Business Environment

Japanese Language barrier

Number of Japanese language learners, teachers and educational institutions

Although the number of foreigners studying Japanese overseas has increased as Japan’s economy has grown, it appears to have reached a plateau due to the prolonged economic stagnation.

The motivation for learning Japanese is also changing dramatically…

In Southeast Asia, where there is still a large salary gap between Japan and other countries, and where there are many foreign students and migrant workers, it is expected that the percentage of people learning Japanese for work purposes will decrease as their countries’ economies develop. Therefore, it will become more and more difficult to secure foreign human resources to work in Japan with the conventional recruitment style that requires high Japanese language skills.

The highest level of difficulty in learning Japanese

There is still a large salary gap with Japan, and it is no wonder that fewer people are willing to learn the highest level of difficulty Japanese, which is only understood in a country that has had the lowest economic growth rate among developed countries for the past 20 years.

Shortage of high-level human resources

Declining workforce in Japan

Japan’s working population could decline by 21 million by 2050. In other words, the working population will decrease by about 30%.

More emphasis is being placed on relearning and the use of AI and robots and collaboration.

Exhibit: Ministry of Economy, Trade and Industry Future Talent Vision

(Source: Compiled by the Ministry of Economy, Trade and Industry based on the births (and deaths) median of the National Institute of Population and Social Security Research’s “Population Projections for Japan (2017 Estimates)”.

Japan, a country not chosen by highly-skilled foreigners

Source: Compiled by METI based on OECD “Indicators of Talent Attractiveness.

And by 2030…

Some predict that there will be a shortage of foreign workers everywhere in Japan.

Exhibit: Ministry of Economy, Trade and Industry Future Talent Vision

(Note) Shortage of foreign workers is calculated by subtracting the labor supply potential of foreign workers from the number of foreign workers required to achieve the target GDP (¥704 trillion in 2040, average annual growth rate of 1.24%) (4.19 million in 2030 and 6.74 million in 2040). (Source: Compiled by the Ministry of Economy, Trade and Industry based on the Japan International Cooperation Agency’s “Survey and Research Report on Initiatives for Realizing a Society in Harmony with Foreign Residents by 2030/40.

Japan’s STEM workforce is

About 550,000 people

Shortage expected

Core human resources for value-added creation will be stretched thin.

Pro-Japan Situation in India

The Indian region is one of the world’s leading STEM talent producing regions.

Indian STEM talent is more “pro-Japan” than Japanese companies think.

Japan is respected for its “industrial technology represented by automobiles” and “high-tech represented by MLCC”.

However, Indians are familiar with Western culture (British, American…),
working in Japan is not a positive option。
against the backdrop of visa issuance in the US.

Side job (remote work)

job-based employment

Highly talented people preferably entering the country

・・・thess steps are necessary

Status of Remote Work





The shift to remote work has allowed companies to utilize expatriates more smoothly than ever before, so it’s likely that online-based hiring and working practices will continue.

Image of the two-career model

There is an emerging concept of working as an unqualified regular employee at first and then converting to job-based employment after building a career.

Exhibit: Ministry of Economy, Trade and Industry Future Talent Vision (Note) With regard to job-type employment, note that in other countries it has been confirmed that the closer one gets to the management level, the more indefinite the job description becomes.

(Source: Ministry of Economy, Trade and Industry, based on a statement by Professor Kotaro Tsuru of Keio University, “Issues in the HR function in Japanese-style job-type employment” by the PERSOL Research Institute.

Through human capital management, the relationship between workers and organizations should change from a “closed” relationship to a “choose and be chosen” relationship.

Exhibit: Ministry of Economy, Trade and Industry Future Talent Vision

(Source: Created based on “Report of the Study Group on Sustainable Improvement of Corporate Value and Human Capital,” Ministry of Economy, Trade and Industry.