Japan’s innovation problem

…Japan really needs a dual approach to boosting long-term growth prospects: more babies and more immigration.

Thanks to a rapidly aging population, a low birthrate and no pro-growth immigration policies to speak of, Japan faces a skilled-labor shortage. Stimulating procreation is an awkward task for governments, and Japanese already live the longest on a world scale. A more immediate cure is attracting more workers from overseas.That’s easier said than done in uniquely homogeneous Japan. A reminder of the nation’s aversion to opening the floodgates came last week with the publication of a magazine on crimes committed by foreigners. FamilyMart, Japan’s third-largest convenience-store chain, pulled “Gaijin Hanzai Ura Fairu,” or “Secret Foreigner Crime Files,” from its shelves, citing the publication’s “inappropriate racial expressions.”

It’s significant, though, that some leading politicians such as Shintaro Ishihara, the [right wing] Tokyo governor, are speaking more about the need to attract international talent.

First, a couple of caveats. As a regional leader, Ishihara might not seem all that important. Yet when you manage Tokyo and appear on television as frequently as the charismatic 74-year- old, you have some serious sway over popular opinion.

Also, Ishihara is an unabashed nationalist known for xenophobic statements; he’s sometimes described as Japan’s answer to France’s Jean-Marie Le Pen. Feminist groups also weren’t amused a few years back when Ishihara said women past childbearing age are “useless.”

That said, at least part of Ishihara’s immigration argument is worth exploring. “The country should take it upon itself to adopt an immigration policy,” Ishihara said in an interview with Bloomberg News on Feb. 6. “This is not a question of procuring a labor supply. We should be letting in more people who are intelligent.”

Ishihara’s comments came with a rant about lax Japanese immigration controls that allowed an increasing number of Chinese to enter Japan illegally. “This is leading to new forms of crime,” he said. Such comments only feed those who equate “foreign” with crime and disorder. In my opinion, this part of Ishihara’s immigration stance should be ignored.