- Japan’s rural companies are facing severe labor shortages due to an aging population.
- Foreign workers from Asia, especially Vietnam, are filling the gaps.
- Small businesses are critical to Japan’s economy but struggle with integration challenges.
As Japan’s population shrinks and ages rapidly, businesses in rural areas are struggling to find enough local workers.
Japan’s immigration policies have historically been restrictive, but economic pressure is forcing changes. While large urban corporations have adapted to this transition earlier, rural companies are now finding ways to attract and integrate foreign employees.
Japan’s Regional Businesses Rely on Foreign Workers to Counter Labor Shortages
In the face of labor shortages driven by a rapidly aging population, Japan is increasingly reliant on foreign workers, particularly in rural areas. Hizatsuki Confectionery, a long-established rice cracker company, hired its first foreign workers in 2020. This shift highlights the critical role foreign labor is playing in keeping traditional small and medium-sized enterprises afloat.
For rural businesses, integrating foreign workers presents unique challenges. Communities in these areas often have limited exposure to other cultures, and language barriers complicate day-to-day operations. The lack of a national system for language and cultural support adds to the difficulty of this transition.
Despite these obstacles, foreign workers are becoming indispensable. According to Yuki Hashimoto from the Research Institute of Economy, Trade and Industry (RIETI), small businesses like Hizatsuki Confectionery may not survive without foreign labor. As a result, local governments and businesses are trying to develop support systems to accommodate and retain these workers.
How well these efforts succeed could shape the future of Japan’s regional economies. Whether foreign workers feel welcome and integrated enough to stay long-term will determine the survival of businesses that rely on them.
The survival of Japan’s regional economies hinges on whether businesses can successfully integrate and retain foreign workers, addressing both labor shortages and cultural challenges.
“Without [foreign workers], they will collapse.” – Yuki Hashimoto, Senior Fellow, RIETI
