Z-kai Group is redefining the learning experience by integrating advanced technology, emphasizing social-emotional development and expanding globally, responding to Japan’s demographic challenges while preparing students to thrive in a rapidly evolving world.
Japanese education has undergone significant transformation from the 20th to the 21st century, marked by a shift from traditional teaching methods to a greater emphasis on technological integration. This evolution has required adapting conventional approaches while embracing opportunities introduced by non-traditional forms of education. How do you view the changes in Japanese education and learning over the past several decades? And where do you believe it is heading in the future?
Education is evolving rapidly, and its nature has changed significantly compared to several decades ago. These changes are not merely superficial but are deeply penetrating, triggering ripple effects of social transformation. When viewed from the perspective of human capital, this evolution strongly demands that education continuously adapt to societal change and create a self-reinforcing cycle of growth and reform.
We, the Z-kai Group, are the only comprehensive education group in Japan with more than 270,000 total customers, producing over 10,000 successful applicants to top-tier universities each year, and boasting a history of over 90 years. As reflected in the Z-kai Group philosophy, “Excellence in education for future global leaders,” we place great importance on developing individuals who can become future leaders responsible for shaping society. Therefore, while discussions of educational transformation often focus on technological changes, such as the use of AI and tablets, we believe it is equally essential to foster social-emotional skills such as thinking ability, judgment, and expression. Furthermore, in light of recent social demands, global perspectives and diversity are becoming increasingly vital in education.
Historically, Japanese education has primarily focused on acquiring knowledge and skills. However, fostering critical thinking and autonomous decision-making remains a major challenge. Recently, remarkable advancements in new technology have the potential to address this issue by enabling each student to pursue diverse and personalized learning experiences more actively and independently. As these changes accelerate, we as an educational company must continually adapt to megatrends and changes in the times and environment.
One example of change in the Japanese education system is teaching methodology. Previously, classroom instruction centered around the teacher, with students receiving uniform instruction in groups. Today, the focus is shifting to individual learners. It is no longer sufficient to simply teach knowledge and skills. Educators must teach students how to perceive and respond to ever-changing situations by thinking for themselves. This transition toward individualized instruction is essential for students to acquire diverse and adaptive skill sets. For more than 90 years, we have provided instruction designed to cultivate essential thinking skills, such as critical thinking. We view the introduction of new technologies as a tremendous opportunity to enhance and expand these efforts, and we see great potential in this field.
The pace of technological advancement is astonishing, with AI being one of the most symbolic examples, having achieved dramatic progress in just a few years. These technological innovations offer us the opportunity to advance together. By actively utilizing technology, we can better support students’ growth and development, which is a significant advantage for us. Moreover, new technology not only enhances learning efficiency but also frees up time through that efficiency, enabling reinforcement of social-emotional skills essential for a rapidly changing society.
In response to the changing educational environment, we have re-evaluated the future of education and identified three key elements: “what to teach,” “how to teach,” and “how to integrate technology into the learning environment.” Based on these considerations, we continue to innovate for the next generation.
Regarding your services, how do you address unmet student needs and provide access to things that traditional universities and educational systems cannot? Do you follow a specific learning model, or are you introducing new skills that set your approach apart?
With respect to our products and services, we believe that it is essential to shift our perspective on education toward nurturing more fundamental academic abilities suited to the new era. While making the most of the advantages of traditional instruction, we are by no means complacent and have been placing increasing emphasis on the assessment and development of non-cognitive skills in recent years.
From a technical standpoint, let’s take tests such as the SAT as an example. These standardized tests consist mainly of multiple-choice questions. If students can arrive at the correct answer, they can select the right option, but if they cannot reach the correct answer, there is little room to assess how deeply they have thought through the process.
We therefore strongly advocate for written-response questions, especially those composed of full-length answers that require deep thinking to solve. These questions demand students to think logically and accurately express their thoughts in order to reach a solution. Additionally, third-party evaluators can analyze the student's thought process and provide extremely useful feedback on how they arrived at their answer.
This interactive written instruction method (correction-based instruction) has formed a core value of our distance learning service since it was introduced by our founder around 90 years ago. Today, it is offered to a broad range of customers from preschoolers to high school students, and even to university students and working adults. By helping each student acquire essential thinking skills through this instructional method, we strengthen the realization of our mission to cultivate future leaders.
As for non-cognitive skills (social-emotional skills), we plan to actively expand our services in this area going forward. However, to ensure statistical reliability, we need to collect more data. At this stage, we are conducting pilot programs rather than formal assessments. A major challenge is that many of the indicators we aim to measure—such as emotional intelligence, critical thinking, awareness of diversity, and proactivity—are not easily quantifiable, unlike paper-based tests. The next step in developing services related to non-cognitive skills is to accurately assess students’ current status, calculate the gap from the desired state, and provide instructional programs that bridge this gap to guide students in the right direction.
One of the greatest challenges Japan faces today is the population crisis. As the world’s oldest nation, Japan’s population is declining year by year due to historically low birth rates. This demographic shift has already had a major impact on the education system, with around 450 schools closing annually. Furthermore, universities are now struggling with declining applicant numbers. How has this demographic shift affected your company? What challenges and opportunities does it create? And to ensure long-term sustainability and growth, to what extent do you believe it is necessary to look beyond Japan?
Although the Japanese government has introduced various measures to address the population crisis, in reality, these policies are unlikely to yield immediate results. Even if they are effective, it would take at least five years to see visible outcomes. As a company, we recognize the need to address this challenge from both short-term and long-term perspectives, rather than waiting for the situation to improve.
In the short term, we must maintain profitability to ensure revenue. One of the strategies under consideration is raising the customer unit price. However, when adjusting prices, we must maintain customer satisfaction and retention, so price revisions are only a temporary solution to a larger problem. As the overall market shrinks, competition intensifies. We must secure our own survival while also ensuring that customers are satisfied with the value of the products and services we provide.
While these challenges arise from the impact of population decline on the education industry, there are also sectors with long-term growth potential. Therefore, identifying promising business opportunities and determining how to allocate management resources is a key focus for our group. The B2C market, which targets individual customers, is heavily affected by population decline, but the B2B market, which targets corporate clients, continues to grow strongly in specific areas. There are numerous opportunities, such as improving teachers’ work environments through IT and introducing new methods to measure and develop non-cognitive skills in schools. These untapped markets are valuable opportunities for us to continue growing despite the shrinking domestic market.
Our B2B business provides services to three main customer groups: companies that operate cram schools, educational institutions such as schools, and government agencies such as boards of education and the Ministry of Education, Culture, Sports, Science and Technology. All of these customer bases have the potential for business expansion. We recognized the value of IT early on and have actively invested in this area. Few educational companies invest in IT as heavily as we do. We operate a shared B2B platform across the group, which allows us to integrate our B2B business more effectively and differentiate ourselves from competitors.
Population decline poses a significant challenge to Japan’s education industry, and we will address it through the strategies mentioned above. However, ultimately, it is clear that we must expand our business outside of Japan. We will explain our international strategy in the latter part of this interview.
Your company recently announced plans to open the Z-kai Inventive School, an experimental school in Toyota Woven City aimed at redefining education through innovation. A preschool will open in fall 2025, with after-school care to follow in 2026. This initiative aims to merge your educational expertise with Toyota’s technological knowledge to create a new learning model. Could you share insights into this project? What are the main goals you hope to achieve through this initiative? And how do you believe this project will shape the future of education?
First, Z-kai Group and Toyota share a common vision, particularly with regard to society and education. We strongly resonate with Toyota Woven City’s purpose of “well-being for all” and its mission of “to pave the way towards the next generation of movement on a test course that empowers innovation.” This shared outlook on the future sparked our partnership.
As an educational company, the Z-kai Group is committed to nurturing future global leaders by providing the highest standards of education. At the Z-kai Inventive School, we aim to demonstrate, invent, and embody excellence in education as one of the inventors participating in Toyota Woven City. We seek to create an unprecedented educational experience, revolutionize Japan’s education market, and contribute to the development of global education.
In Toyota Woven City, Woven by Toyota will contribute advanced technologies with a focus on mobility, while the Z-kai Group will bring instructional expertise cultivated over more than 90 years. By leveraging our respective strengths, we aim to realize both “new learning environments” and “leveraging data to realize innovative educational methods.” Our goal is to cultivate the next generation of innovators who will bring new ideas and value to future society.
We aim to foster inventive intelligence and sensibility and value a child-centered approach. At the Z-kai Inventive School, children will engage in enquiry-based learning such as STEAM (science, technology, engineering, arts, and mathematics), nurturing autonomy and curiosity. We place particular emphasis on this type of enquiry-based learning as a method to develop independent thinking and self-reliance.
Another important pillar of learning at the Z-kai Inventive School is to foster global citizenship. Students are encouraged not only to receive education as Japanese citizens but also to embrace diversity and inclusion, building a worldview that enables them to thrive as global citizens in an interconnected society. Through these various initiatives, graduates of the Z-kai Inventive School will develop an innovation-oriented mindset.
You mentioned that international markets play a key role in your long-term strategy. Our research shows that your company has already expanded services to countries such as Australia, Vietnam, and North America. What opportunities do you see in these markets? Are there any countries you are targeting for future expansion? Additionally, what unique value does your company bring to the global education space?
In expanding our overseas business, the Z-kai Group adheres to one core principle and emphasizes three key considerations. First and foremost, we prioritize quality above all, both domestically and internationally. We are committed to delivering high-quality, high-value-added services that ensure customer satisfaction.
When considering overseas market expansion, we evaluate three factors based on this principle:
First, whether the target market has sufficient growth potential. Since we are expanding overseas to break through the growth limitations of the shrinking Japanese market, outperforming Japan’s education market growth rate is a prerequisite.
Second, whether the high-quality products and services we offer can be accepted and valued in the target market.
Third, whether the target country or region can create synergies with the Global Study Program run by our group company, International Students Services Co., Ltd. (ISS). ISS holds a very high market share in study abroad arrangements within Japan, and leveraging the local network established by ISS is a crucial strategy for building our business foundation.
Let me give two specific regional examples:
The first is North America. We operate through our subsidiary, Eikoh North America. Since establishing a local corporation in 2018, we have been providing educational services in the U.S. for seven years. Despite a temporary impact from the COVID-19 pandemic, the business has continued to grow steadily each year and returned to profitability in the previous fiscal year. We are actively implementing various measures to expand further. One key to our success is strong local support. Unlike other Japanese education companies in North America that mainly target Japanese expatriate children, we focus not only on returnee students but also on local children—about half of our students are American. This initiative is highly valued by the local community and has led to various collaborations with local political and business leaders.
In addition to North America, we also have a subsidiary in Australia. In Australia, we operate four childcare and kindergarten facilities, all of which cater entirely to local children. Among them, the Normanhurst Child Care Centre, our headquarters, has received the highest rating of “Exceeding” for two consecutive years from the New South Wales Department of Education.
These subsidiaries work closely together, complementing each other’s strengths, and are especially known for their comprehensive support from enrollment to graduation.
Looking at long-term business expansion, we see great potential in Asia beyond North America and Australia. However, entering a new market requires appropriate local partners. From past experiences, we’ve gained valuable insights that strong partnerships are essential to establishing a meaningful presence in new markets. Moving forward, we aim to establish new businesses through strategic partnerships, and we are working diligently so that we can share results with you in the near future.
If you were to define your company in a single phrase, what would it be?
A comprehensive education group that sincerely pursues excellence in education. If any companies are interested in partnering with us, we would love to explore mutually rewarding opportunities together.
For more details, please visit the following website: https://www.zkai-gr.co.jp/en/
To read more about Zoshinkai Holdings, check out this article about them.
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