Outsourcing Japan

Directorate for Science, Technology and Industry

David Rooney

Outsourcing is a growing practice in Japan’s business sector.

A survey conducted by the Japanese Ministry of International Trade and Industry, in 1997 showed that 20.1% of outsourcing firms outsourced their job training, compared with 19.7% for information systems, 17.4% for production processes, 14% for accountancy and tax affairs and 13.7% for R&D. The MITI survey found that more than 70% of firms which had outsourced with the aim of increasing specialisation, maximising efficiency and reducing costs had achieved their objectives.

Firms deciding to outsource were looking for a range of advantages, such as improving management efficiency, cutting costs and providing business flexibility. Many firms used outsourcing simply to carry out internal restructuring. Firms reported that by using external specialised resources they were able to expand their information networks; improve the employment-related benefits enjoyed by employees; and even avail themselves of useful performance assessment by the outsourced service.

Surveyed firms agreed that outsourcing allowed them to concentrate on their core activities. It is expected that outsourcing will continue to grow in Japan and may extend to such areas as marketing, labour recruitment services, vocational education and job training. In the long term, outsourcing is expected to revitalise Japan’s economy and promote industrial restructuring. With the economic recovery in sight, perhaps this has already begun to happen.

Bibliography

Research on the Outsourcing Industry, Services Division, Ministry of International Trade and Industry, Japan 1997.

See also:

"The rise and rise of the strategic business service", OECD Observer No 219, December 1999. 

"Personnel wanted", OECD Observer No 219, December 1999. 

©OECD Observer No 219, December 1999




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