Indian aspirants will have to be duly reoriented emotionally and professionally. In a welcome juxtaposition of circumstances, the time is propitious for Japan and India to script a new chapter amidst the rapid global transformation in mental and material geography. With an apparent convergence of views on many issues, economic and strategic, between Japan and India, the people of the two countries constitute a “confluence of the two most deep-rooted democracies”. While Japan is blessed with the advantage of capital and technology, India’s strength is embedded in its demography, its expanding market, and infrastructural development.
According to an India-Japan study group, the difference in the population dynamics of the two countries is an important factor that makes their economies complementary. Against the backdrop of Japan’s shrinking workforce, India has almost 40 per cent of its population below 18; in 2015, some 550 million Indians were under 20 years of age. From the Indian perspective, Japan offers opportunities for absorption of technical and skilled manpower.
A wrinkled society, Japan betrays signs of ageing. Its demographic profile is somewhat akin to a Japanese lantern. Before long, it might look like an inverted urn. No other country has grown so old and so rapidly.
There are 400,000 more deaths than births each year. Life expectancy is 84 years ~ the world’s highest. More than 28 per cent of the population is above 65, compared with 21 per cent in Germany, 15 per cent in America, and 6 per cent in India, and is projected to rise to 36 per cent by 2050. The country has 69,785 centenarians, a seven-fold increase since two decades ago (The Economist).
As the country ages and its population dwindles, health bills soar and there are fears that the pension system might get disrupted. No less than 70 per cent of Japan’s social security expenditure goes for the elderly, rising from Yen 11.5 trillion in 1990 to over Yen 27 trillion in 2010. The number of workers to support every pensioner fell from 10 in 1950 to 4 in 2000. It is estimated to fall further to just 2 by 2025. Hundreds of towns and villages are threatened with depopulation. As women of child-bearing age migrate to big cities, it is feared that nearly 900 municipalities, or half of the total, are likely to disappear by 2040.
Japan’s population is declining by almost 400,000 a year; there are 1.6 vacancies for every jobseeker. By 2050, its working age population will be less than it was in 1950. The workforce, predicted to fall from 67m in 2017 to 58m in 2030, is shrinking so fast that even the country’s xenophobic elite is discussing subjects such as higher immigration and encouraging women to accept jobs. During Prime Minister Shinzo Abe’s six-year tenure, 2 million more women have joined the workforce, lifting the female participation rate above America’s.
Japan’s post-war (1946-1976) 55-fold growth in the economy is largely ascribed to its unique “rolling consensus”, “private collectivism” “spiderless cobweb”, and “Japan Inc.”. Its economic miracle is traced to lifetime employment, seniority (neko) wage system, and enterprise unionism. But the much celebrated job-for-life system is fast becoming defunct. Nearly 40 per cent of its workers are now on contract; two-fifth of them now fall into this “irregular” category.
Many companies have raised their retirement age or taken to rehiring retired workers, often on a part-time basis. Currently, only 2 per cent of the workforce are foreigners, compared with 17 per cent in America. Even con
sidering the pool of 3 million Japanese descendants worldwide, the replacement of the workforce would not be enough, especially in areas such as construction, services and high-end professional jobs.
Although change in Japan has been generally slow, there have been significant developments. The proportion of Japan Inc owned by foreigners has risen sharply. Its companies increasingly belong to foreigners, who now own 30 per cent of the stock market, up from 4 per cent in 1989. Abe’s book, Utsukushii Kunie ( Towards a Beautiful Nation) views Japan as a country to which people from all over the world want to come and work, even invest. His government aims at raising the retirement age for civil servants from 60 to 65. Corporates are being encouraged to do the same. He wants them to “remain active without retirement throughout their lives”. Aiming at “designing the 100-year-life society”, Abe says he wants Japan to demonstrate how to make ultra-long lives fulfilling ~ and affordable.
The Diet is debating a bill that would allow up to 345,000 foreign workers (called “trainees” or “guest workers”, not permanent immigrants) to enter Japan by 2025, on visas of no more than five years. These blue-collar workers are required in 14 industries, including construction, shipbuilding, and care of the elderly. In the long run, Abe hopes, rapidly advancing technologies will help ease the labour shortage.
“I do think that we will need fewer jobs because of higher productivity”. Insurance firms, for example, are already replacing staff by software. A driverless taxi service is envisaged before the 2020 Tokyo Olympics.
A 2015 Nomura Research Institute report predicts half of Japan’s workers are likely to be replaced by robots by 2040.
Today, economies increasingly use technology to substitute capital for labour. And skillbased technical change increases the relative demand for highly educated workers, while reducing the demand for less educated workers whose jobs frequently involve routine cognitive and manual tasks. India realizes its much-touted demographic dividend encounters a formidable challenge of skill deficit, necessitating a concerted strategy for its burgeoning young population to be adequately trained in different disciplines and trades.
Japan and India need to determine mutually agreed professional qualifications certified by accredited institutions. There is need to promote liberal exchange of people of the two countries through tourism, cultural festivals, scholarships, student exchange schemes, language courses, etc. Above all. aspirants seeking jobs in Japan must be duly equipped emotionally and professionally to respect Japanese sensitivities.
As India revamps and expands its wherewithal for skill development, it may well seek Japanese ODA to develop its human capital, especially bluecollar skills, and leverage it not only for the labour requirements of Japanese firms investing in India, but also to address the needs of the Japanese labour market. There are several Indian IT firms in Japan; Indians are also engaged in basic research in Japan’s high-tech firms and state research institutes. To service the Japanese market, India’s software companies have realised the complexity of language and culture as well as presence on the ground, rather than off-shoring work to India.
To do business with Japan in the coming decades, the importance of social and cultural evolution cannot be overstated. So much like in India, where centuries coalesce, the old juxtaposed with the new, Japan deftly blends tradition with modernity ~ abacus with microprocessors, judo and karate with baseball and bowling, kimono, thatami, and sushi with high skirts, luxury beds, and junk food fare. The miniature TV sets and smart phones have emerged in a land that prefers to work within small spaces, think in terms of haiku and bonsai.
To manage an influx of people of different nationalities, religions and ethnic diversities is a challenge for Japan ~ a monolithic, mono-cultural society.
Indians must understand the Japanese psyche, the traits and sensitivities, the deep emotions, intense patriotism, penchant for details, punctuality and discipline, and an almost robotic workforce. India is a deeply stratified hierarchical society, in contrast to Japan’s egalitarian ethos. Japanese society is also consensual, with harmony as its bedrock.
(The writer is Senior Fellow, Asian Institute of Transport Development, and former CMD, Container Corporation)