In Japan, small industries have been taken up as an important element of the economic/industrial structure from the turn of this century. We traced the legacy of small business studies and problems in Japan. The focal point is the dramatic development and metamorphosis of Japanese small business in its technological and managerial ability especially in the last two decades. Under the rapid industrial restructuring; small business in Japan is struggling for establishing management strategies of its own in diverse directions, especially of internationalization and informatization.