This deck discusses how the nature of work is changing, and what the Japan government can do to support the workforce in terms of human capital. The target audience is the general public in Japan.  Human capital in Japan is currently at a high level. However, as the Japan demography is getting older, this country needs to consider maintaining or expanding the productivity of its aging workforce. Regarding learning, Japan can create an environment for workers to learn new necessary skills continuously. For health, the country can promote the elder's and worker's health improvement to extend the healthy life expectancy.

1. How the nature of work is changing, and
what the Japan government can do to support the workforce
© 2019 IBM Corporation
September 20, 2019
Final Project of MOOC WBGx: WDR1901x
Shunichi Yamaguchi (student)

2. Summary
This deck discusses how the nature of work is changing, and what the
Japan government can do to support the workforce in terms of human
capital. The target audience is the general public in Japan.
Human capital in Japan is currently at a high level. However, as the Japan
demography is getting older, this country needs to consider maintaining or
expanding the productivity of its aging workforce. Regarding learning,
Japan can create an environment for workers to learn new necessary skills
continuously. For health, the country can promote the elder’s and worker’s
health improvement to extend the healthy life expectancy.
© 2019 IBM Corporation

3. 1. How the nature of work is changing
© 2019 IBM Corporation

4. Technology Eliminates and Creates Jobs 4
The idea that “machines take away
our work” has been a concern for
hundreds of years.
It would be true that automation
which new technology such as AI
enables is taking over routine tasks
and will eliminate many low-skill
jobs from across the globe.
However, it is difficult to estimate
how much work will be eliminated
by automation.
Meanwhile, the innovation that
technology enables is creating
opportunities and paving the way
for new and changed jobs.
Source: Glaeser, Edward L. 2018. “Framework for the Changing Nature of
Work.” Working paper, Harvard University, Cambridge, MA.
In the future, the forces of automation and
innovation will shape employment
Estimates of the % of jobs at risk from
automation vary widely

5. Technology Accelerates Worker’s Competition 5
Global value chains will expand with the
development of network technology.
Geography barriers have been
removed, and new jobs have been
brought to new places. Offshore work
for developed countries is increasing.
From the worker’s perspective, this
globalization intensifies worker
competition on an international scale.
There are not many foreign workers in
Japan(1.6% in 2016), and labor mobility
is low, so workers’ competition is
mainly in the organization they work.
However, this globalization requires
them to compete with people around
the world.
For example:
In China, rural micro e-tailers began to
emerge in 2009 on Taobao.com Marketplace.
Owned by Alibaba, it is one of the largest
online retail platforms in China. These
clusters—“Taobao Villages”—spread fast,
from just 3 in 2009 to 2,118 across 28
provinces in 2017. In 2017 490,000 shops
were online.
Source: 2019 World Development Report

6. Technology Increases Gig Economy 6
As the online platform-based business
develops, more people will have
access to it and will be able to work
more flexibly. It is possible to work not
only for long-term employment but
also for a short period contract (gig
economy).
Although the current population of
the gig economy is small, this trend
will continue, while it also can
immobilize “informal economies.“
Two billion people are already
working in the informal economy and
are not protected by stable wage
employment, social safety nets, or
benefits of education. New work
patterns are adding to a dilemma that
predates the latest innovations.
Two out of three workers in emerging
economies are in the informal economy
(selected countries)
In Japan, there are 4.4 million freelancers(1)
while the total number of workers is 66.6
million(2).
Source: (1)2019 Recruit Works Institute. (2)2018 Japan Ministry of
Internal Affairs and Communications
Currently less than 0.5% of the active labor
force participates in the gig economy globally,
with less than 0.3 % in developing countries.
Source: 2019 World Development Report

7. Technology Changes Skills and Learning 7
A lot of jobs will require specific skills
that combine technological know-
how, problem-solving, critical
thinking, and soft skills (cognitive
skills) such as perseverance,
collaboration, and empathy.
Staying in one job, or with one
company, for decades is waning. In
the “gig economy,” workers will likely
have many gigs throughout their
careers, which means they will have
to be lifelong learners.
With the development of technology, the
skills required for humans are for work that
cannot be automated with AI and robotics.
(“cognitive skills”)
Critical thinking
Recognizing emotions
Enhancing teamwork
Advanced analytical skills
Interpersonal skills
Manual skills requiring significant dexterity
People management Relationship
Care giving

8. 2. What the Japan government can do to support the workforce
in terms of human capital
© 2019 IBM Corporation

9. Human Capital 9
Human capital represents the sum
of a population’s health, skills,
knowledge, and experience, which
measures a country’s performance
in terms of economy.
Innovation will continue to
accelerate, and developing
countries will need to act quickly to
be able to compete in the future
economy.
They will need to invest in their
people, especially in health and
education, which are the elements
of human capital, to use technology
to alleviate the worst disruptions.
Learning and stunting are the building blocks
of human capital

10. Human Capital Index 10
The World Bank has developed the
Human Capital Index. It measures the
results of investment in human capital
from the viewpoint of losing the
productivity of next-generation
workers. Learning and stunting are
the two main components of the
index.
In countries with the lowest human
capital investments today, the future
workforce will be only one-third to
one-half as productive as it could be
if people enjoyed full health and
received a high-quality education.
Measuring the productivity as a future worker
of a children born in 2018

11. Human Capital Index of Japan 11
Japan's index is high, which is
suggesting that the future
workforce who are born now will be
highly productive, as they will enjoy
almost full health and receive a
high-quality education.
Meanwhile, as the country's
demography is getting older, this
country needs to consider
maintaining or expanding the
productivity of its aging workforce.
What are the challenges of an
aging workforce in Japan from the
viewpoint of human capital, i.e.,
learning and health?
2018 Human Capital Index:
Japan’s index is high

12. Challenge in Japan – Lifelong Learning 12
Firstly, on learning.
The Japanese population is aging,
and the government is taking
measures to encourage employment
throughout life.
From the viewpoint of learning, there
are few adult learners in this country.
In other words, although the
provision of learning opportunities
for young people before work is
substantial, there is no environment
for workers to learn new necessary
skills continuously.
Proportion of Bachelor's Enrollments
Aged 25+ is low in Japan (2014)
Japan(2.5%)
OECD Avg(16.8%)
Source: National Institute of
Population and Social Security
Research (2017 )
Age 60
2015
2040 Projection
2065 Projection
Source: Japan Ministry of Education,
Culture, Sports, Science and Technology
Aging Japan Population
Countries→

13. Challenge in Japan – Elderly Health 13
The other point is health.
The average life expectancy is very
high in Japan(Male: 80 years old,
Female: 86) while the healthy life
expectancy is about ten years lower.
This data means that, although adult
survival rate is high, the last ten years
of the elderly are non-productive
periods that require a lot of health
care, while the number of these
elderly is increasing.
Japan Healthy Life Expectancy is lower
than its Life Expectancy by about 10 years
Life Expectancy
Healthy Life Expectancy
Gap
Male
Female
Age
Source: Japan Ministry of Health,
Labour and Welfare

14. What can Japan government do? 14
For Japan government to maintain and improve the productivity of future
workers across generations, the followings are proposed solutions:
1. Investing in the encouragement of lifelong learning
• Subsidize workers who attend schools/colleges and other institutions
• Develop learning programs on soft skills and cognitive ones
• Subsidize companies who provide adult learning opportunities for
workers
2. Investing in health promotion to extend the healthy life expectancy
• Develop and promote exercise/lecture programs for the elderly to
maintain and improve their health
• Develop and promote exercise/lecture programs for workers to reduce
the decline in health due to aging

15. What is needed for the solutions? 15
The followings are needed for the proposed solutions to bring the desired
outcome:
1. Funding to subsidize workers/companies who promote adult learning
and health, as well as hiring subject matter experts
2. Subject matter experts who are specialized in soft skills or cognitive
ones to develop the adult learning programs
3. Subject matter experts who are specialized in human health to develop
the worker’s health improvement programs
4. A consortium led by the government with companies, educational
institutions, labor unions, and health insurance associations for
improvement of worker ’s learning and health
The solutions will maintain and improve the human capital of the aging
workforce, which will enhance the productivity of the economy as well as
the quality of life of workers.
Increasing revenue mobilization by upgrading taxation systems, especially
for the global platform companies, will provide fiscal space to finance
human capital development.

16. 16
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