Japan owes its wide middle class to postwar laborers who selflessly worked for large corporations on lifetime employment contracts. Now that system is faltering under the threat of digital globalization.
To return to prosperity, Japan Inc. should fast-track high-potential talent into positions of authority. A two-track employment system — one for high achievers and a second for everyone else — would unshackle Japan's human potential.
Employees earmarked for management positions are promoted comparatively late in Japan. The tenure-based lifetime employment system may be fair, but it is inefficient. "Fair is good, but fairness can lead to mediocrity," says Darren Menabney, speaking as adjunct professor at GLOBIS School of Management.