• Bloomberg


There’s bad news for Japan as it seeks the talent it needs to compete in the global economy with an aging, shrinking population.

Japan ranks last among 11 Asian nations for its appeal to highly skilled foreign employees, behind countries including Indonesia, Thailand and Malaysia, according to the 2017 IMD World Talent Ranking released Monday. Worldwide, Japan ranked 51st among 63 nations. Singapore ranked first in Asia, with Hong Kong second.

Recognizing the need to attract outside talent, Prime Minister Shinzo Abe’s government has opened the doors to highly skilled foreign workers, offering people who meet strict criteria what it claims is the world’s fastest path to permanent residency — an aggressive move for a country notoriously averse to immigration.

But the language barrier and rigid business practices are widely seen as obstacles to hiring top foreign talent in Japan.

The IMD results raise questions about Japan’s ability to sustain the technological development it is counting on to cope with a shrinking workforce, said Jose Caballero, senior economist at the IMD World Competitiveness Center.

Japan needs to do more to establish an effective flow of talent in the future, he said.

“In the short term it’s not a major problem, but if this trend continues it will be, especially with the aging population,” Caballero said. “Will the local workforce be enough to develop the technology they need?”

IMD’s digital competitiveness rankings illustrate the challenge for Japan as it seeks to compete with the likes of China and the U.S. in the era of the “fourth industrial revolution.”

While Japan ranked 27th globally in overall digital competitiveness, according to results IMD released earlier this year it ranked near the bottom for its use of big data and analytics in business decision-making.

It could get worse for Japan. The country faces a growing shortage of workers in “frontier IT” — big data, artificial intelligence and the internet of things — expected to reach about 48,000 by 2020, and a shortfall of nearly 200,000 information security workers, the economy ministry said in a report last year.

IMD’s results were compiled from a survey of senior executives, both Japanese and foreign, with experience working in the country, Caballero said.

“Highly skilled” is used to describe workers with post-secondary education and a broad range of skills, from finance to international experience to language.

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