Lecture 1: The background behind the increasing importance of recurrent education in Japan | Japan’s HRM & IR Information | Publications | The Association for Overseas Technical Cooperation and Sustainable Partnerships [AOTS]

February 4th, 2022 [No. 91-2021]

Dr. YAMADA Hisashi,
Vice Chief Counselor, Senior Economist,
The Japan Research Institute, Limited

Japan's initiatives as recurrent education grows increasingly important

Lecture 1: The background behind the increasing importance of recurrent education in Japan

In recent years, one often hears the terms "recurrent education" and "reskilling" among Japanese policymakers and in Japanese industry. Recurrent education got its start in policies adopted in postwar Sweden to encourage midcareer relearning. Reskilling is a term that has come into widespread use in recent years, referring to retraining intended to teach employees the skills newly needed in the workplace.

In the background behind this growth in the importance of relearning and retraining are important factors on both the supply and demand sides of human resources. One important factor that can be identified on the supply side is the fact that today people are expected to continue working for long periods. The average lifespan of Japanese people has skyrocketed from 63.60 years for males and 67.55 years for females in 1955 to 75.92 years and 81.9 years, respectively, in 1990 and 81.41 years and 87.45 years, respectively, in 2019 [1]. At the same time, the birth rate continues to decrease, as the total fertility rate fell to 1.34 in 2020 and the number of births has fallen to less than one-half the figure during the first half of the 1970s.

These trends toward longer lives and a lower birth rate are greatly impacting the social security system. While Japan has developed thorough pension and healthcare programs, since these are based on a structure of transfer of income from the working generations to the retired generations it will be impossible to maintain these through social security programs unless the numbers of workers supporting them are increased, through making it common practice for people to work beyond the age of 60 years. Fortunately, Japan's healthy lifespans are estimated to have grown to 72.14 years for males and 74.79 years for females as of fiscal 2016 [2], physically enabling people to work longer years. However, as knowledge continues to progress steadily in order for workers to continue working for many years it has become necessary for them to learn new knowledge to replace the outdated knowledge that they learned when they were young.

On the human-resources demand side—that is, as a factor related to the business environment—the pace of technological innovation has accelerated, and the knowledge and expertise essential to doing business are growing increasingly advanced and specialized. In particular, progress in digital technologies has led to the introduction of a succession of new information tools, and the ability to put these to full use has become an essential job skill. Recently, the ability to generate efficient business processes utilizing technologies such as artificial intelligence (AI) and Big Data has come to be recognized widely among businesses as being essential to survival amid increasingly intense competition across industries. Under such conditions, teaching employees new knowledge and skills has become one of the most important elements of enhancing corporate competitive strengths.

In light of the above environmental changes on both the supply and demand sides of human resources, needs for relearning and retraining are becoming manifest in the process by which Japanese firms are being forced to modify their organizational and personnel structures. In the past, when the pace of change in the world was relatively slower, and Japanese firms employed stable, pyramid- shaped organizations, there was little need for full-fledged relearning because on-the-job training (OJT) was the most effective method of skills development under Japanese-style human-resources systems characterized by lifetime employment and seniority-based pay. Furthermore, employees in middle age and above tended to play roles more in human-resources management and organizational management than in direct business execution as managers, so that they did not necessarily need to have the latest practical business knowledge.

However, to adapt to today's time of dramatic changes Japanese firms have implemented frequent reorganization and adopted flatter and more flexible organizational structures, proactively recruiting experienced midcareer hires. Their wage structures also have started to focus more on performance, and managers in particular need increasingly to have a command of more advanced and up-to-date knowledge. This has led to the need for recurrent education being pointed out strongly.

[1] Ministry of Health, Labour and Welfare, "2019 Simplified Life Table."
[2] Ministry of Health, Labour and Welfare, "2020 Edition: Annual Health, Labour and Welfare Report: The social security system and people’s work styles in the Reiwa Era."

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