Economic growth basically keeps pace with population increase. Both the rapid economic growth in Japan and the recent growth in emerging economies are mainly attributed to the “population dividend.” However, Japan today is becoming a society with a low birthrate and aging population. In order for Japan to achieve economic growth despite a declining population, consideration of how to increase the number of workers among the current population is necessary. The focus should be on women, older people, and foreign nationals.

There are a total of 52,670,000 employees in Japan. The number of non-regular employees has been increasing to reach 19,530,000, or 37.1% of all employees. This is almost double the 9,580,000 non-regular employees in 1992, immediately after the collapse of the bubble economy. This is attributable to labor regulations that are designed to protect regular employees. They do this so well that, contrary to intention, they result in the institution of high eligibility criteria for regular employment that many cannot meet. To support the growth of the Japanese economy, it is essential to develop labor regulations that enable the smooth transition of workers to growth industries. We need to change the labor regulations in a direction that will mobilize and activate the labor market.

Prof. Shinya Yamanaka, a G1 Board member, received the Nobel Prize in Physiology or Medicine for his work in creating iPS cells, an event that is still fresh in our memory. iPS cells are a true homegrown medical technology for Japan. By its nature, Japan’s strength should lie in the area of advanced medicine. At present, however, with regard to medicines and medical devices, imports exceed exports by 2.4 trillion yen. It is necessary to establish a system that facilitates the development of advanced medical technology ahead of other countries and implement measures to take advantage of Japan’s inherent strength.

When talking about reforming the healthcare system, the starting point of the discussion is often the increase in the demand for healthcare services and rising medical expenses as the population ages, with claims that “we therefore must increase insurance premiums,” “we therefore must increase the consumption tax rate,” and “we therefore must increase the number of facilities providing medical services and nursing care services” being common. Instead, what we should be asking ourselves is how can we change the healthcare system so that we can live healthier and longer lives without it costing so much.

The number of babies born in 2014 in Japan was a record low of 1,003,539 and the birthrate was 1.41, significantly lower than the 2.08 necessary to maintain the population. As a result, it is projected that the Japanese population will decrease to 95 million in 2050 and 47 million in 2100. The declining birthrate and aging population are the most serious issues facing Japan. We need to recognize this situation as one critical enough to shake the foundations of Japanese society.

Referring to “grants in money,” Sontoku Ninomiya once said, “Such help only induces avarice and indolence, and is a fruitful source of dissensions among the people … poverty must be made to rescue itself” (excerpted from Representative Men of Japan by Kanzo Uchimura). The number of welfare recipients reached a record high of 2,170,000 in 2015, exceeding the number during the post-war reconstruction period, and public funds spent on welfare have increased to 3.8 trillion yen. The system should be reformed to incorporate incentives that encourage people to become independent and to pull themselves out of poverty.

The long-term care insurance system was introduced in 2000. In the beginning, the amount of benefits was 3.6 trillion yen and the average premium was 2,911 yen. At present, the amount of benefits is 9.4 trillion yen and the average premium is 4,972 yen. According to the estimate of the Ministry of Health, Labour and Welfare, the amount of benefits will be 21 trillion yen and the average premium will be about 8,200 yen ten years from now. It is necessary to address the continuous increase in nursing care costs not by continuing to increase premiums but by reforming the system with a view to controlling the increasing costs.

Do you know the age of Namihei Isono, the father of Sazae-san (of the famous manga & TV series)? He was a full-time employee during Japan’s period of high economic growth and his wife was a full-time housewife. The population pyramid of the large Isono family was triangular in shape, as was the population pyramid of Japan. It may come as a surprise, but Namihei was 54 years old! He was in his 50s and already an old man who would soon reach the mandatory retirement age and go on the pension. Since that time, society has changed significantly. To respond to these changes in society, the pension system should also be reformed.

The universal health insurance system is one that Japan can be proud of. It is estimated, however, that national healthcare expenditures will increase on the scale of one trillion yen every year to reach 54 trillion yen in 2025. In a society with a low-growth economy and a decreasing population, maintaining the current level of welfare constitutes nothing less than the exploitation of future generations. To achieve a sustainable healthcare system, it is necessary to incorporate incentives into the system to reduce medical costs and maintain our collective health.