Progress of Japanese policy on

the acceptance of highly skilled

human resources

Natsuko Horii
Director, Foreign Workers Affairs Division
Employment security Bureau,
Ministry of Health, Labour and Welfare, Japan
The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian
Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI
does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use.
Terminology used may not necessarily be consistent with ADB official terms.

Mr. Hagiwara, Japanese ambassador to France and Mr. Christensen,

the first Secretary-General of OECD, putting their signatures on MOU
of Japans accession to OECD.1963

Japanese economy has recovered,

but still in a difficult situation.
(trillion Yen)

Transition of nominal GDP

480 trillion
(3rd quarter,2013)
nominal GDP growth
(compared to previous year)

(1st quarter,2013)
(2nd quarter,2013)
(3rd quarter,2013)

(quarter)
(year)

Advancement of aging society

Transition of aging percentage

40

2050
35.6%

35
30
2010
22.7%

25

PRC

France

Germany
Japan

Italy

Sweden

UK

USA

20
15
10
5
0

1950

1960

1970

1980

1990

2000

2010

2020

2030

2040

2050
year

Source: UN World Population Prospects : The 2006 Revisionmoderate change estimate

Birth rate has been low in Japan.

total fertility rate

Transition of total fertility rate in 8 countries

4.5
4
3.5
3
2.5
2
1.5
1

Japan

US

France

UK

Sweden

Germany

Rep. of
Korea

Singapore

0.5

0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 year
Sources Vital Statistics(Japan), Births and Deaths in England and Wales, 2011(UK, Bilan demographique(France)*provisional date in2011, Statistisches Bundesamt(Germany) Statistics
SingaporeSingapore, Demographic indicators(ItalySummary of Population Statistics(Sweden), National Vital Statistics Reports(USA), Birth and Death Statistics in 2011(R.O.Korea)

Labor force may continue to decrease

due to declining birth rate and aging population.
ten thousand)

14,000

Population of Japan (result and estimated number)

Estimated number

Result number

12,000
10,000

8,000
6,000
4,000
2,000
0

Under 64
64

65 and over
65

Source:
Until 2010: Ministry of Internal Affairs and Communications National Census
After 2015: estimation by National Institution of Population and Social Security Research in January, 2012.

Potential labor force of women can be exploited.

international comparison of
employment rate2009

90

90

80

80

70

70

60

60

50

50

40
30
20
10
0

USA

Italy

Sweden

Republic f Korea

Japan
15 to 20 to 25 to 30 to 35 to 40 to 45 to 50 to 55 to 60 to
19
24
29
34
39
44
49
54
59
64

employment rate and potential labor force

participation rate2010

40
30
Employment rate

20
Potential labor

10
0

force participation

rate

15 20 25 30 35 40 45 50 55 60 65
19 24 29 34 39 44 49 54 59 64
& over

(note) potential labour force participation rate

(note) For USA and Sweden, 15 to 19 means 16-19.

employees the unemployedthose who want to work

pouilation (age of 15 and over)

Source: OECD Database "LFS by sex and age"http://stats.oecd.org/

Source: Ministry of Internal Affairs and Communications Labor Force Survey FY2009

Promoting the employment of young people

(NEETs, part-timers) is essential.
Number of NEETs

Number of part-timers
10 thousand

80

250
208

217 214

200
150

91

98

99

201

97

70
187 181

92

92

170

87

178 183

91

97

17

[age]

50

93 2534

40

100
50

64 64 64 64 62
62 64 63

60

174 176

93

10 thousand

18

18

18

18

19

19

18

18 19 18

20

18

18

18

18

30
117 119 115
104 95

20
89

83

87

86

81

83 1524

10

60
17

57 60
17

18

[age]
30
34
25
29

17

16

18

16

18

16

17

16

16

16

15

15

15

20
24

12 11

10

10

10

15
19

17

0
14 15 16 17 18 19 20 21 22

22
23year

14 15 16 17 18 19 20 21 22

22 23

Source: Ministry of Internal Affairs and Communications Labor Force Survey

note part-timers are. male graduates and female graduates (especially unmarried) in their age of15-34 and dont engage in housework nor
commute to schools, also satisfy one of conditions below.
employees who are called part-timer in their workplace.
unemployed persons who are seeking job as part-timers.
persons who are hoping to work as part-timer among non-labor force population
note 2223are numbers without Iwate Pref., Miyagi Pref. Fukushima Pref.
noteNEETs are those of 15-34 among non-labor force and dont engage in housework nor commute to schools

The desire to work of elderly people is strong.

Until what age do you want to work?
people of 60 and over
Over76 years
old

Until about 75
years old

Until about
60 years old

Until about
65 years old

Until about
70 years old

About
0%

10%

20%

30%

As long as I can work

90 % want to work after the age of 65

40%

50%

60%

Source: Cabinet Office2008

survey of men and women who are 60 years old and over=3,293

70%

80%

90%

100%

Baby-boom generation is expected

to perform in labor market.
Percentage of employment
(years old)

45

80

70.8
64.4
57.3

57.2

35

56.8

30
50
40

46.6
male

32.7
28.9

30

24.9

20
10
0

16.6
14.8

29.9

25

43.2

41.2

41.0

42.5

40

67.5

70
60

Percentage of employment
(years old and over

female

20

23.3
19.8
15

15
10

10.6

12.9

12.2
9.9
5.3

4.4
2

2.5
0.9

7.4

6
1.2

Source: .Stat Extract LFS by sex and age(July, 2008)

Percentage of employment(6064 years old = employees who are 6064 years oldpopulation of 6064 years old
Percentage of employment(65 years old and overemployees who are 65 years old and morepopulation of 65 years old and more

Economic growth and promotion of labour

participation are essential.
A simulation of employed population until (male and female )

62,980,000

60 and
over

59,370,000
62,890,000
(3,610,000)
(90,000)
About 3,500,000
increase
About 1,600,000
increase

3059

1529

54,530,000
60,850,000
(8,450,000)
(2,130,000)
About 6,300,000
increase
About 2,900,000
increase

About 1,400,000
increase

About 2,500,000
increase

About 500,000
increase

About 1,000,000
increase

When economic growth

and labour participation
will NOT make good
progress

When economic growth

and labour participation
will make good progress

When economic growth

and labour participation
will NOT make good
progress

When economic growth

and labour participation
will make good progress

(result number)
Sources:2010 result number: Ministry of Internal Affairs and Communications Labour Force Survey, 2020,2030 estimate: by National Institute of Population and Social Security research
Estimations are by The Japan Institute for Labour Policy and training.
when economic growth and labour participation will be progressed properly: high growth will be achieved under Japan Revitalization Strategy and labour participation will be progressed
when economic growth and labour participation will NOT be progressed properly: economic growth will be progressed to some extent until 2015,. But after 2016, economic growth will be zero and labour
participation will not be progressed from 2010.

Overseas business development of Japanese

companies has increased.
Local subsidiaries of Japanese companies (by region)

companies

25,000

20,000

15,000

10,000

5,000

0
98
98 99
99 00
00 01
01 02
02 03
03 04
04 05
05 06
06 07
07 08
08 09
09 10
10 11
11
(fiscal year)
North

America

Mid,

south

America

PRC

ASEAN4

NIEs3

Mid-

East

Europe

Oceania

Africa

Others

Source: Ministry of Economy, Trade and Industries)

Basic policy of Japan for accepting foreigners.

The range of acceptance is decided as Status of
Residence in consideration of the effects on
Japanese industry and public welfare.
Employment is promoted in Professional or Technical
Fields to strengthen international competitiveness.
There is no quota, nor economic needs test for
foreigners. (Open regime)

Categories of foreign workers in Japan

Status of Residence
Aiming to work
-Professional or Technical Fields
about124,000

Professional or Technical fields

Status of Residence
Engineer

Specialist in Humanities

Entering or Residing on the Basis of

Their Status or Position

International Service

about309,000

Examples

Mechanical engineer,
System engineer
White-color worker
(Planning, sales, accounting etc.)
Teacher in language school
Translator, interpreter, designer
Transferee from overseas company

Intra-company Transferee (those who fall within the scope of

Engineer or Specialist in Humanities/

International Service)

Training and Technical Internship Programs

about134,000

Designated Activities (including EPA)

about7,000
Activity other than that permitted under
previous statusex, part-time work of student
about108,000

Skilled Labor

Cook in ethnic restaurant, architect,

pilot, sport instructor

Professor

University professor

Investor, Business
Manager

Manager of foreign-affiliated company

Legal, Accounting

Lawyer, accountant

Medical services

Doctor, dentist, nurse, pharmacist

Researcher in company,
governmental organization
Language teacher in high school
Source: Notification of Employment of Foreign Nationals ( at the end of Oct. 2012)
14 and
Instructor
Each company shall, where he/she has newly hired a foreign national or a foreign national whom he/she employed has separated from service, make a junior
notification
of
the
foreign
nationals
name,
status
of
high school
Researcher

residence, period of stay and other matters to the Ministry of Health, Labour and Welfare. (Foreign nationals with status of residence Diplomat Officials or Special Permanent resident are excluded).

Abilities required for highly skilled foreign workers

Language ability
Approach to foreign markets

Knowledge about foreign business cultures

Developing new product or service which satisfies the needs of
overseas customers
Leadership in global business
Companies are seeking personnel
who can be a bridge between
regional headquarter in Japan and
overseas markets.

The number of foreign workers in

professional or technical fields has been increasing.
The number of alien registrations in professional or technical fields was 200,140 .(Dec 2012)
170% increase from 2002

198,504 201,930 197,980 200,271 200,140

178,057
157,719
144,089
121,280 120,914

127,382

20,717
44,496

55,164

20,807
44,943

65,261

47,682

82,921

89,783

88,146 others

52,273

50,493

46,592

42,634

42,273 engineer

67,291

69,395

68,467

67,854

69,721

56,490

23,210

82,042

71,610
59,769

56,067

78,940

29,044

55,276

35,135

57,323

44,684

61,763

Specialist in
Humanities
/international
service

2002 15
2003 16
2004 17
2005 18
2006 19
2007 20
2008 21
2009 22
2010 23
2011 24
2012
14
(Source: Ministry of Justice, 2012)

others are those who have other status of residence for work excluding diplomat and official.

Economic situation has a great influence on

the number of foreign workers.
The rate of change( from previous year) in the number of foreign workers
in professional or technical fields
14

14

12

12

10

10

others

engineer
Specialist in
Humanities

total

-2

-2

-4

-4

15
20 2009
212010
222011
23
24
2003 16
2004 17
2005 18
2006 19
2007 2008
2012

(Source: Ministry of Justice, 2012)

Global
financial crisis

/international
service

The Great East

Japan Earthquake

A few companies are eager to employ foreigners.

Distribution of foreign workers

(number of company)
25000
20000
15000

60%
10000
5000
0
-5000

-100

100

200

40%

300

400

500
(employee per company)

note Blue indicates companies with 19 employees. Red indicates companies with 10 and more employees.
Size of circles indicates the number of foreign workers.

It is important to promote recruitment in big companies.

Number of companies and foreign workers ( by size of company)
(number of employees)

(number of companies)

24000

24000
22097

22000

22000

20000

20000

18000

18000

16000

16000

14000

13810

12000
10000

12000

10007
7720

7768

8000
6000
4000

14000

13069

10000

9338

8000

5694
4747
3129

3527

4261
1220

2000

6000

6051

1157

1220

798
1441

4000

2000
0

Number of

companies

Number of

employees
(Source: Ministry of Health, Labour and welfare,2012)

The number of foreign students has increased

by 1.8 times in 10 years.
students

Total number of foreign students

(in further education institutions)

Government-sponsored
Privately-founded
Dispatched by Inter-governmental
agreement

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

11
(fiscal year)

(Source: Japan Student Services Organization, FY2011 )

Employment of foreign students in Japanese

companies declined after economic crisis.
Change of Status of Residence from College Student
for Employment Purposes
(people)

application
permission
No permission

Source: Ministry of Justice, 2011

Not all foreign students who desire to work in Japan

are actually employed.
Desirable life path after graduationmultiple answers

foreign students who

graduated from
universities:

60.0%
50.0%

49.6%

52.2%

40.0%

37,898 people.

27.8%

30.0%

graduated during 2011FY

20.0%
8.5%

10.0%

4.2%

7.2%

5.7%
1.4%

0.0%

A: advance
on to school
in JPN

B: find
job in JPN

C: advance
on to school
in home
country

D: find
job in home
country

rd

E: advance on to school in 3 country

rd

F: find job in 3 country

G: not decided

H: unknown
(Source: Japan Student Services Organization, FY2011)

Employed in JPN 7,91020.9

Continue to seek for a job in JPN

4,67812.3
Only about 40 %
of job seekers are
actually
employed.

(Source: Japan Student Services Organization, FY2011)

Mismatch between job offer and job search

From what major do you want to employ foreign students?
(by industry)

Foreign students by their major

(n=137,756)
Domestic
Science, Educatio

2.1%

Manufacturing
industry

n, 2.4%

Health
care,

Others,
9.4%

2.2%

10

11

12 13

14 15 16

99

1: Humanities(literature, history, philosophy)

2: Humanities(foreign literature)
3: Social science(politics, economics, sociology)
4: Social science(law, accounting)
5: Engineering (mechanical, electronic)
6: Engineering(electronic communication)
7: Engineering(civil, architecture)
8: Engineering(others)
9: Science(mathematics, chemistry, biology, physics, earth science)
10: Agriculture
11: Health Science
12:Domestic Science
13: Education
14: Others (Social science and humanities, human relationship)
15: Others(international affairs)
16: not especially
99: no answer

Source: Career Gateway to Asia program, 2011)

Humaniti
es,

20.4%

Non-Manufacturing
industry

total

Arts,
3.3%

Agricultu
re, 2.3% Engineeri
ng,

16.9%

Social
science,

39.3%
Science,
1.6%
Source: Japan Student Services Organization, FY2012

Mismatch between job offer and job search

present and future of highly-skilled professionals
Nationalities of foreign employees at present

Nationalities of foreign employees that companies want to

employ in the future

90.0%
80.0%

Bangladesh
2%

77.0

Srilanka
1%
Thailand
1%

Nepal
2%

70.0%
60.0%

Others
11%

Viet Nam
3%

50.0%
40.0%

Nationalities of foreign students employed

in Japanese companies2011

35.6

Taipei,
China
4%

33.0

30.0%

14.1
15.713.6

20.0%

17.8

13.6

4.2

6.3

Thailand

India

7.3

10.0%

15.2

9.9
6.3

7.3
3.1

14.1
10.5

R.O.Korea
14%

Peoples
Republic of
China
62%

Source: Career Gateway to Asia program, 2011)

US

Philippines

Indonesia

Viet Nam

Taipei,China
(
)

Rep. of .Korea

Peoples
Republic
of China

0.0%

source: Ministry of Justice, FY 2011)

Approaches to accept highly skilled professionals

Promoting acceptance of foreign students

Plan for 300,000 Exchange Students
Promoting employment of highly skilled professionals and foreign
students
Initiatives of Employment Service Centers for Foreigners
Career Gateway to Asia Program
Promoting acceptance and adaption of highly skilled professionals
Points-based preferential treatments
Promoting foreign investment in JapanPromoting acceptance of
global enterprises
Japan as a Asian business center

Plan for 300,000 Exchange Students

Japanese government hopes to boost the number of foreign
students to 300,000 by 2020. (Decided in July, 2008)
Approaches
raise interest among international students in studying Japan
make changes in the current system of entrance exams, enrollment, immigration
Facilitate globalization in Japanese higher education
create good conditions for students to concentrate on their studies
support employment after graduation
Governmental ministries(MOFA,MOJ,MHLW,METI,MLIT,MEXT)
have worked together to achieve these measures.

Further development (from April,2014)

identify target countries and areas ()and allocate coordinators
coordinators will collect and disseminate information and create human network between
local universities, related organizations to secure advanced overseas resources
target countries and areas: ASEAN, Russia, Africa, Middle-East, Southwest Asia, East-Asia, South America, US,
Middle and Eastern Europe

Initiatives of
Employment Service Centers for Foreigners
Employment Service Centers for Foreigners:
public employment office specializing in providing job counseling and placement services for non-Japanese
(in Tokyo, Osaka, Nagoya, Fukuoka)
Job counsellors specializing in employment of foreigners and interpreters are allocated to support
foreigners who are seeking jobs in Japan

Initiatives
Careful support of foreign students job seeking through nation-wide network of employment security
offices until their graduation
Cooperation with universities in finding students who have yet to get job offers, giving guidance to
foreigners hoping to work in Japan in their earlier grade.
Arrangement of internship and employment interview between foreign students and companies to
promote mutual understanding
.

Further Development
Cooperation with Employment security offices specializing
in employment of new graduates in developing job offering
and arranging internship, employment interview etc.
Employment interview held by
Osaka Employment Service Centers for Foreigners

Accepting talented individuals who can be

bridges between Japan and Asian countries
Career Gateway to Asia programApril,2007March,2013
In collaboration between industries and universities, development of advanced overseas
human resources has been promoted.
seek and choose foreign students in Asian countries
provide students with specialized education, Japanese language and Japanese business
employment-support
provide Japanese companies with human resources who work toward global expansion
and innovation
Japan
Asia
Managing entities
employment

publicity
Study
abroad
universities

universities

Specialized education
program
Support for Internship

Nationally
endorsed
scholarship

Training in Japanese business

language and Japanese business
companies
Industry -universities
consortiums

Employment support

In 2 years

Japanese
companies

Points-based preferential treatments

Within professional or technical fields

Highly skilled
professionals

Points are awarded according to applicants

annual salary academic background professional
career research achievement etc,
qualifying score:70 points
recognized as highly skilled foreign professionals and
will be given preferential treatments

professor
Researcher
Investor/Business manager
etc.

even if total points are under 70.

still possible to enter and stay in
Japan under the current framework
of Status of Residence

Introduced in May, 2012

to promote the acceptance of foreign nationals with
advanced abilities and qualifications who are
expected to contribute to Japans economic growth
and creation of new demand and employment
Improved in Dec,2013
points calculation table
contents of preferential treatment

revised

aim to dramatically increase the number of

highly skilled professionals

Points-based preferential treatments

preferential treatment in immigration procedures
Permission for multiple purpose of activities
Easing of requirements for permanent residence
Work permission for the spouse
Permission for domestic workers to accompany
the highly-skilled foreign professionals
Permission for the parent(s) to accompany
the highly-skilled foreign professionals
etc.

Promotion of Japan as an Asian Business Center

By attracting foreign companies and capital to Japan, there will be

the chance of an inflow of superior technologies and new
expertise.

To strengthen Japanese economy

To revitalize Asian economy

Act for Promotion of Japan as an Asian Business Center

Support measures as follows shall be taken for R&D business and regional headquarters
businesses that are newly conducted by global enterprises certified by the competent minister.
- Reduction of corporation tax
- Reduction of patent fees for the outcome of R&D businesses (only for SMEs), etc.

Targets
R&D bases
(gathering advanced researchers
indispensable for innovation)

Regional Headquarters
(gathering advanced managerial
talent indispensable for global
economic society)

Submission of business plan

Examination and Certification by competent minister

Support measures will be taken for global enterprises.

Expected effects
construction of high-value added bases in Japan
creation of employment opportunities
development of new products and technology in cooperation with SMEs

To create comfortable conditions

Support for language education

Arrangement of medical
institution with multilingual
service and medical
interpreters

One-stop service for advice and

assistance in administrative
procedure

Improve educational environment

for childrenex. development of
international schools

Support for improvement

and arrangement of
accommodation

Expansion of Social
Security Agreement

Thank you for your attention!