2017

Analysis of the Labour Economy

― Challenges for Promoting Innovations and Realizing Work-Life Balance ―

〔 Summary 〕

September 2017

Ministry of Health, Labour and Welfare

2017

Analysis of the Labour Economy

― Challenges for Promoting Innovations andRealizing Work-Life Balance ―

〔 Outline 〕

While the Japanese economy is gradually recovering, employment situation is steadily improving:

the FY2016 average unemployment rate was 3.0%, the lowest rate in 22 years since FY1994, and

the effective ratio of job offers to applicants was 1.39 times, the highest ratio in 26 years since

FY1990 and so forth. [Fig. 1-1, Fig. 1-2]

[Trends of regions and regular/non-regular employment]

By region, the effective ratio of job offers to applicants reached a level exceeding 1.0 times in all

prefectures for the first time in history since the statistics have been collected. [Fig. 1-3]

For people younger than 55, the number of regular employment workers has increased for two

consecutive years, and in 2016 it increased to 28,050,000, exceeding the rate of increase of that of

non-regular employment workers. [Fig. 1-4]

The rate of involuntary non-regular employment workers has decreased from the same quarter of

the previous year for 13 consecutive quarters since the quarter of January to March 2014. [Fig. 1-5]

[Trends of wages]

The wages of full-time workers have increased for four consecutive years since 2013, and the

hourly wage of part-time workers has been on an increasing trend for six consecutive years since

2011, an increase of 67 yen from 2010 to 1,084 yen in 2016. [Fig. 1-6]

Part I: Trends and Features of the Labour Economy

i

(Note) The numerical values in Fig. 1-3 are based on the place of employment.

1.45

2.13

0.94

2.82.5

3.0

3.5

4.0

4.5

5.0

5.5

0

0.5

1.0

1.5

2.0

2.5

3 7 11 3 7 11 3 7 11 3 7 11 3 7 11 3 7 11 3 7 11 3 7 11 3 7 11 3 7 11 3

2007 08 09 10 11 12 13 14 15 16 17

Fig. 1-2 Unemployment rate and effective ratio ofjob offers to applicants are steadily improving

Unemployment rate (right axis)

Ratio of new joboffers to applicants

Effective ratio of job offers toapplicants for regular employees

Effective ratio of joboffers to applicants

(Times) (%)

(Year/Month)

1.36

1.08

1.401.33

1.39

1.56 1.59

1.25

1.57

1.43

1.24

0

0.8

1.0

1.2

1.4

1.6

1.8

Fig. 1-3 Effective ratio of job offers to applicantsexceeded 1.0 times nationwide (2016)

(Times)

Exceeded 1.0 times in all regional blocks/prefectures

40.1

41.2

1,017

1,084

0

950

1,000

1,050

1,100

0

40

41

42

2007 09 11 13 15

Fig. 1-6 Wages of full-time workers increased for 4consecutive years and hourly wage of part-time workers

increased for 6 consecutive years(10,000 yen) (Yen)

Increased for 6consecutive years

(Year)

Increased for 4consecutive years

Hourly wage of part-timeworkers (right axis)

Monthly wage offull-time workers

1.0

1.3

-8

-6

-4

-2

0

2

4

6

2007 08 09 10 11 12 13 14 15 16

Fig. 1-1 Japanese economy is graduallyrecovering

Real GDP growth rate

Nominal GDPgrowth rate

(Change from theprevious year・%)

(Year)

Both the real and nominalGDP growth rates rose for 5

consecutive years

270

18.9

14.2

0

250

300

350

400

450

500

0

11

13

15

17

19

21

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ

2013 14 15 16 17

Fig. 1-5 Percentage of involuntary non-regular employment workers decreased

(%)

(Year/Quarter)

(10,000 persons)

Decreased from the samequarter of the previous year for

13 consecutive quarters

Number of involuntary non-regularemployment workers (right axis)

2,805

1,307

0

1,200

1,250

1,300

1,350

0

2,750

2,800

2,850

2,900

2007 08 09 10 11 12 13 14 15 16

Fig. 1-4 Regular employment workers increasedfor 2 consecutive years (younger than 55)

(10,000 persons) (10,000 persons)

Regular employment workers

Non-regular employment workers(right axis)

(Year)

ii

[Current status of innovations in Japan]

When compared internationally, the current status of innovations in Japan is at a low level for bothmanufacturing and service industries. [Fig. 2-1]

In order to promote the realization of innovations, active capital investment in R&D anddevelopment of competent human resources (specialized human resources) are important. [Fig. 2-2]

[Challenges for promoting innovation activities]

In Japan, investments in R&D and development of new products are at a low level, and activeinvestments in these fields are important for realizing innovations. [Fig. 2-3]

In order to realize innovations, effective utilization of specialized human resources by conductingpersonnel evaluation based on the R&D results, etc. is important. [Fig. 2-4]

[Awareness of AI utilization and impacts of changes in industrial structure on employment]

Many companies utilize AI to make the existing work more efficient and less labour intensive, butonly a few utilize it to create new added values. [Fig. 2-5]

While workers engaged in the occupations mainly involving routine work are decreasing due tochanges in industrial structure, including the advancement of AI, etc., those engaged in technicalwork helping to create new added values are increasing. The impacts of AI on employment aretherefore considered to vary depending on the occupations, and thus efforts need to be made inunderstanding actual situations in the future. [Fig. 2-6]

(*) “AI” refers to “Artificial Intelligence”.

Part II Chapter 1: Relationship between Economic Growth andInnovation/Employment in Japan

iii

35

190

-386

-500 -250 0 250 500

Occupations requiringtechniques

Occupations requiringhuman added values

Others, including occupationsmainly involving routine work,etc.

Fig. 2-6 Impacts of changes in industrial structure, includingthe advancement of AI, etc., on employment vary depending

on occupations(Increase and decrease of the number of workers till 2030 ・

10,000 persons)

37.0

26.5

24.5

18.5

15.0

0

10

20

30

40

50

60

Germany U.K. France U.S.A. Japan

Fig. 2-1 Percentage of realization of innovationsis low when compared internationally

Manufacturing industry

Service industry

All industries

(%)

(Note 1) The realization of innovations is defined as the “development of new products/services, introduction of new production/sales methods, and creation of new added values through theintroduction of new business management methods”.

(Note 2) The occupational categories in Fig 2-6 are provided by the MHLW, taking into consideration OECD (2016) “The Risk of Automation for Jobs in OECD Countries”, etc.

43.1

9.0 6.93.7

20.417.0

0

20

40

60

Cap

acityenhancem

ent

New

/advanced

prod

ucts

Ratio

nalization/

labour

saving

R&

D

Maintenance/rep

air

Others

1990s 2000s

Fig. 2-3 Investments in R&D and productdevelopment are at a low level

(%)

(Motives

forcap

italinvestm

ents)

44.0 43.033.0

70.061.0 59.0

0

20

40

60

80

R&

D

Acq

uisition

ofad

vanced

mach

ines,etc.

Ed

ucation/training

forem

ployees

Lack

ofcom

peten

tem

ployees

Pu

rsuit

ofim

med

iatesales/p

rofits

Lim

itedtech

nological

abilities

and

kn

ow-h

ow

Promotinginnovation activities

Obstructinginnovation activities

(%)

Fig. 2-2 R&D and utilization of competent humanresources are challenges for innovations

18.3

9.7

-0.7-3.9

-10

-5

0

5

10

15

20

Person

nel

evaluation

based

onth

eR

&D

results

Execu

tivesorigin

atedfrom

R&

Dsection

s

En

han

cemen

tofresearch

ers’au

thority

Re-em

ploym

ent

ofretired

researchers

Fig. 2-4 Reviewing organizational structureswithin companies focused on achievements is

importantPositive impacts on the

realization of innovations

High

(Rate

ofincrease

ofthe

probabilityof

realizationof

innovations)L

ow

Negative impacts on therealization of innovations(%)

iv

Fig. 2-5 Many companies intend to utilize AI for the existing work,but only a few intend to utilize it to create new added values

[General situation of a work-life balance in Japan]

Although the percentage of workers working long hours of 60 or more per week is on a decreasing

trend, it still remains at a level exceeding 10%. In addition, the percentage of workers working long

hours in Japan is high when compared internationally. [Fig. 3-1]

Large percentages of both males and females, mainly in double-income households, are stressed in

their attempts at balancing work and family, and enhancement of efforts to realize a work-life

balance is a challenge. [Fig. 3-2]

[Effects of promotion of a work-life balance and status of efforts of companies]

Although many companies are working towards reducing overtime hours, those actually achieving

positive results are limited, and thus exercising more ingenuity is needed. [Fig. 3-3]

In order to make efforts more effective in achieving a work-life balance, placing a high value on

performing work in shorter hours and reviewing organizational structures are important. [Fig. 3-4]

[Prevalence of working style without being employed]

Working style without being employed are expected to prevail in the future. While such a way of

working is considered effective in achieving a work-life balance, there are issues concerning income

and skill development, etc. It is required to discuss how to respond to such working style in the

future. [Fig. 3-5, Fig. 3-6]

Part II Chapter 2: Changes in Environment Surrounding Working Style andRealization of Work-Life Balance

v

Yes(92.6%)

No(6.8%)

No answer(0.6%)

Fig. 3-3 Approx. half of companies reducedworking hours by efforts to reduce overtime

68.5

71.570.4

65.8

78.9

63.4

0

70

80

Males

Fem

ales

Wife

isa

regularem

ployee

Wife

isnot

working

(full-time

housewife)

Person

herselfis

aregular

employee

Person

herselfis

notw

orking(full-tim

ehousew

ife)

Total Males Females

Fig. 3-2 Large percentages of both males and females, mainly indouble-income households, are stressed from their attempts at

balancing work and family(%)

(Percen

tageof

peop

leb

eing

stressedfrom

their

attemp

tsat

balan

cingw

orkan

dfam

ily)

21.9

11.713.0

12.0

0

5

10

15

20

25

30

0

2

4

6

8

10

12

14

16

18

20

2000 02 04 06 08 10 12 14 16 Japan U.S.A. OECDaverage

Fig. 3-1 More than 10% of workers working at least 60 hours perweek remain, and the ratio of workers working long hours is high

when compared internationally

(Year)

Percentage of workers working atleast 60 hours per week among thoseworking at least 35 hours per week

(%) (%)

Percentage of employeesworking at least 50 hours

per week (right axis) 52.8

45.9

0 20 40 60

Reduced

No change(including “not sure”)

(Effectiveness (actually reduced or not))

55.3

26.7 26.6 26.2 24.5

0

20

40

60

80

100

Can

freelychoo

sed

esirable

work

Can

spendtim

ew

itho

ne’sfam

ily/

for

childcare

andnursin

g

No

annoyin

ghum

anrelations

Sho

rtw

orkingho

urs/com

mutin

gtim

e

Can

choose

thep

laceto

wo

rk

Fig. 3-5 Working style without being employedare effective for realizing a work-life balance

(%)

(Reason

sfor

satisfactionw

ithw

orkin

gstyle

with

out

bein

gem

ployed

)

89.8

31.4

9.8 8.8 8.6

0

20

40

60

80

100

Incom

e(no

payraise/unstable

income,

etc.)

Cannot

developskills/

unclearfuture

prospects

Cannot

freelychoose

desirablew

ork

Work

fluctuation

Long

working

hours/comm

uting

time

Fig. 3-6 Issues concerning income and skilldevelopment exist with working style without

being employed(%)

(Reason

sfor

dissatisfaction

with

work

ing

stylew

ithou

tb

eing

emp

loyed)

22.8

18.717.3 16.8

15.9

0

5

10

15

20

25

Placing

ahigh

valueon

performing

highquality

work

inshorter

hours

Establishing

asystem

thatallow

sothers

tow

orkin

substitution

when

thepersons

incharge

areabsent

Prohibiting

meetings

outsideof

office

hours

System

sin

which

superiorsw

hohave

reducedlong

working

hourso

ftheir

subordinatesare

highlyevaluated

Providing

guidanceto

superiors

who

haveallow

edlong

working

hours

(%)

Fig. 3-4 Placing a high value on hours worked andreviewing work distribution are effective in

reducing overtime

vi

(Differen

ceb

etween

effortsth

atw

orkers

consid

ereffective

inred

ucin

govertim

ean

defforts

actually

taken

)

2017

Analysis of the Labour Economy

― Challenges for Promoting Innovations andRealizing Work-Life Balance ―

〔 Overview 〕

Part I: Trends and Features of the Labour Economy― Employment situation [1] ―

Source: Prepared based on “Report on Employment Service”, MHLW (middle figure and right figure); “System of National Accounts”, Cabinet Office (left figure); and“Labour Force Survey”, Statistics Bureau (MIC) (middle figure)

While the Japanese economy is gradually recovering, employment situation is steadily improving: the FY2016 average unemploymentrate was 3.0%, the lowest rate in 22 years since FY1994, and the effective ratio of job offers to applicants was 1.39 times, the highestratio in 26 years since FY1990 and so forth.

By region, the effective ratio of job offers to applicants increased in all regional blocks and reached a level exceeding 1.0 times in allprefectures.

1.36

1.08

1.40

1.33

1.39

1.561.59

1.25

1.57

1.43

1.24

0.6

0.8

1.0

1.2

1.4

1.6

1.8

Effective ratio of job offers toapplicants by region

2015 2016

(Times)

Exceeded 1.0 times in all regional blocks/prefectures

1.0

1.3

-8

-6

-4

-2

0

2

4

6

2007 08 09 10 11 12 13 14 15 16

Transition of the real/nominal GDPgrowth rate

Real GDP growth rate

Nominal GDP growth rate

(Change from theprevious year・%)

(Year)

Both the real and nominalGDP growth rates rosefor 5 consecutive years

1.45

2.13

0.94

2.8

2.5

3.0

3.5

4.0

4.5

5.0

5.5

0

0.5

1.0

1.5

2.0

2.5

1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1 7 1

2007 08 09 10 11 12 13 14 15 16 17

Unemployment rate/effective ratio of joboffers to applicants

Unemployment rate (right axis)

Ratio of new joboffers to applicants

Effective ratio of job offers toapplicants for regular employees

Effective ratio ofjob offers toapplicants

(Times) (%)

(Year/Month)

1

Part I: Trends and Features of the Labour Economy― Employment situation [2] ―

Source: Prepared based on “Labour Force Survey” (left figure); and “Labour Force Survey (Detailed Tabulation)” (upper right figure and lower right figure), Statistics Bureau (MIC)(Note) “Transfer to regular employment” in the lower right figure indicates the number calculated by subtracting the “Number of persons transferred from regular to non-regular employment”

from the “Number of persons transferred from non-regular to regular employment”.

For people younger than 55, the number of regular employment workers has increased for two consecutive years, and in 2016 itincreased to 28,050,000, exceeding the rate of increase of that of non-regular employment workers.

The rate of involuntary non-regular employment workers has decreased from the same quarter of the previous year for 17 consecutivequarters, and the rate of transfer from non-regular employment to regular employment has increased for 17 consecutive quarters sincethe quarter of January to March 2013.

2,805

1,307

1,000

1,100

1,200

1,300

1,400

1,500

2,600

2,700

2,800

2,900

3,000

3,100

2002 03 04 05 06 07 08 09 10 11 12 13 14 15 16

Transition of the number of employees by employmentstatus (younger than 55)

(10,000 persons)

(Year)

(10,000 persons)

Regular employment workers

Non-regular employment workers (right axis)

270

14.2

200

250

300

350

400

450

500

11

13

15

17

19

21

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ

2013 14 15 16 17

Transition of the ratio of involuntary non-regularemployment workers

(%)

(Year/Quarter)

(10,000 persons)

Decreased from the same quarter of theprevious year for 13 consecutive quarters

Number of involuntary non-regularemployment workers (right axis)

-3

1015

8

15

-10

0

10

20

30

Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ Ⅱ Ⅲ Ⅳ Ⅰ

2012 13 14 15 16 17

Transition of transfer to regular employment (age 15-54)(10,000 persons)

(Year/Quarter)

Annual average

Continue to be positive for 17 consecutive quarters

2

Part I: Trends and Features of the Labour Economy― Trends of wages ―

Source: Prepared based on “Monthly Labour Survey”, MHLW

Nominal wages in FY2016 increased for three consecutive years mainly due to the increase in full-time workers' scheduled wages.

Nominal wages of full-time workers have been increasing for four consecutive years since 2013.

The hourly wage of part-time workers has also increased for six consecutive years since 2011, an increase of 67 yen from 2010 to 1,084yen.

41.2 41.2

39.8

40.2 40.240.1

40.3

40.640.8

41.2

39

40

41

42

2007 08 09 10 11 12 13 14 15 16

Transition of wages of full-time workers

(Year)

(10,000 yen)

Increased for 4 consecutive years

982

1,0091,019 1,017 1,020

1,0281,039

1,0531,068

1,084

900

950

1,000

1,050

1,100

2007 08 09 10 11 12 13 14 15 16

Hourly wage of part-time workers(yen)

(Year)

Increased for 6 consecutive years

0.5

▲0.2

▲1.0

▲0.3

0.5

0.2

0.4

-2

-1

0

1

2

2010 11 12 13 14 15 16

Transition of wages

Contribution of the ratio of part-time workers

Contribution of the total sum of cash earnings of part-time workers

Contribution of the special wages of full-time workers

Contribution of the non-scheduled wages of full-time workers

Contribution of the scheduled wages of full-time workers

(Percentage change・%)

Percentage change from the previous year of the total

sum of cash earnings of all workers

(FY)

3

Improvement of labour productivity

Complementing labour force by AI, etc.(Improving work efficiencies)

Increasing the added value ofindustries

Increasing options for working style(Realizing employment of those with

constraints such as childcare andnursing, etc.)

Elimination of supply constraints

Realization of economic growth under supply constraints

○ Declining economic growth rate○ Supply constraints due to the decline in birthrate and demographic aging

Advancement of innovations

Responding to diversified workstyles of females, etc.

[1] Improvement of added values [2] Realization of work-life balance

Dealing with both as “two halves of the whole”

Part II: Promotion of Innovations and Challenges for Realizing Work-Life Balance

[Current status in Japan]

4

Enhancement of skillsdevelopment

/Utilization of human resources

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Current status of economic growth in Japan ―

The GDP growth rate has remained at a low level of less than 1% when compared to other major countries since the 2000s.

While the contributions of increase in labour and capital inputs are weakening, the TFP increase rate, for which the relationship with theGDP growth rate is becoming stronger, is slowing down. In addition, the TFP increase can be anticipated even where large increase inlabour input cannot be expected.

Source: Prepared based on OECD.Stat(Note) TFP (Total Factor Productivity) refers to growth factors other than capital and labour inputs (e.g., innovations, etc.) when the economic growth is decomposed.

0

100

110

120

130

140

2000 02 04 06 08 10 12 14 15

Transition of the GDP growth rate(Year 2000 = 100)

(Year)

Japan

U.S.A.

GermanyFrance

U.K.

Japan

U.S.A. Japan

U.S.A.（2001-2014）

y = 1.219x + 0.8619（2.55）

R² = 0.3328

（1986-2000）y = -0.0541x + 2.8765

（-0.17）R² = 0.0022

-1

0

1

2

3

4

5

-1.0 -0.5 0 0.5 1.0 1.5 2.0 2.5

(GD

Pgro

wth

rate)

(Increase rate of TFP)

Correlation between GDP and TFP 01-14 86-00

(%)

(%)

Japan

U.S.A.

(TFP 1986-2014)y = -1.0393x + 1.4363

（-1.43）R² = 0.1365

-1

0

1

2

3

4

0 0.5 1.0 1.5 2.0

(Increased

rateo

flab

ou

rin

pu

t)

(Increase rate of TFP)

Correlation between labour input and TFP(%)

(%)

1.7 1.30.5

0.3

-0.7 -0.4

3.0

0.5

0.7

-1

0

1

2

3

4

5

6

1980s 1990s 2000s

Breakdown of contribution of added values

Contribution of TFP

Contribution of labour input

Contribution of capital input

(%)

GDP growth rate

5

GDP growth rate (avg.)France 1.3Germany 1.3Japan 0.8U.K. 1.9U.S.A. 1.9

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Importance of innovations and status in Japan ―

Realizing innovations is important for improving TFP.

When compared internationally, the current status of innovations in Japan is at a low level for both manufacturingand service industries.

Source: Prepared based on “Report on the Fourth Round of the Japanese National Innovation Survey” (2016), National Institute of Science andTechnology Policy (MEXT) (right figure); OECD.Stat (left figure); and “Innovation statistics and indicators”, OECD (right figure)

(Notes) 1) The percentage of realization of innovations refers to the percentage of companies that realized innovations during the reference period: 2012-2014 forJapan, 2008-2010 for U.S.A., and 2010-2012 for other countries.

2) The right figure shows the status of realization of product innovations.

U.K.

Germany

Japan

France

（2013-2014）y = 0.0305x - 1.179

（2.65）R² = 0.3338

-1.0

-0.5

0

0.5

1.0

1.5

2.0

20 40 60 80 100

(Increaserate

of

TF

P)

(Percentage of realization of innovations)

Correlation between innovations and TFP(%)

(%)

6

44.0

28.0 28.0

23.3

19.0

30.0

25.0

21.0

13.811.0

37.0

26.524.5

18.5

15.0

0

10

20

30

40

50

60

Germany U.K. France U.S.A. Japan

Status of realization of innovations

Manufacturing industry

Service industry

All industries

(%)

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Challenges for realizing innovations ―

The factors in promoting innovation activities include R&D and acquisition of advanced machines, etc.

The lack of competent human resources has been an obstructive factor for innovation activities, and making effortsin securing human resources is important.

70

6159 58 58 58

52

48

44

0

50

60

70

80

Lack

ofcom

petentem

ployees

Pursuit

ofim

med

iatesales/p

rofits

Lim

itedtechnological

abilitiesand

know-how

Uncertain

dem

andfor

newproducts/services

Intensem

arketcom

petition

Lack

ofgood

ideas

Stable

ordersfrom

theexisting

customers

Difficulty

infinding

cooperationpartners

Lack

ofinternal

funds

Obstructive factors for innovation activities(business establishment survey)

(%)

44 43

33

21

1715 14

0

10

20

30

40

50

R&

D

Acquisition

ofadvancedm

achines,etc.

Education/train

ingfo

rem

ployees

Marketing

activities

Oth

eractivities

Design

activities

New

utilizationof

advancedIT

services

Promoting factors for innovation activities(business establishment survey)

(%)

Source: Prepared based on “Report on the Fourth Round of the Japanese National Innovation Survey” (2016), National Institute ofScience and Technology Policy (MEXT)

7

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Importance of capital investments for realizing innovations ―

The trend toward obsolescence is rising in Japan, and the fact that investments in product development and R&D aresmall has been a factor obstructing the advancement of innovations.

It has been observed that the relationship is such that the more R&D advances, the easier it is to innovate, andadvancing R&D aimed at creating new business and enhancing technology platforms is important.

U.K.

Germany

France

Japan

0

20

30

40

0 10 11

(Percen

tageof

realizationof

inn

ovations)

(Obsolescence)

Relationship between the percentage of realization ofinnovations and obsolescence

(%)

(Year)

The obsolescence is high, and the percentageof realization of innovations is low

The obsolescence is low, and the percentageof realization of innovations is high

20.6 16.1 10.2 16.9 11.3

37.0

26.5 24.5

18.515.0

0

10

20

30

40

Germany U.K. France U.S.A. Japan

Relationship between the increase rate of R&D expenses andthe percentage of realization of innovations

Increase rate of R&D expenses Percentage of realization of innovations

(%)

66.0

32.048.0 48.0

0

20

40

60

80

Enhancement of existing businesses Creation of new business and enhancement ofown technology platforms

Objectives of R&D

Japan U.S.A.

(%)49.7

7.38.3

4.214.2 16.4

43.1

9.0 6.93.7

20.4 17.0

0102030405060

Cap

acityen

han

cemen

t

New

/advan

cedp

rodu

cts

Ration

alization/laboursavin

g

R&

D

Main

tenance/rep

air

Oth

ers1990s

2000s

Motives for capital investments(company survey)

(%)

Source: Prepared based on “National Wealth Survey”, Cabinet Office (upper left figure); “Report on the Fourth Round of the Japanese National Innovation Survey”(2016), National Institute of Science and Technology Policy (MEXT) (upper left figure and upper right figure); “The R&D Process in the U.S. and Japan:Major findings from the RIETI-Georgia Tech inventor survey” (2009) (lower right figure) and “JIP Database 2015” (upper left figure), Research Institute ofEconomy, Trade and Industry; “Survey on Planned Capital Spending” Development Bank of Japan (lower left figure); EU KLEMS database (upper leftfigure); “Innovation statistics and indicators”, OECD (upper left figure); and OECD.Stat (upper right figure)

(Note) The reference period in the percentage of realization of innovations: FY2012-2014 for Japan, 2008-2010 for U.S.A., and 2010-2012 for other countries. 8

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Importance of utilizing advanced human resources for the realization of innovations ―

In Japan, education/training is not conducted in 60% or more of companies, and promotion of education/training is important forrealizing innovations.

Utilizing advanced human resources such as graduates from doctoral programs is effective for realizing innovations, but the percentageof these graduates is low in Japan, and recruitment that takes into consideration specialized knowledge and research content has notbeen accomplished.

U.K.

Germany

Japan U.S.A.

y = 7.8232x + 7.6461R² = 0.4571

0

10

20

30

40

50

0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

(Percentage

ofrealizationof

innovations)

(Percentage of graduates from doctoral programs)

Relationship between the percentage of graduates fromdoctoral programs and the percentage of realization of

innovations(%)

(%)

3.12.7

2.4

1.2

3.22.9 2.7

0.50

1

2

3

4

Eagerness/w

illingness

Ability

totake

action/getthings

done

Com

municatio

nskills

Specialized

knowledge/resea

rchcontent

Matters in which emphasis is on recruitment(company survey) Graduates of doctoral

programs

Graduates ofuniversities/master’sprograms

Greater

imp

ortan

ce

(Point)

Source: Prepared based on “Report on the Fourth Round of the Japanese National Innovation Survey” (2016), National Institute of Science and Technology Policy (MEXT) (left and upper right figure);“Questionnaire Survey of Corporate Recruitment and Employee Education” (2012), Japan Association of Corporate Executives (lower right figure); and “Innovation statistics andindicators”, OECD (upper right figure)

(Notes) 1) The left figure shows the percentage of implementing education/training by counting companies that answered “High importance” or “Medium importance” to the question about the degreeof importance of the obstructive factor of lack of competent employees for realizing innovations as “Yes” and those that answered “Low importance” or “No importance” as “No”.

2) The reference period in the percentage of realization of innovations in the upper right figure: FY2012-2014 for Japan, FY2012-2013 for Australia, 2009-2010 for Chile, 2008-2010 forU.S.A., and 2010-2012 for other countries. 9

34 31

66 69

0

10

20

30

40

50

60

70

80

90

100

Yes No

Experience of innovations being obstructed by lack of competent employees

Relationship between the experience of innovations beingobstructed by lack of competent employees and the percentage of

implementing education/training for employeesEducation/training is implementedEducation/training is not implemented

(%)

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Efforts for effective utilization of human resources ―

Introduction of personnel evaluation based on the R&D results and discretionary labour system is important for the realization ofinnovations.

In introducing such employment systems, efforts such as conducting appropriate personnel management to prevent long working hoursare also important.

18.3

9.7

-0.7

-3.9

-10

-5

0

5

10

15

20

Person

nelevalu

ationb

asedon

the

R&

Dresu

lts

Ex

ecutives

originated

fromR

&D

sections

En

han

cementof

researchers’

auth

ority

Re-em

ploym

ent

ofretired

researchers

Increase rate of the probability of realization ofinnovations and concrete measures(In

creaserate

ofth

ep

robab

ilityof

realizationof

inn

ovations)

(%)

37.9

22.9

0

10

20

30

40

50

Introduced Not introduced

Introduction of discretionary labour system andpercentage of realization of innovations

(%)

Source: Prepared based on “Effects of Organizational/Personnel Management in R&D Activities on Innovations” (2016), National Institute of Science andTechnology Policy (MEXT) (left figure) and questionnaire information of “Survey on Status of Responding to Innovations” (2017), The JapanInstitute for Labour Policy and Training (right figure)

(Note) The numerical values in the left figure indicate the increase rate of the probability of realization of innovations when each measure is implemented.10

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Changes in workers associated with innovations ―

Industries are becoming more service-oriented in Japan, and by occupation, the percentage of workers engaged inclerical work and specialized/technical work is increasing.

The percentage of female researchers remains at a low level when compared to other countries.

155.5

186.0

193.7

338.8

0

50

100

150

200

250

300

350

1970 75 80 85 90 95 2000 05 10 14

Changes in the number of workers/employees(U.S.A)(Year 1970 = 100)

(Year)

Personsengaged inmanufacturi

ng,production,

machineoperation,

andconstruction

29.7%

Personsengaged inagriculture,

forestry, andfishery17.3%

Personsengaged in

clerical work14.8%

Personsengaged in

sales13.0%

Personsengaged in

security andservices

7.6%

Personsengaged inspecialized/

technicalwork5.8%

Others11.9%

[1970]

Personsengaged in

clerical work19.7%

Personsengaged inspecialized/

technicalwork

16.5%Persons

engaged inproductionprocesses

13.9%

Personsengaged in

sales13.4%

Personsengaged in

services12.3%

Others24.2%

[2015]

Transition of the number of workersby occupation

Source: Prepared based on “Labour Force Survey”, Statistics Bureau (MIC) (middle figure); “National Accounts Main Aggregates Database”, UN (left figure); and“Education at a glance 2016”, OECD (right figure)

123.9

168.0

307.4

0

50

100

150

200

250

300

350

1970 75 80 85 90 95 2000 05 10 13

Changes in the number of workers/employees(Japan)

WorkersEmployees

Population

GDP growth rate

(Year 1970 = 100)

123.5(Population in 2010)

(Year)

122.7

11

15.3

26.1

37.4

45.6

33.1

0 10 20 30 40 50

Japan

France

U.K.

Italy

OECDaverage

(%)

Ratio of female researchers(international comparison)

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Changes in workers based on skills ―

By skill, polarization is advancing in Japan, and the number of workers in low-skilled occupations is increasing when compared toU.S.A.

The reasons for the increase in the number of workers in low-skilled occupations are considered to be the failure to keep up with the ITrevolution and the increase in non-regular employment workers due to diversified working styles.

18.4

-13.6

140.4

-20

0

20

40

60

80

100

120

140

160

Changes in the number ofworkers by skill (Japan)(%)

24.2

-11.9

7.8

-20

-15

-10

-5

0

5

10

15

20

25

30

Changes in the number of workersby skill (U.S.A.)

(%)

100.0

144.7

46.1

100.0

142.1

184.7

0

50

100

150

200

Early stage Middle stage Late stage

Difference in GDP in manufacturing industry andinformation and communications industry

between Japan and U.S.A.Manufacturing industry

Information and communications industry

(Early stage=100)

22.0

39.2

52.3

13.0

25.7 28.0

0

10

20

30

40

50

60

Percentage of non-regular employment workers by skill

2012 1997

(%)

Source: Prepared based on “Basic Survey on Employment Structure” (lower right figure) and “Labour Force Survey” (left figure), Statistics Bureau (MIC); OECD.Stat(upper right figure); EU KLEMS (upper right figure); IMF stat (upper right figure); and “Labor Force Statistics from the Current Population Survey”, Bureau ofLabor Statistics, US Department of Labor (middle figure)

(Notes) 1) In the upper right figure, the early, middle, and late periods of the manufacturing industry refer to 1980, 1985, and 1990, and those of the Information andcommunications industry refer to 2000, 2005, and 2014, respectively.

2) Here the occupations requiring complex work are expressed as high skill and those requiring routine work as low skill.3) The left and middle figures show the increase rate from 1995 to 2015.

High LowDifficulty of skill

High LowDifficulty of skill

High LowDifficulty of skill

12

45.3

-15.0

4.7

27.0

-78.5

46.5

107.9

35.7

-0.5

-38.4

-187.1

-36.7

1.6

-73.6

-250 -200 -150 -100 -50 0 50 100 150

Engineers

Specialized work

Creative work

Managerial work

Clerical post

Sales

Home helpers, etc.

Service

Security

Agriculture, forestry, and fishery

Production processes

Transportation, etc.

Construction, etc.

Cleaning, etc.

Changes in the number of workers by occupations

(10,000 persons)

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Impacts of the advancement of AI, etc. on employment ―

As one impact that AI brings to workplaces, labour productivity is expected to improve through reduced working hours and improvedwork efficiencies, but only a few companies utilize AI to create new added values.

The advancement of AI is expected to change the way of employment, but employees engaged in occupations requiring techniques andhuman added values, etc. will increase.

-225

-161

-160

-1

-300 -200 -100 0

Labour forcepopulation

Total of all industries

Manufacturing

Non-manufacturing

(10,000 persons)

Changes in the labour force populationand the number of workers

35

190

-386

-500-400-300-200-100 0 100 200 300

Occupations requiringtechniques

Occupations requiringhuman added values

Others, including occupationsmainly involving routine work,etc.

Changes in the number of workers by skill

(10,000 persons)

67.554.4

43.0 36.826.3

12.3 9.6

0

20

40

60

80

Impro

vingefficiency/pro

ductivityo

fexisting

wo

rk

Saving

existinglabo

urfo

rce

Impro

vingvalues

provided

byexisting

wo

rk

Supplem

entinginsufficient

labour

force

Creating

wo

rkw

ithnew

values

Increasingm

otivatio

nto

engagein

andsatisfactio

nw

ithnew

wo

rk

Increasingm

otivatio

nto

engagein

andsatisfactio

nw

ithexisting

wo

rk

(%) Possible roles/functions of AI

78.1 78.1 51.7

83.4 79.470.2

0

20

40

60

80

100

Reduced working hours Increased work efficiency Reduced scope of work

Impacts of the introduction of AI on workplaces Company survey

Employee survey(%)

Source: Prepared based on “Interim Report on the New Industrial Structure Vision - Japan's Strategy to lead the fourth industrial revolution” (2016), METI (lower figure); and “Estimate oflabour force demand and supply - Preliminary Calculations by Prefecture Based on New National Estimate (2015 edition)” (lower figure), “Survey on Status of Responding toInnovations” (2017) (upper left and upper right figure), and “Survey on Working Style for Responding to Innovations” (2017) (upper left figure), The Japan Institute for LabourPolicy and Training

(Note) “Employee survey” in the upper left figure refers to the survey on regular employees. 13

Part II Chapter 1: Relationship between Economic Growth and Innovation/Employment in Japan― Abilities required for workers in the age of advanced AI ―

The skills required in the age when AI is commonly used include the ability to understand the possibility of AI and make full use of itand communication skills that cannot be replaced by AI, and improving these skills will be important in the future.

While both companies and employees do not have much sense of danger about the prevalence of AI, raising their awareness is needed.

21.8

58.9

0

10

20

30

40

50

60

70

Job

su

nlikely

toreq

uire

com

mu

nicatio

nskills

Job

sreq

uirin

gco

mm

un

ication

skills

Jobs needs to be performedby humans

Source: Prepared based on “Survey on Status of Responding to Innovations” (2017) (middle figure and right figure), “Survey on Working Style for Responding toInnovations” (2017) (middle figure and right figure), The Japan Institute for Labour Policy and Training; and “The Effects of AI and Robotics on Business andEmployment: Evidence from a Survey on Japanese Firms” (2016), Morikawa (left figure)

(Notes) 1) In the left figure, “Jobs unlikely to require communication skills” refers to driving vehicles, etc. and “Jobs requiring communication skills” refers to nurseryservices, medical services, and education, etc.

2) “Employee survey” in the middle and left figures refers to survey on regular employees.

(%) (%)

(%)71.6

45.2

39.3

29.7

21.4 20.9

72.6

41.836.6

22.424.6

20.0

0

10

20

30

40

50

60

70

80

Ru

dim

entary

kn

owled

gefor

correctlyu

nd

erstanding

the

values

and

possib

ilitiesof

AI

Tech

nological

kn

owled

gefor

correctlyu

nd

erstanding

the

values

and

possib

ilitiesof

AI

Creativity

and

design

ability

tocon

sider

the

meth

ods

ofu

tilizing

AI

Sk

illfor

imp

lemen

ting

AI

invariou

ssystem

s

Basic

skills

forread

ing/w

riting

program

sto

createA

I

Ad

vanced

program

min

g,design

ability,d

ataju

dgm

ent

forsearch

ing/p

ursuing

various

possib

ilitiesof

AI

Skills required in the age when AI is commonly used

Company survey

Employee survey

19.9

33.6

46.6

22.0

34.3

43.7

0

5

10

15

20

25

30

35

40

45

50

Less than 10years

10 years fromnow

More than 10years

Period when AI is introduced inthe company

Employee survey

Company survey

14

Source: Prepared based on “Monthly Labour Survey”, MHLW (left figure); “Labour Force Survey”, Statistics Bureau (MIC) (middle figure); and OECD.Stat (right figure)

13.0

21.9

12.811.7

7.8

5.0

0

5

10

15

20

25

Total ofOECD

membercountries

Japan U.K. U.S.A. France Germany

Percentage of workers working long hours(international comparison)

(%)

Percentage of employeesworking at least 50 hoursper week

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Current status surrounding a work-life balance, including long working hours ―

168.8 168.7

154.4

143.7

20.31

30.7

0

5

10

15

20

25

30

35

130

140

150

160

170

180

190

2000 05 10 16

Total of all workers

Ratio of part-time workers (right axis)

(Number of hours)

Transition of work hours

(Year)

(%)

Full-time workers

17.6

13.412.7

12.0

0

2

4

6

8

10

12

14

16

18

20

2000 05 10 15 16

Percentage of workers working long hours(total of males and females)

(Year)

(%)

Percentage of workers working atleast 60 hours per week among thoseworking at least 35 hours per week

15

While the number of working hours of full-time workers remains stable, the number of workers working long hours is decreasing, but

still remains over 10%. In addition, the percentage of workers working long hours in Japan is high when compared internationally.

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Changes in environment surrounding working style and increase in number of double-income households ―

With the progress of labour participation of females in the child-rearing generation, the participation rate of females with households isrising, and double-income households are increasing.

Female’s awareness about employment has changed, and those hoping to work even if their husbands have high income and thosewilling to continue to work even when they have children are increasing.

46.6

61.359.4

67.468.774.1

16.9 19.7

0

10

20

30

40

50

60

70

80

2006 16

Participation rate of females with households(%)

Age 45 to 54

Age 35 to 44

Age 25 to 34

65 or older

(Year)

59.8 62.968.1

48.9

90.7

73.9

93.3

71.8

30.9

15.8

0

20

40

60

80

100

Males Females Males Females Males Females Males Females

Total Age 25 to 34 Age 35 to 44 65 or older

Changes in the employment rate

2000 2016(%)

0

50

60

70

80

Less than 2 million At least 2 million,but less than 5 million

At least 5 million,but less than 10 million

At least 10 million

Employment rate of wives by income level ofthe husbands

(%)

2016

2011

20022006

(Yen)

4.1 3.37.8 4.6

10.4 8.3

33.1

54.4

37.6

26.2

0

10

20

30

40

50

60

2000 02 04 07 09 12 14 16

Transition of awareness aboutemployment of females

(%) Females shouldcontinue to work evenwhen they have children

Females should stopworking when theyhave children, and startworking again whenchildren get older

Females shouldcontinue to work untilthey have children

Females shouldcontinue to work untilthey are married

Females should notwork

(Year)

Source: Prepared based on “Public Opinion Survey on a Gender-Equal Society” (2016), Cabinet Office (lower right figure); and “Labour Force Survey” (upper leftfigure and lower left figure) and “Labour Force Survey (Detailed Tabulation)” (upper right figure), Statistics Bureau (MIC)

16

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Challenges in balancing work and family ―

Those working longer hours tend not to realize a work-life balance, and husbands/wives in double-income households are morestressed than those in full-time housewife households, and therefore efforts for realizing a work-life balance are important.

As the baby boomer generation (those born in 1947-1949) turns 75 years old in the years to come, the nursing care needs of the babyboomer junior generation (those born in 1971-1974) who are the bearers of employment will increase.

68.5

70.4

68.5

65.8

71.5

78.9

71.7

63.4

0

65

70

75

80

Total

Wife

isa

regular

emp

loyee

Wife

isa

non

-regular

emp

loyee

Wife

isn

otw

orkin

g(fu

ll-time

hou

sewife)

Total

Person

herself

isa

regular

emp

loyee

Person

herself

isa

non

-regular

emp

loyee

Person

herself

isn

otw

orkin

g

Males Females

Stress conditions of a balance betweenwork and family

Being stressed

(%)

Source: Prepared based on “Individual/Company Survey on Work-Life Balance” (2014), Cabinet Office (left figure); “2015 Population Census”, Statistics Bureau (MIC)(right figure); and “National Employment Situation Panel Survey” (2016), Recruit Works Institute, Recruit Holdings (middle figure)

973 964

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Ag

e15

to19

Ag

e20

to24

Ag

e25

to29

Ag

e30

to34

Ag

e35

to39

Ag

e40

to44

Ag

e45

to49

Ag

e50

to54

Ag

e55

to59

Ag

e60

to64

Ag

e65

to69

Ag

e70

to74

75

orold

er

(10,000 persons)

Population by age group

41.8

29.4

58.2

70.6

0

20

40

60

80

100

Less than 10 hours 10 hours or more

Matching status between expectedand actual work-life balance (regular

employees)

Expected status and actual status do not match

Expected status and actual status match(%)

(Daily work hour)

17

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Effectiveness of efforts to realize a work-life balance ―

It has been observed that the relationship is such that the shorter the working hours, the higher the labor productivity, and thereforereducing working hours is important.

By advancing efforts to realize a work-life balance, increased income and lower turnover rate can be expected.

Tokyo

Osaka

Okinawa

y = -6.0606x + 15515（-4.3） （6.2）R² = 0.293

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

1,600 1,700 1,800 1,900 2,000

(Lab

our

pro

ductivity)

(Number of hours worked)

Relationship between work hours and labourproductivity (by prefecture • 2013)

(Number of hours)

(Yen)

34.4

52.6

37.0

49.3

0

10

20

30

40

50

60

Decreased

Increased

Decreased

Increased

Yes No

(%)

Sales by status of receivingcertifications/awards, etc.

Source: Prepared based on “Monthly Labour Survey (Prefectural Survey)”, MHLW (left figure); “System of National Accounts”, Cabinet Office (left figure);and questionnaire information of “Survey on Effects of Companies’ Employment Management on Business Operations” (2015), Mitsubishi UFJResearch and Consulting (middle figure and right figure)

30.9

56.6

0

10

20

30

40

50

60

Yes No

(%)

Turnover rate by status of receivingcertifications/awards, etc.

18

69.1 66.155.1 50.0 45.0 43.1 42.3 38.3

26.0 24.217.1

12.0 10.3 6.7 1.9 0.10

20

40

60

80

Un

derstan

din

gactu

alsitu

ations

(actual

work

hou

rs,etc.)

Alertin

gan

dp

rovidin

gad

viceto

work

ersw

orkin

glon

gh

ours

and

their

sup

eriors

Review

ing

the

conten

t/division

ofw

ork

Introd

ucin

gan

advan

cen

otificationsystem

forovertim

ew

ork

Gran

ting

comp

ensatory

days

offfor

work

ing

onh

olidays

Establish

men

tofn

oovertim

ew

orkd

ays

Secu

ring

app

ropriate

person

nel

Raisin

gaw

areness

byen

courag

emen

tfromth

etop

man

agem

entan

din

trodu

cing

busin

essstrateg

ies

Prom

oting

the

utilization

ofn

on-reg

ular

emp

loyeesan

dou

tsourcin

g

Provision

oftrain

ing

and

raising

awaren

esson

work

hou

rm

anag

emen

tand

health

main

tenan

cefor

man

agers

Hold

ing

discu

ssions

atcom

mittees,

etc.

An

nou

ncin

gclosin

gtim

evia

pu

blicad

dress

system,

etc.

Provision

oftrain

ing

and

raising

awaren

esson

work

hou

rm

anag

emen

tand

health

main

tenan

cefor

non

-m

anag

ers

Man

datory

ligh

ts-offan

dp

ower

offof

allP

Cs

aton

ce

Oth

ers

No

answ

er

Content of concrete efforts of companies that reduced overtimework hours

(%)

52.8

45.9

1.3

0 10 20 30 40 50 60 70

Reduced

No change (including “not sure”)

No answer

Effectiveness (actually reduced or not)(%)

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Effective efforts to reduce long working hours ―

Many efforts have been taken to reduce long working hours, but the actual effects are limited.

Although companies that reduced long working hours have taken such efforts as understanding the actual conditions, efforts that areconsidered effective such as “placing a high value on performing high quality work in shorter hours” and “establishing a system thatallows substituting work” have not been sufficiently implemented, and therefore implementing these efforts in addition would be moreeffective.

Yes(92.6%)

No(6.8%)

Noanswer(0.6%)

Efforts to reduce overtime work hours(Of companies that answered “Yes”)

Source: Prepared based on “Individual/Company Survey on Work-Life Balance” (2014), Cabinet Office (lower right figure); and “Survey on Working HoursManagement and Efficient Work Styles” (2015), The Japan Institute for Labour Policy and Training (upper figure and lower left figure)

19

0

10

20

30

Placing

ahigh

valueon

performin

ghigh

qualityw

orkin

shorterhours

Establishing

asystem

thatallow

sothers

tow

ork

insubstitutio

nw

henthe

personsin

chargeare

absent

Prohibiting

meetings

outsideof

officehours

System

inw

hichsuperiors

who

havereduced

longw

orkinghours

of

theirsub

ordinatesare

highlyevaluated

Punishm

ents/penaltiesto

superiorsw

hohave

allowed

longw

orkinghours

Lim

itingthe

time

andnum

berof

meetings

(settingthe

upperlim

itto

onehour,

etc.)

Mandatory

lights-off

inoffices

Rem

indin

gby

superiors

Establishing

scheduledno

overtime

work

days

Introducinga

managem

entsystem

ofentering

andleaving

time,

andalerting

Efforts that workers consider effective in reducing overtime

Effective efforts Efforts actually taken

(%)

Difference between effective effortsand efforts actually taken

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Status and Efforts of balancing housework/child care and work ―

There is almost no difference in the number of hours husbands spend in housework between double-income households and full-time housewife households.

The percentage of males wishing overtime work hours to be reduced so that they can engage in housework/child care is high, mainly among workers workinglong hours.

Many people are willing to cooperate with those raising children while working, and therefore asking people around in workplaces, etc. for support iseffective.

0

20

40

60

80

Red

uced

overtime

work

Leaves

that

canm

oreeasily

be

taken

Imp

rovedcom

mu

nication

with

one’s

spou

se

More

flexible

person

nel

assignm

ent

inw

orkp

laces

Imp

rovedsk

illsin

hou

sework

/ch

ildcare

Matters considered necessary to engage in housework/child care (males/regular employees) (by work hour)

Less than 10 hoursAt least 10 hours, but less than 12 hours12 hours or morePersons dissatisfied with 12 hours or more

(%)

Source: Prepared based on “Individual/Company Survey on Work-Life Balance” (2014), Cabinet Office (middle figure); “Survey on Time Use and Leisure Activities”(2011), Statistics Bureau (MIC) (left figure); and “7th Survey on Working Life” (2015), The Japan Institute for Labour Policy and Training (right figure)

12

207

9

283

0 100 200 300

Hu

sban

ds

Wives

Hu

sban

ds

Wives

Number of hours husbands and wives spentin housework by household attribute

(Minute)

Do

ub

le-Inco

me

ho

useh

old

sF

ull-tim

eh

ou

sewife

ho

useh

old

s

20

82.2

65.7

0

20

40

60

80

100

Su

pp

ortin

gco

wo

rkersat

wo

rkplaces

Su

pp

ortin

gn

eighb

ors

and

peo

ple

inco

mm

un

ities

(%)

Awareness about supporting those raising childrenwhile working (Percentage of those who answered

that they are willing to support)

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Effects of new work styles utilizing information technologies ―

While new work styles associated with technological revolutions are drawing attention, promoting the introduction of new work stylesutilizing information technologies such as telework is expected to contribute to the improvement of labour productivity and realizationof a work-life balance.

Telework, which has been broadly spreading, is advantageous for both companies and workers in improving work productivity,reducing stress, and securing family communications, etc.

52.2

34.9 34.931.0 31.0 30.6

12.99.1

0

20

40

60

Mo

red

iversew

ork

styles

Impro

vedlabo

rparticipatio

nrate

of

theexisting

emplo

yees

Readjustm

ento

fo

rganization

andperso

nnelassignm

ent(co

nsolidatio

no

fthe

wo

rkw

ithhigher

addedvalues,

etc.)

Impro

vedsatisfactio

nand

mo

tivation

of

emplo

yees

Acquisitio

nand

sharingo

fkno

wledge/kno

w-ho

w

Recruitm

ento

fnew

emplo

yees

Increasedw

ork

hours

Impro

vedrelatio

nshipsw

ithexternal

interestedparties

(insideand

outside

theindustry,

dom

esticand

overseas,

etc.)

Effects of promoting labour participation utilizinginformation technologies

(%)54.4

17.4 16.5 15.210.0

0

20

40

60

Imp

rovedp

rodu

ctivity/efficiency

ofw

ork

Less

comm

utin

gb

urd

en

Imp

rovedcu

stomer

services

Less

stressan

dm

orep

eaceof

min

d

More

family

comm

un

ications

Advantages of telework(%)

16.2

3.4

0

5

10

15

20

2011 12 13 14 15

Status of introducing telework

Introduced

Not introduced, but have concrete plans to do so

(%)

(Year)

27.0

31.4

0

26

28

30

32

Overall total With high labour productivity

Percentage of increased use of IT technologiesin the last 3 years(%)

Source: Prepared based on “Study Report on a Structural Analysis of the ICT Industry in the IoT Era and Verification of ICT’s Multifaceted Contributions to Economic Growth” (2016)(lower left figure) and “FY2015 Communications Usage Trend Survey” (upper right figure), MIC; and Survey on Working Hours Management and Efficient Work Styles” (2015)(upper left figure) and “Results of Study on the Actual Situation of Diverse Work Styles Using Information and Communication Devices” (2014) (lower right figure), The JapanInstitute for Labour Policy and Training 21

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Interest in flexible work styles utilizing technological innovations and their effects [1] ―

There is a high interest in working styles enabling people to work whenever and wherever they choose, and the number of people

choosing working styles without being employed utilizing information technologies is increasing.

By income level, those with low income are relatively large in number, but there are a certain number of those with high income.

18.9

31.4

4.9

9.7

23.8

41.1

0

10

20

30

40

50

2007 12

(Year)

Number of business operators utilizing informationcommunications technologies with no employees

Females

Males

(10,000 persons)

0

2

4

6

8

10

12

Less

than

1m

illion

1to

1.99m

illion

2to

2.99m

illion

3to

3.99m

illion

4to

4.99m

illion

5to

5.99m

illion

6to

6.99m

illion

7to

7.99m

illion

8to

8.99m

illion

9to

9.99m

illion

At

least1

0m

illion

Income distribution of business operators utilizing informationcommunications technologies with no employees

2007 2012

(10,000 persons)

(Yen)

Source: Prepared based on “FY2007 Basic Survey on Employment Structure” and “FY2012 Basic Survey on Employment Structure”, Statistics Bureau (MIC) 22

233

285

360

443

501

548

600

0

100

200

300

400

500

600

700

2014 15 16(Expect.)

17(Predict.)

18(Predict.)

19(Predict.)

20(Predict.)

(100 million yen)

Transition and prediction of the scale of domesticsharing economy market

(FY)

Part II Chapter 2: Changes in Environment Surrounding Working Style and Realization of Work-Life Balance― Interest in flexible work styles utilizing technological innovations and their effects [2] ―

The domestic market for sharing economy is expected to expand.

With regard to the degree of satisfaction in working style without being employed, while many answered that they can freely choosedesirable work, many listed income issues and unclear future prospects as the reasons for dissatisfaction. Therefore, it is required tounderstand the actual situation and discuss how to respond to it for the future.

Source: Prepared based on “Sharing Economy” (2016), Yano Research Institute (left figure); and “Survey of Actual Conditions for Work Style Reform toRespond to New Industrial Structure” (FY2016 Industrial Economic Research Commissioned Project of METI), Mizuho Information & Research Institute(middle figure and right figure)

55.3

26.7 26.6 26.2 24.5

0

20

40

60

80

100

Can

freelych

oosed

esirable

work

Can

spen

dtim

ew

ithon

e’sfam

ily/

forch

ildcare

and

nu

rsing

No

ann

oying

hu

man

relations

Sh

ortw

orkin

gh

ours/com

mu

tingtim

e

Can

choose

the

place

tow

ork

Reasons for satisfaction withworking style without being employed

(worker survey)(%)

89.8

31.4

9.8 8.8 8.6

0

20

40

60

80

100

Incom

e(n

op

ayraise/u

nstab

lein

come,etc.)

Can

notim

prove

skills/u

nclear

futu

rep

rospects

Can

notfreely

choose

desirab

lew

ork

Work

fluctu

ation

Lon

gw

orkin

gh

ours/com

mu

tingtim

e

Reasons for dissatisfaction withworking style without being employed

(worker survey)(%)

23