An interview with Mr. Shoto Furuya, the author of "The Impact of a Shortage of 11 Million Workers", is now available.

I'm Umada, the director of PEP. PEP Talk is a video and podcast for policy entrepreneurs conducted by the Policy Entrepreneur's Platform, or PEP for short. For this episode, we have Mr. Furuya from Recruit Works, who compiled the book "The Impact of a Shortage of 11 Million Workers" in January 2024. Wage increases due to labor shortages are finally starting to occur in Japan. However, it is said that there are major social issues waiting beyond that. Or, as Mr. Furuya told us this time, there are also great opportunities there. While deepening our knowledge by listening to Mr. Furuya's story about this labor shortage, which is said to be a bigger problem than pensions and social security, I hope you will learn about the sense of crisis, thoughts, and hopes behind Mr. Furuya's writing of this book. Please listen. 

It's time for PEP Talk. Today, we have Mr. Furuya, a senior researcher at Recruit Works Institute and the representative director of the general incorporated association School to Work. Mr. Furuya, thank you for coming.

 

Thank you. My name is Furuya.

 

You published a book with the shocking title "The Impact of a Shortage of 11 Million Workers" in January 2024. I'd like to ask you about this today, so thank you in advance.

 

Thank you very much.

 

Well then, some of you may already know Mr. Furuya from TV and other media, but if you don't mind, could you please introduce yourself and tell us about your usual research and activities?

 

Thank you very much. My name is Shoto Furuya. I am a senior researcher at the Recruit Works Institute and the representative director of the general incorporated association School to Work. I consider myself a researcher of people and work, and when I think about Japan as a country, I often consider at various opportunities that people are the one and only greatest resource, so how can we uplift and make shine this treasure that is people, the one and only greatest resource of Japan, and how can we create a sustainable society and Japan, and the world? That's the kind of research I do. Originally, in relation to PEP, I used to work at the Ministry of Economy, Trade and Industry, and I changed jobs seven years ago to my current position. Thank you for having me today.

 

Thank you. By the way, Mr. Furuya, when did you become interested in people?

 

I went straight to graduate school, which was the beginning of my life's mistake, but at that time I was already majoring in educational sociology, so I had a strong interest in people at that time. Even in high school, I did things like moderate debates for members of the Diet and visit local business owners to hear their stories, so in that sense, this society is made up of people thinking and working on various things, so I may have been interested in what kind of efforts the people living in this society have been making for a long time. In that sense, I really like listening to people's stories, and I have something like thousands of people's interview records at hand, combining my hobbies and work, and I write books while looking at them from the side.

 

I see. Today, you are on the side of being interviewed. I feel like my interviewing skills are being tested.

 

You can tell a person's character by the way they interview, can't you?

 

That's right. It's easy to tell if someone is good or bad at it, so I'll be careful not to be thought of as bad at it.

 

I've read your work, Mr. Umada, and you're a person of execution and vision, so I've been really looking forward to this opportunity today.

 

Umada 

Thank you very much. This interview is about your book on labor shortages, but I understand that you originally focused on other areas as well, is that correct?

 

As a researcher of people and work, I don't intentionally set specific areas of expertise, because I don't think you can tackle modern society in the world of research by saying you don't know because it's not your area of expertise. So, in reality, in order to tackle various social issues, I collaborate with people from various academic fields, so in that sense, of course, there are parts that I have been researching as my main focus, but in that sense, I also research the creation of careers for the next generation, the labor society of the next generation, focusing on young people, the career development of young people, the development of young people, the youth labor market, and so on.

 

From there, in terms of the future, it's the same, and in terms of how people work, it's the same, but I think you've also ventured into slightly different areas such as labor shortages. After hearing your story today, I thought it was because of your background of doing everything. Now, I'd like to get into the main topic of "The Impact of a Shortage of 11 Million Workers," but could you please give us a brief overview for those who haven't read it yet?

 

This book is based on a simulation that predicts that Japan will face a structural labor shortage for about the next 15 years. Japan has passed a dramatic turning point in the labor market, and this book points out what will happen to Japan after passing that turning point, and proposes solutions to overcome it, because if we sit and wait, it's almost certain that life will be difficult and we won't be able to work.

 

I see. So, it's a book that you wrote with quite a lot of passion.

 

Yes. I've been to various regions and various workplaces with labor shortages, and I really need to think about this seriously. In other words, Japan will enter a phase of aging population and population decline in the future, or rather, a phase where the elderly population will grow enormously, and there are things that need to be considered much more than the issue of pensions and social security. In other words, the problem caused by the shortage of labor in life maintenance services will become larger. Despite this, there has been almost no consideration of this issue. I'm thinking about what will happen to the labor market due to changes in Japan's population dynamics. What happens in the labor market is that everyone living in this society consumes someone's labor to maintain their lives, right? We can't even throw away a piece of garbage without someone's labor, so in that sense, the tightening of the labor market for life maintenance services will inevitably be caused by changes in population dynamics in the future, and this is a problem that needs to be considered more than issues such as pensions and social security. But in fact, we don't really know what will happen. We don't know what will happen to the labor market due to the aging population, and it hasn't been examined. I'm a person who is currently researching such things.

 

I see. Regarding the proposal that it may be more important than social security, I also heard about it for the first time, and I think that not many people actually have a real sense of it, even though it's becoming a little more apparent, not just a little, but that it will become a bigger problem than social security. I'd like to ask you more about this later, but before that, I think you mentioned in your talk that you realized this problem while interviewing various people, so could you please tell us about the background that led to your writing, which I think was also mentioned at the beginning?

 

Originally, this was one of the core studies conducted by the Recruit Works Institute in FY2022, called Future Forecast 2040, and the book "The Impact of a Shortage of 11 Million Workers" published in January 2024 incorporated the latest research results. The original Future Forecast 2040 was based on my very strong sense of crisis about what would happen if the current labor shortage on the ground reached its destination, and it was a study that started under the hypothesis that a society with labor supply constraints might come, to put it bluntly. What is a labor supply constraint? In other words, the current labor shortage is a tremendous labor shortage, and you may not really feel it if you live in Tokyo, but this problem is the farthest away from Tokyo, the headquarters, the head office, and even more so, Kasumigaseki. Kasumigaseki is basically a white-collar area. It's not a life maintenance service, is it? To put it bluntly, even if everyone in Kasumigaseki were to disappear, frankly, it wouldn't be much of a problem in terms of daily life, right? Of course, in the medium to long term, it would be very troublesome. But the moment police officers, caregivers, pharmacists, truck drivers, and others on the front lines disappear, our lives would fall apart. In that sense, the people farthest from this story are the headquarters in Tokyo. The same goes for the head offices of major companies. The people who empathize with this the most are those on the ground in local areas. In that sense, I would like the people who are listening to this story to hear it and know about it. At the same time, I believe that this is where Japan's greatest crisis and hope lie. I may not be answering your question, but this is the background.

 

Recruit Works also released a research report last year in 2023, and there was a part where they summarized it in a 5-minute video, so I thought it was a place where they were properly appealing their achievements. But now that it has become a book, I think it will reach more people, so I'd like to hear more about this later. Looking at the book, I think it's composed of three parts: the first part analyzes the issues, the second part is a solution as a proposal to those issues, and the final chapter is a broader, longer-term proposal for the future. If there are any parts that you particularly want people to read, Mr. Furuya, could you please tell us first?

 

The major premise of our research is that we conduct simulations of labor demand and supply. We construct a mathematical model of the overall structure of the labor market, that is, labor demand and supply, and run simulations. As a result, we know that there will be a shortage of 3.4 million workers in 2030 and 11 million workers in 2040, or in other words, an excess of labor demand. That's one point. Another point is that we do this by occupation. As I mentioned earlier, we say that there is a shortage of workers in a flat manner, but among them, we point out life-sustaining services as an area that absolutely must not be short of workers. Without life-sustaining services, we can't even work. Even if there are people doing amazing research on generative AI or doing something really innovative in the aerospace field, if the care workers in that area disappear and there is no one to take care of their parents, they can't focus on their work. They can't talk about AI research or space engineering. They have to take care of their families. This is the situation that Japan is facing. There is already a problem of nursing care refugees occurring in some areas, and the closure of nursing care offices is really happening one after another. Based on this awareness of the issue, we thought we should discuss what these problems will cause with some kind of evidence. So, we select representative occupations in life-sustaining services, seven occupations, such as drivers, care workers, medical professionals, and construction workers. We simulate these individually, which is the second point. How much shortage there will be and how much impact it will have. Based on this shortage rate, the third point is that we have a page that describes in detail what life in Japan will be like in 2040. Since we know the shortage rate, we can write in detail about how much life services will be cut down at that shortage rate and what impact it will have on real life. To put it simply, life will be so tough that people won't be able to focus on work. If we just sit and wait, it's almost certain to end up like this. There are already some areas where this is happening. In terms of issues, let me add that a decline in living efficiency means a decline in economic efficiency. For example, NHK reported a story about Ichihara City, Chiba Prefecture, where the number of bus services has decreased, right? This is happening not only in the Tokyo metropolitan area but also in local areas. There are no drivers at all, so the number of bus services is decreasing and routes are being abolished one after another. As a result, there was a care worker who used the discontinued bus service in Ichihara City, and her commuting time doubled. It became two hours, up from one hour. This is what's happening, they say. As a result, she had to switch to shorter working hours. That's right. She has her own life, so she had to shorten her work hours and leave early to go home. In other words, the shortage of workers in life-sustaining services accelerates the shortage of workers. The decline in living efficiency reduces the labor supply. The total labor input is an important factor of GDP, as you know. It's total labor input times productivity, so it might create a ceiling on labor input. It might lower that ceiling, which is the most troublesome thing about the labor shortage in life-sustaining services. It's a vicious cycle in that sense.

 

It really becomes a vicious cycle when you hear about it now. The phrase "life is too busy to work" is very catchy and easy to understand. It's a really pressing issue, and if it's not communicated well and measures aren't taken from now on, it's going to be a difficult situation, isn't it?

 

It's already happening, right? Since before Covid, I've been calling them the four heavenly kings of labor shortage, but nursing care, medical care, logistics, and construction. The people who are directly connected to our lives and are the must-have workers are already in a serious labor shortage. After Covid, it's getting even worse, and when I listen to the stories from the nursing care sites in rural areas, it's likely that in the near future, in relatively large cities, there will be no place to accept people who are considered to need relatively mild levels of nursing care. I have this sense of crisis. As I hear stories about how the lead time from certification to acceptance is getting longer, I have a sense of crisis that in 2 or 3 years down the line, there will be no one to receive nursing care services for people who need support.

 

I see. I'm hearing now that this kind of thing is gradually coming and may explode somewhere. On the other hand, when I look at the current Japanese media, there seems to be a nuance that when demand becomes excessive, it's welcome because it raises wages. Do you have any thoughts on that, Mr. Furuya?

 

That's exactly right, and economists like Goodhart are saying that aging increases total demand, and I completely agree, so it brings inflation, which was a fairly minority opinion, but it's being proven in Japan, isn't it? That's why I call the current situation the turning point of Reiwa. In other words, it's the second turning point in human society since the modern era, triggered by demographic dynamics, following Arthur Lewis' turning point. The trigger for the Lewis turning point was that the rural population disappeared and everyone became factory workers in urban areas, which started to raise wages. The change in the balance between the rural and urban populations was the trigger, but the trigger for the Reiwa turning point is probably the increasing ratio of the population aged 85 and over. The older you get, especially over 80, the more labor you consume. It's easy to understand if you imagine medical and nursing care, for example. In the case of medical care, the number of annual outpatient visits is 34 days for people aged 85 and over, and 9 days for the working-age population, so it's about 4 times more consumed in total. I think this structural labor shortage brought about by these factors is bringing a turning point to Japan, and I think it's causing a triple increase in wages, prices, and capital investment. This is what I think is the first phase of this Reiwa turning point. But I also think there's a second phase.

 

What do you mean?

 

In other words, if we can't successfully switch the system of the whole society in this triple increase phase, there will be a singularity somewhere, and the degree to which life maintenance services will not be able to keep up will get worse in the medium to long term in the future. At some point, there will be a chasm. For example, after a typhoon passes, a power outage occurs, but that power outage doesn't get restored for a month in the middle of summer in Tokyo. Things that could have been maintained until now will suddenly become impossible to maintain. Moreover, the decline in economic efficiency due to such a decline in living efficiency will lead to a further decline in living efficiency, and a vicious cycle will begin. In fact, what we are beginning to see now is that there are companies that cannot make capital investments due to labor shortages. The gap between capital investment plans and actual capital investment is widening, the largest gap in 12 years, and when we look into the reasons, the Nikkei newspaper and others point out that labor shortages are in the background. In other words, this is the worst vicious cycle, and the only way for Japan in the future is to increase productivity. We have no choice but to increase the labor supply per person by using various means, and capital investment is the biggest part of that. It can directly increase productivity, but even the capital investment to increase productivity is becoming impossible due to labor shortages. Even if new machines are introduced, there are no people to operate them, or there are no personnel to allocate there in the first place, or there are no personnel to educate them.

 

In the book, you also point out that as people continue to flow into life maintenance services, there will come a time when there will be no people to enter places that can create innovation, and I thought while listening to your story just now that this might lead to a vicious cycle. The situation where people can't be allocated to innovation or there are no people even if they want to make capital investments is already happening right now, isn't it?

 

It seems so. When you look at data such as capital investment plans and their actual results, and compare them in articles from the Nikkei newspaper, there is a very large gap. Plans are not being achieved. When you carefully interview the background, they point out that there is a shortage of manpower. This is the worst-case scenario, isn't it? We have to make capital investments no matter what in the future society. We need to change things that people can do so that they can be done without people, and we need to put more and more machines there. In Nihonbashi, Tokyo, following the United States as the second country, a food delivery service is now running on the road and delivering food using green-colored mobile machines of about this size, which is being done by Uber, isn't it? The machine is called Serve. We need to put more and more of these into Japan. Even this is becoming impossible due to the shortage of manpower. It's a singularity, a singularity in Japan's future society. Such a vicious cycle will not stop. The decline in living efficiency leads to a decline in economic efficiency, and the decline in economic efficiency leads to a decline in living efficiency, and the worst snowball begins to roll. If left unchecked, this singularity will occur. At this moment, there is a triple increase, so it's a bit exciting, but this is only the first half of the phase.

 

So, you have a sense of crisis that we need to take action now, right?

 

Yes, exactly.

 

I'd like to hear a little bit about the solutions, but in the book, I think there are several things mentioned as possible solutions, such as mechanization, automation, the Workish Act, and reforms to eliminate waste in work. Could you briefly explain these points, and also tell us what you would like us to read and what you are particularly passionate about?

 

It's a huge social issue, so I think there are many solutions, and there are many more solutions besides the ones we have mentioned. Basically, however, it's definitely going to be a huge social issue that Japan will have to tackle for the next 15 years, but there are only two basic patterns of solutions, right? One pattern is to reduce labor demand, and the other pattern is to increase labor supply. There are only these two patterns. We are proposing four solutions for these two patterns, but the meaning of presenting these four major solutions is that there are already people taking action, meaning that they are not just armchair theories, but there are already practitioners, and the results are starting to emerge. They may be small, but they are initiatives where such buds are emerging. Therefore, if you want to work on it, you can work on it. Already. We have listed four solutions as such. In that sense, it's not about which one is the best, but all of them are necessary, but in that sense, thorough automation and mechanization are an absolute must, and if anything, it's an area where Japan has great potential, right? No one would object to introducing robots like Uber's Serve that I mentioned earlier. Or, when it comes to the idea of introducing robots in nursing care settings, the number of companies researching this is also increasing, and no one would completely oppose this, right? There is no sense that your job is being taken away. There are not enough people. I think that in the future, there will be a situation where the most advanced technologies from various countries will be brought into Japan in this field of automation and mechanization. In addition, we also advocate the "Workish Act", which is a term I coined, and if you want more details, please google it, but in my research, I realized that even when people live normally, they somehow end up helping others without realizing it, and moreover, they often do it not because it's an obligatory shadow work, but because it's fun or there's some reward or it makes them feel richer. Put together, it's the Workish Act. Nowadays, it's a general term for side jobs, second jobs, volunteer work, community activities, hobbies, and entertainment, but it refers to activities that meet someone's labor needs on the side of one's main job. I call it the Workish Act. It's like boyish or girlish, with -ish added to work, and it's an act or activity that seems to function in society. The Workish Act is a bit difficult to grasp the image without talking about it specifically, so let me give you just one example. For instance, there is a service that has been created where you can inspect utility poles with a smartphone game. It's a location-based smartphone game called TEKKON, and if you take a picture of a utility pole or manhole, you get a lot of points for rare ones, and you can dress up your avatar more cutely, or your ranking goes up, and it's just a normal game using location information. The photos taken are mapped out on a map of Japan. Of course, it's just a game, but the problem is that electric companies are already using this data to inspect utility poles. Tohoku Electric Power Company and Hokuriku Electric Power Company are using the data as a substitute for initial visual inspections, even though the photos were taken by amateurs playing a smartphone game. These kinds of cases are emerging. So it's not like the participants are super conscious and think they want to somehow support this society, it's a game. It's just a way to kill time. They're just doing it because it's fun, but as a result, it's aiming at someone's labor demand, and such platforms are being created in Japan. Whole Earth Foundation, the company that provides this TEKKON service, is an American startup based in Silicon Valley, but the president said that they are operating in the US, Philippines, Indonesia, and Japan, and the amount of data from Japan is overwhelmingly large, apparently 40 times more. This may be because Japanese people like games, but it's also because an ecosystem is in place. In other words, there is an overwhelming shortage of manpower on site. So there are people who want to buy that data. This creates an ecosystem and furthermore creates a platform where various proposals and relationships can be made with users who play the smartphone game. Against the backdrop of labor shortage. The Workish Act. There are other examples, such as people whose hobby is running wearing flashy T-shirts, and when they run, it becomes a neighborhood watch activity and they are commended by the police station. It's called Patorun, and Otetsutabi has also become famous. There is such potential for innovation in Japan.

 

Listening to the story about the Workish Act now, I think it's different from the fun aspect in Japan, but I thought that the way of local governance, where people govern themselves, might also change a bit. In a sense, as this issue becomes more severe and apparent in local areas, how do you think this labor shortage will affect local governance, and how will the Workish Act affect it? Mr. Furuya, would you mind sharing your imagination, even if it's just a guess?

 

It will have an extremely big impact. The decision-making function absolutely has to be close to the actual sites to solve this problem. This problem is exactly the issue of the decision-making function itself, because the bottleneck is the life-sustaining services at the actual sites, which is the bottleneck for the entire society. In that case, the people working at the actual sites are the ones who most accurately understand what problems are occurring, what issues there are, and for what reasons and causes. Therefore, the thing that is farthest away from that is the headquarters in Tokyo. So there is a possibility that completely off-the-mark policies will be implemented one after another, so it's truly a problem of the decision-making function. The centralized way of doing things is terribly incompatible with the problem of the impending life-sustaining services in the future, and if innovation is to occur, I absolutely believe it will come from the actual sites in Japan from now on. In areas where capital accumulation is necessary, Japan definitely can't compete against the United States or China. However, in terms of the overwhelming sense of issues at the actual sites and the small inventions there, I think Japan will never lose. After all, the dire current situation and sense of issues there will become a reality earlier than in any other country. Therefore, I think it will become a problem of the decision-making function. Rather, the decision-making mechanism, and I feel that a major point that will determine the sustainability of Japan in the future lies in how much we can create a society where judgments can be made that benefit the people living there, close to the actual sites.

 

I see. Perhaps the solutions may need to include major policy proposals that encompass local autonomy and decentralization.

 

And it's also a problem of who will be responsible. The diversification of public service providers, and I think it's like preaching to the Buddha to Mr. Umada, but when you look at the people who come to PEP and such, you really feel that the public service providers are becoming more diverse, and that's also a big source of hope. A centralized system alone can't keep up with working hard for the benefit of the people living there. I feel that we are entering an era where opinions and solutions will come from various perspectives, various actors, and various layers.

 

In the latter part of the book, you also wrote something like, from now on, it won't be the customers who are gods, but the workers who will be gods in society. Listening to what you said earlier, I thought that perhaps even administrative services in local governments, which have been more of a provider-consumer relationship between administrative services and residents, may become more mixed in the future. May I ask one more question?

 

Yes.

 

In the book this time, I thought it was a good point that you made - when there is a good outward-facing industry like tourism, it sucks people in, and conversely, if you create such high value-added employment, the people who provide life-sustaining services will be absent. Recently, there was news that everyone in Niseko was going to the mountains, which is exactly what's happening, and I think it's quite difficult to balance this, but what do you think?

 

It will probably become a really big problem, and it's already happening in places like Kumamoto. Or in various regions, foreign-owned supermarkets and large supermarkets have very high hourly wages. When they hire at hourly wages, local stores have no manpower at all, and everyone wants to work there. In addition to that, of course it's important for Japan to have manufacturing, and probably inbound tourism in the future, as well as information and communication - these outward-facing industries that can earn foreign currency. However, if the current structure continues as it is, where those areas have higher added value, higher productivity, and can pay higher salaries, life will not be sustainable and work will be out of the question. Therefore, if we are to consider Japan's future growth strategy, what should be at the starting line is increasing the productivity of life-sustaining services. By doing this, we first make life-sustaining services a growth industry, gather capital investment and human resources into life-sustaining services, combine various cutting-edge technologies there, and make Japan's life-sustaining services a growth industry. This must always be at the starting line. By doing this, we first need to have a surplus of labor supply. Only then can we avoid the current situation where medical and nursing care are becoming labor-intensive and sucking in labor like a black hole, when you look at the macro data. The labor input has increased 1.4 times. Even though Japan is already in the negative, this is the labor input. The number of employed persons is increasing, but the labor input, which is the number of employed persons multiplied by the average working hours, in other words, the amount of labor supply by the Japanese people in man-hours, has already become negative in Japan. In such a situation, the medical and nursing care alone has increased 1.4 times in 10 years. It will keep increasing in the future, as the number of elderly people will increase. We will have to throw all the working-age people into life-sustaining services. In order to break through this situation, what absolutely must be at the starting line is to make life-sustaining services a growth industry. I call this a labor-saving industry, and I think that the labor-saving industry is the only way to open up a breakthrough for Japan.

 

Since we've come to the topic of the last chapter, I'd like to hear about it. In the last chapter about new ways of working in 2040, if there are any points that you particularly want to push or highlight, could you please tell us?

 

I think we are at a turning point. Frankly speaking. Japan is at a major turning point, and I think the difference may be a trivial thing. Even if left alone, as I mentioned earlier about the triple high, triple up, there is a very high possibility that wages, prices, and capital investment will increase. Because there is a shortage of manpower. In such a situation, it's about how we give meaning to it as a society. For example, let's say a certain nursing care facility or a certain transportation company in a local area, the president makes a decision and works hard to make capital investments, or creates a system where women and seniors can play active roles. We shouldn't let it end with just saying that the company worked hard or that it's good that they're making money. We need to give meaning to it. In other words, we should give meaning to it as being frontrunners fighting against the biggest challenge for Japan's future labor supply constraints. I think these are probably the trivial points that will bring the turning point in a good direction. In that sense, the reason I go to local areas and talk with various business owners and local government officials in various regions is that if I can, in my small way, give some meaning to such trial and error, I think it might serve as a reference for changing society in a better direction, even if just a little, and that's why I have included many cases from various regions in this book.

 

You've already started taking action, Mr. Furuya, but amidst the macro-level discussions we've had so far, what should individuals like yourself or us do to face this society with a shortage of workers? Since you're already running as a frontrunner, do you have any advice you could share with us?

 

It's becoming an era where action holds more value than information. When I see various people engaged in trial and error, in the end, it's nothing but trial and error. There are no right answers. So, past information is completely meaningless, and I feel that the value of even small actions has relatively increased, paradoxically increased. Taking those actions and giving meaning to them, these are the two steps. Action and giving meaning.

 

I see. Thank you. Then, there's one more thing I'd like to ask. In the recent discussions about labor shortages, especially the recent focus on wage increases in the media and policies, if there are any hints from a policy perspective that you hope will emerge in the policy discussions in Japan regarding this labor supply shortage, could you please share them with us?

 

I think the social indicators we should aim for will change. One representative example is GDP, right? I think there are also discussions about gross national happiness, but what I want to say is that Japan's GDP is bound to decrease. Moreover, GDP per capita is bound to decrease, and why is that? It's because the number of elderly people is increasing. The proportion of elderly people among the employed is greatly increasing in Japan. Even if the elderly are working, those over 70 years old work an average of about 29 hours per week in terms of working hours. The working-age population generally works around 38 hours on average. It's bound to decrease. Because there are many employed people over 70 years old. Then that would mean GDP per capita will decrease, right? Because they only work for a short time, there's no way GDP per capita will increase that much. Essentially, that means GDP won't increase. GDP is definitely not going to increase. It's no use pursuing GDP. What I want to say is GDP per hour. In other words, labor productivity, and if this decreases, it's over. Amidst the rapidly increasing proportion of elderly people among the employed, what we absolutely must pursue is GDP per unit of total labor input, in other words, labor productivity. We should make increasing this a national goal. If this starts to decline, it's over for Japan. Actually, Japan is still doing quite well in this regard compared to other countries over the past 10 years or so. Of course, the absolute value is very low to begin with. There are also issues with the industrial structure and such. But labor productivity, how much can be earned per hour, based on each individual. Not income, but hourly wage per hour. We need to pursue this. On a more micro level, things like the unemployment rate are of course important, but Japan has been in almost full employment for the past 10 years or so. This will continue in the future as well. What I think needs to be seen as a policy issue in the future is, in the labor market after this turning point in the Reiwa era, the biggest problem is people whose income hasn't increased. For example, we need to consider what policy approaches can be taken for people whose income, or perhaps income per hour, hasn't increased over a period of 3 or 5 years.

 

I think there will be an increase in policy proposals from the private sector regarding these areas, so I thought that looking at it in terms of hourly rates rather than overall GDP should be a basis for discussion. Thank you. Well, as we're approaching the end of our time, I would be grateful if you could give a final message to the readers of this book and the audience of PEP.

 

What I really want to say at the end is that Japan's future is kind of doomed, in that sense. It looks doomed. When I give this kind of explanation, like the issues I talked about in the first half today, the reactions are like "I'm in despair" or "It feels like we're doomed", and when I talk to university students, they say things like "I'm going to emigrate overseas", those kinds of opinions really come up, but wait a moment. After seeing those, what I'm saying is that this current state of Japanese society might turn into an incredible opportunity. I mean, inventions implemented in society, inventions implemented in human society, there's always a necessity behind them, right? Troubles or wanting to do something this way, wouldn't it be convenient if we did this? We're having this problem, we have this need. Necessity is the mother of invention, so if you think about it calmly, labor demand in Japanese society is overflowing like crazy, isn't it? Labor demand is, in a nutshell, a mass of this necessity. The voice of society as a whole, wanting people to do this, asking if there's anyone who can do this, is rising. Against the backdrop of this necessity, I believe that Japanese society over the next 15 years will become an era of invention. I believe the seeds of various inventions, like the stories I compiled in "Workish Act" and such, will likely give rise to unicorns originating from Japan, and as I mentioned the labor-saving industry, I'm hoping that innovators and founders of unicorn companies will emerge from places like the nursing care and logistics industries. Moreover, the future of the entire human society depends on this. Because Japan is in the first wave, Japan is the frontrunner among frontrunners in terms of this demographic change. In the second wave, there's Korea, and in the third wave, Spain, Italy, and China. It continues on after that, and Japan is at the cutting edge of that. In that sense, I want to create a society where the entire human society can wholeheartedly rejoice in the fact that lifespans are getting longer and longer, and we're becoming a longer-living society. I hope you'll all join me in this, and I'm looking forward to it.

 

I hope we can create it together. I really hope we can work together to create a society where innovations that solve needs using opportunities are constantly born, so please continue to work with us.

 

Please do.

 

Today, we had Mr. Furuya join us and we asked him various questions about "The Impact of a Shortage of 11 Million Workers". Mr. Furuya, thank you very much.