Tokyo Report

Japan Looks to India’s Growing Tech Talent Pool

With competition to recruit IT engineers intensifying, Japan is extending its talent search to emerging economies like India.

Japan Looks to India’s Growing Tech Talent Pool
Credit: Pixabay

Japan’s information technology (IT) sector is feeling the crunch in a worsening technical skills shortage that could stunt the industry’s technological edge and global competitiveness in the coming future. The latest data from the Ministry of Trade, Economy, and Industry estimates Japan will be short 290,000 tech workers in 2020, which will double to 590,000 by 2030 if left unaddressed. With an impending sense of crisis, IT company recruiters are broadening employment options and are aggressively scouting top tech talent in booming IT hubs such as India, which has a reputation for highly productive and hard-working graduates.

India’s prestigious engineering science university, the Indian Institute of Technology (IIT), held its first job fair exclusively for Japanese companies in October. The fair featured Japan’s 10 biggest companies, such as Toshiba and Denso.

Japanese e-commerce giant Mercari is one company scouring for top computer science students abroad. It starts with a software development contest where winners are invited for an all-expenses paid internship with the potential for employment. While Mercari is relatively unknown in India, it has a growing Indian workforce. Within the last year the company has doubled in size, going from 596 employees to 1,140. Out of the 100 newest recruits, 44 were foreign nationals, with 32 people coming from India, three from Taiwan, two from the United States, and two from China, among other countries.

Mercari believes it can’t raise its profile as a global company if its workforce is homogeneously Japanese. They say rolling out a support system for foreign nationals to help with visas, housing, and language barriers will attract a larger talent pool regardless of Japanese language ability. Keeping up with the fierce talent rivalry also means loosening Japan’s rigid corporate culture. Mercari coined the new strategy “epoch making” in its efforts to facilitate a corporate shift toward diversity.

As companies head toward digitization and restructure businesses accordingly, the need to supply IT engineers in advanced fields highlights the importance of finding “quality” engineers over the need for quantity. The challenge of recruiting highly skilled IT workers stems from the fast-paced nature of technological innovation and changing trends. This means once you master a skill, the market can rapidly change, making your expertise obsolete in just a few years. For young people, getting a job in IT will not necessarily guarantee a steady job or a safe future. The IT industry is also known for its high turnover; after recruitment companies need to make continuous efforts to ensure work conditions are attractive to foreign employees.

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Current projections warn that the labor shortage, if left unchecked, could hinder Japan’s technological advancement, large scale data analysis, and cybersecurity. Already there are concerns about digital gaps being created among IT companies. If the trend to invite skilled IT engineers from overseas doesn’t take off, Japanese companies will be compelled to move offshore, to places with an abundant pool of IT human resources.

In regional areas, drastic countermeasures are becoming an urgent priority and attracting top foreign talent is even more difficult. Under Japan’s recently revised immigration laws, a new visa system is being drafted to avoid foreign workers concentrating in big cities like Tokyo. In Shimane prefecture on the west coast of Japan, Matsue city began trialing an IT internship specifically for Indian IT students in 2016. Two graduates from IIT were hired at a manufacturing firm to develop a raw material procurement software aimed at other manufacturing companies outside the prefecture and received initial training in a two-week internship as university students. It’s the first time the company has employed foreign nationals and the company president says it’s a leap in the right direction, especially for companies hoping to expand into Asia.

The success of the cultural exchange between India and Japan is behind the launch of an executive committee currently planning to snap up more IT talent from India to tackle the labor shortage that is felt more severely in regional communities. A technical internship with several local firms and a short-term exchange program at Shimane University are part of an attractive package that has spread to five neighboring cities, home to 60 IT companies altogether, which also hope to attract IT workers for the long term.