Trustnet Magazine Issue 46 December 2018 | Page 12

Advertorial feature
rein in costs. The government
subsequently introduced legislation
that requires companies hiring staff
working on temporary contracts
for more than five years to employ
them as permanent employees.
Outsourcing’s business model
effectively hires such workers
from major corporations as regular
employees – providing them with
the benefits of permanent staff – and
leases them back to the company
from which they originally came.
The client pays an annual fee to
Outsourcing and also pays the
workers’ wages.
Not only are they providing this
large pool of experienced workers
to companies that need them,
they are also hiring these contract
workers from their clients and
employing them as their own full-
[ BAILLIE GIFFORD ]
10 / 11
Contrary to the downbeat
commentary you see in
the financial press and
elsewhere, there is a brighter
side to Japan’s labour
crunch both for investors
and for society at large
time employees, giving them all the
associated benefits such as pensions,
insurance and wages commensurate
with their experience and expertise.
This arrangement removes a
potentially expensive staff overhead
for clients. Meanwhile, Japan’s world-
leading expertise in robotics gives it
natural advantages in laboursaving
strategies. Cyberdyne is a company
in the Baillie Gifford Japan Trust’s
portfolio that makes a robotic
exoskeleton, enabling the physically
disabled to walk. Now its technology
is being used on construction sites to
help workers perform heavy lifting.
Other labour-saving technologies
exploit inefficiencies in Japan’s
economy – a system of middle-men
and legacy relationships that push
up costs for consumers. Infomart, for
example, allows restaurants to place
orders online from suppliers, in an
industry greased by personal contact.
Broadleaf runs a platform for garages
to shop around for auto parts online.
Both companies, which are in Baillie
Gifford Shin Nippon’s portfolio,
challenge cherished practices that
serve as social binders but hold back
an urgent need to boost productivity.
And Katitas – the company that
renovates abandoned homes – is a
pioneer in promoting Japan’s most
important neglected labour resource
of all: its women. About 40 per cent of
Katitas’s workforce is female and the
company is proactive about bringing
them into management. Last year,
all five top salespeople on Katitas’s
staff were women. And unusually
for Japan, the company extends
generous maternity leave – without
any career setbacks to be expected
upon return.
Kumar believes that, contrary to the
downbeat commentary you see in the
financial press and elsewhere, there
is a brighter side to Japan’s labour
crunch both for investors and for
society at large.
The value of a stock market investment and any income from it can fall as
well as rise and investors may not get back the amount invested. Investments
with exposure to overseas securities can be affected by changing stock market
conditions and currency exchange rates. Investment in smaller companies
is generally considered higher risk as changes in their share prices may be
greater and the shares may be harder to sell. Smaller companies may do less
well in periods of unfavourable economic conditions. The trusts’ exposure
to a single market and currency may increase risk. For a Key Information
Document please visit our website at www.bailliegifford.com
This article does not constitute, and is not subject to the protections afforded to, independent
research. Baillie Gifford and its staff may have dealt in the investments concerned. The views
expressed are those of the manager, are not statements of fact, and should not be considered as
advice or a recommendation to buy, sell or hold a particular investment. If you are unsure whether an
investment is right for you, please contact an authorised intermediary for advice. Baillie Gifford & Co
Limited is authorised and regulated by the Financial Conduct Authority (FCA). The trusts are listed on
the London Stock Exchange and are not authorised or regulated by the Financial Conduct Authority.
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