ABSTRACT
This chapter places the Japanese IT industry in the context of the twin crises of demographic decline and the protracted economic slowdown since the early 1990s. The objective is to relate these predicaments to the imperatives of capital accumulation by way of rising tension in labor markets both as an internal supply problem and as external pressures due to the mobility of foreign professionals. The consequences of these two crises are changing labor markets, although the mechanisms for and implications of their impact are different from the experiences of other advanced capitalist countries. While the secular decline in the Japanese fertility rate is reducing the labor pool and increasing the dependency ratio as the society ages, slow economic growth has truncated the venerable lifetime employment system, which most Japanese in the post-World War II era have been accustomed to. The scarcity of jobs, the hollowing out of manufacturing, and alternative employment pathways for the younger generation have resulted in the dismantling of some established labor market institutions. The rise of part-time, contract, and temporary (or irregular) employment is now commonplace in Japan. Hence, the net effect has been a reduced pool of workers in specific labor markets, but more importantly, a dampening effect on the long-term supply of technical professionals.
