Contrasts in small business policy are examined for Japan and the United States. The author argues that Japan's small business policy has been part of an industrial growth‐oriented policy, while comparatively the U.S. small business policy has been mainly part of locally‐based economic revitalization schemes. Recent trends in policy development indicate that the policies in the two countries are converging. The U.S. policymakers have become increasingly concerned with the small business sector becoming competitive in global markets, while widespread offshoring of large firms have prompted Japanese policymakers to focus on supporting small businesses in order to prevent further loss of manufacturing j