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Report of the service economy/employment policy subcommittee of
the New Growth Policy Section, Industrial Structure Council
Toward the Establishment of a Diversified, Creative Work System
Conforming to the Trend Toward a Service Economy
July 2002
CONTENTS
Introduction
Chapter 1 Current Situation and Environmental Changes
1. Current state of the Japanese Economy
2. Sluggish corporate earnings
3. Progress of the trend toward a service economy
4. Worsening employment situation and changing employment system
Chapter 2 Progress of the Trend Toward a Service Economy and Change in the
Employment System
1. Significance of the trend toward a service economy
(1) Trend toward a service economy as a current
(2) Progress of the intra-industry/in-company trend toward a service economy that
goes beyond industrial classification
2. Trend toward a service economy and strengthening competitiveness
(1) Deepening the interdependent relationship between manufacturing industries
and the service industry in the United States
(2) Delay in the business reorganization of Japanese corporations and the trend
toward a service economy
(3) Enhancing competitiveness amid the progressing trend toward a service economy
3. Trend toward a service economy and the expansion of employment opportunities
(1) Service sector likely to increase employment opportunities
(2) Increase in employment opportunities in the United States brought about by the
trend toward a service economy
(3) Increase in employment opportunities in Japan brought about by the trend toward
a service economy
(4) Increase in employment opportunities through the deregulation of the public
service sector
4. Trend toward a service economy and diversified employment styles
(1) Progress of the trend toward a service economy and diversified employment styles
(2) Necessity of establishing environments conforming to diversified employment
styles
i
5. Change in the employment system
(1) General characteristics of a conventional employment system
(2) Change in the employment system
6. Individual trend
Chapter 3 Potential Trend Toward a Service Economy and the Direction of the
Employment System
1. Impact that the progress of the trend toward a service economy has on the
employment system and its changes
(1) Impact that the progress of the trend toward a service economy has on the
employment system
(2) Relative shrinkage of the scope of long-term employment and the change in its
significance
(3) Review of the seniority-based wage system (Toward wage/treatment system
reflecting the current labor value)
(4) Strategic human resource development by corporations
‫(ޓ‬5) Diversified and pluralistic employment styles in accordance with corporate
strategy
2. Individuals’ response and establishment of environments
(1) Response to change in employment styles brought about by the trend toward a
service economy
(2) Promotion of skill-development by individuals
(3) Balancing work and life
(4) Fostering of the youth and promotion of employment
3. Direction of the Japanese employment system in conforming to the trend toward a
service economy
(A creative employment system that allows individuals and corporations to make
diversified, flexible choices and create new value)
Chapter 4 Basic Direction of Future Policies
1. Basic direction of policies conforming to the trend toward a service economy and the
change in the employment system
(1) Direction of policies conforming to the trend toward a service economy
(2) Direction of future employment policy
(3) Implementation of comprehensive employment/manpower policy
ii
2. Specific approach to policy implementation
(1) Industrial revitalization through business reorganization and the establishment of
environments conforming to the trend toward a service economy
(2) Expansion of employment opportunities conforming to the trend toward a service
economy
(3) Establishment of environments conforming to the diversified employment styles
brought about by the trend toward a service economy
(4) Improvement of the labor market to effectively promote optimal positioning of
personnel
(5) Enhancement of the human resource development system to strengthen
competitiveness and revitalize the economy
(6) Establishment of an appropriate safety net conforming to the increased labor
movement and diversified employment styles
Committee Discussions / Contents
Committee Members
iii
Introduction
Amid the growing needs to put the Japanese economy on the path to sustainable
growth in the medium and long term, the Committee, focusing on the “progress of the
trend toward a service economy” and “changes in the employment system,” has
prepared this Report from the following standpoints:
(1) accurately understanding how the trend toward a service economy, which has a
major impact on the Japanese industrial and employment structures, will
progress amid environmental changes, such as globalization and greater use of IT;
(2) analyzing what impact the progress of the trend toward a service economy will
have on corporate employment systems and how it will affect the relationship
between corporations and individuals in terms of employment;
(3) accurately understanding the movements of the trend toward a service economy
and the changes in the employment system from the aspect of economic
revitalization and sustainable growth, and of putting policy measures into
perspective.
We focused on the trend toward a service economy and the employment system
because they are important in dealing with the problem of sustainable economic growth
for the following two reasons.
First, amid the increasing importance of services in economic activities, the source of
added value is shifting from simply providing goods per se to providing diversified
services that meet market needs through a combination of various information,
knowledge and ideas. This trend toward a service economy has a major impact on
enhancing productivity, strengthening competitiveness, creating new value, and
achieving the revitalization and sustainable growth of the economy.
Therefore, it is important to put into proper perspective the relationship between the
trend toward a service economy and the mechanism to enhance productivity, strengthen
competitiveness, and create new value.
Second, the trend toward a service economy causes a major change to the
conventional employment system, as it promotes changes in business environments,
such as the business process and the form of organization, and in employment
environments, such as individual work styles. At the same time, the trend toward a
service economy is likely to create a new employment system that will contribute to the
expansion of value creation and the revitalization of the economy.
The trend toward a service economy and drastic environmental changes, such as the
prolonged stagnation of the economy, has accelerated the review of the conventional
1
employment system that was generally characterized by life-time employment and
seniority-based wages. Meanwhile, in order to enhance productivity, strengthen
competitiveness, and revitalize the economy, it is important for the employment system
to conform to the environmental changes and to create new value by effectively utilizing
manpower. From these standpoints, it is necessary to clarify what manners of impact
the progress in the trend toward a service economy will have on the employment system
and what form of employment system should be established to promote economic
revitalization.
Third, although the trend toward a service economy and the change in the
employment system are progressing in tandem, they are based on the assumption of the
conventional frameworks of corporate- and employment-related systems. Therefore, we
have to comprehensively implement system changes and infrastructure development
that are necessary for achieving economic revitalization and sustainable growth
through the trend toward a service economy and the establishment of a new
employment system.
In particular, it is important to closely coordinate measures to revitalize the economy,
such as enhancement of productivity and reinforcement of competitiveness through the
trend toward a service economy, and market/employment expansion, with employmentand work-related measures, such as labor market improvement for the movement or
transfer of manpower, enhancement of manpower development, and a safety net.
The service economy/employment policy subcommittee has been established under
the New Growth Policy Section of the Industrial Structure Council in order to put into
proper perspective the necessary measures to achieve economic revitalization and
sustainable growth, with a focus on the trend toward a service economy and the
employment system. This Report outlines the results of the study made by the
subcommittee on the progress in the trend toward a service economy, the change and
direction of the employment system, and the basic direction of measures to be
implemented.
2
Chapter 1 Current Situation and Environmental Changes
1. Current state of Japan
The Japanese economy has been stagnant for a long time. In the second half of the
1990s, in particular, its real growth rate was 1.3%, the lowest among the industrialized
nations. This is due to a long-term shortfall in demand against the background of slow
business investment and sluggish personal consumption. With price declines continuing,
the economy is in a deflationary phase.
2. Sluggish corporate earnings
The demand deficiency and worsening deflation are having a profound effect on
corporate activity. Of course, there are highly profitable corporations, but on the whole,
corporate profits are decreasing. Moreover, the number of business failures is high.
Under the circumstances, many corporations are striving to improve earnings by
curbing business investment, restraining total employee expenses through wage
revision and outsourcing, closing unprofitable divisions, promoting overseas transfer of
production bases, or reducing costs and liabilities.
However, the poor profitability is not due to the lack of demand alone. Another factor
is that corporations have been unable to produce attractive new products/services one
after another. U.S. corporations succeeded in strengthening their competitiveness in the
1990s by steadily promoting the optimum combination of manufacturing and service
industries, reducing indirect department costs, and devoting resources to profitable
divisions. On the other hand, many of the Japanese corporations have lost their
competitiveness because they were slow in building and implementing management
strategies conforming to the environmental changes brought about by the trend toward
a service economy.
3. Progress of the trend toward a service economy
Increasing the efficiency of the supply structure and improving productivity through
business reorganization by corporations will irreversibly promote the trend toward a
service economy, as they provide services supplementing attractive products, and
revitalize the service sector through outsourcing. Amid the shift in emphasis of
economic activity to the production of knowledge and information, supported by IT and
other technological innovations, providing services and information through the
3
medium of products as well as providing goods has become an important source of value.
Moreover, the diversification of consumption and the progress of the aging society, with
less children, will expand the people’s needs in the fields of services related to the
people’s daily lives and in the fields of health care, nursing care, and child care. This
will further promote the trend toward a service economy.
The progress of the trend toward a service economy has not only increased the
weight of the tertiary industry in the table of industrial classification but has also
caused structural changes in every aspect of economic activity, such as production
activity, employment, corporations, and market.
䌛Changes in nominal GDP components䌝
components䌝
䌛Changes in employment structure (Japan)䌝
(Japan)䌝
(%)
Manufacturing
30
20
Service
10
Commerce
0
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98
(year)
╙ ᰴ↥ᬺ
╙ ᰴ↥ᬺ
╙ ᰴ↥ᬺ
Source: OECD “Labor Force Statistics”
Statistics”
Source: Cabinet Office “Annual Report on National Accounts”
Accounts”
4. Worsening employment situation and changing employment system
Amid the prolonged recession, the number of corporations feeling they have excess
employees is increasing, and they are increasingly forced to take severe employment
adjustment measures, such as voluntary retirement programs, in addition to wage
adjustments and drastic review of the wage system. This has resulted in an increase in
the number of people out of work and a decrease in the number of job offers, aggravating
the employment situation drastically.
The worsening employment situation has brought about a drastic change to the
employment system. It has increased employment costs and created a decreasing trend
in labor demand amid the prolonged recession. In addition, intensified competition
caused by globalization and rapid changes of product/service markets and technological
trends call for constant efforts to effectively utilize manpower and maximize
employment costs. This has resulted in changes to the life-time employment and
seniority-based wage systems, or the background assumptions for the conventional
employment system.
Meanwhile, individuals have increased their tendency to build their own careers
according to their own will and of seeking a lifestyle that balances their jobs with their
family life.
4
Moreover, the progress of the trend toward a service economy has increased
diversified forms of work, including outsourcing and independent contractors as well as
part-timers and temporary staffers. Corporations, for their part, no longer stick to the
conventional employment system and are flexibly dealing with the diversified forms of
work. As the trend toward a service economy is also expected to create innovative
services and new business models, the demand is rising for high-quality personnel
capable of coping with such changes.
Changes in the unemployment rate and
effective job offer ratio
(䋦)
Changes in the numbers of regular workers and nonregular workers, and non-regular worker ratio
(times)
6.0
(୚)
0.0
5.5
䋨ਁੱ䋩
0.2
4000
0.4
3500
0.6
3000
3.5
0.8
2500
3.0
1.0
2000
1.2
1500
1.4
1000
1.6
500
1.8
0
5.0
Number
ᱜⷙ␠ຬᢙ
of regular workers
of non-regular workers
Non-regular
worker ratio
㕖ᱜⷙ␠ຬᲧ₸
4500
35.0%
Number
㕖ᱜⷙ␠ຬᢙ
28.7%
23.2% 23.6%
4.5
4.0
19.1%
2.5
2.0
20.2% 19.8% 20.5% 20.8% 20.3%
24.9%
26.0%
27.2%
25.0%
20.9% 21.5%
20.0%
3640 3486
3639 3705 3756 3805 3779 3800 3812 3794 3688 3630
3452 3488
817
30.0%
881
897
958
986
971
1001
1043
1152
1173
1225
1273
1360
15.0%
1406
10.0%
1.5
5.0%
1.0
Unemployment
ቢోᄬᬺ₸
rate
Effective
job offer
᦭ല᳞ੱ୚₸
ratio
0.5
2.0
H8
H9
H1
0
H1
1
H1
2
H1
3
H1
4
H5
H6
H7
H3
H4
H1
H2
S4
5
S4
6
S4
7
S4
8
S4
9
S5
0
S5
1
S5
2
S5
3
S5
4
S5
5
S5
6
S5
7
S5
8
S5
9
S6
0
S6
1
S6
2
S6
3
0.0
ᐕ
Source: Ministry of Public Management, Home Affairs, Posts and
Telecommunications “Labor Force Survey”
Survey”; Ministry of Health, Labour
and Welfare “Employment Referral Statistics”
Statistics”
89
Hర
90
H2
91
H3
92
H4
93
H5
94
H6
95
H7
96
H8
97
H9
98
H10
99
H11
00
H12
01
H13
0.0%
02(Jan-Mar)
H14
* Non-regular worker ratio (%) = Number of non-regular workers / Number of employees
1-3᦬
(excluding directors)
* Non-regular workers = Part-timers, temporary employees dispatched by personnel agency,
and others (employees on a short-term contract)
Source: Ministry of Public Management, Home Affairs, Posts and
Telecommunications “Labor Force Survey (special survey)”
survey)”
5
Chapter 2 Progress of the Trend Toward a Service Economy and
Change in the Employment System
1. Significance of the trend toward a service economy
(1) Trend toward a service economy as a current
The progress of the trend toward a service economy is said to be a worldwide current.
The trend toward a service economy is generally viewed as a decrease in industrial
production and an increase in the weight of the service industry, or a rise in demand for
so-called white-collar workers. Simply put, it is viewed as a shift of the economy from
the primary industry to the secondary industry and then to the tertiary industry. In fact,
the actual economic trend and employment situation are shifting in that direction.
For example, the structure of occupation in industrialized nations shows that the
proportion of workers employed in the tertiary industry stands at around 70%. In the
United States, the proportion already stands at about 75%, with the number of workers
in the primary and secondary industries decreasing by about 1.2 million during the
1990s, while the number of workers employed in the tertiary industry increasing as
many as about 14.85 million. This shows that the tertiary industry is the source of new
business/jobs.
In Japan, the proportion of workers employed in the tertiary industry is about 63%.
During the 1970s through the late 1980s, the proportion of workers employed in the
secondary industry stayed stable at around 30%, and this was seen as a phenomenon
peculiar to Japan by other industrialized nations. However, the number of workers in
the manufacturing industry has been on the decrease since the beginning of the 1990s,
reflecting sluggish domestic production and an increased transfer of plants abroad. If
the trend continues, the Japanese economy, as seen from its employment structure, is
likely to shift to the tertiary industry at an accelerating pace.
This trend is not limited to the structure of occupation. It is also seen in the
production structure, demand structure, and capital stock. The weight of the tertiary
industry is steadily expanding in all economic activities.
(2) Progress of the intra-industry/in-company trend toward a service economy that goes
beyond industrial classification
At the same time, the trend toward a service economy has brought about changes to
every industry and corporation regardless of whether it is in the agriculture,
manufacturing, or service industry. For example, under the table of industrial
nomenclature, a manufacturing company is classified as belonging to the secondary
industry regardless of the contents of its corporate activity. However, the
production/sales/service provision systems of the manufacturing industry have
6
advanced and become complicated, reflecting the progress of IT and production control
technology and the diversification of market needs. As a result, solution and
service/information provision through the medium of products have increased in
importance as sources of value, in addition to the attractiveness of the products. As seen
from the employment structure of the manufacturing industry, employment has been
steadily increasing in the in-house service divisions, such as sales, general affairs,
planning, and customer services, rather than on the shop-floor division directly engaged
in the production process. A similar trend can also be observed in corporations classified
as belonging to the tertiary industry, like the service industry and distribution industry,
where employment in divisions other than those engaged in providing services has been
increasing. The systems to effectively support the provision and sales of services as well
as enhancing the added value of services have increased in importance.
<Industry-by-industry composition of jobs>
䌛↥ᬺ೎⡯⒳᭴ᚑᲧ䌝
<Secondary
industry>
䋼╙ੑᰴ↥ᬺ䋾
<Tertiary
industry>
䋼╙ਃᰴ↥ᬺ䋾
80.0%
23.3%
3.4% 15.4%
42.9%
34.3%
1960ᐕ
1960ᐕ
3.6%
77.0%
21.8%
19.1%
39.6%
38.4%
1970ᐕ
1970ᐕ
73.9%
22.3%
3.7%
19.0%
38.1%
42.3%
19.0%
38.1%
42.3%
1980ᐕ
1980ᐕ
70.0%
24.3%
5.4%
1990ᐕ
1990ᐕ
Sales/services
⽼ᄁ䊶䉰䊷䊎䉴 6.1%
67.0%
2000ᐕ
Production/transportation
↢↥䊶ㆇャ
0%
20%
40%
Clerical/technology/
੐ോ䊶ᛛⴚ䊶▤ℂ
management
60%
80%
Sales / services
35.9% ⽼ᄁ䊶䉰䊷䊎䉴
18.3%
26.7%
100%
2000ᐕ ↢↥䊶ㆇャ
Production/
transportation
0%
Jobs related to production
↢↥䊶ㆇャ㑐ଥ⡯ᬺ
or transportation
20%
43.8%
Clerical/technology/
੐ോ䊶ᛛⴚ䊶▤ℂ
management
40%
60%
80%
Jobs related to production
or transportation
Jobs related to sales or service
Jobs related to desk work,
technology, or management
↢↥䊶ㆇャ㑐ଥ⡯ᬺ
Jobs related to sales or service
⽼ᄁ䊶䉰䊷䊎䉴㑐ଥ⡯ᬺ
Jobs related to desk work,
technology, or management
੐ോ䊶ᛛⴚ䊶▤ℂ㑐ଥ⡯ᬺ
⽼ᄁ䊶䉰䊷䊎䉴㑐ଥ⡯ᬺ
੐ോ䊶ᛛⴚ䊶▤ℂ㑐ଥ⡯ᬺ
Source:
Ministry of Public Management, Home Affairs, Posts and
಴ᚲ䋺✚ോ⋭䇸࿖൓⺞ᩏ䇹
Telecommunications “National Census”
಴ᚲ䋺✚ോ⋭䇸࿖൓⺞ᩏ䇹
Source: Ministry of Public Management, Home Affairs, Posts and
Telecommunications “National Census”
With the emphasis on economic activity gradually shifting to accumulation,
manipulation and production of information and knowledge, the distinction between
goods and services has become obscure, and trying to make a clear distinction between
them or contracting the manufacturing industry with the service industry is losing its
significance.
Therefore, in order to understand the essence of the trend toward a service economy,
it is not enough to simply understand the phenomenon that the weight of the tertiary
industry in the economy has increased. Rather, it is important to recognize that what is
crucial in the trend toward a service economy is information and knowledge. They
7
100%
change what economic activity should be and cause structural changes to employment,
corporations and markets, and eventually to the all aspects of economic activity.
2. Trend toward a service economy and strengthening competitiveness
(1) Deepening the interdependent relationship between manufacturing industries and
the service industry in the United States
Changes in the U.S. employment structure during the past economic expansion
periods show that employment expansion was mainly led by the manufacturing
industry up to the end of the 1970s, by the service industry and commerce during the
1980s, and by the service industry during the 1990s. However, in terms of real
production value, the service industry did not play as outstanding a role as it did in
employment expansion. The manufacturing industry continued to play a major role in
leading the U.S. economy throughout the 1990s.
Back in the 1980s, the U.S. manufacturing industry was hard hit by a sharp rise in
imports from Asian countries and a decrease in corporate profits against the
background of the dollar’s overvaluation, and “loss of international competitiveness of
the (U.S.) manufacturing industry” was a major issue. It was this sense of crisis that
prompted the government and the private sector to issue reports on strengthening
international competitiveness, including the Young Report. The manufacturing
industry’s share in real gross domestic product turned downward in 1989 and continued
to post sharp declines until 1992. However, it is noteworthy that the share began to rise
sharply in and after 1993 and that the manufacturing industry led sustainable
economic growth thereafter. Studying the background that made the V-shaped recovery
of the U.S. manufacturing industry possible, therefore, will give us useful suggestions
as to what measures Japan should take to restore the international competitiveness of
the Japanese manufacturing industry.
8
[Industrial shares in U.S. real GDP]
䌛☨࿖䈱ታ⾰࿖ౝ✚↢↥䈮භ䉄䉎䉲䉢䉝䌝
20
䋨ਁੱ䋩
䋨䋦䋩
[Industry-by-industry changes in the
䌛☨࿖䈱↥ᬺ೎㓹↪⠪ᢙផ⒖䌝
number
of employees: U.S.]
6,000
Service industry
䉰䊷䊎䉴ᬺ
5,000
Service industry
19
4,000
䉰䊷䊎䉴ᬺ䋨ో૕䋩
3,000
18
⵾ㅧᬺ
Manufacturing industry
Manufacturing industry
⵾ㅧᬺ
2,000
17
1,000
16
Business support
services
䊎䉳䊈䉴ᡰេ䉰䊷䊎䉴ᬺ
0
70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01
77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97
Source: U.S.
Department
಴ᚲ䋺☨ഭോ⋭
“BureauLabor
of Labor Statistics
Data”
಴ᚲ䋺Economic
Report
of the President
2002 Statistics 2002
Source:
Economic
Report
of theStatistics
President
Statistics Data”
“Bureau of Labor
It goes without saying that behind the revival of the U.S. manufacturing industry
lies joint government-private sector efforts to enhance competitiveness, such as positive
efforts to promote technology development and the steady implementation of strategies
to protect intellectual property. Besides these steady efforts and infrastructure-building
by the government, what should be pointed out first is that manufacturers shifted their
corporate strategies to expand profits by combining their products and service
businesses, as can be seen from the examples of Xerox Corp., Honeywell Inc., and
General Electric Co.
In the past, the competitiveness of the manufacturing industry was determined by
the value of products per se and, as its indicator, quality and cost were given importance.
However, with the technical levels of competing corporations countervailing each other
and faced with a massive inflow of cheap products from China and some other countries,
U.S. manufacturers adopted a new business model in the 1990s. They secured
profitability by adding services to their products or developing new service businesses
by taking advantage of their product production/sales process and customer data
management. In addition, they strived to differentiate their individual products. And by
spending the revenues from the highly profitable service businesses on R&D and
manpower development, they have succeeded in further enhancing the competitiveness
of their products. This was one of the main drivers of the revival of the U.S.
manufacturing industry.
Secondly, faced with a decline in their international competitiveness, U.S.
manufacturers reduced back-office costs drastically and concentrated their managerial
resources on profit centers, or highly profitable departments. In the process, they
carried out drastic cutbacks in personnel, including white collar workers, from the late
9
1980s to the early 1990s.
However, it is not necessarily appropriate to view the restructuring as an attempt to
enhance the price competitiveness of products by simply slashing labor costs. Rather, it
should be viewed as the manufacturers’ business strategy to slash labor costs by
unbundling
in-house
organizations
and
functions
based
on
“selection
and
concentration,” by concentrating resources on competitive, high value-added divisions,
and by thoroughly outsourcing cost centers, or back-office sections. At the same time,
the strategy is also an effort to further enhance the competitiveness of the high valueadded divisions by procuring high-quality services from outside specialists.
As to the specific method of outsourcing, it should be noted that the manufacturers
did not always adopt a simple method of firing their own employees in relevant sections
and purchasing services from outside specialists. Rather, they often adopted a method of
utilizing the knowledge and experience of existing employees by selling not only the
back-office section but also the employees in that section to outside specialists, by
transferring the employees to outsourced companies, or by concluding independent
business contracts with the employees (there are 8 million independent contractors in
the United States).
The separated back-office sections also accumulated know-how and increased their
competitiveness, resulting in doubling the size of the market for business support
services in the seven years from 1992 to 1998. These movements prompted a rise of
many venture companies in and after the 1990s and contributed to the spread of
diversified forms of work.
As just described, it can be said that the revival of the U.S. manufacturing industry
was made possible by separated functions and an increased interdependent relationship
under which “efforts to enhance the competitiveness of the manufacturing industry
prompts the development of the service industry, and the progress of the service
industry further enhances the competitiveness of the manufacturing industry.”
(2) Delay in business reorganization of Japanese corporations and the trend toward a
service economy
U.S. corporations have achieved a V-shaped recovery by resolutely carrying out
employment adjustments, including white collar workers, outsourcing cost centers or
back-office sections, diversifying the employment structure to conform to the trend
toward a service economy, and adopting a strategy that focuses on human capital. By
contrast, Japanese corporations did not take thorough measures to streamline their
back-office sections and make them more efficient until the late 1990s. This was due to
their management style, focusing on employment maintenance/stabilization. They also
failed to conduct a thorough review of their conventional manpower utilization
10
measures.
In the manufacturing industry, in particular, though Japanese corporations made
all-out efforts to cut the costs of the production process, their approach to streamline
and improve the efficiency of such divisions as general affairs, personnel, accounting,
legal affairs and the information system were not necessarily adequate and they tended
to attach importance to the maintenance of employment. When the economy is growing
steadily, maintaining life-time employment on the assumption of employment security
will raise the morale and loyalty of the employees and help to stabilize corporate
management. But, when it is necessary to enhance the efficiency of management and
improve profitability under intensifying international competition, maintaining the
conventional employment system would be difficult.
The failure to positively utilize outsourcing and make a drastic overhaul of the
personnel system in response to the rapid change in economic environments is one of
the factors that have deteriorated the Japanese industrial competitiveness. As to wages,
a method of “evaluating labor properly through work, achievement and ability, and
paying a fair compensation (wages, bonuses)” did not spread widely among Japanese
corporations, resulting in a relative rise in wage and salary costs. For example,
compared with the wage level of U.S. workers in the same type of job, high-productive
workers, such as designers and programmers, are undervalued, while relatively lowproductive workers like nonexempt employees are overvalued.
In addition to these problems of management strategy, the retirement benefit system,
social security system, and taxation system that are all based on the assumption of
long-term employment make review of the personnel system difficult.
[Japan-U.S. comparison
䌛ᣣ☨⡯⒳೎⾓㊄Ყセ䌝
of wages by type of job]
Total number
ഭ௛⠪⸘of
workers
[Japanese
wage level (vs. U.S.)]
䌛ᣣᧄ⾓㊄᳓Ḱ䋨ኻ☨࿖Ყ䋩䌝
Japan
ᣣᧄ
541
391
+ 3 8 .4 %
☨࿖
U.S.
㔚᳇䊶㔚ሶ
Electrical/electronic/
ᯏ᪾⸳⸘
machinery
design
Programmer
497
R&D
⎇ⓥ㐿⊒
- 2 9 .7 %
640
524
742
563
Machinery/electric
ᯏ᪾䊶㔚᳇㐿⊒⡯
development
- 3 4 .2 %
755
450
䊒䊨䉫䊤䊙䊷
Software
development
䉸䊐䊃䉡䉢䉝㐿⊒
- 2 9 .4 %
- 2 1 .6 %
718
450
446
༡ᬺ⡯
Sales
General clerical work
৻⥸੐ോ
Accounting
义੐ോ♽乊
(Clerical)
义ᛛⴚ丵䷧丱䷷上䷡♽乊
(Technology/engineering)
[Annual 䌛ᐕ෼䋨ਁ౞䋩䌝
income (in ¥10,000)]
455
463
481
309
⚻ℂ੐ോ
General affairs/
✚ോੱ੐
personnel
Office management
424
੐ോ▤ℂ⡯
430
0
200
+ 0 .9 %
400
483
482
- 1 .7 %
+ 5 5 .7 %
538
+ 1 1 .4 %
+ 1 3 .7 %
540
+ 2 5 .6 %
600
800
0
0
0
0
0
಴ᚲ䋺䊺䊥䉪䊦䊷䊃䊪䊷䉪䉴⎇ⓥᚲ⹜▚䇭䋨“Current Population Survey 1999,” ㅢ໡↥ᬺ⋭䇸✚วੱ᧚䊆䊷䉵⹏ଔ䇮⾼⾈ജᐔଔ 1$ = 137౞឵▚䋩
Source: Estimates made by the Works Institute (“Current Population Survey 1999” Ministry of International
Trade and Industry “Overall Manpower Needs Evaluation” Purchasing power parity $1 = ¥137)
11
1
(3) Enhancing competitiveness amid the progressing trend toward a service economy
Against the background of intensifying international competition, Japanese
corporations are expected to come under increased pressure to carry out business
reorganization,
integration,
and
rationalization
across
business
groups
and
accompanied by movements of labor. For example, they will have to promote, based on
“selection and concentration,” the sales of business divisions, outsourcing back-office
work, spinning of functional subsidiaries, mergers, establishment of joint venture
companies, and withdrawal from unprofitable operations. Specifically, with the progress
of industrial reconstruction and industrial reorganization, cases of labor movements
from the manufacturing industry to peripheral business support services are expected
to increase. Japan lags far behind the United States in terms of establishing an external
labor market. Therefore, in order for Japan to achieve both “business reorganization to
enhance
industrial
competitiveness”
and
“smooth
labor
movements
without
unemployment,” it is necessary to take drastic measures to facilitate labor movements,
such as powerful measures that support reemployment and manpower development.
Amid the progress of the trend toward a service economy within and outside
corporations, human capital is the very source of competitiveness. In order for
corporations to enhance competitiveness, it is important to enhance employees’ special
capabilities and establish corporate identities. Japanese corporations were once said to
be good at developing human resources through in-house training programs. However,
U.S. and European corporations have also been striving to develop manpower through
the establishment of corporate universities. One report says that they spend more on
education than Japanese corporations do. Under the circumstances, in order to
revitalize manpower development efforts by Japanese corporations, it is necessary to
improve skill development systems within and outside corporations, including the
utilization of universities and graduate schools.
3. Trend toward a service economy and expansion of employment
opportunities
(1) Service sector likely to increase employment opportunities
Japan’s per capita GDP adjusted for purchasing power parity is about 70% of the U.S.
level. This is because the Japanese labor productivity remains at a low level, despite the
fact that per capita labor input is almost at the same level as in the United States. A
comparison of Japan’s industry-by-industry labor productivity with those of other
countries shows that in the fields where Japan has international competitiveness, such
as automobiles, consumer electronics and machine tools, the Japanese labor
productivity is much higher than in other countries. However, those fields account for
12
only about 10% of the overall economic activity in Japan and they should rather be
regarded as an exception. On the other hand, the labor productivity of the service
sectors that account for a major portion of the overall economic activity, though it varies
widely, is lower than in other countries on the whole. Therefore, increasing the
productivity of the service sectors is extremely important in order to enhance the
vitality of the Japanese economy amid the forecast that Japanese labor input will
decline in the medium- to long-term because of shorter working hours and a decrease in
the labor force population due to the rapidly aging population.
By increasing productivity, it will become possible to provide products and services
at lower prices or higher quality products and services at the same prices. Moreover,
progress in the rationalization and efficiency of process will increase available
resources; and if the resources are used effectively it is expected to lead to the
development and production of innovative products and services. Enhancement of
productivity and provision of quality goods and services will spur consumer demand,
leading to market expansion, and this in turn is expected to lead to the
creation/expansion of employment opportunities.
An inter-industry analysis of the Japanese employment situation ten years from now
shows that, under certain conditions, the service sectors as a whole are expected to
increase the number of employees by about 6 million. A sharp increase is expected in the
fields related to personal life, such as the household support industry, the health care
and welfare industry, and the leisure-related industry. This shows that the progress in
the aging population combined with the diminishing number of children will have a
major impact on the industrial and employment structures and that expanding demand
is the best way to promote the growth of the service industry.
[Industry-by-industry changes in the number of employees] (2000㸢
(2000㸢2010)
(10,000 persons)
㧔ਁੱ㧕
Household
Leisure-related
services
Food service
Transportation
Information
ᑪ⸳ᬺ
㔚Electricity/gas
ജࠟࠬ
ㆇャᬺ
ᾲଏ⛎ᬺ
Construction
໡ᬺ
ᄖ㘩↥ᬺ
Commerce
㊄Ⲣ↥ᬺ
Financial
Business
support services
ᖱႎ↥ᬺ
ࡆࠫࡀࠬ
ᡰេࠨ࡯
ࡆࠬ↥ᬺ
ኅᐸᡰេ
ࠨ࡯ࡆࠬ
↥ᬺ
Health
care/welfare
ක≮⑔␩
↥ᬺ
૛ᥜ㑐ㅪ
ࠨ࡯ࡆࠬ
ᬺ
಴ᚲ䋺⚻ᷣ↥ᬺ⋭⹜▚
Source: Estimates
by the Ministry of Economy,
Trade and Industry
On the other hand, though the service industries as a whole posted a positive growth
in the last three years thanks to the strong performance of the business support service
industry, such as information service and worker dispatch businesses, living-related
services and education/recreation-related services remain on a downward trend,
13
reflecting sluggish consumer demand. By type of business, however, new industries that
utilize information technology, and the niche industry and the contents industry that
meet consumers’ needs posted remarkable growth. In other words, accurate
understanding and development of consumer/user needs and ingenious innovation on
the part of service providers hold the key to the development of the service industry.
[Latest
trend of service industry]
䌛⋥ ㄭ 䈱 䉰 䊷 䊎 䉴 ↥ ᬺ 䈱 േ ะ 䌝
120
Seasonally
for䋱1995)
ቄ ▵ ⺞ ᢛadjusted
ᷣ ᜰ ᢙindex
䋨 䋹 䋵(100
ᐕ 䋽
䋰䋰䋩
Business services
ኻ ੐ ᬺ ᚲ 䉰 䊷 䊎 䉴
䉰Service
䊷 䊎industry
䉴 ᬺ
110
Personal services
ኻ ୘
ੱ 䉰related)
䊷 䊎䉴
(living
䋨↢ ᵴ 㑐 ㅪ 䋩
100
90
ኻPersonal
୘ ੱ 䉰services
䊷 䊎䉴
related)
䋨(recreation
ᇅ ᭉ 㑐 ㅪ
䋩
80
㸇
99
㸈
㸉
㸊
㸇
00
㸈
㸉
㸊
㸇
01
㸈
㸉
10
11
಴ ᚲ 䋺╙ 䋳ᰴ ↥ ᬺ ᵴ േ ᜰ ᢙ 䉕 䉅 䈫 䈮 ⚻ ᷣ ↥ ᬺ ⋭ ૞ ᚑ
Source: Prepared by the Ministry of Economy, Trade and Industry on
the basis of Indices of Tertiary Industry Activity
(2) Increase in employment opportunities in the United States brought about by the
trend toward a service economy
The industries that played a key role in creating employment opportunities during
the 1990s in the United States were new health care industries, such as preventive
medical care and home medical care, and service industries like business support
services against the background of increased outsourcing by manufacturers. What is
characteristic was that employment opportunities in the service industries were created
not only by increasing employment in existing companies but also by establishing or
starting new businesses. In the early 1990s, the United States carried out drastic
personnel cutbacks, including white collar workers mainly in the manufacturing
industry. Since many of the laid-off white collar workers were unable to get reemployed
due to the recession, they chose to become self-employed in various styles of work, such
as SOHO, independent contractors, and franchisees. Existing companies actively used
the various services produced by the new types of work to slash costs and concentrated
on establishing core strengths. In this way, a new division of labor has been established
between existing companies and professional service providers, including the new selfemployed individuals. And since the mid-1990s there has been a virtuous cycle in
promoting the revitalization of the existing companies. This in turn increased the
businesses of the new self-employed individuals.
(3) Increase in employment opportunities in Japan brought about by the trend toward a
service economy
14
In Japan, on the other hand, the business closing ratio has remained above the
business opening ratio since the mid-1980s. In past recession periodsn, small and
medium-sized corporations absorbed workers laid off by big corporations. However, the
prolonged recession is having a serious impact on small and medium-sized corporations
and they are losing their function as absorbers of laid-off workers. In addition, the
number of self-employed individuals in Japan has been on a downward trend. As just
described, the opening of new businesses remains sluggish and the number of selfemployed individuals is decreasing; it is difficult to find a new absorber of laid-off
workers, as companies are also restraining employment.
In these circumstances, in order to create employment opportunities by the society
as a whole, it is important to improve infrastructures that facilitate not only the
establishment of high-end venture companies but also the opening of new businesses
and that foster an environment in which failed entrepreneurs can try again. In this
regard, franchise businesses have a relatively low business-opening risk as franchisers
provide their franchisees with management know-how. It is hoped that the franchise
business will become one of the absorbers of retired workers. In fact, a look at the
previous positions of those now engaged in franchise business shows that about 70% of
those in the United States and about 50% of those in Japan were employees. Generally
speaking, individuals take part in franchise businesses. But, recently, the number of
existing companies concluding franchisee contracts with franchisers has been
increasing. They conclude contracts with more than one franchiser to utilize their idle
land, facilities and human resources as part of their efforts to change business
activities.
Franchise business is growing steadily in Japan, although the economy as a whole
remains stagnant. It is expected to grow further, especially in the field of services. In
order to promote the sound development of franchise business, it is necessary to develop
environments that facilitate smooth operations. Specifically, it is necessary to ensure a
fair execution of laws and let the industry expand/strengthen voluntary standards.
In recent years, the number of self-employed individuals who take a new form of
business, like SOHO, has been increasing. If various forms of work spread in the future,
mainly in service sectors, there will arise more cases where a company and an
individual have to conclude a contract or where complicated contracts have to be
concluded. Therefore, it will be necessary to take measures to ensure fair transactions
in such service sectors.
(4) Increase in employment opportunities through the deregulation of the public service
sector
The public service sector, including public services, such as health care, nursing, and
education, and administrative services, such as sewerage/waste disposal, accounts for
15
about one-fourth of the tertiary industry. There are still various regulations and
constraints in the public service sector, restricting private entry into some of the
services. Many of the services are monopolized by the public sector. In the past, the
deregulation of the transportation and communication service sectors resulted in
drastically expanding the markets. If the public service sector is deregulated or placed
under private management, it is expected to increase employment opportunities.
Meanwhile, employment in the public service sector as a percentage of working-age
population in Japan is only about 15%, as compared with about 28% in the United
States.
public
in 䉰
the䊷tertiary
䌛 ╙ [Share
ਃ ᰴ ↥ofᬺ
䈮 භ services
䉄 䉎 ౏ ౒
䊎 䉴 䈱 industry]
䉲 䉢 䉝 䌝
Private
᳃ 㑆
䉰 䊷service
䊎 䉴
౏ Public
౒ 䉰 service
䊷 䊎 䉴
2 2 . 6䋦
5 . 4䋦
Administrative
Public
service
ⴕ ᡽ 䉰 䊷service
䊎 䉴౏
⊛ 䉰
䊷 䊎 䉴
Financial/
Commerce
໡ ᬺ
Sewerage/
ᢎEducation/
⢒ 䊶⎇ ⓥ
research
㊄insurance/
Ⲣ 䊶଻ 㒾
real
ਇ estate
േ ↥
Transportation/
ㆇ ャ
communication/
ㅢ ା
broadcasting
᡼ ㅍ
Other
䈠 䈱
ઁ services
䉰 䊷 䊎 䉴
Other public services
᳓ waste
㆏ ᑄdisposal
᫈ ‛ ಣ ℂ
䈠 䈱 ઁ ౏ ౒ 䉰 䊷 䊎 䉴
ක ≮ Medical/health/
䊶 ଻ ஜ 䊶 ␠Social
ળ security
଻ 㓚
0%
20%
40%
60%
಴Source:
ᚲ 䋺 ㅢ ໡Ministry
↥ ᬺ ⋭ 䇸of
ᐔ International
ᚑ 䋱 䋰 ᐕ ↥ ᬺ ㅪ
㑐 ⴫ and
䋨ᑧ 㐳
⴫ 䋩䇹
Trade
Industry
80%
100%
“Interindustry Relation Table 1998 (Extended table)”
Outsourcing public services to the private sector has a cost-cutting effect resulting
from simply replacing the public sector with the private sector. It will also make it
possible to provide efficient, high-quality services that meet customer needs through
various methods based on the private sector’s ingenuity and expertise. Outsourcing to
the private sector is also expected to provide momentum to create new services and help
expand the range of service markets. This, in turn, is expected to expand employment
opportunities.
Note) For example, the municipal government of Takahama, Aichi Prefecture saved
about 300 million yen by outsourcing 27 of its services, including office counter work,
data processing, lunch cooking and hospital paperwork, to the private sector. It also
created new jobs mainly for women and the elderly, and their services are highly
appreciated by the citizens.
However, it is also true that there are various restrictions, such as public property
management regulations and industry regulations, and budgetary constraints that
block the promotion of the smooth outsourcing of public services to the private sector.
16
Therefore, it is necessary to review such regulations, realize a multiple-year budget, set
a quantitative target for outsourcing, and study incentive measures for local
governments.
With the separation of roles between the public and private sectors under review and
public services increasing the shift to the private sector, NPOs have come to play an
increasingly important role. Japanese NPOs still constitute a relatively small portion of
Japan’s GNP or employment compared with their U.S. or European counterparts.
However, in future growth fields, such as health-care/welfare, child-bearing support,
and social education, that require close contact with communities, supply-demand bidirectionality, and a response to individuals’ diversified needs, it is hoped that NPOs
will further develop as they specialize in these points. Moreover, amid shorter working
hours and diversifying attitudes towards work, people taking part in NPOs have also
become diversified. Besides retired persons, self-employed individuals and housewives
who have accounted for the majority in NPOs, corporate workers have also gained
interest in participating in NPO activities in recent years. In addition to playing a role
as the main supplier of public services, it is hoped that NPOs based on spontaneity,
self-fulfillment and willingness to make social contributions will become one of the
important options for individuals deciding their way of work, and will also play an
important role in creating new employment opportunities. It is necessary to study
measures to establish the foundations to support NPO activities, such as the promotion
of partnership between administrations and companies and the promotion of
individuals’ participation.
4. Trend toward a service economy and diversified employment styles
(1) Progress of the trend toward a service economy and diversified employment styles
With the trend toward a service economy advancing, corporations are shifting their
strategies to increase profits by enhancing planning, designing and other software
elements of products and combining them with service businesses. In these
circumstances, “knowledge” and “creativity” have become more important than ever
before and the people who possess such abilities have become the source of corporate
competitiveness. Therefore, it is extremely important for corporations to establish
environments where each employee can enhance his motivation and where highly
motivated persons can excel in ability and skill. And in order to promote a more effective
use of manpower, corporations should get rid of the conventional way of classifying their
employees into “permanent employees” and “non-permanent employees” and instead
should establish more flexible employment styles and working conditions in response to
17
the business environments surrounding them and to employees’ needs.
(2) Necessity of establishing environments conforming to diversified employment styles
Amid the increasing importance of motivated and talented personnel as the source of
competitiveness as stated above, corporations have begun to take various measures.
There are movements to shift the basic strategy for personnel management from the
conventional way of treating employees in a uniform/one-track manner to the one
focused more on diversity and plurality. For example, some corporations have made
evaluation standards more transparent, reduced the element of seniority in wages and
placed more emphasis on work, achievement and ability. Some other corporations have
adopted a double-track career course: one for management and the other for specialized
staff. Amid moves toward “selection and concentration” on core businesses, there are
also increasing cases where corporations, in addition to promoting spin-offs and
outsourcing, give responsibility and authority to motivated, talented part-time workers
and treat them with adequate rewards and training.
These revisions of the employment system to conform to the diversified employment
styles also meet the needs of individuals. Promoting the diversification of employment
styles will become extremely important in establishing work environments for women
and old people who are expected to play increasingly important roles. However, there
are still institutional constraints that block diversification in employment styles. For
example, regulations on manpower dispatch, time-limited employment and free
working hours are the major factors that narrow the range of work-style options.
Moreover, the wage levels of part-time workers are lower than those of full-time
workers: the wage of a female part-time worker is about 70% of the wage of a female
full-time worker and the wage of a male part-time worker is about 50% of the wage of a
male full-time worker. In addition, there is also a wide disparity between part-time
workers and full-time workers in fringe benefits, such as corporate pensions, retirement
allowances, bonuses, use of welfare facilities, and self-development support.
18
between full-time workers and part-time workers]
[Wage disparity
䌛৻⥸ഭ௛⠪䈫䊌䊷䊃ഭ௛⠪䈱⾓㊄ᩰᏅ䌝
(Full-time
worker = 100)
䋨৻⥸ഭ௛⠪=100䋩
the coverage of various systems]
[Comparison of䌛ฦ⒳೙ᐲ䈱ㆡ↪⁁ᴫᲧセ䌝
80.0
䋨䋦䋩
100
95.9
90.5
Full-time workers
90
60.0
৻⥸ഭ௛⠪
Part-time workers
䊌䊷
䊃䉺䉟䊛ഭ௛⠪
80
70
70
60
40.0
55.5
49
50
41.6
40
30
20.0
27
20
Male
↵
ᅚFemale
2.7
䋰䋰
ᐕ
ᐕ
0
ડᬺᐕ㊄଻㒾
Private pension
ㅌ⡯㊄೙ᐲ
Retirement
allowance
಴ᚲ䋺䊌䊷䊃䉺䉟䊛ഭ௛⎇ⓥળਛ㑆䈫䉍䉁䈫䉄䋨ᐔsystem
ᚑ䋱䋴ᐕ䋲᦬䋩
䋲䋰
ᐕ
䋹䋹
䋱䋹
ᐕ
䋹䋷
䋱䋹
䋹䋸
ᐕ
䋱䋹
䋱䋹
䋹䋶
ᐕ
ᐕ
䋹䋴
䋹䋵
䋱䋹
ᐕ
䋱䋹
䋱䋹
䋹䋳
ᐕ
ᐕ
䋹䋲
䋱䋹
ᐕ
䋹䋰
䋹䋱
䋱䋹
䋱䋹
9.1
9.1
10
0.0
⾨ਈᡰ⛎೙ᐲ
Wage system
⑔೑
ෘ↢of
ᣉ⸳
╬䈱೑↪
Use
welfare
facilities
⥄Self-development
Ꮖ໪⊒េഥ೙ᐲ
support system
Source: Ministry of Health, Labour and Welfare “General Survey on
Diversifying Working Conditions”
Source: Ministry of Health, Labour and Welfare “Basic Survey on
Wage Structure”
5. Change in employment system
With the progress of the trend toward a service economy expected to enhance
productivity, strengthen competitiveness, expand employment opportunities and
diversify employment styles through business reorganizations, the employment system
is also expected to undergo a major transformation.
In order to further promote the trend toward a service economy, it is necessary to
develop environments in which the inter-corporate and inter-industrial movements of
labor progress smoothly, in which appropriate skill development and human resource
development are provided within and outside corporations, in which workers are
treated fairly in diversified employment styles and in which persons who have lost jobs
against their will are provided with adequate security and re-employment support. In
this regard as well, a flexible employment system is required.
(1) General characteristics of conventional employment system
First, let’s take a general view of the conventional employment system. The
conventional employment system that is characterized by long-term employment and
seniority-based wages functioned properly in the environment in which stable economic
growth, under certain rational assumptions, was expected.
1) “Long-term employment” meant “an appropriate way of securing labor” for
corporations and “job security” for workers.
Under the situations where securing labor was difficult and the labor market was
not yet well-developed, and when the economy was expected to post a high growth rate,
19
it was rational for corporations to secure labor by ensuring long-term employment.
For workers, long-term employment reduced the risk of being fired and provided
stable job security.
2) The seniority-based wage system was “an incentive for long-term work” to workers.
The seniority-based wage system reduced workers’ moral hazard due to its “deferred
payment” nature and served as an incentive for a long-term willingness to work and
skill improvement. It also helped retain workers for a long period of time.
3) In-house human resource development was for “securing a stable supply of skilled
workers.”
Because the labor market was not well-developed, it was rational for corporations to
conduct in-house human resource development on a long-term and stable basis in order
to secure skilled workers.
In addition, “small disparity, slow promotion, rotation” and “teamwork and
information sharing/mutual complement; evaluation and promotion within the team”
were effectively incorporated as measures for reducing workers’ moral hazard and
enhancing the incentive to work.
4) “Small disparity, slow promotion, rotation”
Small disparity and slow promotion based on a seniority-based wage system fostered
a feeling that “one can stage a comeback any time,” reduced the moral hazard of many
workers, and enhanced incentives for long-term competition and work.
As a result, many workers took part in competition and enhanced business disposal
capacity through skill formation on the floor.
Job rotation made it possible for workers to acquire pragmatic skills in a wide range
of fields. It also helped enhance the fairness of evaluation.
5) “Teamwork and information sharing/mutual complement; evaluation and promotion
within the team”
“Teamwork,” in which employees proceed with their jobs by mutually complementing
technology, skills and know-how, while sharing information, was effective in enhancing
productivity and business performance through the accumulation of skills. In order to
efficiently carry out a collaborative work, it was effective to understand and
complement each other’s work through job rotations.
In teamwork, employees’ mutual evaluation of their approach to work and
contribution influenced their appraisal and promotion. This interaction among
employees also acted as a work incentive. For these reasons, it was rational for
20
individual employees to try to contribute to their teamwork as much as possible in order
to improve reputation.
At the same time, employee contribution helped increase the business performance
of the group.
In other words, the conventional employment system, mainly of big corporations,
was generally characterized by securing workers with ensured long-term employment
and employment security, work incentives by means of a seniority-based wage system,
small disparity and slow promotion, and ways to do business in a mutually
complementary manner in teamwork through information sharing.
Note) Incidentally, the system based on long-term employment security and steadily
rising wages leads the stability of employee lifestyles to become heavily dependent
on the
continued existence and growth of the company. Therefore, under such a system,
employees and the company share a basic common interest and they cooperate with
each other for the development of the company. Namely, the system creates a
cooperative labor-management relationship premising growth of the company. The
cooperative labor-management relationship in Japan has been created under such
circumstances.
(2) Change in employment system
By the way, amid the rapid progress of globalization, IT, and the trend toward a
service economy, structural changes are taking place in the conventional employment
system as well. It has been increasingly difficult to maintain long-term employment and
seniority-based wages. The outline of the changes that are taking place in the
employment system is as follows.
1) Although long-term employment still remains popular, calls for partial revision
are rising.
2) As to the seniority-based wage system, although it enjoys a measure of popularity,
voices calling for some kind of review are increasing. Basically, moves to make
clear the relationship between work and wage are spreading, such as the adoption
of wage systems based on work, achievement or ability.
In other words, in view of a rise in employment costs and an increase in the risk of
long-term employment security caused by recent environmental changes, corporations
have come to discern the portions of long-term employment that are still effective and
the portions for which effectiveness has relatively declined and, in accordance with the
distinction, combine various forms of employment, such as independent contractors,
21
part-timers and dispatched employees, and the use of outsourcing services.
Manpower development, which has mainly been carried out by corporations, is also
changing. With market trends and technology trends changing rapidly and the number
of job leavers expected to increase due to the difficulty of obtaining long-term
employment security, there is growing concern that corporations may decrease their
human investment.
Meanwhile, the need for individuals to acquire skills that can be used in other
companies is also increasing due to the difficulty of obtaining long-term employment
security. However, with the labor market and external skill formation system remaining
underdeveloped, it is highly risky to engage in skill development on an individual basis.
In order to enhance the industrial competitiveness of Japan and realize a
sustainable growth, it is necessary to beef up the skill development system and
strategically promote manpower development. However, there is concern that the
investment in skill development may decrease on a corporate and individual basis.
22
‫ޓ‬Present state of corporate personnel system
Note) Prepared based on the corporate hearings at the 5th subcommittee meeting.
1. Management policy and organization management
Ø
Based on “selection and concentration,” corporations are focusing on core
businesses at their parent companies and relegating peripheral businesses to
spin-offs, contractors, franchisees or other forms of outsourcing.
Ø
Even parent-only companies separate the functions of the corporate division
and the business division, relegating authority to the business division and
expanding its discretionary business management.
Ø
Meanwhile, corporations clearly define their corporate philosophy and
communicate it throughout the company in order to secure cohesive power.
Ø
Corporations doing business on a global scale focus on the unified management
of all group companies.
2. Basic strategy for the personnel system
Ø
With regard to the personnel system, such as recruitment, assignment,
manpower development, evaluation and treatment, they are shifting emphasis
from a unified treatment of employees to a diversified, pluralistic treatment.
For example, business divisions are given greater discretionary power and
conduct personnel management based on division-by-division characteristics.
Ø
While placing emphasis on developing and securing core personnel who
support the parent company, they are actively utilizing part-time workers and
dispatched workers for peripheral businesses. Core personnel are given special
considerations in treatment and development on a long-term employment
basis.
Ø
In the development of core personnel, emphasis is placed not only on
administrative position but also on specialist position.
3. Evaluation and treatment
Ø
As to employee treatment, the element of seniority in wages has been reduced
and more emphasis has been placed on work, achievement, and ability. In
addition, corporations attach importance not only on personal achievement but
also on teamwork, process and the degree of contribution.
Ø
By clarifying job duties and evaluation standards, corporations place emphasis
not on the person but on the job in employee treatment.
Ø
The merit- and performance-based wage system is aimed at enhancing
employee morale and securing talented manpower by treating them in
accordance with their performance, and at reducing personnel costs through a
23
revision of age-based treatment.
Ø
Corporations disclose information concerning personnel affairs, such as the
evaluation system, conduct evaluations from various angles, and place
emphasis on communications with employees in order to increase their
understanding.
4. Human resource development
Ø
Emphasis is placed on management and specialist development. Management
trainees are selected and trained at an earlier stage than before.
Ø
In order to develop manpower that supports global management, the
development of core personnel is carried out uniformly by the business group
as a whole.
Ø
Some corporations encourage their employees to voluntarily develop their
capacities by utilizing off-the-job training, while other corporations place
emphasis on on-the-job training.
5. Employment adjustment
Ø
Since corporations are restructuring their businesses amid global competition,
they have also reduced employment costs.
Ø
They reduce employment costs by restraining the recruitment of new
graduates, utilizing part-time workers and dispatched workers, changing the
type of business to new fields, sending on loan or transferring. In the case of
transfer, some corporations compensate for reduced employment security and
salary.
24
6. Individual trend
Recent rapid changes in environments and employment systems also impact the
individual’s work and life style.
In the first instance, with long-term employment security provided by corporations
becoming increasingly difficult and with a spate of employment adjustments and
corporate failures in recent years, individuals have lost confidence in long-term
employment. Individuals have also lost confidence in the seniority-based wage system,
as the risk of the deferred payment nature of the aged-based system has increased due
to the change in long-term employment.
Under the circumstances, the need to flexibly choose one’s job, including changing
jobs or becoming independent, has increased at the individual level, as the risk of
leaving one’s career to one corporation has increased. With work, achievement and
ability being given increasing importance in wage and treatment, individuals have come
to call for rewards in accordance with their current labor value. Moreover, many
individuals have come to develop their capability voluntarily, reflecting growing needs
to acquire skills that can be used in a wide range of fields.
In other words, individuals, while reducing the risk of committing themselves to one
company, have come to try to voluntarily build their careers to meet their own needs.
Moreover, with the progress of the trend toward a service economy, business has
become increasingly specialized and advanced, and opportunities to create new value,
such as novel services and business models, are expected to increase. In order to
respond to these changes, individuals have come to acquire high-quality knowledge and
skills.
Incidentally, these voluntary/independent efforts at the individual level are fraught
with more elements of uncertainty and instability than in the case where long-term
employment and faculty development by corporations were guaranteed. Moreover, since
acquiring advanced knowledge and skills requires considerable costs, it is important to
establish a mechanism to support and supplement such efforts.
Meanwhile, reflecting the growing number of working women and the rapidly aging
population combined with the diminishing number of children, the trend toward a life
style that strikes a balance between work and life has been rising among people
regardless of sex and age. The number of full-time housewives is on the decrease. The
needs for women to strike a balance between work and housekeeping/child care are
increasing. There are many elderly people who want to contribute to the society through
work in accordance with their physical strength. Moreover, young people also want to
strike a balance between work and life. They are not particularly interested in longterm employment. Rather, they want to work in an environment where they can utilize
25
their ability.
As just described, the progress of the trend toward a service economy and the change
in the employment system have increased the needs for individuals to make
voluntary/independent efforts. At the same time, there is a call for the establishment of
an environment to support and supplement such individual efforts.
Ratio of workers by reason for taking up current job (part-timers)(multiple response)
⃻࿷䈱ዞᬺᒻᘒ䈮ዞ䈇䈢ℂ↱೎ഭ௛⠪ഀว䋨䊌䊷䊃䉺䉟䊙䊷䋩䋨ⶄᢙ࿁╵)
Because special qualifications/skills can be utilized
Short-time part-timers
Because of good pay
Other part-timers
Because no company offered a full-time job
Because I do not want to be bound by an organization
Because of shorter working hours/days
Because I can work at a convenient time
Because of the work is simple and does not require too much responsibility
To support family budget, school expenses, etc.
Because the job is compatible with family life and other activities
Because of shorter commuting time
For health reasons
Others
䋨಴ᚲ䋩ෘ↢ഭ௛⋭䇸ᐔᚑ䋱䋱ᐕዞᬺᒻᘒ䈱ᄙ᭽ൻ䈮㑐䈜䉎✚วታᘒ⺞ᩏႎ๔䇹
(Source) Ministry of
Health, Labour and Welfare “FY1999 Overall Actual Condition Survey on the
Diversification of Employment Styles”
26
Chapter 3. Directions of the Trend Toward a Service Economy and
the Employment System
1. Impact that the trend toward a service economy has on the employment
system and its change
Amid the trend toward a service economy and other rapid environmental changes, in
which direction does the employment system move?
(1) Impact that the trend toward a service economy has on the employment system
The trend toward a service economy connotes a mechanism to create a newly added
value, as it provides new goods and services that accurately meet customer needs and
creates business models through improvements in the production/sales/management
processes, under mutual cooperation of diversified manpower. The trend toward a
service economy advances along with IT, which makes sharing and networking of wideranging, high-quality information possible. In this sense, the progress of the trend
toward a service economy and that of IT are closely linked and should be viewed as a
unit.
Greater use of IT
Trend toward service economy
Combination and coordination
of diversified human resources
Connection, combination, and
networking of diversified
knowledge/ideas
Sharing extensive, high quality
information
Making
through
mutualbeing
involvement
ment
progress
involve
Making
by mutually
involved
progress
The trend toward a service economy and IT has three major impacts on the
employment system.
First,
there
is
increased
efficiency
in
the
business
process
and
diversification/flexibility in the organization form/employment form.
The trend toward a service economy will lead to an increase in the opportunities to
promote efficient and mutually complementary operations through the cooperation of
diversified manpower within and outside corporations.
Meanwhile, sharing a large volume of high-quality information through IT will make
it possible to mutually complement operations flexibly and in a wide range of fields
within and outside corporations. As a result, it is possible to review business and
operation processes and organization in response to a change in situations.
In other words, the cooperation of diversified manpower and networking will make it
possible to carry out efficient operations and will increase the diversity and flexibility of
27
the organization/employment forms.
It is also expected to lead to the expansion of the employment forms that are not
restrained by time or place, such as discretionary work, SOHO, and satellite offices.
Note) The rigid business style based on job classification, under which duties are
minutely subdivided, employees are assigned individual duties, and supervisors
coordinate the duties, is not appropriate when environments undergo drastic changes.
The trend toward a service economy and IT eliminate such negative effects of business
environments, make mutual information sharing and flexible business planning
possible, and facilitate production activities in groups or at the project level. The trend
toward a service economy and IT will facilitate the transfer of a large volume of highquality information and this, in turn, will facilitate appropriate judgments at the
operational level, leading to the reduction of the cost and risk of decentralizing
decision-making.
In other words, the progress of the trend toward a service economy and IT reduces
the negative effects of rigid operations, slashes management costs by facilitating a
flexible combination of manpower and mutual complement of information, enhances the
flexibility of business processes and organization while decentralizing decision making,
and contributes to the enhancement of productivity.
Second is the utilization of outsourcing and outside management resources
The trend toward a service economy expands the use of outside managerial
resources by promoting the outsourcing of standardized operations. On the other hand,
IT decreases the portions dependent on indigenous technology, skills or know-how and
encourages the use of outside managerial resources, such as outsourcing services, by
promoting the generalization and standardization of operation processes, such as
production, physical distribution, and sales management.
Therefore, the trend toward a service economy and IT will collectively promote the
use of outsourcing and outside managerial resources for routine work and peripheral
operations.
And this is expected to increase the opportunities of using dispatched workers and
independent contractors.
Third is an increase in the opportunities to create new value and a rise in demand
for manpower having high-quality knowledge and skills.
The trend toward a service economy is expected to increase new value, such as novel
products and services, and the creation of business models in the fields of production,
distribution and services, as they promote a flexible combination of diversified
manpower and sharing and a mutual complement of high-quality information within
28
and outside corporations.
Along with an increase in the opportunities to create new value, demand for
manpower capable of flexibly responding to environmental changes and creating new
value while adequately processing diversified information and ideas is expected to
increase. Therefore, securing and developing intellectual manpower that has highquality knowledge, technology and skills will become an important factor for corporate
competitiveness in the future.
Note) With the trend toward a service economy progressing, it will become strategically
important for corporations to promote the efficient and effective utilization of manpower
by combining and networking diversified manpower.
When the knowledge, capacity or skill that a corporation requires is professional
knowledge, etc. that is generally used and standardized in the fields, for example, of law,
accounting, or patent, it will be effective for the corporation to utilize outside
professional manpower as the need arises. On the other hand, if the required knowledge,
capacity or skill is not standardized and peculiar to the corporation, it will be important
for the corporation to make a positive investment to secure and develop such manpower
in the medium and long term and accumulate and utilize necessary intellectual capital
and human capital.
In any case, it is important for corporations to promote the creation of new value by
not necessarily monopolizing intellectual capital and human capital but by integrating
and harmonizing them systematically and comprehensively through close intercompany or company-individual cooperation and networking that will be made possible
by the progress of the trend toward a service economy and IT.
Just as described above, the trend toward a service economy and IT, by mutually
complementing each other, collectively promote efficiency in the business process, the
flexibility of organization/employment forms, the outsourcing of business and the
construction of new value creation systems utilizing intellectual property and human
capital. In this way, they have a significant impact on corporate employment systems.
Note) Individual corporations have been pushing for the revision of their employment
system in response to environmental changes. But, needless to say, the system change
varies depending on the type of business and present situations.
For example, for a corporation that believes that utilizing outside managerial
resources is effective from the standpoint of business strategy, the progress of the trend
toward a service industry has made it easy to utilize outside managerial resources. Such
a corporation will establish a flexible system that can effectively cope with demand
29
fluctuations by aggressively utilizing dispatched workers, outsourcing services and
utilizing franchisees. (Many are corporations in the field of physical distribution, retail
and IT services.)
On the other hand, there are corporations that find it effective to share information
that is indigenous to them. For such corporations, though they have become more open
and flexible organizations than before, the merit of long-term employment remains
strong and their system change will be limited. (Many are corporations in the fields of
automobile, steel and power generation.)
30
‫ޓ‬System design for the labor market of the IT industry
[Third proposal by the Information Economy Group of the Industrial Structure Council
(Published on March 8, 2002)]
In the IT industry, which is faced with a rapidly changing market and global
competition, it is necessary to respond to changes in the market and business
environments by taking prompt action in the field of personnel. In this sense, it is
important to build a flexible employment system.
Since efforts by individual corporations in the industry have reached their limits, it
is necessary to develop an environment that allows for the flexible selection of jobs from
among diversified, industry-wide forms of employment. For these reasons, the following
three pillars will form the basis for the system design for the labor market of the IT
industry.
(a) Strengthening the external labor market function
It is important to promote outsourcing of the employment adjustment function that
has so far been carried out by individual corporations. To this end, it is necessary to
improve job intermediary services. It is also important for labor unions to strengthen
industry-wide job intermediary functions. As a result, job-changing risks will be
reduced and options for both labor and management will be expanded.
(b) Expansion of options for employment forms
It is important to get rid of the system that is based on full-time employment and
instead promote the diversification of employment and balanced treatment. This will
facilitate the acquisition of diversified manpower and the inter-corporate movement of
labor.
(c) Consensus-building concerning job changes
Job-change systems and legal framework against the abuse of the right of dismissal
set by individual corporations alone will create disparity in job-changing risks. This is
due to the difference in corporate sizes and causes unnecessary misunderstanding and
confusion, as both labor and management’s predictability in regards to job changes do
not increase. Therefore, it is necessary to establish explicit, rather than implicit, rules
on job changes industry-wide.
31
(2) Relative shrinkage of the scope of long-term employment and change in its
significance
Amid the progress of the trend toward a service economy as was described in (1),
what changes are specifically taking place in the employment system?
First, long-term employment has a dual nature: one being employment security and
the other being continuous technology/skill accumulation and human resource
development. However, the diversification of work styles caused by the trend toward a
service economy and the expansion of high-quality information sharing brought about
by IT have further advanced the diversification of employment and the liquidation of
manpower. Under the circumstances, the employment security aspect of long-term
employment as symbolized by lifetime employment will become smaller and the scope of
workers to be employed for a long term will become relatively narrower.
Meanwhile, individual corporations will implement long-term employment more
from the standpoint of accumulating necessary technology and skills, acquiring and
developing manpower, and continuously enhancing productivity in order to respond
flexibly to the trend toward a service economy and IT and to maintain and strengthen
competitiveness. For example, the efforts to shift personnel management from the
conventional way of treating employees in a uniform/one-track manner to the one
focused more on diversity and plurality, such as double-track career course for
management position and specialist staff position, decentralization of decision-making,
diversification of wage/treatment system, self-development support and strengthened
manpower training at corporate universities, are aimed at effective technology/skill
accumulation and manpower development under long-term employment by offering
employees with diversified options and thus enhancing the motivation for wok and
faculty development.
Therefore, the rational field of long-term employment will become limited. But, in
the fields where intellectual capital and human capital are important, it will remain as
the core of employment forms.
Note) For example, since accumulating necessary intellectual capital and human
capital by acquiring and developing personnel that play key roles in management and
business execution on a long-term basis leads to a sustainable growth of the corporation,
it is important to take measures to retain such personnel.
The need to acquire and retain high-quality intellectual manpower has increased
further, as the progress of the trend toward a service economy and IT have increased the
opportunities to create new value. In this sense as well, securing core personnel on a
long-term basis has become important.
32
toward lifetime employment (corporate side)
Attitude
⚳り㓹↪䈱䈅䉍ᣇ䋨ડᬺ஥䋩
0.0
10.0
20.0
Lifetime employment will be
30.0
40.0
33.8
ේೣ䈫䈚䈩䈖䉏䈎䉌䉅⚳り㓹↪䉕⛽ᜬ䈚䈩䈇䈒
maintained in principle
Partial revision
is inevitable
ㇱಽ⊛䈭ୃᱜ䈲䉇䉃䉕䈋䈭䈇
44.3
Fundamental ၮᧄ⊛䈭⷗⋥䈚䈏ᔅⷐ䈪䈅䉎
revision is necessary
No longer
lifetime employment
⃻࿷䉅⚳り㓹↪䈮䈲䈭䈦䈩䈇䈭䈇
50.0
17.1
Source: Corporate Management/Employment Practice
Study
by the
special committee on corporate management and
䇭䇭䇭䇭᦭ല࿁╵ᢙ䋻ᓥᬺຬⷙᮨ1000ੱએ਄䈱ડᬺ690␠
employment practice” (1999)
಴ᚲ䋺ഭ௛⋭
ੱ੐ഭോ▤ℂ⎇ⓥળ
Working
Group, ડᬺ⚻༡䊶㓹↪ᘠⴕWG
Personnel Labor Management
䇭䇭䇭䇭䇸ડᬺ⚻༡䊶㓹↪ᘠⴕኾ㐷ᆔຬળ䇭ਛ㑆ႎ๔䇹䋨ᐔᚑ11ᐕ䋩
Committee, Ministry of Labor “Interim report
3.8
Number of responses: 690 companies with a work force of
1,000 or more
(3) Review of the seniority-based wage system (Toward wage/treatment system
reflecting the current labor value)
How do the environmental changes brought about by the progress of the trend
toward a service economy impact the wage/treatment system?
Many of the big Japanese corporations use a qualification system as a measuring
stick to determine wages and promotion. Since the second half of the 1970s, instead of a
seniority-based qualification system, an “ability-based grade system” had been most
widely used, under which employees were graded in accordance with their job
performance.
Since employees’ wage and promotion are determined in accordance with their job
performance and their post and wage are not linked under the ability-based grade
system, it had the advantages of making in-house job transfers easy and of prompting
the employees to enhance their abilities. Therefore, the system worked effectively under
the situations where external changes are relatively small and future uncertainties are
not exactly large.
However, factors, such as the prolonged recession, worsening deflation, intensified
competitive environments, drastic changes in market and technology trends and aging
work force, prompted corporations to reform their employment cost structures and at
the same time made the problems involved in the ability-based grade system clear, thus
accelerating the review of their wage and treatment systems.
Since the ability-based grade system is based on job performance that rises with
experience, it eventually came to be employed on a seniority basis. Moreover, since posts
and wages were not linked, the wages were sometimes not commensurate with business
contribution. In addition, since the system was based on job performance, which in turn
is based on in-house experiences, it was not designed for mid-career recruitment to
begin with and tended to increase personnel costs due to the aging of employees.
33
Therefore, it will be difficult for corporations to maintain the conventional
wage/treatment system based on the ability-based grade system. They will have to
weaken the seniority elements as much as possible and shift to a wage/treatment
system that accurately reflects the current labor value based on work, achievement, and
ability.
In response to the spread of diversified forms of work/organization brought about by
the trend toward a service economy and to the rising need for high-quality intellectual
manpower, corporations will diversify their wage/treatment systems in order to reflect
current work contents and labor value on the systems by, for example, reviewing the
wages and treatment of the employees engaged in business, for which the duty and
wage pattern are clear, or engaged in the same business as the one carried out by
outside talents (shift to pay according to function or payment by results), introducing a
special wage/treatment system for engineers and specialists, or increasing the benefits
linked to business performance, such as options, to core personnel.
Ratio of corporations by changes (in the past 5 years)
in the weight of the determining factor for base salary
ၮᧄ⛎䈱᳿ቯⷐ⚛䈱䉡䉣䉟䊃ᄌൻ䋨ㆊ෰䋵ᐕ㑆䋩೎ડᬺഀว
<Administrative
position>
䋼▤ℂ⡯䋾
Age andᐕ㦂䊶ൕ⛯ᐕᢙ䈭䈬
service years
18.0
1.3
16.3
⡯ോ䈭䈬઀੐䈱ౝኈ
Work content
1.2
Achievement
ᬺ❣䊶ᚑᨐ
1.2
Duty performing
ability
⡯ോㆀⴕ⢻ജ
1.5
-30.0
-20.0
-10.0
31.4
34.7
0.0
10.0
20.0
<Other than administrative position>
30.0
40.0
䋼▤ℂ⡯એᄖ䋾
17.7
Age and ᐕ㦂䊶ൕ⛯ᐕᢙ䈭䈬
service years
-30.0
16.0
⡯ോ䈭䈬઀੐䈱ౝኈ
Work content
1.9
ᬺ❣䊶ᚑᨐ
Achievement
1.6
29.3
32.8
⡯ോㆀⴕ⢻ജ
Duty performing
ability
(%)
1.4
-20.0
1.8
-10.0
0.0
䇸㒰ᄖ䇹䋫䇸䉡䉣䉟䊃ᷫ䇹
“Exclusion” +
“Weight decrease”
10.0
20.0
“New” + “Weight
䇸ᣂⷙ䇹䋫䇸䉡䉣䉟䊃Ⴧ䇹
increase”
30.0
40.0
(%)
Source: Ministry of Health, Labour and Welfare “FY2001
Comprehensive Survey on Work Conditions”
(4) Strategic human resource development by corporations
Amid rising uncertainties caused by rapid changes in market/technology trends, the
risk of human investment by corporations is increasing. At the same time, however,
corporations are seeking personnel with high-quality knowledge, technological ability
and skills and who are capable of flexibly coping with environmental changes, against
34
the background of the increase in opportunities to create new value as a result of the
progress of the trend toward a service economy. In light of the situations, corporations
are expected to focus on efficient, effective human investment by concentrating on the
development of talented manpower capable of coping with changes and of producing
new value.
The knowledge, technologies and skills that create new value are not necessarily
peculiar to corporations and many of them, including law, finance, accounting, patent
and IT, are generally used. It is, therefore, important to increase off-the-job training
opportunities by positively using vocational schools, universities and graduate schools.
Enhancing off-the-job training in the fields that are not peculiar to the corporation is
also important in that it will lead to raising the motivation of the employees who are
provided with an opportunity to enhance their abilities in a wide range of fields and to
expanding the range of intellectual manpower capable of meeting new needs.
On the other hand, with the trend toward a service economy causing rapid changes
in business environments and requiring a more flexible response than ever before, the
importance of accumulating experiences and training at the floor level for a long time in
the fields of knowledge, technological ability and skills, that are peculiar to the
corporation and of enhancing trouble-shooting and emergency-response capabilities will
remain unchanged from the standpoint of enhancing productivity and competitiveness.
Prospect of manpower development investment
(total budget) in the future (over next 3 years)
੹ ᓟ 䋨䋳 ᐕ 㑆 䈓 䉌 䈇 䋩䈱 ੱ ᧚ 㐿 ⊒ ᛩ ⾗ 䋨੍ ▚ ✚ 㗵 䋩 䈱 ⷗ ㄟ 䉂
ో ૕(n=234)
䋨䌮䋽234䋩
Total
23.9
⵾ ㅧ ᬺ 䋨(n=105)
䌮䋽105䋩
Manufacturing industry
35.0
30.5
㕖 ⵾ ㅧ ᬺ(n=125)
䋨䌮䋽125䋩
Non-manufacturing industry
17.6
0%
35.5
30.5
34.3
40.8
35.2
20%
40%
Ⴧ ട 䈘 䈞 䉎Increase
⧯ ᐓ Ⴧ ട 䈘 䈞 䉎Increase
⃻⁁ਗ䉂
slightly
60%
4.7 0.9
3.81.0
5.6 0.8
80%
100%
Keep
at䈘present
⧯
ᐓᷫዋ
䈞䉎
ᷫ ዋ Decrease
䈘䈞 䉎
level
Decrease
slightly
Source: Japan Management Association; JMA Research Institute
“Survey report on ‘manpower development strategy’” (April 2001)
(5) Diversified and pluralistic employment styles in accordance with corporate strategy
As described above, in line with the progress of the trend toward a service economy,
corporations will review their long-term employment, seniority-based wage system and
in-house manpower development, and will promote diversified, pluralistic employment
styles in accordance with their actual conditions.
With the knowledge, technological ability and skills to create new value expected to
35
become increasingly important, individual corporations will have to carefully study
their current business conditions, the level and characteristics of the intellectual
property/human capital they require and the availability of outside human resources,
and, based on the management strategy, promote the diversification of employment
styles. For example, it is important for them to study whether the knowledge,
technological ability and skills required for their business performance are at a high
level or not, standard/all-purpose or peculiar, and whether outside human resources can
be easily secured or not.
2. Individuals’
Individuals’ response and establishment of environments
What efforts are required to be made by individuals in response to the trend toward
a service economy and changes in the employment system? And what environments do
we need to establish?
(1) Response to change in employment styles brought about by the trend toward a
service economy
With work styles and employment environments diversifying due to the trend
toward a service economy, individuals are required to cope with the changes properly.
Namely, since the diversification of work styles and employment environments
caused by the trend toward a service economy makes it difficult for corporations to
guarantee long-term employment, individuals will have no choice but to assume greater
responsibility for their own career.
In these circumstances, it is important to develop proper employment environments
that conform to diversified work styles and guarantee fair treatment so that individuals
would not be disadvantaged even when they chose different work styles.
Meanwhile, as we described earlier, the wage level of part-timers is lower than that
of long-term full-time workers. There is also disparity in the coverage of social
insurance and employment insurance. Moreover, some work styles, like independent
contractors, are not receiving sufficient benefits in terms of work environments, social
security and other fringe benefits despite of the fact that they are employers in some
sense. If the situations remain as they are, while individuals will be provided with
greater employment options as the diversification of employment advances, they are
more likely to be disadvantaged in terms of working hours, wages and benefit programs.
Therefore, it is necessary to take measures to dissolve such situations.
Moreover, as the cooperative relationship between individuals and corporations
based on long-term employment changes to a one-by-one relationship due to the
diversification of employment, individuals, who are weak relative to corporations, are
36
likely to be placed in a disadvantageous position and individual labor-management
disputes are expected to increase. Therefore, it is necessary to build environments for
the protection of the rights of individuals and corporations and for prompt settlement of
disputes.
Meanwhile, although long-term employment is expected to become more limited in
the future, providing appropriate incentives will increase individuals’ willingness to
work and sense of belonging. Therefore, it is hoped that such efforts will be made along
with the establishment of environments conforming to the diversification of
employment.
For example, giving due considerations to the present labor value by reviewing the
seniority-based wage system and clarifying the relationship between work and
treatment can be one of the means to increase work incentives.
Although individual commitment to organizations has declined due to a series of
employment adjustments and corporate failures, it is important to note that their
commitment to a team or a project can be maintained if we present a clear mission,
provide work commensurate with their abilities and needs, allow them to take part in
decision-making, and offer group activities and mutual evaluation of work with
colleagues. If individual commitment can be maintained in these ways, their
willingness to work will increase irrespective of whether it is for long-term employment
or short-term employment.
(2) Promotion of skill development by individuals
Although
the
long-term,
systematic
manpower
development
provided
by
corporations, such as on-the-job training, is still one of the effective means for
individuals to enhance skills necessary for their jobs, excessive dependence on
knowledge, technological ability and skills peculiar to one corporation will result in
jeopardizing their career considerably. Therefore, it is important for individuals to take
various opportunities voluntarily to acquire knowledge and skills that can be used in
other companies.
However, there are many uncertainties in the present labor market as to, for
example, what knowledge, technological ability, or skill is required in which field, what
ability is evaluated highly, and how much one can make with what ability. Moreover,
information on educational institutions, such as the quality of education and track
record, is not sufficiently provided. Due to these uncertainties, the risk is high for
individuals to voluntarily develop their own skills and they tend to lose enthusiasm.
Therefore, from the standpoint of securing manpower in the medium and long term,
it is essential to provide strong support to individuals’ voluntary efforts for faculty
37
development by enhancing information on jobs and skill development, establishing an
external skill formation system and increasing subsidies. It is especially important to
support individuals’ voluntary efforts to acquire new, advanced knowledge and skills
that meet the new needs created by the progress of the trend toward a service economy.
In addition, it is important to provide the labor market with specific information on
the manpower required by corporations in order to dissolve the information gap
between individuals and corporations, promote employment that meets individual’s
needs, and to make it easier for corporations to secure human resources.
(3) Balancing work and life
In order to meet individuals’ diversifying needs, such as a sharp rise in the number
of working women, a rising demand for child and nursing care, and an increasing
number of elderly people willing to work, it is necessary to take measures to strike a
balance between work and life.
Specifically, it is necessary to develop environments to support balancing work and
life in accordance with individuals’ diversified lifestyles by increasing the flexibility of
work “hours” through the introduction of short-time employment and discretionary
work and expanding the options of work “places” through the diffusion of working-athome and satellite offices.
It is also necessary to facilitate the use of maternity/family-care leave systems and
improve childcare environments, including overtime childcare and employer-sponsored
child care, so that both parents can work and care for children or elderly people without
difficulties.
Building a social infrastructure to support flexible ways of work will not only lead to
the improvement of the individual employment environment and enhancement of life
value but will also make it possible to utilize the abilities of the women and elderly
people who have been unable to work due to various constraints.
(4) Fostering of the youth and promotion of employment
Reflecting a decrease in labor demand in recent years, the employment
environments of the youth have deteriorated sharply, leading to an increase in
unemployment among young people and a decrease in full-time employment. A study
indicates that an increase in unemployment among young people and a decrease in
full-time employment are having adverse effects on the employment environments of
the people in the same generation. The study shows that the ratio of employees who
work long hours has been increasing, especially among male full-time workers in their
30s.
38
Ratio of employees working long hours (60 hours or longer a week)
(Non-farm employees; Male; Employees who work 35 hours or longer a week)
26.0%
2001ᐕ
2001
22.0%
18.0%
1996ᐕ
1995
14.0%
65
-
15
-1
9
20
-2
4
25
-2
9
30
-3
4
35
-3
9
40
-4
4
45
-4
9
50
-5
4
55
-5
9
60
-6
4
10.0%
Source: Ministry of Public Management, Home Affairs, Posts and
Telecommunications “Labor Force Survey”
In order to achieve a sustainable growth of the Japanese economy, it is necessary to
develop and secure manpower that supports the growth in the medium and long term.
In this sense, it is extremely important to foster young people and promote their
employment. At present, young people are not given enough employment opportunities.
And even if they were employed, it would be difficult for them to develop skills properly
due to heavy work loads.
Therefore, it is necessary to take drastic measures to enhance young people’s ability
and skills. In addition to enhancing their basic ability, it is necessary to have them
acquire advanced, practical work ability, as demand for high-quality knowledge and
ability has increased due to the trend toward a service economy. To this end, it is
important not only to establish skill development systems to enhance basic work ability
but also to establish and strengthen advance, practical manpower development systems
by utilizing universities/graduate schools and private institutions. It is also important
that corporations establish a system to promote self-development by their young
workers.
At the same time, it is essential to enhance young people’s attitudes toward work
and increase their employment opportunities. To this end, positive measures should be
adopted, including the utilization of internship programs and expansion of employment
on a trial basis. From the standpoint of increasing employment among young people
amid diversifying forms of employment brought about by the trend toward a service
economy, it is important to promote employment not confined to the conventional sense
of employment. To this end, environments for establishing new businesses and for
franchisees and independent contractors should be developed.
39
3. Direction of Japanese employment system conforming to the trend toward
a service economy
(Creative work system that allows individuals and corporations to make a diversified,
flexible choice and create new value)
Now, in what direction should the Japanese employment system as a whole move in
response to environmental changes, such as the trend toward a service economy, and
the trends at the corporate/individual level?
In response to the progress of the trend toward a service economy, corporations are
expected to review their employment systems in order to combine various forms of
employment and to utilize intellectual capital and human capital flexibly and effectively,
while individuals are expected to make voluntary/selective efforts in accordance with
their careers. These moves will diversify corporate labor demand and individual ways of
work and skill development, resulting in strengthening the relationship between the
corporation/individual and the external labor market.
However, the Japanese external labor market has yet to be fully developed and
therefore is unable to adequately cope with, for example, the labor mobility caused by
the progress of the trend toward a service economy and changes in response at the
corporate/individual level, the diversification of employment forms, and a decrease in
human investment.
Therefore, it is necessary for the nation as a whole to establish “a creative work
system that allows individuals and corporations to make a diversified, flexible choice
and create new value” by establishing a labor market that allows corporations and
individuals to take rational employment/work behaviors, by improving the environment
to offer diversified forms of employment options, and by developing an environment to
fostering high-quality manpower to meet new needs, in response to the progress of the
trend toward a service economy.
40
Relationship of corporation, individual and the state and direction of Japanese
employment system
Corporation:
Individuals:
More risks arising from leaving one’s career in the
hands of one corporation
٤Increased importance of taking subjective/autonomous measures,
such as enhancement of employability
٤
٤ Relative shrinkage of long-term employment/review of seniority-based wages
٤ Human investment likely to decrease
Based on reasonable selection in line with the type of operation and
actual business conditions, corporations are more likely to utilize
diversified employment styles, such as part-timers and temporary staffers,
shift to a wage system based on work, achievement and ability, and promote
employment adjustments in accordance with a change in management
environment.
‫ޓ‬As corporations are less likely to provide long-term employment
guarantee and human resource development, it has become
increasingly necessary for individual employees to enhance
their careers on their own.
Change in employment system caused by the progress of the trend
toward a service economy
||
Change in long-term employment, seniority-based wage system, in-house
human resource development, increased importance of intellectual
property/human capital
“Creative work system that allows individuals
and corporations to make a diversified, flexible choice
and create new value”
value”
State:
State:
٤ Establishment of environments for flexible forms of work
conforming to environmental changes
The
government is required to establish environments that are
necessary to develop a highly flexible employment system
conforming to changes in employment situation and environments
and the diversifying moves of corporations/individuals and capable
of creating new value.
41
Chapter 4 Basic Direction of Future Policies
1. Basic direction of policies conforming to the trend toward a service
economy and the change in the employment system
As we have described so far, in order to cope with the progress of the trend toward a
service economy, it is necessary to establish “a creative work system that allows
individuals and corporations to make diversified, flexible choices and create new value.”
Then, what policies should be implemented to that end?
In this chapter, we study the basic direction of future policies both from the aspect of
response to the trend toward a service economy and from the aspect of
employment/work measures to cope with the trend.
(1) Direction of policies conforming to the trend toward a service economy
In order to achieve a sustainable growth of the Japanese economy, it is imperative to
create new markets and employment, in addition to enhancing industrial productivity
and competitiveness.
In order to strengthen industrial competitiveness on one hand and to cope with the
trend toward a service economy and other environmental changes on the other, it is
important to promote industrial revitalization and service economy in an integrated
manner through business reorganization based on “selection and concentration.”
At the same time, it is necessary to create markets conforming to the trend toward a
service
economy
and
increase
employment
opportunities
by
promoting
the
establishment of new businesses in the service sector and deregulation in the public
service sector.
(2) Direction of future employment policy
(a) Characteristics of conventional employment policies
Conventional employment policies have two major characteristics.
First, they are based on the assumption that corporations play many of the
employment maintenance/stability functions, such as long-term employment guarantee
and in-house job transfer and personnel training, and focused on supplementing such
functions. In other words, conventional employment policies are based on the growth of
corporations and are for stable systems centering on long-term employment.
Since they were mainly for long-term full-time workers, not enough measures were
taken to establish external labor markets for job changes and re-employment and to
cope with diversified work styles, such as part-timers, term-limited contract workers
and dispatched workers.
Second, conventional employment policies focused on the protection and security of
42
individuals who are in a relatively weak position vis-à-vis corporations, such as in
guaranteeing minimum working conditions, ensuring the right to organize and
guaranteeing unemployment compensation. Individuals, if they are given opportunities
to improve their abilities, can become a major force in generating economic value,
creating new value and contributing to increased productivity. However, not enough
measures were taken to increase the bargaining power of individuals through
faculty/human resource development.
It is important to increase the bargaining power of individuals through the
development of manpower with the new knowledge, technological ability and skills that
conform to the trend toward a service economy so that individuals can establish an
employment relationship with corporations on an equal footing. It is also important to
promote the revitalization of the economy and achieve sustainable growth by effectively
utilizing such manpower.
(b) Direction of future employment policies
i) Implementation of policies conforming to the diversified work styles brought about
by the trend toward a service economy
(From policies premising long-term employment to policies conforming to
diversified work styles)
With the progress of the trend toward a service economy, the way of work has further
diversified, including dispatched work, contract, franchise and independent contract.
In these circumstances, conventional policies focused on employers have become
unable to adequately cope with the diversified ways of work. For example, the legal
position of franchisees and independent contractors is not clearly defined and they are
not covered by employment insurance.
Moreover, the increase in the opportunities to add new value has increased the need
for manpower with high-quality knowledge, technological ability and skills. Therefore,
the improvement of employment environments is expected to become important not
only for corporate full-time work but also for the types of employment that allow people
to work without being constrained by place and time, such as discretionary work and
SOHO.
In this light, it is important to carry out appropriate work policies that go beyond the
conventional employment policies in order to cope with the diversifying ways of work.
ii) Implementation of new policies focused on revitalizing the economy by effectively
utilizing manpower
(From employment policies focused on the protection/security of individuals to
employment/manpower policies focused on revitalizing the economy through the
effective utilization of manpower)
43
As described above, conventional employment policies have focused on the
protection/security of individuals on the assumption that corporations will maintain
and stabilize employment. However, since the assumption is breaking down due to
rapid environmental changes, such as the prolonged recession and the trend toward a
service economy, employment policy should also change its conventional paradigm.
In view of the need to strive to achieve sustainable growth in the Japanese economy
and a rise in need for high-quality intellectual manpower, we should view “manpower,”
Japan’s invaluable resource, as a source of economic value. Specifically, it is necessary
to distribute the “manpower” in an optimal way for the society as a whole and use them
effectively in order to enhance productivity and competitiveness, create new value and
eventually revitalize the economy.
Therefore, it is necessary to change from employment policies focused on the
protection/security of individual workers to work/manpower policies focused on
revitalizing the economy through the effective utilization of manpower.
In specifically implementing such policies, it is necessary to place emphasis on (a)
improving the labor market to effectively carry out the optimal positioning of personnel
and (b) enhancing the human resource development system to strengthen
competitiveness and revitalize the economy.
The present safety net, which is based on the assumption of corporations’ high
employment maintenance capability and low unemployment rate and focused on life
security at the time of unemployment, should be restructured into the one conforming to
the increased labor movement and diversified employment styles brought about by the
trend toward a service economy, and focused on effective utilization of manpower
though early re-employment.
(3) Comprehensive work/manpower policy
Just as described above, the basic direction of future policies should be to implement
“comprehensive work/manpower policies” that go beyond the conventional framework of
employment policies, by focusing on the effective utilization of manpower and economic
revitalization in response to the progress of the trend toward a service economy.
Specifically, the following measures should be implemented comprehensively:
(1) Industrial revitalization through business reorganization and the establishment of
environments conforming to the trend toward a service economy
(2) Expansion of employment opportunities through promotion of the trend toward a
service economy
(3) Establishment of environments conforming to the diversified employment styles
brought about by the trend toward a service economy
(4) Improvement in the labor market to effectively promote the optimal positioning of
44
personnel
(5) Enhancement of the human resource development system to strengthen
competitiveness and revitalize the economy
(6) Establishment of an appropriate safety net conforming to increased labor
movement and diversified employment styles.
Incidentally, in order to enhance the effectiveness of the work/manpower policies,
they should be implemented in close coordination with economic revitalization policies,
such as policies to enhance productivity and strengthen competitiveness through
industrial reorganization, service industry policies, small and medium-sized enterprise
policies, regional economy and industry policies and education policies.
[Traditional employment policy] = Employment maintenance/stability policy premising long-term employment by
corporations 䂾Inadequate labor supply/demand adjustment policy 䇭䂾Support for employment maintenance/hiring by corporations
䂾Support for in-house training
٤ Safety net premising low unemployment
Prolonged recession, deflation,
decline in expected growth rate,
globalization, IT, etc.
Relative shrinkage of long-term
employment, Review of
seniority-based wages, Focused
on in-house manpower
development
Changes in internal
labor market
Rise in labor costs, Decreased
labor demand in manufacturing
industries, Progress in business
reorganization
Increased productivity/competitiveness
through business reorganization, Expansion
of market/employment in service sector,
Diversified employment styles, such as parttimers and temporary staff
Increase in job leaving and
unemployment, Expansion in
labor mismatch, Inadequate
manpower development
system, Diversification in
corporate/individual needs
Inadequate external
labor market
Progress of the trend toward service economy
٨ Increased importance of intellectual property/human capital
٨ Necessity to implement measures for economic revitalization and sustainable growth
[Basic direction of future policies]
= Comprehensive work/manpower policy focused on economic revitalization
through effective use of manpower
٤ Industrial revitalization through business reorganization and establishment of environments conforming to the trend toward a service economy
٤ Expansion of employment opportunities through the promotion of the trend toward a service economy
٤ Establishment of environments conforming to the diversified employment styles brought about by the trend toward a service economy
٤ Improvement of labor market to effectively carry out optimal positioning of personnel
٤ Enhancement of the human resource development system to strengthen competitiveness and revitalize the economy
٤ Establishment of a safety net conforming to an increased labor movement and diversified employment styles.
45
2. Specific approach to policy implementation
The specific directions of the policies based on the above basic principles will be as
follows.
(1) Industrial revitalization through business reorganization and establishment of
environments conforming to the trend toward a service economy
Amid intensifying international competition, reorganizations at business and
functional levels and the trend toward a service economy are expected to make further
progress based on the principle of “selection and concentration.” In the course of
progress, there will be improvement in business processes and the creation of new
goods/services and business models, leading to enhanced productivity and strengthened
competitiveness for the Japanese industry. Therefore, it is important to develop
environments to promote revitalization of the industry and enhancement of
competitiveness through business reorganization and the trend toward a service
economy.
Meanwhile, the process of the industrial revitalization and competitiveness
enhancement may have adverse effects, such as a temporary rise in the number of job
leavers and unemployment. However, since business reorganizations and an increase in
employment opportunities brought about by the trend toward a service economy take
place and move almost simultaneously, as was seen in the United States, the adverse
effects on employment can be contained to a minimum. Therefore, it is necessary to
develop environments to facilitate inter-corporate and inter-industrial movements of
labor, such as from the manufacturing industry to its peripheral business support
service industry, as well as environments to allow a flexible selection of diversified work
styles and to provide adequate security and skill development/re-employment support
to people who have lost their jobs against their will.
(2) Expansion of employment opportunities conforming to the trend toward a service
economy
(a) Environments to start/establish new businesses
In order to promote the vitality of the Japanese economy, it is important to create
new markets and employment opportunities through opening new businesses, as well
as to increase the productivity and strengthen the international competitiveness of the
Japanese
industry
through
the
positive
promotion
of
business/industrial
reorganization,
With the trend toward a service economy spreading to all aspects of Japanese
economic activity, consumers’ /users’ needs have further advanced and diversified at an
accelerated speed. Therefore, from the standpoint of revitalizing the economy, it is
46
extremely important to grasp consumers’/users’ needs precisely, promote innovation to
meet the needs and create new value. In order to create a virtuous cycle of demand and
innovation, it is important to develop environments to promote not only new businesses
by existing corporations but also the establishment and opening of startup companies.
It has been pointed out that the resources that are necessary for establishing startup
companies, such as a staff, goods, money and technologies, were not adequately
provided. Therefore, Japan has been rapidly implementing support measures and
system reforms mainly for the promotion of high-tech venture companies, including the
establishment of a system to facilitate fund procurement, a review of company lawrelated systems, strategic utilization of intellectual property and establishment of a
setup to promote cooperation with universities.
In these circumstances, in order to promote the smooth expansion of markets and
employment through the trend toward a service economy, it is important to establish
environments that facilitate the establishment of not only high-tech venture companies
but also a wide range of other startup companies. To this end, it is necessary to revise
systems related to labor union laws and establish business environments for the
franchise business, SOHO, etc. It is also necessary to examine how to foster an
environment in which failed entrepreneurs can try again by, for example, allowing them
to retain the minimum required amount of living funds.
(b) Establishment of proper transaction rules conforming to diversified forms of
transactions
The progress of the trend toward a service economy has drastically expanded the
consignment market in the service sector, such as content development. In transactions
in such sector, large business operators or consigners are often in a dominant position
and may claim copyrights unilaterally. Meanwhile, a main contractor and a
subcontractor are not necessarily determined by the size of the corporations and this
causes various problems as transaction structure and transaction contents become ever
complicated and diversified. Moreover, with the increase in the number of self-employed
persons who take new forms of work, like SOHO, transactions not only between
corporations but also between a corporation and an individual have increased.
In order to create new markets in the service sector and expand the range of such
markets by supporting creative and enterprising corporations and individuals, it is
necessary to understand the actual condition of the transaction structure in the service
sector and take measures to promote the construction of transparent and fair
transaction relations.
(c) Expansion of service markets through deregulation
It is necessary to open the public services, such as health care, nursing, childcare,
47
water and sewerage, river, road, park and waste disposal, to the private sector by
reviewing the separation of roles between the public and private sectors, easing
restrictions on entry and regulations on the business sphere, and promoting publicprivate cooperation.
To this end, it is necessary to aggressively promote deregulation, transfer to private
hands, and utilization of PFI in accordance with the characteristics of individual public
services. It is also important that the state, local governments and private businesses
work hand-in-hand in promoting such businesses.
(3) Establishment of environments conforming to the diversified employment styles
brought about by the trend toward a service economy
Amid diversifying work styles brought about by the trend toward a service economy,
it is necessary to adequately meet the needs of corporations that want to utilize human
capital effectively and efficiently by combining diversified manpower and the needs of
individuals who want to work flexibly in accordance with their lifestyle.
Therefore, it is important to carry out a drastic review of the system based on the
assumption of long-term full-time employment and to have diversified work styles
firmly established in the society by establishing (a) environments to revitalize the
economy by effectively utilizing human capital in accordance with diversified work
styles and (b) environments in which fair treatment is given in accordance with work
styles and in which the rights of corporations and individuals are properly protected.
Specifically, it is necessary to strive to (a) realize diversified work styles that are not
constrained by “time,” “place” and “term,” (b) promote fair and balance treatment in
accordance with work style, and (c) establish rules for subordinative proprietors and
independent contractors not adequately covered by current laws.
(a) Realization of diversified work styles not constrained by time, place and term by
promoting, for example, the exemption of white collar workers engaged in jobs of a
highly discretionary nature from regulations on working hours. Prompt
implementation of institutional reform, such as deregulation of worker dispatch.
(b) Development of environments to allow corporations and individuals to choose
diversified employment forms under fair rules by promoting the establishment of
rules on changing working conditions in accordance with diversified/individualized
employment, improvement and enhancement of dispute settlement systems, and
review of collective/uniform employment contract rules.
(c) Promotion of fair/balanced treatment commensurate with diversified work styles,
such as part-time employment.
48
(d) Establishment of a system to promote the appropriate protection of rights in
accordance with diversified work styles, such as subordinative proprietors and
independent contractors.
(e) Development of work/life environments conforming to diversified life styles, by
promoting support to people striking the balance between work and life.
(f)
Promotion of a review of employment-restraining tax and social security systems,
such as spouse allowance and third insured person pension system.
(4) Improvement of the labor market to effectively promote the optimal positioning of
personnel
With labor mobility expected to increase in the future in line with business
reorganization, the trend toward a service economy and diversified and advanced
employment needs, it is essential to develop labor markets that will work as
intermediaries between corporations and individuals and effectively promote the
optimal positioning of personnel.
In other words, in order for a corporation to create new value by strategically
utilizing manpower within and outside the corporation and positioning human
resources in an optimal way, it is essential to develop a flexible and effective labor
market. And in order for an individual to get an employment opportunity where he can
demonstrate his ability to the fullest extent, a wide range of options have to be provided.
In this sense, it is also necessary to develop a labor market where information flows
smoothly and its transparency is ensured.
However, the Japanese labor market is not well developed, hampered by such
problems as an inadequate information distribution foundation, ambiguous separation
of roles between the public and private sectors concerning intermediary functions, and a
low transparency of contract rules. Its market functions, such as the information
distribution function to facilitate labor mobility and re-employment, and matching
function, do not work sufficiently, resulting in heightening risks for corporations and
individuals and hampering the optimal positioning of personnel for the society as a
whole.
In the light of the above situations, it is necessary to develop “a labor market where
market mechanisms work properly and where the optimal positioning of personnel will
be facilitated” with the aims of (a) providing diversified employment/job options to
corporations
and
individuals,
(b)
facilitating
labor
mobility
while
avoiding
unemployment risks under fair rules, (c) encouraging corporations to conduct
49
appropriate positioning of personnel, and (d) making it possible for individuals to find
jobs commensurate with their abilities, allowing them to demonstrate their abilities to
the fullest extent.
(a) Strengthening market functions by establishing information environments for
parties concerned, such as the establishment of an information infrastructure for
employment and the establishment of an information distribution environment
premising diversified workers.
(b) Expanding employment/job options for corporations and individuals by drastically
enhancing the market’s labor force supply/demand adjustment functions, such as
strengthening the employment intermediary function through active use of
private-sector vitality, and specializing public employment security offices in
market-complementary functions.
(c) Protecting the rights of corporations and individuals properly by clarifying rules
concerning conclusion/termination of labor contracts.
(d) In response to increasing labor mobility, establishing tax and social security
systems that are neutral in their effects on employment, job leaving and job
changes, by reviewing retirement benefit-related taxation and enhancing the
portability of pensions.
(5) Enhancement of human resource development system to strengthen competitiveness
and revitalize the economy
Making maximum use of manpower, which is the source of added value, is crucial for
a sustainable growth of the Japanese economy. For this reason, it is necessary for
corporations to make strategic human investment and utilize the abilities of their
employees to the fullest extent in order to enhance productivity and strengthen
competitiveness. Individuals, for their part, must develop their potential abilities and
contribute to the enhancement of productivity and creation of new value.
Therefore, it is necessary to build the infrastructure to accumulate human capital
and utilize them to the fullest extent in order to drastically enhance the human
resource development system for greater productivity and competitiveness and the
creation of new value.
Specifically, it is necessary to provide appropriate support to corporations’ strategic
human investment and to develop an environment that removes uncertainties
concerning an individual’s development in capacity and promotes such investment. At
50
the same time, it is necessary to develop a market-complementary capacity
development system in order to ensure equal opportunity.
In addition, it is necessary to develop an environment that promotes advanced
manpower development in response to rising needs for intellectual manpower capable of
creating new value by properly processing diversified information and ideas.
(a) Information infrastructure for capacity/manpower development will be established
in order to remove uncertainties of information concerning capacity development.
(b) Support for individuals’ voluntary efforts to develop capacity will be drastically
increased, while giving due considerations to fairness.
(c) Advanced manpower development utilizing private-sector vitality will be enhanced,
with particular emphasis placed on capacity development to meet the needs for new
knowledge and technology created by the trend toward a service economy.
(d) Advanced, practical vocational education at universities, etc. will be enhanced,
including the establishment of professional schools and community colleges.
(e) Support for systematic manpower development by corporations and advanced
manpower development by corporate universities will be increased.
(f)
Enhancement of the capability of young people to work and facilitate their
employment will be strongly promoted in order to foster manpower that supports
the Japanese economy in the medium and long term.
(g) Public-sector’s occupational skills development will be specialized in marketcomplementary functions. Specifically, it will focus on providing opportunities for
capacity/manpower development to persons who are faced with difficulties in
gaining employment, long-term unemployment and low-income earnings and on
supporting capacity development by small and medium-sized enterprises.
(6) Establishment of an appropriate safety net conforming to increased labor movement
and diversified employment styles
Under the work system premising a labor market, an appropriate safety net against
unemployment risks will continue to play an important complementary role to the
market.
With the number of jobless workers expected to increase and become increasingly
diversified in line with an increase in labor mobility and the diversification of work
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styles caused by the trend toward a service economy, it is necessary to design an
appropriate system by fully taking into account the degree of jobless people’s risks and
the necessity to provide security.
Since unemployment benefits have an employment-restraining effect in itself and
may also cause adverse effects, such as prolonging unemployment and lowering the
willingness of jobless people to reenter the workforce, it is not appropriate to provide
excessive security, such as increasing benefits and extending the period of benefit
without careful consideration.
Therefore, when reconstructing a safety net in response to the trend toward a service
economy, the basic role of the safety net should be defined as “providing minimum
security at the time of unemployment in response to diversified employment” and
“promoting early re-employment to effectively utilize human resources.” It is necessary
to revise the current safety net drastically in order to provide appropriate security in
accordance with the actual situations of the jobless workers and to strengthen the
structure to facilitate early re-employment.
(a) With regard to the employment insurance system, benefits to voluntary job leavers
and the elderly should be reviewed, and a flexible, focused system appropriate to
unemployment risk and the necessity of security should be established. At the same
time, the certification of unemployment should be made stricter and an
environment that provides appropriate benefits should be established. In addition, a
system that provides benefits in accordance with the actual living conditions of the
jobless workers and their families should be introduced.
(b) With regard to three employment insurance projects (employment stability, capacity
development, employment welfare), subsidies for hiring and other measures that
are not widely used should be abolished as much as possible and the system as a
whole should be reviewed and reorganized drastically in order to contain insurance
expenses.
(c) A safety net conforming to diversified forms of work should be established by
expanding the coverage of social/employment insurances to part-timers and
dispatched workers.
(d) An infrastructure that provides life/employment support to persons out of work for a
long time or out of business and not covered by employment insurance systems
should be established and an environment that encourages them to seek reemployment or try again should be developed.
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<Deliberation Process / Contents>
1st Meeting: February 27, 2002 (Wed.)
Present state of the Japanese economy
Present state of the trend toward a service economy
Present state of employment
Problems to be studied by the subcommittee
2nd Meeting: March 13, 2002 (Wed.)
Problem of the trend toward a service economy and employment problems
System design for employment market in IT industry
3rd Meeting: April 4, 2002 (Thurs.)
Basic direction of future employment policy
Future labor market
Future capacity development
4th Meeting: April 18, 2002 (Thurs)
Trend of corporations in response to environment changes
Development of environment for diversified work styles
Safety net
5th Meeting: May 7, 2002 (Tues)
Hearing from corporate members and Rengo
6th Meeting: May 30, 2002 (Thurs)
Basic concept to prepare report
Outline of report
Future policy implementation
7th Meeting: June 12, 2002 (Wed)
Outline of report by subcommittee
“Simulation survey on effectiveness of employment policies (interim report)”
8th Meeting: June 25, 2002 (Tues)
Preparation of report by subcommittee
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Service Economy/E
conomy/Employment Policy Subcommittee
of the New Growth Policy Section, Industrial Structure Council
Members
Subcommittee Chairman:
Sato, Hiroki
Prof. University of Tokyo, Institute of Social Science
Araki, Takashi
Prof. University of Tokyo Faculty of Law
Okubo, Yukio
Head of Works Institute
Otake, Fumio
Prof. Institute of Social and Economic Research, Osaka
University
Kawai, Kazuyuki
Head of Personnel Department, Toyota Motor Corp.
Kurosawa, Masako
Assistant Prof., Meiji Gakuin University, Faculty of
Economics
Genda, Yuuji
Assistance Prof. University of Tokyo, Institute of Social
Science
Kojima, Noriaki
Prof. Osaka University, Graduate School of Law
Shimizu, Hirohisa
Personnel Department Director, Seven-Eleven Japan Co.
Takagi, Norihiko
Personnel Department Director, Kao Corp.
Nishijima, Minako
Workforce Diversity Manager, IBM Asia Pacific
Hirayama, Yoshizo
Personnel and Labor Relations Department Director,
Nippon Steel Corp.
Yamada, Hisashi
Chief Researcher, Japan Research Institute
Wada, Toshimasa
Acting Director, Electronic Device Department, Fujitsu
Ltd.
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