined the Asian Development Bank (ADB) in October 2011 as a Financial Sector Specialist (SME Finance) in the Office of Regional Economic Integration.
Shigehiro is a national of Japan. He holds a doctoral degree in Asia-Pacific Studies from Waseda University in Japan and a Master's degree in Business Administration from École Nationale des Ponts et Chaussées in France.
Prior to joining ADB, he was an advisor to the Indonesian Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) as a JICA Expert from 2007 to 2011, where he mainly supported policy issues relevant to microfinance and SME finance in Indonesia.
He was also an Administrator of Directorate for Financial and Enterprise Affairs, Organisation for Economic Co-operation and Development (OECD) in France from 2001 to 2005, where he dealt mainly with projects on housing finance in transition economies and securities market development in Central Asia as its outreach activities.
His basic professional background came from experiences at the Ministry of Finance in Japan through holding various posts such as a Special Officer for Development Finance and a Section Chief at the Legal Office of the Balance of Payments Division, with experiences of international negotiations with several countries.
INSME: Can you give us a wrong and a right definition of innovation?
Mr. Shinozaki: I would say that a wrong definition of innovation just addresses something newly created with no linkage to enhancing social welfare or improving people’s living standards.
Innovation should result from risk-taking actions or processes that embody human needs and bring value-added to people.
Benefits from innovation should be directly or indirectly enjoyed among all people. I believe that SMEs are an important segment effectively disseminating the benefits from innovation to individuals.
INSME: Do you think that nowadays economic players are conscious enough of the opportunity that the international dimension represents for being innovative and of the benefits they could get back? If they are not, which is the main obstacle?
Mr. Shinozaki: Venture businesses and growth-oriented SMEs understand well the benefits from innovation, i.e., its economic and social impacts.
Even if they expect such benefits, however, the opportunity for being innovative is not always evenly shared among economic players because a comprehensive mechanism supporting innovation from various angles is often lacking at the national level, although the context is different in each country.
In this regard, the role of government should be more focused. For instance, top-down or post-active policies and regulatory approaches for private sector development may restrain people’s innovative mind and hence increase opportunity costs in economic growth and social welfare enhancement.
INSME: How worldwide networks like INSME can help public bodies, stakeholders and intermediaries to foster innovation in favor of SMEs?
Mr. Shinozaki: There are many useful networks among business practitioners all over the world where innovative ideas are actively exchanged across borders.
National regulators and policy makers pay attention to such networks because they realize that fostering innovation, rather than strictly regulating it, is effective for building a resilient national economy.
Taking this into consideration, I think that an important role for INSME is as a catalyst to properly connect new ideas and approaches generated by private sectors with public sectors.
SMEs are a significant pool of innovation and the traditionally underserved, which means that the role of INSME takes on greater importance.
INSME: What is, according to your experience, the most effective way to help SMEs entrepreneurs to be innovative?
Mr. Shinozaki: SMEs are still regarded as a risky segment for financing among financial institutions.
SMEs’ poor access to finance has now become the new normal globally, which has led to an environment in which SMEs are reducing investments in realizing their innovative ideas.
To expand the base of innovative SMEs that will eventually contribute to sustainable economic growth, national policy makers need to develop a comprehensive menu of policy options to promote innovative financing modalities that enhance financial accessibility for SMEs beyond traditional SME lending.
The Asian Development Bank supports such national and regional efforts to develop diversified financing modalities for SMEs.