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Economy

Japan industrial policy spotlights AI, foreign labor

Prime Minister Shinzo Abe, center

TOKYO -- Japan has hatched new measures to increase industrial productivity and ease its labor shortage with technological innovation and deregulation, charting a path toward the government's ambitious 600 trillion yen ($5.46 trillion) nominal gross domestic product target.

Plans for productivity

A Cabinet Office council on industrial competitiveness revealed a growth strategy Thursday centered on the so-called fourth industrial revolution of robotics and artificial intelligence. Introducing self-driving cars, drones, technologically enhanced production management and other innovations in industrial settings is intended to raise Japan's productivity, which has fallen behind that of the U.S. and others. The goal is to create a 30 trillion yen market for such technologies by 2020.

Extending productivity increases to small and midsize businesses is a particular emphasis. The council aims to cut the cost of introducing small, general-use industrial robots by 20% and double the number of professionals capable of supporting that process by 2020.

The plan also includes measures encouraging foreign nationals to settle in Japan, aimed at securing a pool of talented workers and drawing investment from overseas companies. The council will consider shortening the time required to obtain permanent residency in Japan from five years to less than three.

Efforts also are underway to ease restrictions on foreign labor in Japan's national strategic special zones. Prime Minister Shinzo Abe pledged Thursday to "clarify standards under which foreign professionals can be employed at businesses helping revitalize Japan's regions." Housekeeping services operating in these special zones already can employ foreign workers under certain circumstances. The government soon will consider expanding that program to farmwork and other fields hit hard by an aging population.

Broader efforts to ease labor shortages in certain key sectors are in the works. Those without formal child care qualifications could have an easier time finding work at public day care facilities in the strategic zones. A framework to increase wages for irregular child care workers also will be considered.

Removing barriers

A separate council on regulatory reform released its own report Thursday, recommending 80 changes in fields such as medicine, employment and investment.

The group's positions on agriculture drew the most attention. Japan's current system for distributing dairy products including butter and raw milk is controlled by agricultural unions, an arrangement criticized by Taro Kono, minister in charge of administrative reform, as a "planned economy." The regulatory council had called for abolishing that restrictive system in a draft report revealed in March.

Yet fierce opposition from the ruling Liberal Democratic Party's farm wing ahead of the upper house parliamentary election in July led that plank to be softened and the word "abolish" removed. Though Kono maintained that "many of those involved in the matter take issue with the current state of the dairy industry," a decision on the distribution system was put off until autumn.

Recommendations on the labor front were similarly lacking in force. The council included measures to provide job seekers with better information on companies and promote internships, though such efforts can hardly be called deregulation. Still-unrealized measures from earlier years, such as efforts to move away from hourly pay in certain areas, were carried over to this year's report as well.

Japan's cabinet will adopt final versions of the growth strategy and deregulation plans at the end of May, along with a broader economic policy framework. The two councils' policies provide a starting point for reform. But more fundamental improvements, both in labor and in the byzantine policymaking process, are needed to put the economy on a secure path to expansion.

(Nikkei)

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