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• Recruitment of New College Graduates
• Council on Investment for the Future
• Corporate Internal Reserves
• Japan-China Relations

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Recruitment of New College Graduates

This year the start of the graduate recruitment selection process was brought forward by two months, from August 1 to June 1. We have examined companies' actual recruitment activities and the impact of the altered schedule. Generally, companies indicated that last year's problem of compelling students to undertake a prolonged period of job-seeking in the hottest part of the year was rectified. In fact, around 70% of companies responding to Keidanren's questionnaire said that this year's schedule was better than last year's.

Universities have also told us that this year's schedule was an improvement, and that it did not appear to cause students any major confusion. However, reducing the recruitment campaign period from five months to three months caused companies to conduct earlier and shorter campaigns, and issues remain relating to company research and matching. Some more time will be required to examine these issues.

At this stage the most important matter is to promptly announce Keidanren's policy for the 2017 recruitment campaign (for graduates to commence work in 2018). After considering all aspects, we have decided not to alter the recruitment schedule used this year. We will take every opportunity to urge member companies to follow our policy. The government has also requested that industry organizations conform with Keidanren's policy.

I would also like to mention the need to consider students studying abroad and trainee teachers. I understand that companies have reserved a certain number of positions for students studying abroad and conducted recruitment seminars overseas, and that no serious problems have occurred. Many companies have also made various allowances for trainee teachers, such as scheduling interviews on weekday evenings or weekends. Even so, it seems that some trainee teachers couldn't arrange their schedules to participate in the recruitment process, and further consideration of how their needs can be met seems necessary.

We will take some more time to consider the schedule for 2018 and thereafter, and make an announcement by next spring. We are aware that many member companies prefer the original schedule of starting the recruitment campaign in December and the selection process in April, but nothing has been decided at this stage. Various options will be put up for debate, and discussions will be held in cooperation with those involved.

We also acknowledge that some companies have suggested abandoning the policy of a fixed recruitment period and recruiting throughout the year. However, mass recruitment upon graduation is common practice in Japan, and 90% of students seeking employment take up a job when they graduate. Most Keidanren executives hold the view that certain guidelines and policies, including a schedule, are necessary, and that an uncontrolled, "anything goes" approach is undesirable. Thus we believe that some form of policy should be maintained.

Council on Investment for the Future

The Council on Investment for the Future recently established by the government as a command post for growth strategy is a timely initiative. The business community will take an active part in council discussion with a view to accelerating the growth strategy being implemented under Abenomics. Some three years and nine months have now passed since the policies of Abenomics were launched, and over this period progress has been made on resolving the "six crucial issues" facing Japanese businesses. These include correcting excessive yen appreciation, reforming corporate income tax, and pushing ahead with economic partnership agreements in order to place the Japanese business environment on an equal footing with its international counterparts, as called for by the business community. Businesses have responded with proactive management initiatives, including boosting capital expenditure, R&D investment, and M&A activity, as well as increasing pay rates. However, individual consumption is still sluggish and the pace of growth in emerging economies is slowing. The Japanese economy is not yet firmly back on the path to growth. Investment is also lacking vitality. Under these circumstances, there is a need for the public and private sectors to carefully examine what has been missing from previous initiatives in order to encourage committed investment for the future.

I urge the government to conduct a full review, encompassing all ministries and agencies, of the growth strategies and structural reforms it has implemented so far, while also examining new initiatives to bolster the business environment, including capital expenditure incentives and regulatory reform. The business community will similarly work across boundaries between enterprises and corporate groups to consider direction for new growth strategies, while also reviewing capital expenditure and R&D investment to date.

Triggering a fourth industrial revolution and realizing the Society 5.0 concept are key goals of the growth strategy set out in the Japan Revitalization Strategy 2016, and systems need to be established to move towards these goals. The relevant ministries and agencies are currently examining these issues individually, but a fourth industrial revolution and Society 5.0 should be positioned as a national strategy, and the Council on Investment for the Future should play a core role in building unified national systems. The business community will respond to such moves with initiatives aimed at deploying cutting-edge technologies throughout society, such as expanding industry-academia-government collaboration and open innovation with venture companies.

Meanwhile, other projects are still at the conceptual stage, and have not yet reached the point of considering processes to bring them to fruition. These include making Japan a health services leader, promoting agriculture and tourism, and stimulating individual consumption. I hope that such projects will soon be fleshed out.

Productivity-boosting initiatives such as the i-Construction project being undertaken by the Ministry of Infrastructure, Land and Transport need to fully utilize new technologies including the Internet of things, big data, artificial intelligence, and robotics to resolve labor shortages and maintain, upgrade, and further enhance aging infrastructure. To this end, there is a need to develop systems and environments for data use, including standardization of infrastructure-related data formats and promotion of open access.

Corporate Internal Reserves

This fiscal year internal reserves (retained earnings) rose 23 trillion yen year-on-year to 377 trillion yen. Internal reserves represent surplus earnings after tax has been paid and are used for purposes including capital expenditure, R&D investment, and M&A, so they are not held entirely in the form of cash. Companies hold cash to provide short-term working capital over an appropriate period of around six to eight weeks, and do not accumulate excessive amounts.

Japan-China Relations

Keidanren regards Japan-China and Japan-Korea relations as important issues in private diplomacy. When Japanese business representatives visit China later this month for discussions with Chinese political leaders, we will continue to emphasize that stronger economic relations between our two countries benefit both nations, and that improved political and diplomatic relations are a prerequisite for revitalizing lackluster trade and investment between Japan and China. Reinvigorating exchanges at all levels, including leader-to-leader contacts, and building good political and diplomatic relations are essential to furthering the national interests of both countries.