Japan’s demographics are a ticking time bomb. With a rapidly aging population and a declining birth rate, the country faces a critical labor shortage. A 2022 report by the Japan Ministry of Health, Labor, and Welfare projects a workforce shortfall exceeding 8.4 million by 2030. This looming crisis demands innovative solutions that go beyond simply filling empty seats.
Table of Contents
Understanding Japan’s labor shortage
The challenge: A shrinking workforce
Japan’s labor force participation rate, which measures the proportion of the working-age population that is employed or actively seeking work, has been steadily declining. In 2023, it stood at just 62.3%, one of the lowest among developed nations. This workforce shrinkage, coupled with an aging population where many are nearing retirement, creates a significant gap between available workers and job openings.
The traditional approach: Limitations and shortcomings
Traditionally, Japan has addressed labor shortages by relying on increased immigration and longer working hours. However, these approaches have limitations. Public anxieties around cultural integration and a desire to preserve a homogeneous society have hampered significant immigration efforts. Additionally, concerns about worker well-being and burnout have led to a push for shorter working hours, further reducing available labor.
The solution: Embracing automation and upskilling
The answer lies in a two-pronged approach: automation and upskilling. By strategically leveraging automation technologies and investing in workforce development, Japan can create a more efficient and productive work environment with a smaller labor pool.
Automation: Streamlining processes and boosting productivity
As Japan grapples with a persistent labor shortage driven by demographic challenges, companies across various sectors are turning to Robotic Process Automation (RPA) and Intelligent Automation as innovative solutions to address workforce gaps and enhance operational efficiency. A 2021 McKinsey Global Institute report estimates that automation could potentially automate up to 80% of activities across 16 occupational categories in Japan.
Here are some examples of how automation is already making a difference in Japan:
Fujitsu
Fujitsu, a global leader in information technology and services, has implemented RPA to optimize its internal processes and alleviate the burden on its workforce. By automating routine tasks such as data entry, invoice processing, and IT support ticket resolution, Fujitsu has been able to reduce manual effort and free up employees to focus on higher-value activities. This approach has not only improved operational efficiency but also mitigated the impact of Japan’s labor shortage on Fujitsu’s business operations.
MUFG Bank
MUFG Bank, one of Japan’s largest financial institutions, has embraced Intelligent Automation to streamline its banking operations and enhance customer service. By deploying chatbots powered by natural language processing (NLP) and machine learning, MUFG Bank has automated customer inquiries, account inquiries, and transaction processing, reducing the workload on its customer support staff. This automation has enabled MUFG Bank to maintain high levels of service quality and responsiveness despite the challenges posed by Japan’s shrinking workforce.
Hitachi
Hitachi, a multinational conglomerate with operations spanning various industries, has leveraged RPA and Intelligent Automation to optimize its manufacturing processes and supply chain operations. By deploying robots equipped with AI-powered vision systems, Hitachi has automated tasks such as quality inspection, assembly, and material handling in its factories. This automation has increased productivity and reduced reliance on manual labor, helping Hitachi mitigate the impact of Japan’s labor shortage on its manufacturing operations.
Aeon Co., Ltd.
Aeon Co., Ltd., one of Japan’s largest retailers, has implemented RPA to streamline its back-office operations and enhance efficiency in its supply chain. By automating processes such as inventory management, order processing, and vendor management, Aeon has been able to reduce the administrative burden on its employees and improve the accuracy and timeliness of its operations. This automation has allowed Aeon to cope with the challenges of Japan’s labor shortage while maintaining high service standards and reliability for its customers.
ANA Holdings Inc.
ANA Holdings Inc., the parent company of All Nippon Airways (ANA), has adopted Intelligent Automation to optimize its airline operations and improve passenger experiences. By deploying AI-driven algorithms to optimize flight scheduling, crew rostering, and aircraft maintenance, ANA has been able to streamline its operations and reduce the workload on its staff. This automation has enabled ANA to cope with the challenges of Japan’s labor shortage while maintaining high levels of safety, reliability, and customer satisfaction.
These success stories underscore the transformative potential of RPA and Intelligent Automation in helping Japanese companies overcome the constraints imposed by labor shortages and achieve sustainable growth in an increasingly competitive global marketplace.
Upskilling: Empowering the workforce for the future
While automation takes care of some tasks, it is crucial to equip the remaining workforce with the skills needed to thrive in a more automated future. Upskilling programs and training initiatives can bridge the skill gap and ensure workers can collaborate effectively with automation technologies.
Here is what successful upskilling initiatives in Japan might look like:
- Focus on digital skills: Equipping workers with digital literacy, data analysis capabilities, and proficiency in using new technologies.
- Reskilling for emerging roles: Preparing employees for jobs created by automation, such as those related to AI development, data management, and cybersecurity.
- Lifelong learning: Encouraging a culture of continuous learning and skill development to adapt to the ever-evolving work environment.
Examples of successful implementation
Several Japanese companies are already pioneering automation and upskilling initiatives:
- SoftBank Robotics: This company develops humanoid robots for various applications, including eldercare and customer service. They also emphasize employee training to ensure successful human-robot collaboration.
- Nissan: Nissan is heavily investing in automation for its manufacturing plants, while also offering extensive training programs for its workforce to adapt to new technologies.
- IT company under Top Electronic Group: The company has adopted akaBot training course and then built a team with 18 developers. The results were significant: They have confidence in building bots that automate dozens of different operation processes, thereby enabling automation in-house teams to support business optimization.
Conclusion
Japan’s labor shortage presents a unique challenge, but it’s also an opportunity to innovate and adapt. Significantly, by embracing automation, upskilling the workforce, and fostering a collaborative approach, Japan can build a more efficient, productive, and future-proof economy. This transformation will not only address the immediate labor shortage but also position Japan as a leader in the global race toward a more automated and technologically advanced future.
akaBot (FPT) has emerged as a strong partner in addressing Japan’s labor shortage through innovative automation solutions. With our impressive 15,903 RPA bots deployed and 52.5 million hours saved for customers, akaBot demonstrates the potential of automation to optimize operations and free up valuable human resources. Besides, akaBot can tailor our RPA solutions to address the specific needs and challenges of the Japanese market.
To address labor shortages, gain a competitive advantage, and achieve groundbreaking results, contact us today.
References
Japan’s shrinking labor pool sharpens quest for productivity
Japan to support upskilling of one million workers
Japan turns to new technologies to counter labor shortages
akaBot (FPT) is the operation optimization solution for enterprises based on the RPA (Robotic Process Automation) platform combined with Artificial Intelligence, Process Mining, OCR, Intelligent Document Processing, Machine Learning, Conversational AI, etc. Serving clients in 21+ countries, across 08 domains such as Banking & Finances, Retail, IT Services, Manufacturing, and Logistics…, akaBot is featured in “Voice of the Customer” for Robotics Process Automation” by Gartner Peer Insights, G2, and ranked as Top 6 Global RPA Platform by Software Reviews. akaBot also won the prestigious Stevie Award, The Asian Banker Award 2021, Everest Group’s RPA Products PEAK Matrix® 2023, etc.
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