Trustnet Magazine Issue 46 December 2018 | Page 10

Advertorial feature
[ BAILLIE GIFFORD ]
8 / 9
Praveen Kumar, manager of Baillie Gifford Shin Nippon and deputy
manager of the Baillie Gifford Japan Trust, tells journalist Joji Sakurai
that Japan’s staff shortages have sparked creativity and investment
opportunities
The bright side of
Japan’s labour crunch
A
s Japan’s population
declines, it has been
left with a glut of about
8 million abandoned
homes, known as ‘akiya’, across
the country. Katitas, held in Baillie
Gifford Shin Nippon, buys up
such houses, renovates them and
sells them at an affordable price –
rejuvenating communities and giving
young families a start.
Katitas is a compelling example
of the opportunities to be reaped
in what looks like an alarming
demographic picture – often cast
as condemning Japan to long-term
decline. One of Japan’s most pressing
issues is an acute labour crunch as
its working age population, which
peaked in 1997, continues to shrink.
There are currently about 160 job
FE TRUSTNET
openings for 100 applicants, the
tightest labour market since 1974.
One-third of Japan’s construction
workers are over the age of 55. Many
all-night restaurants in Japan are
closing because they cannot find
enough staff. And Yamato Transport
– Japan’s largest parcel delivery
company – is mulling an exit from
Amazon same-day deliveries because
of a lack of drivers.
Yet there is another way to look
at labour shortages that points to a
brighter future for Japan’s economy.
Outsourcing and labour-
saving technologies are the
stellar growth drivers in the
labour crunch
Outsourcing and labour-saving
technologies are the stellar growth
drivers in the labour crunch. One
company that is benefiting from this
structural tailwind is the specialist
staffing company Outsourcing Inc,
which both Baillie Gifford Shin
Nippon and the Baillie Gifford Japan
Trust hold shares in. During Japan’s
long period of stagnation, companies
began to rely heavily on contract
workers over permanent staff to
trustnet.com