Tackling Japan’s Unrecoverable Demographic Disaster
While the trend of an aging society is not exclusive to Japan and is experienced in many countries, Japan is the first G20 country to go through such a predicament on a massive scale. The costs of decline in the labor force will impact the economy, the country’s international stature and the ability to compete in foreign markets.
It is predicted that Japan will lose economic and political influence in the international arena if foreign professionals are not integrated into companies. (Crawford, 2021). A decrease in population also reduces the domestic market due to the lack of customers consuming products and workforce producing products. Technological advancement in digital technology and education alongside foreign national professionals’ influx is needed to save the economy.
Challenges that must be addressed by leadership in Japan:
- Who will work in Japan by 2050?
- Who will support the elderly when they outnumber all other demographics?
- What economic structure can reasonably support fewer workers and more elderly/incapable?
- How will Japan’s culture be kept alive with so few Japanese to do it?
Story A: Leadership Seminar
In my leadership seminars, I often ask dozens of senior Japanese corporate leaders attending in the room or lately, more often on the Zoom screen, the following question:
Imagine that you are being chased by a criminal 30 years from now in Japan, and you call the police for help. While you are running away from the violent criminal, you can finally see a police officer in the distance coming to your rescue. When the officer approaches, you can now see the clear image of your rescuer. Here I normally stop and let the audience imagine the scene. Then I continue.
Do you want this police officer to be a 78-year old Japanese police officer or a 24-year old Vietnamese-Japanese police officer?
Most of the audience remains silent, looking totally puzzled. They have never thought of such as scenario as possible in their future life.
A society cannot function properly when the majority of the population is over 65 and the minority under 40 without radical changes. By 2050, there will no longer be enough workforce to run the Japanese society. Trains and buses will no longer run so frequently or be on time. There will be not enough firefighters, self-defence force soldiers, and not enough police officers allocated to mini police stations (Koban) at every corner in the city. There will soon not be enough working-age population to sustain Japan’s once-deemed invincible quality, customer service, infrastructure, technology and social infrastructure. The vast majority of companies can not exist without workers and will disappear. Municipalities and local communities will wither away. Older people’s social welfare is too costly to stay at the same level and will come down sharply while young people’s financial burden to support older generations will skyrocket. Many ex-corporate employee