By focusing on the educational and skill training institutions Japan has developed to generate human resources for modern industry, this book represents a new contribution to the historical analysis of Japan's modern economic growth. The authors concentrate on those large-scale industries that seem to pose the greatest challenges for an agrarian society, such as Japan was in the 1870's, in order to show how an economically less developed country becomes an advanced industrialized nation.
Originally published in 1980.
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Human Resources in Japanese Industrial Development
By Solomon B. Levine, Hisashi Kawada
PRINCETON UNIVERSITY PRESSCopyright © 1980 Princeton University Press
All rights reserved.
Human Resources in Modern Economic Development
THIS study deals with institutions — in particular, educational and training institutions that generate the human resources required by Modern economic enterprises. The study focuses on how these institutions emerged and evolved in Japan since that country began its transformation from a traditional agrarian society in the mid-nineteenth century to an advanced industrialized nation during the first half of the twentieth century. It fills a gap in the knowledge about the process by which an economically less developed country begins and sustains modern economic growth. Only in recent years has there been systematic treatment of the elements involved in such growth. Especially confounding is that part of the process whereby developing nations foster the human skills, knowledge, and abilities for launching and elaborating the new industrial undertakings.
The Japanese case is especially relevant for the insights to be gained not only because of Japan's unusually high rate of economic growth in recent years but also because Japan has been the only nation outside the Western world that succeeded in achieving a steady self-sustaining transformation beginning at least a hundred years ago. Japan's modern economic development over this period provides one of the most dramatic examples of human resource generation demanded by the process.
In general, the modernization of a "backward" economy requires increased proliferation, employment, and organization of previously unlearned and often highly sophisticated manual and mental skills throughout a developing nation's population in order to operate complex technologies and to staff large-scale enterprises efficiently. Acquisition of such skills depends upon a "strategy," conscious or unplanned, for tapping, changing, and enlarging the capacities of the nation's people and imparting to growing numbers of the population those types of knowledge of which there is little or no awareness or use within the society in the pre-modern era. Skill, capacity, and applied knowledge are the outputs sought in this strategy. Indeed, as others have pointed out:
In the final analysis, the wealth of a country is based upon its power to develop and effectively utilize the innate capacities of its people. The economic development of nations, therefore, is ultimately the result of human effort. It takes skilled human agents to discover and exploit natural resources, to mobilize capital, to develop technology, to produce goods, to carry on trade, and to structure effective organizations for these purposes. Indeed, if a country is unable to develop its human resources, it cannot build anything else, whether it be a modern political system, a sense of national unity, or a prosperous country.
Ample evidence now exists demonstrating the economic contribution of formally organized schooling (presumably transmitted into new capacities, knowledge, and skills that are put to use in modern productive processes) to the growth of economies. Although it has proved difficult to measure precisely this contribution, either to the individual or society at large, there is little doubt of its eventual importance as a major source of increased national income in virtually every country that has developed a modern economy. For example, in the last three or four decades in the United States, additional investment in formal education alone is believed to have accounted for at least one-fifth of the rise in national income during that period. Over roughly the same time span, the contribution in Japan is calculated at about 25 percent. If one could take account also of all the nonformal and informal ways in which new knowledge and skills are acquired and utilized and estimate their economic costs and benefits to society, in all likelihood the contribution of such human resource development would be even greater.
The relationship between education and economic growth no doubt deserves careful measurement. While education alone, even though necessary, is probably not a sufficient condition for growth, it may be "a more realistic and reliable indicator of modernization or development than any other single measurement." Education, whether formal or not, certainly warrants as careful scrutiny as that given to material capital formation, population and labor supply, physical resources, structural change in the economy, industrial organization, international trade, monetary and fiscal management, consumption and savings, mobility of labor and capital, utilization of modern science and technology, and similar aspects that have been customarily dealt with in analyzing the processes of modern economic growth. This is not to claim that the sole function of educational and training institutions — in Japan or elsewhere — has been economic; education undoubtedly makes its contribution in the spheres of cultural, social, and political development as well.
"Strategy" in Human Resource Development
The process of modern economic development has required in all known cases the lifting of a nation's stocks of human resources from "lower" to "higher" levels as measured by the amount and types of education and training obtained by the population. What is not clearly understood is how an industrializing nation moves from the lower to higher levels. In general, however, a strategy usually involves a sequence of choices, although often difficult to identify and unconsciously determined. The choices in human resource development may be categorized among a number of dimensions: levels of education, duration of each level, quantities of enrollment at each level, quality of instruction and learning content, stress on subject matter (science, engineering, law, social sciences, arts, humanities, professional, technical, etc.), formal, nonformal, and informal programs, public and private auspices, rewards and penalties for obtaining schooling and applying learning and skills, and so forth. Such an array of dimensions permits a wide variety of choices in the course of economic modernization; that is, strategies need not be uniform for all countries. Moreover, any given strategy adopted by a country at one time may be altered over time. What is not known with any degree of certainty is whether modern economic growth is compatible with just a few or a much larger number of strategic approaches.
In our view, to focus on the choices made for human resource strategy requires more than a quantitative analysis of the enrollments in, expenditures on, and other measures of the size and output of the various types of education and schooling that come into existence in the process of modern economic growth. It also calls for examining the nature of educational and training institutions — their objectives, organization, administration, and relationships to one another. Study of human resource strategy thus embraces dimensions that are best understood by probing the history of the institutions that are created and evolve. This study, therefore, emphasizes the qualitative rather than quantitative aspects from the historical point of view of determining how educational and training institutions became established and underwent change during the 100 years of Japan's industrialization.
Japan's Human Resource Strategy: Universal or Unique?
Recent studies have begun to clarify the historical development of formal education in the emergence of industrialized Japan. As in other economically advanced nations, Japan's formal educational institutions expanded enormously and underwent a highly complex elaboration. By the early part of the present century, when Japan joined the ranks of the great world powers (at least in a military sense), the Japanese government had structured a formal school system that, except for subsequent expansion, remained essentially intact for the next four to five decades. Obviously, these institutions became a principal means for channeling labor force entrants toward new arrays of skills and talents required for the constantly changing occupations and functions in the long-run expansion and industrialization of the Japanese economy.
Far less explored in the Japanese case, or for that matter the case of most countries, is the part that nonformal and informal education and training institutions played in Japan's industrialization. As distinguished from formal education, nonformal and informal education are systems of instruction and learning that are established outside state-supported or officially recognized conventional schools. Nonformal programs are usually organized, while informal education is not. For example, there is a widespread impression that Japan utilized to an unusual degree a wide array of training-within-industry programs outside the formal school system for generating skills and talents for modern industry. Our study attempts to trace the evolution of such programs and to assess their role in human resource development alongside the formal educational establishment.
In taking account of formal, informal, and nonformal institutions, the Japanese experience of human resource development may be especially germane to present-day developing nations that are seeking a "model" of human resource strategy drawn from non-Western experience. Despite the firm hold of a distinctive Eastern culture and feudalistic traditions (or perhaps in part because of them), Japan took less than fifty years to emerge as a predominantly industrial society, the first outside the West. Except for the severe interruption caused by the events of World War II and its immediate aftermath, Japanese industrialization grew with increasing tempo and scope. From the mid-1950s, Japan's rate of economic growth was one of the highest and most sustained in the history of nations, averaging until the 1970s close to a 10 percent gain per year in real national income. From 1954 to 1964 alone, the decade following the restoration of the Japanese economy to its prewar levels, total production per capita tripled, manufacturing output almost quadrupled, and real consumption per family grew about 50 percent. Also, in this period, the agricultural labor force dropped from nearly one-half the total to barely one-fifth. These trends continued into the 1970s when, following a series of domestic and international difficulties, Japan's economic growth markedly slowed.
In terms of human resource strategy, the rapid transformation of the Japanese economy remains largely unexplained. It is known that, despite economic imbalances, there has been remarkable evenness in increases of formal educational levels throughout Japan's growing population over the decades. Six years of primary schooling became virtually universal by the early 1900s. Close to 100-percent literacy was achieved in the 1920s. The spread of formal education undoubtedly created an ever-enlarging pool of potential talents to fill increasing numbers of jobs for industrial policy makers, managers, administrators, engineers, scientists, technicians, teachers, craftsmen, and other functionaries skilled in the operation of advanced techniques and technologies. Indeed, as will be seen in Chapters II to IV, with the rapid expansion of formal schooling relatively early in the process of modern economic development, Japan seemingly became "overendowed" with educated human resources compared to other industrialized countries at similar developmental stages. However, it seems paradoxical that, although there was an early rise in Japan of large-scale and technologically advanced enterprises (especially with the formation of government-owned corporations and private zaibatsu complexes) that required high skill levels and sophisticated divisions of labor, at the same time there was a proliferation of small, family-centered shops and residential factories that depended upon comparatively little capital but large amounts of low-skilled labor. (Until recently, in fact, the latter persistently absorbed a majority of the nonagricultural labor force.) While this "dualism" probably meant that even the less productive sectors benefited from increasingly educated work forces, on the other hand the Japanese labor force as a whole appears to have been "underutilized" in terms of its potential skill development capacity given the rise in educational levels.
We do not necessarily accept that contention. Rather, our hypothesis is that education, training, and allocation of human resources in the process of modern economic growth constitute a highly complex set of dynamic arrangements. These reflect a variety of political, social, cultural, technological, and economic influences that make it unlikely that education and skill at any given time will closely match economic achievement. Moreover, there is no necessarily close correlation between formal educational levels and skill arrays in the modern economy. Between the schools and jobs and occupations is likely to be a set of screening and training institutions, mostly informal or nonformal, which allocate labor force entrants and reentrants among the work positions in existence or becoming available. Labor market arrangements are not likely to be simple devices for matching supply and demand in general, but rather highly intricate labyrinths that in themselves condition particular supplies and particular demands. In examining labor market institutions that evolved in the course of Japan's industrialization, this study depicts the particular combination of formal, nonformal, and informal education and training of the work forces that came to man modern Japanese enterprises.
Japan's long-run strategy of developing human resources for economic modernization may indeed have tended to "overendow" potential skills, at least in certain sectors. On the basis of formal education alone, however, we believe that this question cannot be answered in quantitative terms alone. One has to probe much further into the whole array of training and educational institutions to approximate a conclusion in this respect.
Even then, examination of the experience of one country such as Japan with the process of human resource development raises the question of whether that country devised an entirely unique approach, which is thus not amenable to cross-national transfer. Obviously, a study of a single nation does not permit systematic comparisons to determine feasibility of transfer. However, a "country study" proceeds at least with certain points of comparison in mind, inferred from findings about other nations individually or taken together. For this purpose, our principal reference point is the general analysis provided by Harbison and Myers summarizing the relationships among manpower, education, and economic growth for 75 countries. 15 Drawing from their comparative data, Harbison and Myers suggest that there is a growing commonality among nations in terms of strategies of human re source development in rising from "lower" to "higher" levels of economic development. For example, all categories of formal schooling — primary, secondary, and tertiary — appear to expand their enrollment ratios for the age populations they are intended to serve; financial support of formal education as a percentage of national income steadily grows — at least up to a point; and emphases in secondary school curricula, in nonformal and informal training, and among fields of higher education increasingly shift toward science, engineering, technical, and other professional or subprofessional subject matter. These do not just happen, it is contended, but are the result of deliberate choices made by public and/or private leadership in the society through conscious investment decisions and purposeful manipulation of incentives and rewards.
On the other hand, as Harbison and Myers themselves recognize, it is also clear that, despite such universal tendencies, industrializing nations at the same general level of economic development vary widely not only in the proportion of stocks and rate of flows of the various categories of human resources but also in the kinds of institutional arrangements built to motivate, and regulate human resource development. While moving in the same direction, the enrollment ratios at the various school levels, the relative reliance upon prework and at-work training programs, the emphases upon fields of study and subject matter content, and the reward structures and incentive systems actually appear to display a considerable range of differences from country to country even with similar levels of economic achievement. These observations suggest that, while there may be a degree of crossnational commonality in the strategy of human resource development, it is likely to pertain only to a limited number of general tendencies. Behind them, we suspect, lies a host of particularistic variations, and it may only be happenstance that one country's strategy resembles another in detail and, then, perhaps only for a given period of time. One could argue that, precisely because there are always varying economic, political, cultural, and technological conditions, significant differences among nations will abound in the "infrastructure" of overall strategies that seem generally alike. Depending upon the scope and depth of the analysis one pursues, the conclusions regarding a given country could stress either the similar or the unique.
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Table of Contents
- FrontMatter, pg. i
- Contents, pg. v
- Preface, pg. ix
- I. Human Resources in Modern Economic Development, pg. 1
- II. Formal Education in the Development of Japan's Modern Economy, pg. 22
- III. Educational Indicators of Japan's Human Resource Development, pg. 60
- IV. Industrial Training in Japan: An Overview, pg. 92
- V. Training in Basic Industries: Steel and Shipbuilding in the Prewar Period, pg. 136
- VI. Training Within Government-Owned Industries: Railways and Telecommunications, pg. 176
- VII. Training Patterns in Traditional Private Industries: Banking, Textiles, and Mining, pg. 206
- VIII. Training in Capital-Intensive Industries: Heavy Machinery, Electrical Equipment, and Chemicals, pg. 258
- IX. Human Resources in Japanese Industry: Problems and Prospects, pg. 283
- Bibliography, pg. 312
- Index, pg. 321