How the nature of work is changing, and what the Japan government can do to support the workforce

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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.
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  • 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 End of File
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