How Mizuho Leasing Is Tackling Labor Shortages Through Technology, Sustainability, and Global Partnerships

To begin, could you share your perspective on one of the major challenges facing Japan — the demographic shift? Japan’s working-age population is projected to fall dramatically, with an anticipated shortage of more than 11 million workers by 2040. This situation presents not only a challenge to labor availability but also raises issues regarding workforce skills, technological innovation, and sustainability. How do you view this demographic change — as a challenge, an opportunity, or perhaps both? And how is Mizuho Leasing addressing this from a business standpoint?

Japan is at the forefront of the population-decline phenomenon, but it is not alone. Several other Asian countries, such as China and South Korea, are already experiencing similar demographic contractions. Japan has simply reached this stage first, and in that sense, I see it as a challenge that the rest of the world will eventually face as well.

For many years, Japan endured a prolonged period of deflation, and part of that was attributed to a shrinking population. Many economists and even international investors assumed that population decline naturally leads to deflation. However, what we are seeing now is quite the opposite — inflation is returning. This demonstrates that population decline does not necessarily dictate a deflationary economy.

Looking ahead, even with a continued decline in population, I believe Japan can sustain moderate inflation in the range of two to three percent, thereby maintaining stable nominal growth. The key issue, of course, lies in how we manage the resulting labor shortages. Over the past three years in particular, Japanese companies have been actively adapting to this challenge.

If you walk into convenience stores or restaurants today, you’ll notice a growing number of foreign workers — a visible example of how industries are already adjusting to workforce constraints. In parallel, another major trend is the deployment of robotics. At Mizuho Leasing, demand for robotics used in hotels, restaurants, convenience stores, and similar establishments has been surging for about two years.

Beyond that, robotics applications are now spreading into logistics centers and factories — not just in the traditional sense of factory automation, but in newer, more versatile forms of robotic integration. Robotics has truly become a transformative trend across industries.

That’s fascinating. Japan has historically been quite closed to immigration compared to Western nations, but it seems that’s slowly changing. How do you assess the role of foreign workers in Japan’s evolving labor landscape, and how does that intersect with technological adoption such as robotics?

Compared with Western societies, where immigrants often make up ten percent or more of the workforce, Japan — as an island nation — has long maintained a relatively closed labor market. But in recent years we’ve seen a significant shift. You now find many convenience stores and retail outlets primarily staffed by foreign workers. This reflects the growing acceptance of diversity in Japan’s labor force, and it is one practical response to the labor shortage.

At the same time, the introduction of robotics into business operations — cleaning robots in hotels, service robots in restaurants, and logistics robots in warehouses — represents another dimension of the same solution. Over the past several years, both the acceptance of foreign labor and the use of robotics have grown rapidly, and together they are reshaping Japan’s service and manufacturing sectors.

You’ve described robotics as a major trend. What about artificial intelligence? How is AI being used to enhance productivity and address labor shortages, particularly in areas where regulation has slowed automation?

Alongside robotics, AI is now being actively implemented to raise productivity. While regulatory issues have delayed certain applications — such as autonomous driving and ride-sharing — AI deployment in less-regulated areas has been accelerating, especially among large corporations and, increasingly, mid-sized firms.

Japan’s manufacturing sector already maintains strong global productivity standards, supported by automation. However, some sectors still lag behind in their response. Through the adoption of robotics and AI, these companies can improve productivity and offset workforce shortages. Many Japanese firms are now taking this challenge seriously and beginning to implement concrete measures, which we at Mizuho Leasing are supporting through our business solutions.

Strategic investments and business collaboration through the CVC fund (Business DX Robot) "ugo"

As you mentioned earlier, demographic change is a global issue that other regions will soon face. Do you believe the solutions and business models that Mizuho Leasing is developing in Japan can be adapted internationally?

Yes, I do. Japan serves as a real-world testing ground for challenges that many other nations will confront in the near future. Global technology companies — such as FAANG — are building data centers and expanding operations in Japan precisely because they recognize this. They want to observe, in real time, how businesses are addressing demographic and productivity issues.

For our part, we intend to leverage what we learn in Japan to expand abroad, particularly in markets such as the United States, India, and Southeast Asia. These are regions where productivity enhancement, resource efficiency, and sustainability will become increasingly urgent.

Sustainability is another key pillar of your corporate strategy. Could you elaborate on your partnership with TRE HOLDINGS CORPORATION and your role in promoting the circular economy?

We have established a capital and business alliance with TREHOLDINGS, a leading company in waste management and recycling, and we plan to increase our ownership stake to around 10 percent. This collaboration focuses on building a circular-economy platform — an ecosystem in which materials are reused rather than discarded.

Traditionally, in a linear economy, products are manufactured, used, and then disposed of as waste. Under the circular model, recyclable materials are recovered and reintroduced into production. Mizuho Leasing, in collaboration with TREHOLDINGS, Mizuho Financial Group, and manufacturing partners, is helping to design the systems that make this possible.

Both Japan’s Ministry of the Environment and the Ministry of Economy, Trade and Industry are actively supporting these initiatives — not only for sustainability reasons but also for economic security, ensuring that resources within Japan are reused efficiently. By leveraging our capital alliance in this sector, we aim to play a leading role in establishing the infrastructure for Japan’s circular economy.

Mizuho Leasing is also active in renewable energy. Could you provide an update on your progress and future ambitions in that field?

Currently, our renewable-energy portfolio totals about 800 megawatts, primarily solar power. We expect to reach 1 gigawatt in the near future, which is a realistic and achievable goal.

In addition to solar generation, we have entered the energy-storage business, focusing on large-scale batteries. Since last year, we’ve been collaborating with utility companies such as Tohoku Electric Power and Osaka Gas to develop new storage solutions. This expansion strengthens the overall stability and resilience of Japan’s renewable-energy supply chain.

Commencement of commercial operation at Yatogo Storage Power Station 

One of your most distinctive assets is your international aircraft-leasing platform through Aircastle. How does this partnership enhance your competitiveness compared with other leasing companies?

Our partnership with Aircastle — established jointly with Marubeni Corporation — provides us with a global platform in aircraft leasing. Whereas we previously owned aircraft directly, this structure allows us to expand efficiently by leveraging Aircastle’s specialized expertise and global network.

Through this alliance, we can pursue high-quality international opportunities while maintaining financial discipline and risk control. Among Japanese leasing companies, it has become a significant source of competitive strength for us.

Mizuho Financial Group holds roughly 23.09 percent of your shares, and Marubeni Corporation 20 percent. What strategic advantages arise from having these two powerful shareholders?

The foremost advantage is credit strength. As our main bank, Mizuho provides substantial financing, enabling us to secure funding totaling nearly three trillion yen. That strong credit foundation supports all our activities.

Mizuho’s extensive client base also allows us to access a wide range of corporate customers. Because banking regulations in Japan limit the business capabilities of banks, Mizuho Leasing fills an important role — providing asset-based services and solutions that complement the bank’s offerings.

Meanwhile, Marubeni contributes deep expertise in business investment and international project management. Their global network and accumulated know-how in overseas ventures give us a major advantage when expanding abroad.

To summarize: domestically, we leverage Mizuho’s customer base; internationally, we utilize Marubeni’s global network; and throughout, we rely on Mizuho’s financing power. Combining financial and investment expertise is the key to our corporate growth.

Renewable energy investment in Portugal

Your medium-term management plan identifies three core themes — Challenge, Change, and Growth. Could you explain what each of these means in practice for your organization?

Before addressing those qualitative themes, we first set concrete financial targets — net income, ROA, and ROE — and I’m proud that we achieved them a full year ahead of schedule, in fiscal 2024.

The three keywords — Challenge, Change, and Growth — symbolize the cultural transformation underway at Mizuho Leasing. Over the past few years, the external environment has been shifting dramatically, driven by geopolitical events, technological disruption, and even political instability in Japan. We can no longer make confident ten-year forecasts.

In such times, what matters most is creating an organization that can adapt swiftly to constant change. These three principles encapsulate our determination to remain agile, innovative, and growth-oriented despite uncertainty.

Achieved Financial Targets of Plan 2025 

International investors are increasingly interested in Japanese companies that are innovating in sustainability, digitalization, and productivity. How is Mizuho Leasing engaging with foreign investors, and what message would you like to convey to them?

We attach great importance to overseas investors. Despite some liquidity constraints, we have been proactive in our investor-relations activities. In July this year, we held a small group investor meeting for institutional investors, and in December we plan to organize one for individual investors as well.

Our main appeal lies in the strength of our two major shareholders, Mizuho Financial Group and Marubeni, and how we utilize their respective advantages — Mizuho’s funding capabilities and customer network, and Marubeni’s global business reach.

Beyond that, we are developing our own independent initiatives, such as our circular-economy projects and a recent investment in India. We are building a business model that combines stability with innovation, and we are firmly committed to achieving sustainable long-term growth.

Mizuho RA Leasing (Indian subsidiary) 

This year marks Mizuho Leasing’s 56th anniversary. Looking ahead to your 60th anniversary, four years from now, what achievements would you like to have realized by that milestone?

As mentioned earlier, Japan’s most pressing challenge is the labor shortage. Our goal is to help revitalize Japan’s economy by addressing this and other structural issues — such as insufficient growth investment and the need to foster startups.

If, four years from now, we can look back and say that Mizuho Leasing has played a meaningful role in revitalizing Japan’s economy while achieving sustainable growth ourselves, I would consider that a very rewarding outcome.

Finally, if you were to define Mizuho Leasing in one concise, memorable sentence for the global business community, how would you describe your company?

Mizuho Leasing is a company that embraces challenges, drives transformation, and achieves growth — delivering real solutions to the social and economic issues of our time.

For more information, visit their website at: www.mizuho-ls.co.jp/en/index.html