COVER STORY • 5

Japan’s Advanced
Education: Future Strategies
as a Global Industry

By Tokuo Iwaisako
Points for Consideration• Since the start of the 21st century, universities throughout the world
have been developing into a global industry. In order to consider how
to confront this global competition, and also why Japan’s top
universities are lagging behind in this international competition,
concrete analysis based on this point is essential.
• In the globalization of Japan’s universities, it is vital to secure
outstanding foreign educators. To this end, in addition to raisingsalary levels, it is also necessary to introduce a remuneration systemthat reflects performance.
• Furthermore, it is important to streamline social systems andenvironments that are essential to retain highly educated or highly
skilled foreigners in general, not only researchers. In particular, it isextremely important to enhance the environment so that children canreceive high-quality middle- and advanced-level education fully inEnglish, so they can then advance to top Western universities.
• In the universities of Japan, as well as enabling the receiving of awide range of donations from the private sector, it is essential tocreate an environment that allows the operation of a funding pool
formed by monetary contributions, along the lines of the endowment
funds in the United States.
A considerable amount of time has passed since the lagging behindin the globalization of Japan’s advanced education, especiallyuniversities, was first pointed out. While recently the trend forJapanese universities to steadily drop in international rankings does
not appear to be stopping, the university reform draft laws
promulgated by the Ministry of Education, Culture, Sports, Scienceand Technology (MEXT) and the government’s Education Rebuilding
Implementation Council both lack comprehensiveness and specificity.
In response to Japan’s university reform discussion, as a current
university professor, there are a great many things I wish to say.
However, I’d like to mention here that Professor Takehiko Kariya of
Oxford University suggests that the reform of Japanese universities led
by the government and MEXT is based on “deductive thinking”, whichequals “inferences made from abstract ideals” (see Kariya, 2020.)1
Below, in regard to the kinds of reform that are required to achieve theglobalization of Japan’s universities, I will offer some concrete, notAuthor Tokuo Iwaisako

vague, ideas, and conduct a comparison with universities in othercountries.

Advanced Education in the 21st Century Has
Become a Globalized Industry
Firstly, I would like people in general to understand that, since thestart of the 21st century, advanced education in developed countries
has rapidly been commercialized, and become a globalized industry.
While the “globalization” mentioned here is of course important, ofequal or even greater importance is the “industrialization”.
Similar to Olympic representative teams, at the top universities ofadvanced countries in the 20th century, apart from at a few US
universities, the percentage of researchers having the nationality ofthat particular country was then extremely high. However, the world’s
universities of the 2020s are more like rugby representative teams inthat it is now the norm for such teams to include foreigners. When it
comes to top US universities, as in European soccer club teams, it is
now entirely natural for foreigners to be the main driving force. To thisend, the global competition to acquire top-level researchers has
intensified greatly, and the salaries for top researchers who might betalented enough to receive a Nobel Prize or some similar award havebeen experiencing extreme inflation over the last two decades. The
winners in this competition are in the West, particularly some of the
top universities in the US.
The global competition to obtain students is rapidly changing. As
reflected by the graduation from Harvard University of the daughter ofChina’s President Xi Jinping, the wealthy and elite classes of countries
and regions that have experienced speedy economic growth during the
21st century, such as China, South Korea, Hong Kong, Singapore andthe Middle East, are flocking in droves to send their children to some
top universities in the US and Europe. American and European
universities are resigned to this situation, believing that it is their very
ability to re-allocate the large sums of money received in entrance andclass fees from the children of the wealthy, diverting it into
scholarships for talented top students, that is their societal role. In
contrast, since it is a golden rule for Japanese universities to ensure
equality in entrance exams, for good or bad, they are not even on thesame playing field. As a result, in the two aspects of gaining both

1 Takehiko Kariya (2020), Coronago no Kyoiku he, Okkusfodo kara no Teishou (Towards a Post-Corvid Education: Proposals from Oxford), Chuko Shinsho Rakure, Chuo Kouron
Shinsha.

https://www.jef.or.jp/journal/

Japan SPOTLIGHT • November / December 2022

31

TABLE 1

International comparison of the ratio of foreign teachers
Japan,
nationwide

MIT

Stanford

HarvardCaltechCambridge

OxfordTotal no. of teachers

382,518

2,982

4,285

4,350

953

5,490

6,750

No. of foreign teachers

21,772

1,679

2,042

1,311

350

2,278

2,964

Percentage

5.7%

56.3%

47.7%

30.1%

36.7%

41.5%

43.9%

Sources: Grand Design for Higher Education toward 2040 (Report), Central Council for Education; Ministry of Education, Culture, Sports, Science and Technology (MEXT), and as referencematerials (3/11), materials related to education and research systems. The sources of the original data are the Report on School Basic Survey (2017), MEXT; and QS World University
Ranking 2018, Quacquarelli Symonds (QS).
URL: https://www.mext.go.jp/b_menu/shingi/chukyo/chukyo0/toushin/1411360.htm

researchers and students, Japanese universities are clearly playing
second fiddle to the world’s top universities

The Need to Increase the Ratio of Foreign Teachers
To be more specific, since the start of the 2010s, as one numericaltarget towards the fostering of global personnel, an increase in thenumber of classes taught in English at Japan’s universities has been
advanced. However, it is clear that, in conditions in Japan where
Japanese teachers, for whom English is not their native tongue, andtheir students conduct classes and seminars using English, but then in
the evening have friendly discussions at social gatherings in Japanese,
it is not possible to carry out high-quality global education.
As is the case for global corporations, in order to improve thequality of research and education at Japanese universities, there is aneed to increase the percentage of foreign professors and researchers.
However, as can be seen from the figures in Table 1, in contrast to theratio of from 30% to in some cases over 50% of foreign teachers at
top universities in the US and Europe, the average ratio for Japan as awhole is less than 6%. Even at Tokyo Industrial University, which
specializes in the sciences and where the percentage of foreign
instructors is considered to be relatively high, in 2021 it was no morethan around 12%.2
However, it is not only that Japanese universities are unable toattract outstanding foreign researchers, they are also unable to callback excellent Japanese researchers who have gone to study in the US
or Europe and stayed on to find work there. Also, in the case of Asian
researchers who have gained a Ph.D. in the US or the United Kingdom
and then seek employment at universities in the Asian region, at leastin terms of the benefits aspect, top universities in Japan have been
overtaken by their competitive rivals such as China, South Korea,
Singapore and Hong Kong. Certainly, Japan has advantages such as
good security and well-organized social infrastructure, but in addition
to the definitive factor of the widely differing salary levels, as I will
explain below, for foreigners with advanced skills or high-level
education, on the points of an ideal working environment, and theorganization of a social environment that is easy to live in, Japan isconsiderably behind these countries.

Why Japanese Universities Can’t Attract Top
Personnel: the Salary System Issue
In the US and Europe, it is normal for there to be differences in thesalary level in different research fields. For example, it is considered
natural for salaries of medical researchers to be higher than those of
linguistics researchers. Table 2 shows the average salary level byfaculty at the University of California at Berkeley, one of the top public
universities in the US, and arguably one of the world’s top national
universities.3
In comparison, to give an approximate overall picture of the annual
salaries of teachers at Japan’s national universities, when someone
starts working in their early 30s, their annual salary is around six
million to seven million yen. This gradually increases over time, with a

TABLE 2Comparison of salaries of professors
at the University of California at
Berkeley, by faculty(2015, excluding Faculty of Medicine)Amount of Salary(US$)

Amount of Salary(JPY, $1=110 yen)

Business School

334,916

3,684

Faculty

Economics

326,230

3,589

Electronic Engineering/Computer Science

276,223

3,038

Law School

273,794

3,012

Chemistry

221,234

2,434

Films/Media

205,526

2,261

Physics

193,944

2,133

Education

187,157

2,059

Linguistics

152,766

1,680

Gender/Women’s Studies

143,484

1,578

Source: The Daily Californian, Professor Pay-Checker (database on salaries of teachers at the
University of California, according to a student newspaper at the University ofCalifornia, Berkeley)
URL: http://projects.dailycal.org/paychecker/#database

2 Deta de miru Tokendai Kenkyu (Research at Tokyo Industrial University, seen by data) https://www.titech.ac.jp/public-relations/research/data (Last viewed: July 2022).
3 All American state universities, not only those in California, publish the individual names and salaries of full-time teachers, which can be perused online by anyone.

32 Japan SPOTLIGHT • November / December 2022

teacher in their 50s receiving about 10 to 12 million yen.4 Accordingly,
while it may be surprising that teachers in even in the lowest-paidfaculty at Berkeley are paid considerably more than the level of Japan’snational universities, since this university is located in the Bay Area of
San Francisco, which has extremely high living costs and real estatevalues even for the US, there may be little meaning in making acomparison with the absolute level of salaries in Japan. Meanwhile,even excluding medical faculties and business schools, where it isstandard for payment to be high, there is an almost 200% difference
between the highest- and the lowest-paying faculties. Moreover,professors in faculties such as economics and computer science, thatis, those who teach subjects with high practicality or a high social
demand, receive higher salaries than teachers of the physical sciencessuch as physics and chemistry. Also, although it is not shown here, if
we look at the same public data on teachers’ individual salaries, within
the economic faculties, there is a tendency for researchers ininternational economics and finance economics to generally havehigher salaries, while those of teachers of pure theory and the historyof economics are relatively low.
Of course, we should not over-idealize the conditions of US
universities. The differentials in the income gaps among university
professors and among research fields in the US are extreme even by
world standards, and there is a strong movement towards viewing the
problem as related to the way that up until now the salaries ofresearchers have been determined on a market base. In contrast, forbetter or worse, in Japan all the researchers at a particular university
follow the same salary system. The remuneration system of
professors at Japanese universities is highly rigid compared to Japan’s
private corporations and even to that of bureaucrats in Japanese
central ministries and agencies. Even if conditions in the US can beconsidered extreme, the fact that there is such a low connection
between performance and salary in Japanese universities, reduces thesense of competitiveness on the part of researchers, while the work
environment with that lack of a sense of competitiveness constitutes amajor obstacle to attracting motivated, outstanding foreign
researchers.
To resolve this problem, of course there is a need to improve thesalaries and benefits of university teachers. However, the real issue is
not the salary level, but rather lies in the very composition of the
incentives for Japanese university staff. In Japan, as in other countries,
there are basically only three staff positions at universities: professor,
associate professor, and assistant professor. However, in addition, at
Japanese universities, since the salary system has no relationship at
all to performance or research field, with salaries being mostly
determined solely on the basis of seniority, for staff that have once
taken on a position there is extremely little motivation in terms of
remuneration for outstanding research results to be improved. Also, inthe event that a researcher who has achieved excellent results is headhunted by another university, although it is an everyday occurrence atuniversities in the US and the UK to add to the attraction by increasingsalaries and improving benefits (such as research payment being
provided by the university, or in regard to the number of classes to betaught, a place to do research, housing provided by the university,etc.), at universities in Japan there is almost no flexibility at all in suchmatters. Accordingly, even for Japanese people in Japan, if they arehead-hunted by universities in China, South Korea, Singapore or Hong
Kong, there is almost no opportunity for the Japan side to stop themleaving by means of the salary aspect.

Why Japanese Universities Are Unable to Attract
Global Personnel: Issue of Social Environment
Surrounding Universities
Apart from the issue of the salary system in regard to getting
foreign researchers to work in Japan, there is a more serious problem:the environment in which the researchers and their families will live inJapan. In particular, the question of the educational environment forchildren is extremely important. An important policy issue not just forforeigners, but also within Japan is the enhancement of good-quality
babysitters and kindergartens. In addition, for the elite class in the US
and Europe and Asian countries, getting their children into top Western
universities is an extremely important objective. In actuality, putting
aside the question of whether the children themselves actually hopefor this, in order for this goal to be achieved, whether or not there areopportunities in place to obtain good-quality middle school or highschool education in English (and if possible also in French andGerman), is an extremely important key in whether or not it is possible
to entice foreigners to Japan.
Furthermore, in daily life also, it is necessary to streamline anenvironment in which it is possible to get by to an appreciable extent
with English only. Having experienced streamlining the environment
for the inbound demand and for preparations for the Tokyo Olympics,
conditions have gradually improved considerably, as happened in thearea around Tokyo’s Yamanote Line, such as in regard to offices inpublic local government bodies in the centers of big cities, public
transport organs, taxis, and so on. However, in various procedures
such as for financial institutions and real estate-related matters, there
are numerous local rules, which may be unclear even to Japanesepeople. If one brings to mind the difficulties involved in making a rental
agreement for accommodation, or in signing an agreement for amobile phone, one can very easily imagine the frustration experienced
by foreigners having to do this in a language other than their mothertongue. Further, if workers with advanced skills who have foreign
nationality increase more in the future, there needs to be a more
flexible response to differing religions and cultures.
We must develop the environment so that more flexible responses
to matters such as the handling of religious facilities and religionbased holidays, and dietary issues such as vegetarian, vegan, and halalrequirements are facilitated, and it is necessary that such measures be
implemented not only in specified companies and workplaces, but

4 On advancing to professor level and reaching one’s mid-40s, the amount of pay rise decreases year by year. In addition, since Japan has high progressivity on income tax, on
occasion the amount of salary actually received hardly increases at all.

Japan SPOTLIGHT • November / December 2022

33

rather in Japanese society as a whole. This kind of streamlining of thesocial environment is, at the same time, an important factor in orderfor not only university staff but also for private companies to recruit
excellent foreigners who have high-level education or advanced skills.
We should keep in mind here not the CEOs or star players of major
corporations who earn hundreds of millions of yen per year, butneither on the other hand are we referring to those who have decided
to move to Japan because they are attracted by manga, anime,
Japanese food or other aspects of Japanese culture. The question is,
how can we create a social environment that would persuade experts
who earn from around seven to 50 million yen in annual income andhave skills that are marketable all around the world, and a high level of
education and advanced skills, to consciously choose Japan as theirworkplace? In order to accomplish reform to this end, since there is alimit to leaving the necessary changes only to private-sector self-help
efforts and the natural trends of society, government-led policies must
be implemented. We should establish very large-scale “special
districts” and streamlining environmental and systemic reform so thathighly skilled foreign workers can settle there must be advanced on aconsiderably large scale and in a timely fashion.

How Can University Reform Be Achieved?
As explained above, to reform Japanese universities themselves,
and to increase international competitiveness, it goes without sayingthat there is a need to broadly strengthen the financial foundations
However, especially if we speak in regard to advanced countries, evenfor universities in the US and the UK, their current highcompetitiveness position was not gained as a result of large-scale
government budget support. In regard to British universities, at a time
when government subsidies were being reduced, a strong driving
factor was that they had no choice but to introduce funds from outside
sources and become globalized, and to advance with business (seeKariya, 2020, Introduction).
As someone who is currently employed as a university teacher,naturally I would sincerely be most grateful if the government budget
allocated for advanced education were to be greatly increased.
However, considering the tight financial conditions of Japan, I canclearly see that it is difficult to place any hope on that happening.
Accordingly, the universities of Japan also are forced to follow in the
direction of becoming more business-oriented to a certain extent, andthere is a need to enable the kind of fund-raising that is undertaken byWestern universities. To this end, it is essential to streamline thehandling of taxation systems related to financial contributions touniversities, in particular, tax exemptions. However, more important
than this is to thoroughly organize the system for implementing fundraising on the university side. The most important work of thepresidents of top Western universities is fund-raising, and the funds sogathered are pooled as “endowment funds”. Taking Harvard University
as an example, in 2021 the activity funds of the university as a whole
were about five billion dollars (or, at the rate of $1=110 yen, 550 billionyen), and 40% of this came from the university’s endowment fund.5
Even at business schools and medical schools, where class fees are
high, a quarter of the annual operating costs is provided from theirendowment funds, and when it comes to the usual faculties andgraduate schools (faculties of arts and sciences), that figure rises to
55%.
Therefore, at the top private universities in the US, such as Harvard
and Yale, the role handling the operation of university endowment
funds is an important position in which the salary is higher than that of
the university president. Of course, the idea that in one step Japan’s
universities could all suddenly gather funds in the same way that top
universities in the US do, is a completely unrealistic pipe dream.
Indeed, we do not even know whether the society or people of Japan
see the style of US universities as something desirable. However, atthe least, we should see it as inevitable to reform the extreme
dependence of universities on the state for funding, and to turn therudder towards private-sector donations and fund-gathering. To that
purpose, there is a need to substantially change both the selection
process of university economic staff and the governance structure.
Further, we need to employ and foster different types of experts fromthose that have existed up until now, including specialists in the
management of university endowment funds
But the greatest difficulty is in how to reform the relationshipbetween MEXT and universities, in particular, national universities. The
shift in the economic base of universities to depend more on privatesector funding means that it is essential that government and MEXT
control recede, and that there is a substantial decrease in the numberof positions assigned to bureaucrats that currently exist in major
national universities. No bureaucratic organization wishes to shrink theterritory of its own sphere of influence. At Japan’s universities, toconduct a drastic, fundamental reform along the lines of theprivatization of the Japanese National Railways in the 1980s, thegovernment must take the initiative.

Ongoing Issues for Further Consideration
So far, in regard to the direction of reform for the purpose ofstrengthening the competitiveness of universities in Japan as a global
industry, my discussion has focused on making comparisons with top
universities of the US and the UK. However, as I have alreadymentioned, in this too lies the pitfall of possibly over-idealizing therealities of universities in the US and the UK. I would like to conclude
this discussion by mentioning three important issues for ongoing
consideration.
Firstly, although the top universities of the UK and the US haveachieved high international competitiveness of advanced education asa global industry, universities in other countries, including those in thevarious nations of Europe, continue to face the problem of how toachieve a balance between research and education activities in theirown countries, and global competition. In particular, as in the case of
economics and some aspects of medicine (such as medical

5 Harvard University’s Financial Results for Fiscal 2021. URL: https://finance.harvard.edu/annual-report.

34 Japan SPOTLIGHT • November / December 2022

economics and epidemiology, such as responses to Covid-19), there
are many cases where one’s own nation is made the subject ofanalysis, while in areas of scholarship for which it is hoped that an
important social role will be played in one’s own country, this is anextremely serious and complicated issue. For example, in places like
China, Singapore, and Hong Kong, of the roles expected to be playedby economic researchers affiliated with universities, the weight ofinternational competitiveness in research is overwhelmingly strong,while contributions such as the utilization of statements andknowledge related to domestic socio-economic issues are notconsidered all that important.
Perhaps it might be more accurate to say that, in these places there
exists a definite separation between the kind of personnel whoemphasize international competitiveness and those who are focusedon domestic issues. South Korea is not as extreme as that, but
compared to Japan and the countries of Europe there is a definite
tendency to favor international competitiveness. Moreover, if too muchstress is placed on international competitiveness, in countries where
English is not widely spoken, making it harder to submit papers tointernational academic journals, this means that outstanding personnel
will concentrate in fields where there is comparatively low importanceplaced on the ability to express oneself in English.
Looking at the example of economics, there is a trend for personnel
to gather in theoretical research areas such as theoretical model
analysis and planned economics, whereas in fields with high social
importance such as public economics, labor and finance, the layer of
researchers is thinner. Furthermore, in fields such as computerscience, comparing text mining of texts written in English and text
mining of those in Japanese, the number of researchers who are moreinterested in the former is overwhelmingly larger. However, the social
importance of the latter must also be fully valued within Japan. How toachieve a balance between international competitiveness in researchand the social role of universities in one’s own country is now and willcontinue to be an important theme in a large number of academic
fields.
Secondly, in the industrialization of advanced education, of course
there is a negative aspect. In particular, in regard to US universities, asa result of the advance of commercialization, the academic fees offaculty students have soared since the start of the present century.
Currently, almost one-third of US students have taken out loans inorder to graduate from university, while the figures for 2020 show thatthe average amount owed in debt on student loans is as high as$38,792 (around 4.25 million yen) per person. According to estimatesof the Federal Reserve Bank of New York, the US household sector
bears a total of almost $1.6 trillion in student loan liabilities, which isgreater than credit card and car loans combined.
Furthermore, as a result of the increase in the rate of advancing touniversity education, naturally the overall quality of students is
declining. Looking at the US as a whole, about 40% of students areable to graduate in four years (at the University of California at
Berkeley, the top school of state universities, it is 90%), while eventaking six years only 60% are able to graduate. This lengthening of thetime taken to graduation is in itself a big problem, but it also
exacerbates the enlarging of the burden of student loan debt
mentioned above.
Thirdly, since the start of the 21st century, in the world as a wholeonline education has developed and been enhanced. Large-scalelectures that anyone can attend for free via the Internet are known as
Massive Open Online Courses (MOOC) and have increased explosively.
Examples of representative platforms include Coursera, which was
founded by researchers from Stanford U, and edX, which wasdeveloped by the Massachusetts Institute of Technology (MIT) andHarvard University. In particular, since 2020, when the Covid-19
pandemic meant there was often no choice but to hold classes online,
the trend for university education to be conducted at least partiallyonline has become definitive. Since a vastly larger number of students
can attend an online class at once compared to face-to-face classes,
the number of teachers that require lecture-centered subjects such as
introduction to economics as a general education class decreases
dramatically. The emerging of a situation where all universities in acountry share several extremely high-quality online classes, while eachindividual university conducts only question-and-answer sessions withstudents, and marks their homework and exams, is also no longer
necessarily just a dream story.
Clayton Christensen, the US economist who is famous for his book
The Innovator’s Dilemma, focused at an early stage on this kind ofinnovation in university education, and has said, “As a result of the
spread of online education, and other factors, in 10 or 15 years fromnow, 50% of American universities will go bankrupt.” 6, 7 On the otherside of the coin, we can say that the quality of education in areas suchas students’ motivation to study, and instruction on individual topics
towards their graduation theses, which cannot be addressed online,
have come to be given greater significance than before.
In the current environment in which new technologies and platforms
such as online education are rapidly expanding, the ways in which
competition related to global higher education will change, and how
the universities of Japan will respond to these changes, are extremelyinteresting topics for consideration.

Tokuo Iwaisako is professor and director of the Center for Intergenerational
Studies at the Institute of Economic Research, Hitotsubashi University. He alsoteaches finance and macroeconomics at Hitotsubashi University's Faculty of
Economics and Business School. In the past, he served as president of the
Nippon Finance Association (2018-2020) and principal economist at the
Ministry of Finance's Institute of Policy Research (2009-2011). He holds a B.A.
in Economics from Hitotsubashi University and a Ph.D. in Economics from
Harvard University.

6 Clayton M. Christensen, Michael B. Horn, Curtis W. Johnson, Disrupting Class: How Disruptive Innovation will Change the Way the World Learns, McGraw-Hill, 2008. Translated by
Yuko Sakurai,“Kyoiku×Hakaiteki Innovation — Kyoikugenba wo Bapponteki ni Henkakusuru” (Shoeisha, 2008)
7 Abigail Johnson Hess, “Harvard Business School professor: Half of American colleges will be bankrupt in 10 to 15 years,” CNBC (2018/08/30). URL: https://www.cnbc.
com/2018/08/30/hbs-prof-says-half-of-us-colleges-will-be-bankrupt-in-10-to-15-years.html

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