Companies cannot function without an adequate supply of workers and economic growth is constrained if businesses are unable to fill positions. Herein lies the crux of Japan's mightiest long-term economic challenge: The country is losing workers, and its rapidly aging population is poised to grease this outflow. Japan must, therefore, harness its strengths in automation and robotics to overcome this challenge.
Japan's working age population peaked in 1992, and the country has since relied on part-time workers to replace full-time manpower. The share of part-time workers increased to 31% of Japan's total workforce in 2016, up from 15% in 1990. But, in tandem with sliding birth rates, labor flow is tightening as baby boomers reach retirement and restrictive immigration policies limit new arrivals.
