Higher Education and the Japanese Disease

The word “globalization” is often used as little more than a vague fashionable term, with no concrete meaning. Yet the word seems apt to describe the changes that have been occurring in the realm of higher education since the 1990s. In academia, the cross-border movement involving people (students and faculty), capital (funding for education and research), and academic institutions themselves has been widespread and intense. This globalization of higher education has proceeded hand-in-hand with the globalization of the workforce, as people cross borders to receive their education and earn their degrees and leave their home countries to enter the labor market as highly sought-after human resources. The international rankings of universities that are attracting increasing attention around the academic world are another aspect of the phenomenon, giving rise to true global competition between universities in different countries.

Another important change since the 1990s has been the widening of access to higher education in industrialized countries. Even in Europe, where relatively few people traditionally went on to tertiary education, the proportion of those continuing their education to the university level has risen rapidly. Many of these students continue their studies after completing their bachelor’s degree to pursue professional training and graduate degrees at the master’s and doctoral level. This expanding access to higher education is a response to the global competition for highly skilled workers alluded to above.

This article will begin by clarifying some of the problems that reveal themselves when we examine Japanese higher education in relation to globalization. From this perspective it becomes clear that Japanese universities are now in a weak position as a result of a sluggish response to global competition compared to their counterparts in other countries. Secondly, the article seeks to identify the main problems facing Japan’s universities and ponder why have they been unable to solve them up to now. In addressing these questions, I want to reflect on some of the problems that have beset not only Japan’s universities but its overall society since the early 1990s. These problems comprise what I refer to as the “Japanese disease,” stemming from a failure to move on from the period of postwar economic success that Japan enjoyed until the late 1980s. Finally, I will discuss how this problem, far from being unique to Japan, affects all the developed countries.

The Higher Education Trilemma

To clarify the problems affecting Japanese higher education in a wider context, let us first review a common problem confronting all the world’s industrialized countries. The problem might be described as a trilemma arising from the relationship between the system of higher education and the state. A trilemma is a situation in which three irreconcilable factors coexist. Although it may be possible to balance two out of the three, the third refuses to fit in. The three elements of the trilemma with regard to the relationship between higher education and the state are as follows: maintaining standards, equalizing opportunities (major expansion of higher education), and keeping the fiscal burden on the state to a sustainable level. We can consider the following examples of the trilemma. The effort to equalize educational opportunities by expanding higher education, while also trying to maintain high-quality education, inevitably results in a greater fiscal burden on the state because of increased public investment in higher education. On the other hand, if the necessary funds are lacking, it will be difficult to maintain educational standards. But if you maintain standards, it becomes harder to widen access. Trying to expand the system and limit the fiscal burden at the same time makes it difficult to maintain quality. The harder you try to achieve two of the three aims, the more difficult it gets to achieve the third—this is the trilemma of higher education.

This trilemma has become particularly severe in advanced countries in recent years. The reason has everything to do with the competition to nurture global talent and human resources, as I mentioned at the outset. This has made it more important than ever to expand high-quality tertiary education. But this requires greater expenditures on higher education at a time when many of the world’s developed economies are experiencing serious fiscal difficulties. Each country thus faces the problem of how to resolve its higher education trilemma.

In Europe, where for many years higher education was free and where most higher education took place in state-funded universities and colleges, the search for a solution to the trilemma has brought people face to face with the question of who should cover the costs associated with expanding higher education (particularly for university education). In recent years, England has tried to solve the problem by introducing (and then increasing) tuition fees. In the United States, where many state governments are struggling to balance the books, there have been attempts to resolve the trilemma by increasing the tuition fees at state universities, which in the past have played a vital role in widening access to higher education. Even in Europe, although some countries continue to stick resolutely to a system of free education, there is a fierce debate over who should bear the costs of expanding higher education. (In Germany, for example, a system of tuition fees was introduced for a time, only to be met by a fierce public backlash and movements to have the fees abolished.)

Viewing Japan’s system of higher education within this broader context brings into focus the characteristics of the Japanese approach to solving the trilemma and the problems arising from the situation. Essentially, the Japanese approach has been to keep public investment by the state to a minimum. Approximately 80 percent of Japanese students are enrolled at private universities. In addition, the tuition fees on which most private universities depend for the bulk of their revenue usually come, from individual household incomes rather than national scholarships. In other words, Japan has achieved a major expansion of its higher education sector by increasing the number of private universities and depending on private household income to cover the bulk of the costs.

Japan was faster than European countries in widening access to higher education. According to recent statistics, more than 50 percent of college-age young people in Japan now go on to attend a four-year course of university education, with a further 25 percent attending a two-year college of some kind (these include junior colleges, vocational colleges, and technical colleges). This means that 75 percent of a given year group is accessing higher education. Like universities, most two-year colleges are also private colleges, underlining the fact that Japan has succeeded in bringing about a “mass market” for higher education. This marketization of higher education, including four-year universities, has been achieved while keeping government spending to a minimum and maintaining a system of small government.

These characteristics of the Japanese approach can be seen as part of a tendency to regard higher education as a personal matter, mainly concerning the individuals involved. Education is subject to market forces, and run under a system of small government. The expansion of higher education since 1990 coincided with an easing of government regulations on establishing colleges and universities, with private universities competing in the marketplace to attract students. Additionally, this system has been largely dependent on private household finances. Higher education has been regarded as a personal good of benefit primarily to the individual student. Accordingly, a model was chosen in which the financial burden is borne on a personal rather than a public level. This is the context in which access to high education expanded.

But the Japanese solution, characterized by a focus on private interests and the marketplace, has led to major problems from the perspective of both equal opportunity and quality.

Problems with Japanese Higher Education

There is no denying that this approach was successful in expanding the Japanese higher education system rapidly, and that the system has offered large numbers of young people an opportunity to pursue advanced studies. But because this expansion was achieved by increasing the number of private colleges, a student’s access to educational opportunities depends to a considerable extent on the level of household income. The government’s scholarship provisions continue to be inadequate, despite the increase in tuition fees, and the country has failed to address these economic constraints on access to higher education. Despite an overall increase in access to higher education in absolute terms, therefore, inequalities of opportunity continue to exist depending on a student’s socio-economic background.

Another serious problem is that the expansion of higher education has coincided with a drop-off in quality. This decline has been exacerbated by the focus on private universities and the tendency to regard higher education as a personal investment of benefit primarily to the individual student. There are several reasons for this.

First, private universities with weak financial foundations depend heavily on income from tuition fees. This means that however hard they may try to maintain standards above a certain level, it is difficult for them to oblige students to withdraw even if their grades are unsatisfactory. Another factor is that in order to minimize teaching costs, a lot of the teaching takes place in large lecture-style classes. This makes it hard for faculty to provide personalized guidance and feedback to students. On top of this, most classes have no reading assignments. According to a survey carried out by researchers at Bennesse Corp., a private-sector educational corporation, 73 percent of students spend less than 3 hours a week on preparation, revision, and homework outside class (and 20 percent spent no time at all). Additionally, 81 percent of students studied on their own beyond the curriculum requirements for less than 3 hours a week (with 32 percent spending no time at all). Japanese universities have become places in which no learning goes on outside the classroom.

Even worse, supposed four-year universities are allowing many students to graduate with just three years of education under their belts. This is because most students are busy looking for a job from the second half of their third year, leaving them no time to attend classes. For the most part, private universities have no alternative but to tolerate this attitude from their students. A university’s reputation depends on its graduates successfully finding jobs after graduation. In order to ensure a sufficient intake of new students, a university cannot afford to stand in the way of the job-hunting of the current student body. This makes it almost impossible to impose strict grades and to get rid of students who fail to keep up. Both of these problems arise from the fact that private universities are financially dependent on the tuition fees they receive from students.

Why do students begin searching for a job so early, even if it means sacrificing so much of the time they have supposedly invested in getting an education? To understand the reasons for this, we must turn our attention to the role that university education has played in Japanese society. Considering the background to the problem will deepen our understanding of the pathology of the Japanese disease.

On-the-Job Training and the Pathology of the Japanese Disease

The success that the Japanese economy enjoyed until the early 1990s, despite the country’s lack of natural resources, is often attributed to the excellence of its workforce and the skilled corporate management that was able to get the best out of these workers. In the private sector, companies guaranteed stable long-term employment and an effective framework was in place to improve workers’ skills by devoting time to on-the-job training. This approach achieved high productivity through cooperation and teamwork rather than particularly high skills on the part of individual employees. Unlike in Europe and North America, where job descriptions and requirements were defined quite clearly, in Japan a framework centered on efficiency through collaboration, and job descriptions (and the skills needed to fill them) were less rigid than in the West. Given this, it was not considered necessary for employees to acquire particular professional skills or knowledge before joining a company, since they could pick up these skills during lengthy on-the-job training.

This meant that companies tended not to be interested in what graduates had studied at university, or what specialist skills they had acquired. What was important was trainability—does a potential employee have what it takes to learn the skills effectively on the job? To get an indication of this, companies looked at the type of school a person had attended. Studiousness, smarts, and speed of understanding were the basic aptitudes that were tested by university entrance exams, and these were seen as indicative of a person’s trainability. Because of this, students who managed to get into prestigious schools with their rigorous entrance exams tended to be in demand once they entered the job market.

This approach to hiring and training employees had three main characteristics. First, it was effective so long as it was possible to offer ongoing and stable employment opportunities, centered on large corporations and male employees. But this approach became less effective as the number of openings for permanent employees decreased, and even more so as the system of long-term employment came under threat. It also fails to function well for women, people changing jobs, or others with significant gaps in their résumé.

Second, the framework was premised on the domestic employment market. What the domestic market demanded was not outstanding ability in absolute terms, but relatively high levels of trainability. The system was based on competition to achieve a higher rank within a closed system, and companies brought forward their hiring periods accordingly in order to secure the best talent. Likewise, students looking to improve their own position in the job market had no choice but to begin the job-search process earlier in response.

With the corporate hiring season starting earlier and earlier, students leave the classroom behind to hurry off in search of jobs.

As a result of all this, it became routine for students to embark on the job hunt and hiring process during the second half of their third year in college, despite the interruption in their studies this entailed. Although this curtailment of university education inevitably affected the quality of graduates in absolute terms, people saw no problem since competition was limited to a domestic context. Despite a growing realization of the numerous disadvantages of the system from the perspective of society as a whole, for individual companies and students bringing the recruitment and hiring process forward was a plus. This led the repetition, over and over, of what economics identifies as a “fallacy of composition”—where something that is true or effective in an individual case is wrongly assumed to apply to the whole.

Third, this framework was built on the assumption that it would encourage students to compete to get into the best college they could. This competition to get into good universities was fundamental to the “trainability” framework.

But the declining population of 18-year-olds and the mass expansion of private universities has meant that the system no longer functions properly: With the exception of a small number of elite colleges, getting into university is no longer particularly competitive, and students have lost their incentive to study. Since they need to secure a certain number of students to maintain themselves as viable economic entities, private universities with insecure economic foundations will admit students almost regardless of their academic achievements or readiness so long as they can pay the fees.

In addition to this, globalization and demographic change have combined to eat away at the foundations of the traditional Japanese framework. To protect the jobs of mid-career and older employees while working to reduce payroll costs, many companies have been hiring fewer young people as new permanent employees. There has been a shift from permanent employees with full benefits to non-permanent, part-time, and temporary workers. This change coincided with a relaxation of labor laws in order to increase the abilities of companies to compete in a globalized economy with regard to labor costs. Ironically, the framework that previously ensured the quality of workers has collapsed. Globalization has also disrupted the Japanese framework of jostling for relative precedence within a closed domestic setting. As I mentioned earlier, in many other advanced countries the locus of serious education has shifted to the graduate school level. Thus, in an era where other countries are educating their young people for longer periods than ever and improving curriculum quality, Japanese universities and companies are failing even to make full use of a four-year university course of study. As a result, Japan has suffered a clear decline in the talent and skills of its workforce, precisely when these things are more crucial than ever in an increasingly globalized environment. Although many people realize what is wrong, companies, universities, and the society as a whole have been unable to act to change the system.

This exposes the true nature of the Japanese disease. Unable to respond to the changes brought about by globalization, companies and universities persist with the framework that has served them well in the past, and people continue to squabble for relative advantage within the closed framework of Japanese society. Even if companies and individuals realize that this approach is having serious negative effects when viewed from outside the bubble, they are unable to change the system or abandon it altogether. This has coincided with the deteriorating situation of public finances, and led to a situation in which little can be done to improve matters.

What I have been calling the Japanese disease is not limited to Japan, however. Particularly in education, a tendency toward smaller government is leading to greater privatization and marketization in many countries around the world. But as Japan’s example makes clear, there is no guarantee that rational decisions and behavior on the part of individuals will lead to any improvement in overall quality or greater equality of access. Indeed, it is likely that the short-sighted competition for advantage will lead to a further decline in educational standards and a loss of equal opportunities. How is it possible to avoid the vicious circle resulting from the fallacy of composition with regard to education and training? In facing up to this problem, the rest of the world can learn a lot from Japan’s experiences.

References

Kariya Takehiko, “Credential inflation and employment in ‘universal’ higher education: enrolment, expansion and (in) equity via privatisation in Japan,” Journal of Education and Work, Vol. 24, Nos. 1–2, 2011, pp. 69–94.

Yano Masakazu, Shūkanbyō ni natta Nippon no daigaku, Nihon Tosho Center, 2011.

▼Further Reading:

Globalization and Higher Education Reforms in Japan: The Obstacles to Greater International Competitiveness
Amano Ikuo