“Demography is destiny.”
It’s a renouned phrase, though it’s incorrect.
That was done apparent to me on a new revisit to Tokyo, where gray-haired people distant outnumbered children in a streets. But a dispatch and discord also suggested that Japan does not accept that a aging race means a mercantile prospects contingency diminish. On a contrary, Japan is harnessing dual of a resources — one prolonged underutilized and a other a long-standing source of strength — to support continued mercantile expansion.
Japan positively faces demographic challenges. It is already a oldest nation in a world, as totalled by both a median age of a race (46.3 years) and a share of a race aged 65 years or some-more (26 percent). That compares to usually 40.4 years and 17 percent, respectively, among all high-income countries. And Japan’s birthrate and central immigration rate are low—as a result, a race is not usually aging, though shrinking. Japan’s working-age race appearance some-more than 20 years ago, in 1995.
And yet, Japan’s economy is chugging along. It is by no means a fastest-growing vital economy in a world, though it nonetheless continues to expand. In fact, Japan’s GDP per capita expansion averaged 1.42 percent annually over a final 5 years — somewhat brazen of a OECD normal of 1.36 percent.
As any economist will tell you, a dual keys to postulated mercantile expansion and aloft vital standards are increases in a distance of a country’s labor force and rises in those workers’ productivity. Economies can't grow in a prolonged run though during slightest one of a dual army in play. In annoy of a demographics, both army are now moving a Japanese economy forward.
How has Japan’s economy remained volatile in a face of a demographic challenges? Sunday offers a answer: It’s a International Day of Women and Girls in Science. Both aspects of what a universe is celebrating currently — women and scholarship — are during play in Japan’s mercantile resilience.
First, a Japanese supervision has actively sought to boost a distance of a labor force by enlivening some-more women to work. Prime Minister Shinzo Abe’s launched his “Womenomics” module in 2013, that has increasing a rate of deputy compensate for those on parental leave and stretched a ability of daycare facilities. In addition, a supervision now requires companies with some-more than 300 employees to divulge gender farrago targets and compared movement skeleton for achieving them.
In partial due to those efforts, womanlike appearance in a labor force has risen from 65 percent in 2013 to 68.1 percent in 2016 — distant brazen of a OECD normal of 63.6 percent. That built on gains in prior years interjection to labor marketplace reforms in a late 1990s and early 2000s.
These policies commend a needed to grow a country’s workforce by harnessing a mercantile intensity of women — a prolonged underutilized shred of Japan’s working-age population.
Second, Japan is leveraging scholarship — some-more accurately, science, technology, engineering, and math (STEM), for that scholarship is used as a shorthand in a name of Sunday’s holiday — to boost a productivity. The nation has prolonged been a personality in technological innovation, though now a technological corner is assisting a economy overcome supposed demographic destiny in dual fields.
Automation and robotics are being employed to capacitate larger levels of outlay with fewer workers. That is quite apparent in a production and construction sectors. For instance, electronic tools builder Nidec is building automating robots and an concomitant complement of Internet of Things inclination to urge potency and some-more simply adjust bureau outlay to direct levels. And in construction, Taisei Corporation and a Chiba Institute of Technology recently introduced a drudge that automates rebar contracting — a routine that routinely accounts for 20 percent of a man-hours compared with constructing building frameworks.
Technology is also enabling Japan to improved caring for a expanding aged population. Toyota is among a companies that have launched robots to assistance Japan’s aged people travel independently, while Panasonic has grown a bed that can separate detached into a wheelchair.
Many companies have also grown fraternisation robots designed for a elderly, including Paro, a baby harp sign that nuzzles people who pet it, and Chapit, a rodent that chit-chats with bed-bound patients. Such developments not usually solve for a necessity of workers in health caring and elder care, though also enables younger family members to continue operative rather than take time off to caring for their aging relatives.
As we applaud a International Day of Women and Girls in Science, it is value gripping in mind a instance of Japan. Demography is by no means destiny if a nation has intelligent supervision policies and an innovative spirit. Other countries struggling with demographic or capability hurdles would do good to obey Japan’s winning formula.
Commentary by Paul A. Laudicina, a authority of AT Kearney’s Global Business Policy Council. He is a partner and authority emeritus during AT Kearney.
For some-more discernment from CNBC contributors, follow