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“Much like the American Dream, this is the era of the Japanese Dream”

Interview - November 11, 2016

From its beginnings as a temporary staffing company, the Pasona Group is now an industry creation company that has introduced a host of new working practices and innovative environments – including US-style 401k plans – to Japan and become a leader in Japanese employment and staffing solutions. It has also brought new opportunities and support to previously marginalized sections of society through various initiatives it is looking to roll out nationwide. Group CEO Yasuyuki Nambu looks at the Japanese labor market, the company’s innovations and next generation services, and how he sees future working practices unfolding. 



Pasona Group was born in February 1976 as “Temporary Center” with the goal of solving society's problems, emerging as a "Social Solution Company”. In 1993, you changed the name to Pasona. Now you are a group with 58 subsidiaries and 8,550 employees. Last year, you experienced a 16.6% increase in net sales and a 10.6% increase in operating income. How do you explain this growth?

We introduced a new type of employment, temporary staffing, at a time when there was no word for “entrepreneur” or “startup company”. And we weren’t just concerned with temporary staffing – I wanted to develop and expand upon new styles of employment such as outplacement, outsourcing, and a variety of different safety nets for businesses.

Temporary Center was one of the first Japanese companies to introduce temporary staffing, but now there are more than 10,000 related businesses and the market is about 5 trillion yen. But again, it’s not just temporary staffing – we are creating an infrastructure. We are seen as a system creation company. We have supported women’s advancement in the workplace, introduced the American 401k pension plan to Japan, and implemented healthcare and administrative outsourcing structures.

Agriculture is another industry in which we are focused on creating jobs and job security. We are also involved in promoting healthy lifestyles in accordance with government policies to increase healthy lifespans. And at present we are heavily focused on regional revitalization. We have created all sorts of proposals, and now the government and legal system supports us in many ways.

Despite Japan’s decreasing local population, Tokyo is a place that continues to be heavily populated. Yet there is a sense of urgency as the economy being in decline and the concentration of people in one place have become national problems. In addition, Tokyo and Japan face many challenges in regard to social structure, such as childcare, single mothers, nursing homes, and elderly care. The government is trying to solve these problems by implementing legal changes, but this takes time. At the current rate, these issues may each take five or 10 years to tackle.

As a company, Pasona is trying to solve these problems at once. By the Tokyo Olympics in 2020, we want to bring 100,000 youth out of Tokyo into the outer regions of Japan, and by 2030, a total of 1,000,000 youth into these areas as a part of our regional development efforts. In order to do this, we are creating new businesses outside of the city. Until recently, locals have been hired and drawn into Tokyo, but now we are trying to create regional industries where jobs can be created locally.


Pasona introduced a network of consultants that employed the skills of senior citizens and retirees, as a partial solution to the Japanese skilled-labor shortage. Other potential solutions include immigration and robotics. What is your opinion? What is the best way to tackle this issue?

In Japan, we have an aging society with a low birthrate. The solution to these issues is regional revitalization. We want young people to go to these outer regions, create an area with a high standard of living, and have children there. Over 100 trillion yen is spent every year on social welfare, and this amount increases by 1 trillion every year. But by creating healthy lifestyles through agriculture, medical costs can be greatly reduced. And the more people we involve, including young adults and the elderly, the more we can tackle issues like food shortage as well.


How effective has the system been so far and how do you expect this will introduce more flexibility in the labor force?

Forty years ago, when I was a student, there were no jobs for female graduates and homemakers, and even when they were hired, they were given low wages and limited job prospects. Now they have lifetime employment. Opportunities were also scarce for retirees, who were limited to simple, low-wage jobs. Many large companies can afford to give their employees high wages and benefits like internal medical care, but it is much more difficult for small and medium-sized enterprises to provide this kind of support. Ninety five percent of the companies in Japan are SMEs, so plenty of full-time employees are suffering.

Whether you work in a company with 10 employees or 10,000, Pasona ensures benefits and training for all. We are creating systems to guarantee benefits for those in entertainment and sports industries, whose safety nets can be uncertain. And with the aging population and poverty among the elderly still very much a problem, we want to help people work and earn proper incomes past the retirement age if they want to.

Right now, the economy might be declining, but if we start this new model on Awaji Island, we can bring that to all of Japan. Pasona has been creating all sorts of new, innovative working environments like satellite offices and home offices, and introducing 401k plans to Japan. That’s why despite our beginnings as a temporary staffing company, Pasona is now an industry creation company.


What kind of innovations and next generation services and concepts are you most excited about going forward?

Pasona is very active in the agriculture sector, for instance. We have been working since 2003 to find solutions to problems in the Japanese agricultural sector. We have employed our famous urban farming concepts here in our headquarters, and our employees tend to about 300 different kinds of crops, from rice to cucumbers and lettuce grown using hydroponics. We are working hard to attract younger generations to the sector and this urban farm concept is one of the best ways to showcase contemporary methods of combining agriculture and technology and make it a more appealing sector for the young and old alike.


Pasona is working with different prefectures to revitalize Japanese regions that are losing population in a faster way as younger generations migrate to bigger cities. Among your focus areas have been tourism and the food sector. What other kinds of strategies is Pasona offering as part of its regional revitalization efforts?

We have been nurturing the healthcare and cultural sectors in the regional areas of Japan, in order to reenvision the entire nation of Japan in the image of Tokyo. We have been developing new projects in Awaji Island, Hyogo Prefecture. So far we have supported 200 young people in moving there, and we hope to support 2000 people by next year. The island is known in Japanese mythology as the birthplace of Japan, and sits at the central point of Japan near Osaka and Kobe.

We envision a hypothetical infrastructure that would allow foreign students and expats to work on Awaji Island without having to worry about visas or medical and educational costs, and enable them to live and work free from the worry of heavy regulation. An infrastructure in which freeters and those who work four or five hours a day will be considered regular employees who are entitled to benefits and fair pay. A system like this would revitalize the area and lead to brand new forms of work, and could eventually be brought to the rest of Japan. The problems in cities like Tokyo, Iwate, Aomori, etc., are all the same, and if an infrastructure like this were to be implemented, we think it would work towards creating solutions to the problems that face the nation. This is what we call the “independent work system”, and it’s part of our action plan, the Smart Life Initiative.

Regarding cultural industries, we will be unveiling an attraction on the island that incorporates anime and manga, and their origins. And as for healthcare, we are planning to create an infrastructure to introduce more Chinese medicine to Japan. We are working to create a small, ideal representative of what Japan could be.


How are you strengthening your presence in the United States and overseas, not only to find new customers, but also new partners and investors there?

We mainly provide support to Japanese companies that are expanding overseas regarding their global HR strategies, focusing on developing relationships with businesses whose philosophies align with our mission to provide solutions to society’s problems. We propose new projects and unite companies together in order to improve the job market on the whole. We don’t want to be a best-seller, we are looking to be a long-seller in a sustainable, cooperative economy.


How would you rate the Japanese entrepreneurial environment? What is needed to develop it? What advice would you like to give to the current Japanese entrepreneurs?

If the projects that we’re developing on Awaji Island were to succeed, employment would remain stable in Japan even through another economic disaster like the Lehman shock. We are creating an economic safety net.

Much like the “American Dream”, this is the era of the “Japanese Dream”. With advances in IT, it’s easier than ever for entrepreneurs to start businesses. Many young people are studying abroad and returning to Japan to become entrepreneurs. We have to educate those young people to contribute to society, and focus on benefitting others.

We want to recreate the era of Reaganomics and the American Dream, where people from all over the world gather and innovate, and we are achieving this through business methods as opposed to federal methods. Please keep Awaji Island in your memory – I’m sure you’ll hear of it again.


What would be your message to readers?

Japan will be the number one country for entrepreneurship. To make this happen, we are inviting all people, young and old, to establish new business venture opportunities. I want to especially encourage the youth to do their best. Forty years ago my father taught me a quote from Napoleon: “Heroes rise from the young”. This is the reason I became an entrepreneur.