Japan's engineering shortage

Saturday’s NY Times reported that Japan is now facing a shortage of engineering graduates.

Universities call it “rikei banare,” or “flight from science.” The decline is growing so drastic that industry has begun advertising campaigns intended to make engineering look sexy and cool, and companies are slowly starting to import foreign workers, or sending jobs to where the engineers are, in Vietnam and India.

It was engineering prowess that lifted this nation from postwar defeat to economic superpower. But according to educators, executives and young Japanese themselves, the young here are behaving more like Americans: choosing better-paying fields like finance and medicine, or more purely creative careers, like the arts, rather than following their salaryman fathers into the unglamorous world of manufacturing.

My friend Kaz Asakawa is quoted in this article:

The problem is likely to worsen because Japan has one of the lowest birthrates in the world. “Japan is sitting on a demographic time bomb,” said Kazuhiro Asakawa, a professor of business at Keio University. “An explosion is going to take place. They see it coming, but no one is doing enough about it.”

I suppose it’s good that the smart Japanese students want to be doctors. But finance? (As elsewhere, the willingness to pursue low-paying creative careers would be a function of personal and societal wealth that allow young people to live off the previous generation.) At least it’s not lawyers, who are a net drag on high tech companies.

The US has been facing this problem for more than a decade. How do we get more engineers?

• One way is to persuade high school guidance counselors to send colleges more students.
• Another is to relax immigration rules (such as the H-1b), which some (such as Norm Matloff) argue is just a way to reduce wages.
• A third is to argue — as Hal Salzman and Lindsay Lowell did in Nature earlier this month — that quality is more important than quantity — what matters is proportion of the very best technical talent.

Yet another solution is to hand out lottery tickets — incentive stock options — in hopes that the prospect of a big payout while motivate people to take the risk of working for startups. Certainly that is the philosophy around here in Silicon Valley, in other high tech regions like Seattle and San Diego, and also among MIT alumni. This afternoon I finished reading 17 semifinalists on our business plan contest, and certainly there is no shortage of engineers around here who want to start their own company.

But I have to remind myself there are still engineers (or CS types) that just want a job. These are people paid not in founder’s shares, or qualified options, but in salary. The problem is that (as with nurses and teachers), the economy needs a lot of engineers, so raising salaries across the board is a lot more expensive than paying high wages to a handful of NYSE traders or MLB players.

As I noted in researching entrepreneurship in the Asian PC industry a decade ago, two key factors are cultural attitudes towards startups and the access startups have to the domestic market. But since then I’ve realized that a third crucial factor is labor mobility by technical workers: engineers are willing to start (or join) new companies if they know they can always get a job if the startup fails, whereas historically in Japan and Korea the best jobs were available to those who joined MNCs and never left.

So increasing the attractiveness of engineering as a career both increases the supply of would-be entrepreneurs and the safety net for those who try to be entrepreneurs but fail — not to mention the supply of experienced engineers available to be raided.