Japan eyes labor market reform, focuses on AI, chips to drive growth
A revised action plan released in the same day to achieve Prime Minister Fumio Kishida's push to ensure growth and wealth redistribution highlighted his stronger focus on human resources development through wage hikes and the reskilling of workers.
It also aims to boost the appeal of Japan as an investment destination and a key part of global supply chains to cope with rising geopolitical risks.
While Japan has been accepting more foreign workers in recent years, foreign-born workers account for only 1 percent of all professionals and those with jobs that require high skills, far lower than 23 percent for Britain and 16 percent for the United States, according to the government.
Kishida has been urging companies to raise wages to keep pace with accelerating inflation, with the outcome of annual wage negotiations this spring between management and labor unions the best in about three decades. This year, the government will aim for an average minimal hourly wage of 1,000 yen ($7) nationwide, up from around 960 yen in 2022.
The wage gaps are wide between highly-skilled workers in Japan and those in other Group of Seven members and Asian nations that have attracted foreign talent in such fields as management, IT and marketing, as well as research and development.
«We will identify and examine taxation, regulation and other issues to attract more highly skilled workers and take necessary steps,» the action plan said. In addition, the government will consider extending the duration of startup visas issued to people starting a new business in Japan from the current one year, it said. The government plans to have the draft plan formally approved by the Cabinet after consulting with ruling parties later in June, officials said.
As the country's population is projected to shrink sharply in the coming decades, Japan faces an urgent need to address its demographic challenges while ensuring longer-term growth.
With the fast-growing use of AI chatbot ChatGPT creating both opportunities and concerns, the plan states that the government will help boost the research and development of generative AI in Japan and promote greater use of AI in general in medicine, education, finance, manufacturing and administrative work.
Still, it calls for appropriate legislation and guidelines to make AI «trustworthy,» acknowledging risks to privacy and security, disinformation and copyright infringements.
Economic security is another key pillar of the action plan, after Russia's war on Ukraine and the COVID-19 pandemic have exposed vulnerabilities. It said more domestic investment in strategic areas such as semiconductors, batteries, bio-manufacturing and data centers are needed.
«The government will consider assistance in terms of taxation and budgeting on a scale compatible with the rest of the world,» the draft plan said.
In preparation for a «super-aging» society, Japan will launch «a national project» to accelerate brain science research to prevent and treat diseases such as Alzheimer's.