The Japanification of Work: Lessons from an Ageing Nation
Cuddly Seals and Exoskeletons: How Japan Tackles an Ageing Workforce
In Japan, more than 1 in 10 people are aged 80 or over.
With a shrinking workforce who will care for them?
This has massive implications for the economy, society, and poses a significant challenge for policymakers and employers.
This challenge will also be coming for China, Germany, Italy and other countries with an ageing demographic profile.
For the first time in history there are more people on our planet over 65 than kids under 5.
Looking East for signals about what is coming is standard fare for futurist types.
In this article you can read about cute cuddly seals, exoskeletons for care workers Society 5.0.
What can other countries learn anything from Japan on the ageing workforce?
The 2025 Problem
The thing about the ageing workforce is that you can see it coming a long way off.
Japan has been preparing and living with this for decades, but 2025 is when the country will really start to feel its age. This year, the total number of over-75s will reach nearly 22 million, up from 17 million a decade ago.
This wave of silver septuagenarians will ripple through Japan’s social systems, pushing up health and pension costs while the tax base shrinks.
It is estimated this cost will increase by nearly 60% between 2025 and 2040.
Japanese policymakers refer to this as the ‘2025 problem’.
Japan is already facing a labour shortage, and by 2040 it could be short of 11 million workers.
Riding the Silver Wave - Which Other Countries are Ageing Fast?
So why is this relevant to other countries?
It is not just Japan that has an ageing population. As you can see from this recent graph from the UN, 29% of the population is over 65 in Japan, followed by 24% in Italy, 17% in the US and 14% in China.
One challenge for society is the cost as health, social and welfare systems will buckle under this pressure. As I documented in a recent article,
the average retirement age has barely shifted over the past 50 years, hovering around 65 to 68. In the 1970s, a retiree might have only 10 years of retirement to plan for, in the 2020s, this is nearly twice as long. Retiring Retirement
Worker expectations are shifting rapidly due to the rising cost of living.
41% of American workers expect to work beyond 65, thirty years ago this expectation was 12%.
Employers are responding with schemes such as:
Grandternity leave, egg freezing, menopause benefits, and retaining retired staff as consultants, as seen at Unilever. (Read more in Living Better, not Just Longer )
What is ‘Old’ Anyway? Staying Genki in an Ageing World
As countries and employers grapple with an ageing workforce, it’s worth asking:
What does 'old' really mean in today’s world?
The Japanese gerontological association has suggested reclassifying those aged 65-74 as ‘pre-old’. In Japan many people remain genki, or full of life, long after they are officially ‘old’. More than half of those aged 65-69 and more than one-third aged 70-74 are employed. Most are healthy enough to live independently, with just 3% of those aged 65-74 require nursing care.
To examine quality of life and extend genki, it is also useful to look beyond the life expectancy statistics and look at changes to actual households. For example half of all households have one or more members over 65 and in 2020, 22 percent of women and 15 percent of men over age sixty-five were living alone.
So in a country famous for technology innovation and adoption of robots, might there be technology solutions to the ageing workforce?
My Robot and I
How might technology assist challenges such as loneliness, cognitive deterioration and loss of mobility?
Sony launched a cute robot dog called AIBO in 1999. In care homes, Aibo memorises user’s preferences, has a facial recognition systems, reacts to stimuli along 22 different axes.
If you want a proper cuddle with a furry companion, then PARO has the texture of a baby seal. It moves gently, makes realistic cooing sounds and looks at you with enormous eyes giving particular comfort to those who suffer from dementia, Alzheimer’s, and other cognitive disorders.
How will older people be cared for when there are less younger, stronger workers to care for them?
Japan’s main demographically driven technological trajectories cluster around two contrasting paradigms: augmentation of worker skills and automation of work.
To alleviate the task of lifting patients, some clinics use exoskeletons to give more strength and reduce fatigue. The exoskeleton used for medical use in Japan is called HAL (Hybrid Assistive Limb). It consists of a device that — when connected to the body of a person with mobility problems — detects the signals sent by the brain to the muscles and performs the desired movement.
Instead of the familiar worry,
'What if robots take our jobs?'
a better question might be,
'What if robots don’t take our jobs?'
So cuddle companions and expensive exoskeletons might help to a small extent, but are not going to alleviate the bigger issues of ageing society.
What else is Japan Doing to Support an Ageing Society?
In common with other countries, Japan is increasing the retirement age, from 60, and allowing more flexible re-hiring of retired employees.
And creating the workforce has been a challenge in Japan with low birth rates, which has been cited as 'the most significant challenge to the survival of the nation since the mid-nineteenth century'. There have been many policies to encourage more babies, in October 2019, the government introduced free preschool education and day-care services for children aged 3 to 5.
A challenge in many economies is to attract and retain more women in the workforce. Japanese tax and welfare policies discourage married women from working. When ‘dependent spouses’ earn less than 1.3m yen ($8,900) a year, they do not need to pay in to public-pension and health-insurance schemes. So more than 1.1m working women were limiting their working hours and earnings in order to stay under that threshold. The government has introduced subsidies to alleviate the effects of this so-called ‘income wall’.
To help seniors find new employment, the government operates 300 ‘Lifetime Employment Support Offices’ across Japan - dedicated to assisting senior job seekers in securing new opportunities.
There is a conception that Japan doesn’t welcome immigrants, however it has managed immigration with 2 million foreign workers in 2023. This is a 12% rise from the year before, was nearly triple the number a decade ago. A state think-tank in Japan reckons it needs an additional 2.1m foreign workers by 2030. That implies an 11% annual expansion, in line with the rate Japan achieved in the past decade.
Lifelong learning and upskilling is part of the solution - Prime Minister Kishida pledged $7.6 billion earlier this year to train workers for more high-skilled jobs in the next five years.
Japan has done some interesting work on managing rapid urbanisation. Surely it is easier to care for the over 80s when they are closer to expert facilities. Globally, more people reside in urban areas than in rural ones and that trend is set to continue, by 2050, two-thirds of the Worlds population will live in cities.
The Smart Platinum Society is not an exclusive members-only club, but a Japanese policy - an ‘age-free society’ which encourages citizens to live a fruitful ‘hundred-year life’, and leads to Society 5.0. Older persons are not considered senior citizens but are encouraged to stay healthy and to continue playing active roles in the labor force and society. It acknowledges that older persons constitute a growing market for goods and services and are a critical part of what is often called a ‘longevity economy’. The vision is for a ‘cyberphysical’ system, where digital tools and tech are fully integrated in people’s lives, and repurposing schools into care facilities for older people.
So there are some technological and policy approaches from Japan, to an ageing workforce. But before we try and copy, a few thoughts on the implications for the future of work more globally.
Lost in Translation - What Can We Really Learn from Japan about the Future of Work?
Noah’s First Law of Japan Discourse is that if a debate in the U.S. goes on long enough, someone will eventually cite Japan as support for their position.
Noah’s Second Law of Japan Discourse is that 80% of such arguments will be wrong.
from Noah Smith
So some interesting ideas from Japan around using robots and fairly mainstream solutions about casting the workforce net more widely from abroad and within the existing internal labour market.
What can we reasonably learn from Japan?
Since the 1980s it has been fashionable to look to Japan for signals of what is coming to other developed economies and societies.
Before we extrapolate too wildly, it’s worth considering a few caveats.
Each country has its own unique demographics, labour markets, and culture. Looking to other countries and the history can give useful signals, but as Noah mentions, they are mostly wrong.
Looking ahead 20 years, I think we need to solve the problems of ageing workforce in more radical ways to the past. We need to design our societies around the changing demands of citizens, but we also need a new social contract. We might not have full employment so need other mechanisms for financial security, meaning, a sense of community, and solving nasty social problems with inter-disciplinary teams.
Do give me your examples of how your company is adapting to the ageing workforce.
Looking East,
Andy
