Japan’s high-tech talent market is facing severe challenges. It is expected that there will be a talent gap of approximately 450,000 people by 2030, mainly in emerging technology fields such as AI, big data, and cloud computing. This situation stems from factors such as an aging population, rapid technological updates, and a lagging education system. The market shows obvious regional differences, and each of the major cities, led by Tokyo, has its own characteristics. Although salary levels are higher than those in other industries, there is still a gap compared with the world’s top technology centers. There is a strong demand for talents in fields such as AI, cloud computing, and the Internet of Things, and companies are gradually adjusting their recruitment strategies, including expanding the introduction of overseas talents. The Japanese government and companies are also responding to talent shortages by relaxing policies and strengthening training. Despite the challenges, Japan’s technology startup ecosystem is gradually improving, injecting new vitality into the high-tech talent market. This dynamically changing environment provides opportunities, but also challenges, for overseas companies and talents interested in entering the Japanese market.
Overall supply and demand situation
Japan’s high-tech talent market is undergoing structural changes. According to the latest survey report from Japan’s Ministry of Economy, Trade and Industry, it is expected that by 2030, Japan’s IT industry will face a talent gap of approximately 450,000 people. This data is based on a survey of more than 500 large and medium-sized IT companies in Japan and reflects the current gap between the development of Japan’s technology industry and the supply of talent.
Specifically, the talent shortage is mainly concentrated in several key areas. The gap in artificial intelligence and machine learning is the most significant, estimated to account for about 30% of the total gap. Big data analytics and cloud computing follow closely, accounting for about 20% each. The demand for IoT technical talents is also growing rapidly and is expected to account for 15% of the gap. The remainder is distributed in emerging technology fields such as cybersecurity and blockchain.
Population data from the Statistics Bureau of the Ministry of Internal Affairs and Communications of Japan show that the proportion of Japan’s population over 65 years old has exceeded 28%, the highest in the world. At the same time, the birth rate continues to decline, falling to 1.3 in 2021, well below the population replacement level. This has led to a continued decrease in the working-age population (15-64 years old), with a decrease of approximately 600,000 people per year. As an emerging industry, the IT industry is particularly affected by this.
In terms of technology update speed, according to a survey by the Japan Information Processing Promotion Agency (IPA), Japanese IT companies need to update their main technology stack every 18 months on average. However, it usually takes 3-5 years to cultivate a senior IT talent. This supply-demand mismatch makes it difficult for the existing education system to meet market demand even if it operates at full capacity.
Data from Japan’s Ministry of Education, Culture, Sports, Science and Technology show that although Japan’s higher education enrollment rate is close to 60%, the proportion of students choosing IT-related majors is less than 10%. Among them, courses that truly focus on practical skills such as programming are even more limited. This is related to the tendency of Japanese traditional education to pay more attention to general education and theoretical knowledge.
To deal with this challenge, the Japanese government has begun to take a number of measures. In 2019, Japan revised the Immigration Control Law, established a new “Specified Skills” visa, and relaxed its policy on the introduction of high-skilled foreign IT talents. In the same year, the Ministry of Education, Culture, Sports, Science and Technology launched the “Future Investment Strategy 2019”, aiming to cultivate 250,000 IT talents by 2024.
The Japan Business Federation (Keidanren) also released the “Talent Strategy in the Digital Era” report in 2020, calling on companies to increase investment in reskilling employees and recommending that universities add more practice-oriented IT courses.
Many large Japanese IT companies have already started taking action. For example, SoftBank Group announced that it will invest 100 billion yen in employee training over the next five years, focusing on AI and big data analysis. NTT Data cooperates with a number of universities to provide 3,000 internship positions for current students every year, covering emerging technology fields such as cloud computing and the Internet of Things.
Despite this, the Japan Information Technology Association (JISA) report points out that it will still take time to completely solve the talent shortage problem. It is expected that in the next 5-10 years, the imbalance between talent supply and demand in Japan’s IT industry will continue. This situation not only brings challenges, but also creates opportunities for international cooperation, including multinational companies setting up R&D centers in Japan, and Japanese companies seeking overseas technical cooperation.
To sum up, Japan’s high-tech talent market is in a period of transformation. Governments, enterprises and educational institutions are working hard to alleviate the talent shortage problem through various channels. This process is expected to last several years, during which it may bring about significant changes in the Japanese IT industry structure.
Regional differences
Regional differences in Japan’s high-tech talent market are a complex and multi-layered phenomenon, reflecting the comprehensive effect of various factors such as the economic structure, industrial policies, educational resources, and living environment of each region. The following will provide a more in-depth analysis of the characteristics of the main regions:
As the political, economic and technological center of Japan, Tokyo and its surrounding areas occupy an absolutely dominant position in the high-tech talent market. According to statistics from the Ministry of Internal Affairs and Communications of Japan, the number of IT industry employees in Tokyo accounts for about 35% of the country’s total, while the number of IT-related companies is close to 40%. It is not only home to the headquarters of local Japanese technology giants such as Sony, Hitachi, and Fujitsu, but also the Japanese branches of international technology companies such as Google, Amazon, and Microsoft. Data from the Tokyo Metropolitan Government shows that between 2020 and 2022, the average annual growth rate in the number of IT-related job vacancies in the region will reach 15%. Among them, the growth in the fields of artificial intelligence, cloud computing and data analysis is particularly significant, reaching 25% and 22% respectively. % and 20%.
However, competition for talent is also fiercest in the Tokyo area. A survey by Nihon Keizai Shimbun shows that the average applicant-to-position ratio of Tokyo IT companies is 1:0.7, which means that many positions are difficult to fill. At the same time, the cost of living in Tokyo is also the highest in the country, which offsets the attraction of higher salary levels to a certain extent. The Tokyo Metropolitan Government is implementing the “Digital Talent 1000 Plan” to attract and retain high-end IT talents by providing housing subsidies, children’s education support and other measures.
The Kansai economic circle composed of Osaka-Kyoto-Kobe is the second largest gathering place for scientific and technological talents in Japan, but its characteristics are obviously different from Tokyo. As a traditional business center, Osaka has developed rapidly in the fields of financial technology and e-commerce in recent years. According to statistics from Osaka Prefecture, the number of fintech-related companies in the region will increase by 30% year-on-year in 2021, and related jobs will increase by approximately 5,000. Kyoto, relying on its rich educational resources and cultural heritage, has outstanding performance in basic research on biotechnology and artificial intelligence. Universities such as Kyoto University cultivate a large number of high-quality scientific research talents every year, providing a solid talent foundation for the local high-tech industry. Kobe is known for its advanced manufacturing, particularly in the fields of medical equipment and industrial robots. According to a report from the Hyogo Prefecture Industrial Promotion Agency, the number of robot-related patent applications in Kobe will increase by 22% year-on-year in 2022, and the demand for related talents will increase by 15%.
As an emerging technological innovation center, Fukuoka City has a unique development model. The “Entrepreneurship Zone” policy implemented by the Fukuoka City Government has significantly lowered the threshold for starting a business, including relaxing visa requirements for foreigners to start a business and providing start-up subsidies. These measures have allowed the number of technology startups in Fukuoka City to increase 3.5 times between 2017 and 2022. Fukuoka City has also cooperated with well-known technology companies such as Line and Mercari to establish multiple innovation centers and incubators. According to data from the Fukuoka City Economy, Tourism and Culture Bureau, the city’s IT-related jobs will grow by 18% year-on-year in 2022, with the most significant growth in the fields of mobile application development, artificial intelligence, and blockchain.
Sapporo City is unique in the field of technology application related to game development and winter sports. Universities such as Hokkaido University provide a large number of computer science talents to the local area every year. This, coupled with the government’s preferential tax policies, has attracted many game companies to set up studios here. Data from the Sapporo Municipal Economic Bureau shows that the city’s game industry turnover will increase by 23% year-on-year in 2022, and related employment will increase by approximately 2,000 people. In addition, as a winter sports destination, Sapporo has also made outstanding achievements in the field of sports technology in recent years, such as the intelligent research and development of ice and snow sports equipment.
Nagoya City and surrounding areas, as the core of Japan’s automobile industry, are undergoing a process of transformation towards smart manufacturing. The large-scale investment by Toyota Motor and other companies in fields such as autonomous driving and new energy vehicles has driven the demand for high-tech talents throughout the industry chain. Data from the Aichi Prefecture Ministry of Industry and Labor show that demand for automotive-related software engineers in the region will increase by 35% year-on-year in 2022, and demand for artificial intelligence experts will increase by 40%. Nagoya Institute of Technology and other institutions have also adjusted their curriculum accordingly and added smart car-related majors to meet the talent needs of industrial upgrading.
In addition, some small and medium-sized cities also show unique advantages in specific areas. For example, Hamamatsu City in Shizuoka Prefecture enjoys a high reputation in the field of optoelectronics technology and is one of the world’s major R&D and production bases for optical sensors. Sendai City relies on the research strength of Tohoku University and has outstanding performance in the fields of materials science and biomedical engineering.
This regional difference is not only reflected in industrial structure and talent demand, but also in working styles and quality of life. For example, places such as Fukuoka and Sapporo are actively promoting remote work and flexible working systems, attracting many young technology talents who pursue work-life balance.
Regional differences in Japan’s high-tech talent market present both challenges and opportunities. It provides diversified career options for high-tech talents and injects new vitality into the economic development of various regions. In the future, with the advancement of remote working technology and the implementation of regional coordinated development policies, this difference may further evolve, forming a more balanced and diverse talent distribution pattern.
Salary level
The salary level of high-tech talents in Japan is a complex topic involving multiple factors, including skill level, work experience, company size, geographical location, etc. Overall, salary levels in the high-tech industry are generally higher than in other industries in Japan, but there is still a certain gap compared with some of the world’s leading technology centers.
The annual salary of junior programmers in Japan is usually between 3 million and 4 million yen. This range is mainly suitable for practitioners who have just graduated or have less than two years of work experience. At this stage, salary differences mainly depend on the reputation of the school you graduated from, the types of programming languages you master, and the size of the company. Large technology companies often offer higher starting salaries, while small and medium-sized businesses or startups may offer lower salaries, but often offer more learning opportunities and a faster path to advancement.
The annual salary range for mid-level engineers is wider, generally between 5 million and 7 million yen. This level typically requires 3-7 years of relevant work experience. At this stage, skill specialization and project management capabilities begin to significantly impact salary levels. For example, engineers who are proficient in cloud computing technology or have full-stack development capabilities tend to receive higher salaries. At the same time, there are salary differences between different technical fields. Salaries in popular fields such as network security and big data analysis are often higher than in traditional software development positions.
The annual salary of senior engineers and project managers can reach 8 million to 12 million yen, and some top talents can even exceed this range. This level usually requires more than 8 years of work experience. It requires not only profound technical skills, but also comprehensive capabilities such as team management and project planning. At this level, salary differences are primarily reflected in an individual’s professional reputation, leadership abilities, and actual value created for the company. Some large technology companies will provide long-term incentives such as stock options for core technical talents, and this part of the income may significantly increase overall compensation.
Experts in emerging technology fields such as artificial intelligence and machine learning have the highest salary levels, with annual salaries typically ranging from 10 million to 15 million yen. This reflects the urgent need for these key technical talents among Japanese companies. In this field, academic background (such as having a PhD in a related field), research results and practical project experience are all important factors in determining salary. The annual salary of some top AI researchers may exceed 20 million yen, especially in high-end fields where AI technology is applied, such as financial technology and autonomous driving.
It should be noted that there are obvious regional differences in the salary levels of high-tech talents in Japan. As Japan’s economic center and technological innovation hub, Tokyo’s salary levels are generally 20-30% higher than in other regions. For example, a mid-level engineer working in Tokyo may earn an annual salary of 6 million to 8 million yen, while an engineer doing the same job in a local city may earn an annual salary of 5 million to 6.5 million yen. This difference is partly due to the higher cost of living in the Tokyo area, but also reflects a more intense local competition for talent.
As the second largest economic circle in Japan, the Osaka-Kyoto-Kobe area has high-tech talent salary levels second only to Tokyo, which is about 10-15% lower than Tokyo. Emerging tech hubs such as Fukuoka and Sapporo may offer competitive salaries in specific fields (such as game development in Fukuoka and winter sports technology in Sapporo), although their overall salary levels are lower than those in Tokyo.
In addition, in addition to the basic salary, Japanese companies usually provide various allowances and bonuses, such as housing subsidies, transportation subsidies, year-end bonuses, etc. These additional benefits may account for 20-30% of total compensation. Larger companies often offer more fringe benefits such as health insurance, pension plans, etc. These factors cannot be ignored when considering overall compensation.
In recent years, as the Japanese government promotes work style reforms, some companies have begun to adopt more flexible compensation systems, such as the introduction of performance-oriented bonus systems or equity incentive plans. This trend is particularly evident among technology startups, which provide potentially high-return opportunities for high-end talent.
Although the salary level of Japanese high-tech talents is high in the country, there is still a certain gap compared with global technology centers such as Silicon Valley and Singapore in the United States. This is partly due to Japan’s overall slow wage growth and the impact of the yen exchange rate. In order to attract and retain top talents, some large Japanese technology companies have begun to adopt global compensation strategies to provide internationally competitive compensation packages for key positions.
The salary level of Japanese high-tech talents reflects the rapid development of the industry and the urgency of talent demand. With the deepening of digital transformation and the continuous emergence of new technologies, it is expected that salary levels in this field will continue to maintain an upward trend, especially in key areas such as AI, big data, and network security. At the same time, salary differences between regions may gradually narrow with the popularity of remote work and local government talent attraction policies, which will provide more diversified career options for high-tech talents.
Popular fields and skills
Japan’s high-tech talent market is undergoing rapid change and development, and some fields and skills are particularly popular. These popular areas not only reflect current technology trends, but also indicate the future development direction of Japanese industry.
Artificial intelligence (AI) and machine learning are undoubtedly one of the hottest fields right now. In Japan, everyone from large enterprises to start-ups are actively seeking breakthroughs in this field. As the main programming language for AI and machine learning, Python’s importance is self-evident. Japanese companies particularly value talents who are proficient in TensorFlow and PyTorch, the two deep learning frameworks. According to a survey by Japan’s Ministry of Economy, Trade and Industry, the demand for AI-related positions will increase by 40% year-on-year in 2022, among which the demand for senior AI engineers with practical project experience is the most urgent. Some large Japanese technology companies, such as Sony and Fujitsu, are increasing investment in AI research, which further drives the demand for related talents.
Cloud computing is another rapidly growing area. As Japanese companies accelerate their digital transformation, demand for cloud services has surged. Amazon Web Services (AWS), Microsoft Azure and Google Cloud Platform (GCP) are the main cloud service providers in the Japanese market. According to data from the Japan Cloud Computing Association, Japan’s cloud computing market will grow by 25% year-on-year in 2022, and the demand for related technical talents will also rise. In particular, professionals with experience in multi-cloud environment management are highly sought after. Japanese companies not only need technical talents who master these platforms, but also pay special attention to comprehensive talents who can assist companies in formulating cloud strategies and managing cloud migration projects.
Big data analysis is a key area that supports Japanese corporate decision-making. Big data processing tools such as Hadoop and Spark continue to grow in importance, while data visualization tools such as Tableau help enterprises understand complex data sets more intuitively. Japanese retail giants such as AEON and Rakuten are investing heavily in big data analytics to optimize their supply chains and personalized marketing strategies. This has driven a huge demand for data scientists and data analysts. A survey by Nihon Keizai Shimbun shows that the salary growth rate for data-related positions will reach 15% in 2022, which is much higher than the average level in other IT fields.
Mobile development remains an important part of the Japanese tech industry. With the popularization of 5G networks, the complexity and functionality of mobile applications are increasing. Swift language on iOS platform and Kotlin language on Android platform are the most popular mobile development skills. Japan’s unique mobile application ecosystem, such as super applications such as LINE, provides mobile developers with broad development space. According to App Annie, Japan is the third largest mobile app market in the world, which continues to drive demand for high-quality mobile development talent.
Internet of Things (IoT) technology has unique application prospects in Japan, especially in areas such as smart manufacturing, smart cities, and solutions for an aging society. Lightweight communication protocols such as MQTT and CoAP are widely used in Japanese IoT projects. Embedded systems development skills play a key role in the digital transformation of Japanese manufacturing. For example, companies such as Toyota and Hitachi are vigorously developing the Industrial Internet of Things, which is stimulating the demand for multi-disciplinary talents with cross-domain knowledge such as mechanical engineering and software development. A report from Japan’s Ministry of Internal Affairs and Communications states that by 2025, the number of IoT devices in Japan is expected to reach 1 billion, which will create a large number of job opportunities for relevant technical talents.
These popular areas do not exist in isolation, but intersect and reinforce each other. For example, AI technology is being widely used in cloud computing, big data analysis, IoT and other fields. Therefore, multi-disciplinary talents with cross-domain knowledge and skills are particularly favored in the Japanese technology industry. In addition, with the rapid development of technology, Japanese companies are paying more and more attention to continuous learning capabilities. In addition to specific technical skills, problem-solving skills, teamwork skills and cross-cultural communication skills are also regarded as important soft skills for high-tech talents.
Recruitment Trends
The recruitment trend of Japan’s high-tech talent market is undergoing profound changes. This change not only reflects the development trends of the global technology industry, but also reflects Japan’s unique socio-economic environment. These trends not only affect the talent strategy of enterprises, but also profoundly change the career choices and development paths of job seekers.
Multinational companies are playing an increasingly important role in Japan’s high-tech talent market, and they are more inclined to recruit talents with a global perspective. This trend stems from the internationalization needs of Japanese companies and the expansion of global technology giants in the Japanese market. For example, companies such as Google, Amazon, and Microsoft have rapidly grown their businesses in Japan. They not only need talents who are proficient in technology, but also pay special attention to candidates who can work effectively in a cross-cultural environment. Such talents usually need to have fluent English communication skills, international project experience, and in-depth understanding of global technology trends. A survey by Japan’s Ministry of Economy, Trade and Industry shows that in 2022, more than 70% of the positions recruited by multinational technology companies in Japan require candidates to have overseas work or study experience. This trend has also promoted the internationalization process of Japanese local companies. Companies such as Sony and Nintendo are also actively looking for international talents who can help them expand the global market.
At the same time, Japan’s small and medium-sized technology companies and startups pay more attention to candidates’ practical programming skills and problem-solving abilities. These companies often have limited resources and need people who can adapt quickly and create value for the company. They often assess candidates’ real-world skills through technical tests, live coding challenges, or hackathons. According to a report from the Japan Small and Medium Enterprises Agency, more than 60% of technology small and medium-sized enterprises in 2022 said that the most important thing in the recruitment process is the candidate’s ability to solve practical problems, followed by programming skills and the ability to learn new technologies. This trend is also reflected in recruitment methods. More and more small and medium-sized enterprises are beginning to adopt project-based trial periods or contract labor forms to better assess candidates’ actual work abilities.
The rise of remote working models is another notable feature of Japan’s high-tech talent market. This trend accelerated after the COVID-19 pandemic in 2020 and continues to gain momentum in the post-pandemic era. According to statistics from Japan’s Ministry of Internal Affairs and Communications, the proportion of remote work in Japan’s IT industry will reach 45% in 2022, an increase of nearly three times from 2019. The popularity of this working model allows companies to break through geographical restrictions and search for talents in a wider range. For example, companies in Tokyo can now recruit programmers living in Okinawa or Hokkaido, which not only expands the talent pool but also provides new options for technical talents who want to escape the high cost of living in metropolitan areas. At the same time, this trend has also promoted some new types of work arrangements, such as “working vacation” programs that allow employees to work remotely at resorts across Japan. Large tech companies such as SoftBank have begun implementing these types of flexible work policies to attract and retain top talent.
Despite this, recruitment of “new graduates” (fresh graduates) is still a major feature of Japan’s job market, and this applies equally to the high-tech industry. Traditionally, Japanese companies recruit fresh graduates on a large scale at fixed times every year and provide systematic training. This approach is rooted in Japan’s lifelong employment culture, which aims to create employees who are loyal and familiar with the company culture. However, this system has gradually evolved in recent years. More and more technology companies are beginning to introduce more flexible recruitment methods, such as year-round recruitment, internship conversion, etc. According to a survey by Japan Business Federation, more than 40% of IT companies said in 2022 that they have already or plan to reform their new recruit recruitment system to adapt to rapidly changing market needs. For example, Lotte Group has canceled the unified entry time for fresh graduates and switched to a year-round recruitment system. This change not only provides greater flexibility for businesses, but also provides students with more diverse employment options.
In addition, hiring trends in Japan’s high-tech industry are also reflected in the increasing emphasis on diversity and inclusion. Many companies are working to increase the share of women and international talent in technology roles. The Japanese government is also actively promoting this trend, such as relaxing visa policies for highly skilled foreign talents and providing various support measures to promote the development of women in STEM fields. According to data from the Japanese Cabinet Office, the proportion of female employees in Japan’s technology industry will exceed 25% for the first time in 2022. Although there is still a gap compared with some Western countries, the growth trend is obvious.
The application of artificial intelligence in the recruitment process is also a trend worth watching. A growing number of Japanese technology companies are using AI tools to screen resumes, conduct preliminary interviews, and even assess candidates’ skill matches. This not only improves recruitment efficiency, but also reduces human bias to a certain extent. However, this approach has also triggered some discussions about privacy and fairness, prompting some companies to adopt more cautious and transparent AI application strategies.
The recruitment trend of Japan’s high-tech talent market is developing in a more international, flexible and diversified direction. These changes are not only a response to the development of global science and technology, but also the epitome of Japan’s socio-economic structural adjustment. For job seekers, this means more diverse career development opportunities; for companies, it requires them to continuously innovate recruitment strategies to attract and retain the best talent. As these trends deepen, the talent ecosystem in Japan’s high-tech industry is expected to become more active and competitive, driving innovation and development throughout the industry.
Attitude towards foreign talents
Japan’s high-tech industry’s attitude toward foreign talents is undergoing a profound transformation process. This transformation is not only an inevitable choice for Japan to face the challenges of population aging and labor shortage, but also reflects the strategic considerations of Japan’s technology industry to seek breakthroughs in the context of globalization. In recent years, the Japanese government and business community have taken active measures to attract and retain high-quality international talents, especially in the high-tech field.
The Japanese government recognizes the importance of introducing international talents to maintaining economic vitality and technological innovation, and is therefore implementing a series of policy reforms. The most eye-catching are the “specific skills” visa system introduced in 2019, and the “highly specialized occupation” visa for high-end talents. These new policies have greatly simplified the procedures for foreign highly skilled talents to work and stay in Japan for a long time. For example, the Highly Specialized Occupation visa provides eligible foreign professionals with a faster path to permanent residency, allowing applicants to obtain permanent residency in as little as one year, which would normally take 10 years or more. According to data from the Japanese Ministry of Justice, since the implementation of the policy, the number of visa applications for highly skilled foreign talents has increased by more than 20% annually, with applications in the IT and engineering fields being particularly prominent.
At the same time, Japanese technology companies, especially in cutting-edge fields such as artificial intelligence (AI), big data, and cloud computing, are actively recruiting overseas talents. This trend is partly due to the insufficient supply of local talent in Japan, but also reflects the importance companies attach to global perspectives and multicultural backgrounds. For example, SoftBank Group has more than 40% of foreign employees in its AI research department. Hitachi Manufacturing has also announced plans to increase the proportion of foreigners among its R&D personnel to more than 20%. These measures not only help solve the talent shortage problem, but also inject new innovation power into Japanese companies.
However, despite efforts by both the government and businesses to create a more open and inclusive environment, the integration of foreign talent in Japan’s tech industry still faces several challenges, the most notable of which is language barriers. Although many Japanese technology companies are promoting the internationalization of their work environments, including adopting English as a working language, in actual operations, Japanese is still the main communication tool. This results in foreign talents who understand Japanese tending to be more popular and more likely to succeed in the workplace. According to a survey by Japan’s Ministry of Economy, Trade and Industry, more than 70% of Japanese IT companies stated that Japanese language ability is an important factor when they consider foreign candidates.
In response to this challenge, many Japanese companies have begun to provide Japanese language training courses to help foreign employees better integrate into the work environment. At the same time, some large technology companies such as Rakuten and Toyota have begun to implement “English first” policies in some departments to create a more international working atmosphere. The Japanese government is also working hard to improve this situation, for example, by increasing Japanese language education resources through the “Japanese Language Education Promotion Act” and relaxing Japanese language proficiency requirements in visa applications.
Another trend is that Japanese technology companies are actively expanding overseas R&D centers and branches to better utilize global talent resources. For example, Nidec has established an AI R&D center in Shenzhen, China, and Sony has established an R&D base in Bangalore, India. This strategy of combining “bringing in” and “going out” not only helps companies acquire top global talents, but also opens up new avenues for the international development of Japan’s technology industry.
In addition, the Japanese government and companies are also working hard to improve the living environment for foreign talents to enhance Japan’s international attractiveness. This includes simplifying administrative procedures, improving international schools and medical services, providing multilingual support, and more. For example, the Tokyo Metropolitan Government has launched the “Tokyo Talent Matching Plan” to provide one-stop services for high-skilled foreign talents, including employment consultation, life support, etc.
Still, Japan’s tech industry remains somewhat ambivalent about its attitude toward foreign talent. On the one hand, there is an urgent demand for talents and the desire for internationalization; on the other hand, traditional corporate culture and working methods sometimes create obstacles to the integration of foreign talents. For example, Japan’s unique workplace culture, such as lifelong employment and strict hierarchy, may not be in line with the career development expectations of many foreign talents.
Generally speaking, Japan’s high-tech industry’s attitude towards foreign talents is undergoing a positive transformation process. Both the government and enterprises realize that in the global technological competition, attracting and retaining international talents is the key to maintaining innovation and competitiveness. While some challenges remain, Japan is taking practical steps to create a more open and inclusive environment to attract top talent from around the world.
Training and development
Talent training and development strategies in Japan’s high-tech industry are undergoing a profound change. This transformation stems from the severe talent shortage faced by Japan and reflects the global technology industry’s urgent need for continuous learning and skills updating. Japanese businesses, governments and educational institutions are working together to adopt a diversified approach to address this challenge, aiming to create a more competitive and innovative high-tech talent ecosystem.
Japanese companies are significantly increasing their internal training efforts. Traditionally, Japanese companies have been known for their comprehensive new employee training and ongoing on-the-job training, but in recent years, this training model is moving in a more specialized and personalized direction. For example, Hitachi Manufacturing Co., Ltd. has launched a “Digital Talent Training Plan” aimed at cultivating 100,000 digital transformation talents within three years. The program not only includes traditional classroom training, but also combines online learning, project practice and mentor guidance. Similarly, Fujitsu has also established a “Digital Business School” to provide employees with systematic training in cutting-edge technologies from artificial intelligence to blockchain. These in-house training programs not only help companies fill talent gaps but also increase employee loyalty and productivity. According to a survey by the Ministry of Economy, Trade and Industry of Japan, more than 60% of Japanese IT companies have increased their employee training budgets in 2022, with the average increase reaching 15%.
Online learning platforms play an increasingly important role in cultivating high-tech talents in Japan. With the popularization of the concept of lifelong learning and the rise of remote work, the number of users of international online education platforms such as Coursera, Udacity, and edX has exploded in Japan. These platforms provide flexible, high-quality and cost-effective learning methods and are particularly popular among technical talents pursuing self-improvement. For example, Coursera reports that its registered users in Japan increased by 130% year-on-year in 2022, with IT and data science courses being the most popular. Japanese online learning platforms such as Schoo and Progate have also emerged rapidly, providing more localized content and Japanese teaching support. This online learning trend not only provides individuals with continuous learning opportunities, but also provides companies with an efficient and low-cost way to train employees. Many Japanese companies now allow employees to use these platforms to study during working hours and incorporate the completion of online courses into employees’ performance evaluation systems.
The Japanese government is also actively promoting the cultivation of high-tech talents. The “Future Investment Strategy” launched in 2018 is a landmark policy that clearly regards IT talent training as an important part of the national strategy. The strategy sets the goal of cultivating 500,000 IT professionals by 2025 and proposes a series of specific measures. For example, the government strongly supports industry-university cooperation and encourages universities and enterprises to jointly develop courses that meet industry needs. The Ministry of Education, Culture, Sports, Science and Technology has also launched the “Super Intelligent Society Realization Talent Training Plan” to provide financial support to universities to offer cutting-edge technology courses such as AI and big data. In addition, the government has also launched the “IT Master Training Program” to cultivate a group of top teachers who can lead Japan’s IT education. These policies not only improve the quality of education, but also promote deep integration between academia and industry.
Japan’s talent training strategy also pays more and more attention to the cultivation of interdisciplinary and innovative capabilities. Many universities have begun to implement the STEM+Art education model, integrating art and design thinking into technology education. For example, the University of Tokyo has established a “Design Thinking Research Center” to cultivate cross-disciplinary talents with innovative thinking. At the same time, practical activities such as hackathons and innovation competitions are becoming more and more common in Japanese universities and companies. These activities not only cultivate students’ practical abilities, but also provide new channels for companies to discover talents.
Another is that Japanese companies are strengthening cooperation with top overseas universities and research institutions to cultivate high-end talents with an international perspective. For example, SoftBank cooperated with the Massachusetts Institute of Technology to establish an AI research laboratory, which not only promoted cutting-edge technology research, but also cultivated a group of world-class AI talents for Japan. Hitachi has established a social innovation center with the University of Cambridge, dedicated to cultivating interdisciplinary talents who can solve global problems.
In addition, Japan is also exploring new talent training models. For example, the “Compulsory Programming Education” policy requires that starting from 2022, all primary school students must learn the basics of programming. This policy aims to cultivate citizens’ computational thinking abilities from an early age and lay the foundation for future scientific and technological talent reserves. At the same time, the vocational and technical college (technical school) system is undergoing reform to better adapt to the rapidly changing technological environment. Many specialized schools have begun to cooperate with technology companies to provide more practical and cutting-edge courses, such as artificial intelligence, Internet of Things, etc. However, Japan’s talent training system still faces some challenges. For example, the traditional lifetime employment system limits the flow of talents and the exchange of knowledge to some extent. In addition, Japan’s higher education system still has room for improvement in cultivating students’ innovative spirit and international competitiveness. To cope with these challenges, some forward-looking companies have begun to try new talent development models, such as encouraging employees to work in startup companies for a short period of time or participate in international exchange programs.
Talent training and development in Japan’s high-tech industry is creating a more flexible, innovative and international talent ecosystem. Through the joint efforts of the government, businesses and educational institutions, Japan is gradually building a system that can continuously produce high-quality scientific and technological talents. This is not only crucial to solving the current talent shortage problem, but will also lay a solid foundation for Japan to maintain its long-term advantage in global technology competition.
Entrepreneurial Ecosystem
Japan’s entrepreneurial ecosystem has been undergoing a quiet but profound transformation in recent years. Although Japan’s entrepreneurial environment is still young compared with global innovation centers such as Silicon Valley in the United States, its development speed and potential are increasingly attracting international attention. This change not only reflects the change in the Japanese government and business circles’ understanding of innovation-driven economic growth, but also reflects the increasing recognition of entrepreneurship in Japanese society.
Traditionally, Japan’s business environment is characterized by large companies dominating and stable employment, and entrepreneurship is often seen as a high-risk, low-reward option. However, facing the pressure of global competition and technological innovation, Japan is actively cultivating a more dynamic entrepreneurial ecosystem. In 2018, the Japanese government released the “Entrepreneurship Acceleration Plan”, aiming to double the number of entrepreneurial companies by 2027, which marks the importance of entrepreneurship support at the national level. The plan includes measures such as simplifying company registration procedures, providing tax incentives, and increasing government procurement support for start-ups.
Against this backdrop, entrepreneurial ecosystems in major Japanese cities are booming. As the economic center of Japan, Tokyo has naturally become the focus of entrepreneurial activities. In recent years, several innovation clusters have emerged in Tokyo, such as Roppongi Hills and Shibuya Scramble Square, which are home to numerous technology start-ups, co-working spaces and venture capital institutions. With its manufacturing foundation and open business culture, Osaka is becoming an important base for hard technology innovation. Fukuoka, with its “Entrepreneurship Zone” policy, has attracted a large number of young entrepreneurs, especially in the fields of Internet and mobile applications. According to data from Japan’s Ministry of Economy, Trade and Industry, the number of newly registered companies in Tokyo, Osaka and Fukuoka will increase by more than 15% year-on-year in 2022, of which technology-related start-ups account for nearly 40%.
Incubators and accelerator programs have played a key role in driving the growth of the Japanese startup ecosystem. For example, WeWork Labs, an incubator run by SoftBank, has opened multiple branches in Tokyo to provide early-stage entrepreneurs with workspace, mentorship, and financing connections. KDDI∞Labo focuses on innovation in the fields of 5G and IoT and has incubated more than 100 start-ups. International accelerator programs such as Y Combinator and Techstars have also begun to set up branches in Japan, providing Japanese entrepreneurs with opportunities to connect with global innovation networks. These incubators and accelerators not only provide funding and resources, but more importantly, they are fostering a more open, collaborative entrepreneurial culture, which is especially valuable in the traditionally more closed Japanese business environment.
The role of venture capital in Japan’s startup ecosystem is also growing rapidly. As one of the world’s largest technology investment funds, SoftBank Vision Fund is not only active in the international market, but has also begun to pay more attention to Japan’s local innovation projects. In 2022, the fund announced that it would invest US$10 billion to support innovation in Japan’s artificial intelligence and robotics fields. In addition to large international funds, local venture capital firms such as JAFCO and Global Brain are also actively expanding their investment scale. According to data from the Japan Venture Capital Association, total venture capital investment in Japan will reach 1.5 trillion yen in 2022, an increase of nearly 300% from five years ago.
It is worth noting that large Japanese companies have also begun to actively participate in the construction of the entrepreneurial ecosystem. For example, Toyota launched the “Toyota AI Venture Capital” program to focus on investing in start-ups related to artificial intelligence and autonomous driving. Panasonic has established the “Panasonic Open Innovation Lab” to cooperate with start-ups to develop new technologies and products. This model of cooperation between large enterprises and start-ups not only provides start-ups with valuable resources and market channels, but also helps large enterprises maintain their innovative vitality.
However, Japan’s startup ecosystem still faces some challenges. The first is the talent issue. Many high-quality talents still tend to be employed in large companies, which limits the ability of start-up companies to obtain top talents. Second, despite improvements, Japan’s venture capital scale and exit mechanisms still lag behind those of leading global markets. For example, although Japan’s total venture capital investment in 2022 has reached a new high, it is only equivalent to about 5% of that in the United States. In addition, Japanese society still has a relatively conservative attitude towards failure, which to some extent inhibits the risk-taking spirit of entrepreneurs.
In order to further improve the entrepreneurial ecosystem, Japan is taking a number of measures. In the field of education, many top universities such as the University of Tokyo and Waseda University have opened entrepreneurship courses and entrepreneurship centers to cultivate entrepreneurial talents from the source. The government is also promoting the reform of laws and regulations, such as relaxing restrictions on entrepreneurship in the professional service field and simplifying the procedures for foreigners to start a business in Japan. At the same time, some local governments are experimenting with new entrepreneurship support models, such as the “Entrepreneurship Sandbox Program” launched by Osaka City, which allows innovative projects in specific fields to test new technologies and business models in a regulatory-exempt environment.
Additionally, Japan is strengthening its ties with the international startup community. For example, the Tokyo Metropolitan Government has established entrepreneurial exchange programs with innovation centers such as Silicon Valley and Israel to promote cross-border innovation cooperation. Some Japanese start-ups have also begun to actively expand overseas markets, such as financial technology company Liquid and artificial intelligence company Preferred Networks, which have set up branches in multiple countries.
Overall, Japan’s entrepreneurial environment is experiencing significant positive changes, although it still falls short of the world’s leading entrepreneurial ecosystems. Government policy support, the participation of large enterprises, the growth of venture capital, and the gradual formation of entrepreneurial culture are all pushing the Japanese entrepreneurial ecosystem to develop in a more mature and active direction. This transformation will not only help cultivate a new generation of innovative enterprises, but will also inject new vitality into the Japanese economy.
