|A View on the 2001 White Paper on the Labour Economy from Labor and Management|
Due to a reshuffling of the ministries and other governmental organizations, the White Paper on Labour was issued this year under the new title, 2001 White Paper on the Labour Economy. The structure follows that of the former White Paper on Labour, with Part I devoted to the current state of the labor economy, mainly in the preceding year, and Part II to a particular aspect of that year. As Part I is simply an analysis of the current situation, I would like to focus on the special theme in Part II, The IT Revolution and Employment.
The White Paper's views and conclusions on the impact of the information technology (IT) revolution on employment are basically in accordance with the facts. The analysis is conducted from various points of view, and the report is readily understandable.
It also seeks to eliminate anxiety over employment brought about by the IT revolution, and criticizes the prevailing views that middle-aged and older workers are incapable of mastering IT-related skills and that the IT revolution will crowd out workers in mid-ranking managerial posts. While this is welcome, if the aim is to dispel anxiety over employment, I wonder whether the White Paper should have gone further and incorporated the message that, in order to make the best use of IT, it is essential to improve and enrich the human resources.
Nikkeiren's Position Paper 2001 makes use of the findings of surveys carried out by the Economic Planning Agency (now part of the Cabinet Office) to suggest the following approaches for the successful use of IT:
The first reform of business processes necessary for the successful use of IT will be enhanced by the development and maintenance of human resources. By reform of business processes, the report means understanding the essentials of customer needs and fundamentally reviewing conventional procedures in every aspect, including the procurement and purchase of materials and services, processing and manufacturing, sales, distribution, settlement of accounts, and the role of management and intermediate sections. This requires using information already acquired by employees currently engaged in these tasks. In other words, the crucial requirement for creating a new style of business processes that use IT is the knowledge of workers with expertise in their existing duties along with IT-related skills. Accordingly, it is important to consider how to give existing workers a command of IT.
Nikkeiren has always highly valued the development of human resources, not only in the IT field, but also as a means of strengthening the economy as a whole, and has made various efforts to support revisions to human resource development programs put forward by different companies. Thus, in May this year, the Nikkeiren Career Development Center was established. This center currently holds training seminars for intra-company advisors who will assist employees who voluntarily build and develop their skills.
This year's White Paper merely states that the purpose of IT-related investment is not simply to cut labor costs, but also to improve business processes. It might have been better for the purposes of making the investment more profitable and dispelling anxiety over employment to add the message that the improvement of human resources is essential for maximizing the effect of such investment.
The 2001 White Paper on the Labour Economy focuses on the IT revolution and employment, analyzing the impact of the IT revolution on the nature of jobs, human resource development, diversification of employment patterns, the outlook for the labor market and so on. How, then, does the IT revolution affect employment and working styles?
First, there is the problem of the digital divide. The White Paper claims that, with the ongoing IT revolution, the skills that companies require of workers are fairly basic, such as typing and using e-mail, and that if sufficient time is devoted to these tasks, the widening of the so-called digital divide will be curbed. However, job advertisements seek skillful specialists or young workers. The digital divide refers, rather, to the major gap between the skills and abilities required of all employees and the skills and abilities needed to be re-employed.
The second problem, related to the first, is the issue of mismatching in the labor market, considered to be a major reason for the current high unemployment rate. But the insufficient supply of IT-related workers is a momentary phenomenon occurring in the supply-and-demand relationship; companies tend to hire workers who can contribute immediately to their business, whereas the type of skills required in the medium term is not always clear. At the same time, data show that companies that actively adopt IT-related utilities see this as a reason to take advantage of a higher proportion of non-regular employees. Thirty-five percent of firms say they will increase the proportion of part-timers and temporary workers in their workforce. All this implies that companies are trying to cut back on labor costs, by replacing regular employees with non-regular employees. However, with the steadily advancing IT revolution, if companies judge their personnel solely on such a short-sighted basis, and continue to rely upon labor supplied by the exterior labor market, then the mismatching of employment will never be solved.
The third issue concerns human resource development. It is necessary for firms to train their existing personnel, if for no other reason than to eliminate mismatching. If human resource development is planned and carried out from a medium-term perspective, Japanese employment practices, which involve long-term employment, will surely prove to be effective.
The traditional Japanese employment system has some critical advantages for both labor and management, in that companies are able to invest in human resources with a long-term perspective, and workers can feel secure and ready to work. Although a previous White Paper was somewhat negative about the practice of long-term employment, this year's paper cites the importance of taking advantage of the positive aspects of that practice. With the IT revolution steadily progressing, it is time to re-appraise the traditional Japanese-style employment system.
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