ABSTRACT
Resource mobility, be it capital, labor, or raw materials, is critical to capital accumulation. The Japanese experience in the IT industry illustrated that institutional stickiness limited the mobility of labor domestically as well as internationally. The closed nature of society and industry did not limit business growth so long as the institutions created served domestic production in a mercantilist way. However, capitalist maturity in Japan with its attendant crisis of demography and long, drawn-out recession has thrown open the insular IT industry to the global winds of change. For all practical purposes, Japan has little choice if it is to play the capitalist game. Accommodating external forces such as competitive pressures, foreign workers, and the need to expand Japanese business overseas have become necessary. This is especially so because the demographic gap and economic malaise are unlikely to be resolved endogenously. The only question is on the pace of adjustments that need to be made, since the local capacity to internalize foreign institutions and business practices is still limited, after decades of insularity, and not all constituencies are receptive to the idea of increased inflows of foreigners. However, in the matter of skilled professionals there is not only a greater urgency but, as illustrated below, Japanese institutions, both public and corporate, are responding favorably to the IT industry’s needs in direct and indirect ways. Furthermore, the positioning of Indian IT professionals in Japan has improved qualitatively, if not quantitatively.
