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A shortage of ninjas & the opportunities from other shifts in Asia’s labor market

A shortage of ninjas & the opportunities from other shifts in Asia’s labor market

Workforce dynamics are undergoing dramatic shifts in Asia, with big implications for western firms looking to expand in those markets – not only in terms of employment considerations, but opportunities for mobile workforce, remote work and automation technologies.

Ninja shortage 

After 10 days of business travel in East Asia recently, I found myself relaxing in a ryokan in a rural part of Japan famous for its ninjas. And I remembered an article I’d read which claimed the small city of Iga was facing a “ninja shortage.” 

The ensuing flood of applications from would-be spies and assassins around the world eventually prompted town officials to release a statement politely assuring everyone there were, in fact, no vacancies for ninjas at that time. 

But, ninjas aside, labor dynamics have been dramatically shifting in both Japan and China in recent times. This is having profound effects on business trends in those countries – and the opportunities for western firms with the technologies and services to help. 

China’s fierce battle for talent

In China, labor is now not nearly as ‘cheap’ as many people think. Over the last few years, in fact, manufacturers have been moving production from China to lower-cost Asian countries such as Vietnam, India and Thailand. 

In 2018, China went from being Vietnam’s fifth to its third largest FDI investor. A major reason was the ratcheting of China-US trade disputes – with Chinese firms seeking ways around US barriers and tariffs. It was also a response to the escalating costs of local production, with Chinese wages having increased more than three-fold since 2005.

The competition for talent in China’s hi-tech city of Shenzhen, for example, is particularly fierce. Skilled engineers and scientists are in high demand. There are huge shortages of experienced technicians for precision manufacturing. And many of China’s top tech corporations are engaged in daily battles for tech-savvy employees.

Even with increasing numbers of graduates leaving universities with computer science and engineering degrees, we’re unlikely to see an end to this hiring frenzy in the near term.

Smart manufacturing 

So how is China, often known as ‘the factory of the world’, maintaining its lead in the manufacturing sector despite these workforce pressures?  

A big part of the answer is that, rather than competing on low labor costs as in days gone by, the country is now turning to smart manufacturing - embracing the industrial Internet of Things (IoT), robotics, artificial intelligence (AI) and other enabling technologies.

In his March address to the National People’s Congress, Premier Li Keqiang promised that China would “transform and upgrade traditional industries … create industrial internet platforms [and] speed up the growth of emerging industries.” 

“We will strengthen R&D and the application of big data and artificial intelligence technologies,” he said, “foster clusters of emerging industries like next-generation information technology, high-end equipment, biomedicine, new-energy automobiles and new materials, and expand the digital economy.”

But China can’t do all this alone.  

Various technologies - including robots, autonomous vehicles, location and tagging technologies, AR/VR and IoT security - will be needed for the country to achieve its vision. And this represents big opportunities for western companies with the products and know-how to bring to the party.

Ageing and shrinking in Japan 

In Japan, meanwhile, labor is at such a premium that the country expects a shortage of workers for 6.5 million jobs by 2030. If wages continue to stagnate, this number could balloon to 10 million.

Even this June, the Ministry of Health, Labor & Welfare announced that unemployment stood at 2.3% and there were 161 jobs available for every 100 people seeking work.

Japan’s labor crunch, further driven by its simultaneously aging and shrinking population, is spurring new employment trends including: 

  • An ever-increasing number of women entering work, with females now comprising 44.5% of Japan’s labor force. Japan’s ratio of working women/men is now higher than in the US and France, according to the Internal Affairs & Communications Ministry.

  • An increase in freelancers and remote workers, although these still only account for 3-5% of the workforce. 

  • A shift where - while Japan has largely stuck to its belief that a full-time job, preferably with a single company for life, is the optimal employment format – policies encouraging corporate employees to take on multiple roles are expected to lead to more people embracing the gig economy.

  • A reduction in barriers to remote working, which were traditionally based on concerns about communication, security, labor management and personnel evaluation. Admittedly, Japan has a long way to go here: recent research shows that only 13% of companies allow employees to ‘telework’. But the upsides are now undeniable - including the ability to retain more women (who may also be caring for children or elderly family), to offer a better work/life balance, to enable employees to live in rural areas and to reduce commuting, with all its associated costs and stresses. The Japanese government is promoting policies encouraging ‘telework’ and, just this past summer, led a nationwide campaign to encourage employers to let their staff work remotely. 

Digital workforce solutions

Given all this, systems that can support a Japanese workforce that no longer ‘clocks in’ at a desktop computer in a corporate office are more and more in demand. And changes to who does the work and how, where and when it’s performed are forcing Japanese corporations to embrace digital solutions that are already considered the norm in other countries. 

Such technologies include tools for time tracking, scheduling, communication - including video communications and chat - collaboration, project management and performance evaluation.

A mobile and remote workforce also requires apps which will allow operational tasks to be performed with ease while on the move, including robotic process automation, mobile sales enablement tech, mobile device and application security, and identity and policy management.

Japanese corporations and employees may only be beginning to shift in these directions compared with other countries. But that underlines the sheer scale of the market growth potential, as long as they can be persuaded of the benefits of making the move.

Tools and know-how 

So, I’m afraid to say there aren’t many job opportunities for ninjas right now. 

But there are big openings for international companies with the tools and know-how that can help Japan and China adapt to the significant changes in labor patterns in order to stay competitive in a rapidly changing world.

 

To discuss how to grow your software business in China, Japan or Korea, contact Oren at oren.bernstein@intralinkgroup.com.

About the Author

Oren Bernstein

Oren is Head of the Software & Cloud group at Intralink, helping western tech firms expand in East Asia. Based in Boston and originally from New York, he spent seven years living and working in Japan in various technology sales roles. Prior to Intralink, he served as Business Development Director for a US wireless security software startup and an IT services firm. Then, as a Project Manager in Intralink’s Tokyo office, Oren drove client initiatives in the security, financial, cloud software and clean energy fields.

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