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Japan’s 'demographic time bomb' impacting workforce, economy

Friday, May 23, 2008 Free Headline Alerts

East-Asia-Intel.com

A Japanese government released Children’s Day, a national holiday, bring more bad news for a declining population.

The number of children has declined again for the 27th consecutive year, the latest Tokyo government report said. Children have fallen to an all-time low of 13.5 percent of the population.

“Japan is sitting on a demographic time bomb,” warned Kazuhiro Asakawa, a business professor at Keio University. “An explosion is going to take place. They see it coming, but no one is doing enough about it.” Japanese companies are beginning to feel the pinch of a labor shortage, exaggerated by a declining interest among the young in science and engineering. One government source says the digital technology industry alone is already short almost half a million engineers.

Japan’s difficult language and closed corporate culture create barriers that many foreign engineers simply refuse to accept, even when they can be recruited. That is leading some companies to move research jobs to India and Vietnam because they say it is easier than importing non-Japanese scientists.

Japan now has fewer citizens 14 years or younger than at any time since 1908. In the United States, children account for about 20 percent of the population.

Furthermore, almost a quarter of the Japanese population is 65 or older, the highest proportion in the world. And if present trends do not reverse dramatically, by 2020, the elderly will outnumber children by nearly 3 to 1. According to the latest projections, Japan, now the world's second-largest economy, will lose 70 percent of its workforce by 2050.The total population, now at 127 million, would fall by a third and, within a century, two-thirds of the population would disappear.

In what is now being called a "super-aging" society, department and grocery stores have recorded declining sales for a decade and new car sales have fallen for 18 consecutive years.

Metro Tokyo, the world's largest megalopolis, now has about 35 million people, or 27 percent of the country's population. But children account for just 11.8 percent of the population, the lowest proportion in all of Japan.

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