## ○ Roles played by the manufacturing industry and labour mobility

The manufacturing industry provides quality work opportunities for high school graduates, supports regional employment, and creates employment for all industries through export, thus plays an important role in the Japanese economy.

Due to the change of manufacturing technologies, the value-added through "fine-tuning" which is the strength of the Japanese manufacturing industry has been reduced, and modularized assembly processes are now being transferred to overseas. On the other hand, companies in Europe and in the United States are yielding profits by effectively managing intellectual property.

Although there is a movement of establishing R&D centers in foreign countries, an increasing number of Japanese companies are considering to make new business investment domestically, in order to prevent leakage of technology, etc.

Domestic plants in Japan are supposed to play a role as “mother plants” (the base plants having the functions to develop and accumulate the technologies and skills for overseas markets), and cultivation of core human resources, who will be dispatched to overseas bases, is required. While Japan has its strength in production goods (including parts), maintenance of base technologies is essential for innovation. It is also important to protect the companies producing final consumer goods, through domestic demand stimulation. In addition, it is important to create value added through such means as entry into new industrial fields, and to secure competitiveness, backed by systems to cultivate abilities and qualities of human resources as well as diversification of human resources.

In terms of all industries, the power of expanding employment is weak in the high-income sectors (such as finance and insurance industries), and is strong in sectors with relatively lower income (such as welfare industry); this is one reason for the decline of income level. Increased labour productivity contributes to the increase of wages; it is important for us to increase labour productivity at the macro level, by increasing business investment, by creating industries with high value-added and with labour productivity increase, by allocating labour to such industries through labour mobility without unemployment, and by effectively using technological advancement. Furthermore, we should also improve terms of trade by promoting R&D investment, business investment, business restructuring, etc. and ensuring export prices, and reflect the increased productivity to wages.

### 3. Changes in acquisition and development of human resources in the labour market

## ○ Human resources sought by companies in recruitment of new school graduates

About half of the new hiring is hiring those who changed jobs, and the ratio of hired persons who changed jobs to all employees tends to increase. Personnel relocation is also increasing; it is inferred that companies have reallocated their employees to other departments, as a more moderate way to adjust employment during the time of business difficulties.

When recruiting young people, companies are placing more emphasis on personality, such as enthusiasm, ability to take action and cooperation.

In order to assist employment of young people, companies should make further efforts to more clearly define what kind of human resources they are seeking, and universities should endeavor to improve students' abilities and promote student internships. The government should promote strengthening of collaboration and information sharing among organizations of small and medium-sized enterprises, Hello Works, universities, and other entities.

## ○ Japanese employment system and future challenges

The prolonged low growth, aging of workers and increase of non-regular employees contribute to a drastic change of economic and social structures. In the future as well, we need to promote a system of wages and treatment of employees which will motivate workers and maximize their potential and thereby vitalize companies.