Korean and Japanese Business Organizations Meet to Address Declining Fertility Rates and Rural Depopulation

•  As businesses are directly related to the problem of declining fertility rates and rural depopulation, Korean and Japanese businesses must find solutions to these problems

•  Measures to overcome declining fertility rate: 

   Japan - marriage support, gender equality

   Korea - work-family balance, labor market reforms

•  Korean company case study: strengthening family and birth-friendly policies to overcome the declining fertility rate 

•  Japanese company case study: overcoming the declining fertility rate and rural depopulation crisis with new business models

  With Korea's total fertility rate hitting a record low of 0.72 last year, various social problems caused by the declining fertility rate are becoming a reality, leading think tanks from leading economic organizations in Korea and Japan to hold a meeting to explore the role of businesses in overcoming the problem.

  The Korea Economic Research Institute (KERI), an affiliate of The Federation of Korean Industries (FKI), together with The 21st Century Policy Research Institute, affiliated with Keidanren (Japan Business Federation), held a seminar on "The Role of Businesses in Overcoming Low Fertility Rates and Rural Depopulation: Lessons from Korea and Japan" on Thursday, March 28, at the FKI Tower Conference Center. The first session of the seminar outlined the current situation of declining fertility rates and rural depopulation in Korea and Japan, and the second session introduced management case studies of Korean and Japanese companies.

As declining fertility rates affect companies' sustainability, Korean and Japanese companies need to come together to solve the problem

  In his opening remarks at the seminar, Chul Chung, president of the Korea Economic Research Institute (KERI), emphasized that "the declining fertility rate leads to a decline in the workforce and purchasing power and slowing economic growth, which in turn directly affects the sustainability of corporate management, meaning companies need to actively address the issue." "I hope this seminar will serve as a productive venue for exchange between companies from both countries while sharing examples and getting ideas from each other," he said.

  Takashi Yoshimura, director of Keidanren's 21st Century Policy Research Institute, echoed the sentiment, saying, "The issues of declining fertility rates and rural depopulation are common challenges facing both countries, and we look forward to finding solutions through continued exchange and cooperation between Japanese and Korean companies." 

Policy improvements needed in Korea and Japan to overcome low fertility rates: marriage support, gender equality, work-family balance, reduce dualism in the labor market

  Mikito Masuda, professor of economics at Komazawa University, explained the recent trends in Japan's fertility rate, noting that the decline has been characterized by a noticeable acceleration following COVID-19. Masuda also pointed out that the decline in Japan's fertility rate is due to a decline in the marriage rate and suggested the need for a marriage support system and gender equality measures at the government level. 

  Jin Sung Yoo, a senior research fellow at the Korea Economic Research Institute, who presented on the current status of Korea's low fertility rate, suggested that the biggest factor that discourages women from having children is the effect on career progression.1)  He also pointed out the disparity2)  in fertility rates between regular and irregular workers and between those working at large and small businesses and stressed that establishing a system for work-family compatibility and reforming the dual structure of the labor market are urgent tasks to raise the fertility rate.

1) After giving birth, female job retention rates drop by roughly 30 percentage points

2) Regular workers are 1.9 times more likely to give birth than irregular workers, and large company workers are 1.4 times more likely than SME workers.

Korean companies are becoming role models for demographic solutions by strengthening in-house support policies

  In the second session, Yonggeun Kim, Strategy Team Leader at POSCO’s Corporate Citizenship Strategy Group, presented on POSCO’s efforts regarding the low fertility issue and expressed concern that "Pohang and Gwangyang are expected to experience a sharp decline in the youth population by 2030, and the company is facing an urgent need to secure talent." He also introduced 16 in-house family and childbirth-friendly programs that take into account the life cycle of employees, and said, "POSCO will continue to carry out various activities to become a role model for corporate-level solutions to the declining fertility rate." 

  "As a result of various in-house family-friendly policies that we have steadily promoted over the past decade, the number of births per 100 employees at LOTTE Group is 2.05 as of 2022, far exceeding the national average of 0.81 births per 100 adults in Korea," said Ok-keun Cho, Senior Manager of LOTTE Group, adding that the company plans to expand support not only for mothers, but also for fathers, including parental leave and reduced working hours during early childhood.

Japanese companies tackle the declining fertility rate and rural depopulation with new innovative business models 

  Masanori Yoshino, senior project manager at Hitachi, Ltd., introduced their regional revitalization strategy from a social design perspective. Mr. Yoshino explained that the fundamental solution to overcoming the declining fertility rate is to create healthy "local communities," and to realize this vision, Hitachi has been promoting a community innovation project called "Life Design for Youth" in collaboration with Hokkaido University since 2016. Through this, he emphasized that Hitachi's vision is to create "New People" and "Model Cities" that can overcome the declining fertility rate. 

  Finally, for the presentation of a Japanese company case study, Ryoichi Fujisaki, corporate officer & vice president of the All Nippon Airways (ANA) Strategic Research Institute, discussed the declining fertility rate and rural depopulation from the perspective of an airline. Mr. Fujisaki explained that the effects of the declining fertility rate and aging population will lead to a severe shortage of aviation personnel, including pilots and engineers. He also analyzed the stagnant demand for domestic passengers in Japan. To overcome this situation, ANA is promoting the "Agri-Smart City Project," which aims to promote mutually beneficial cooperation between metropolitan areas and rural areas and to combat rural depopulation, Mr. Fujikashi said.

[Attached] Overview of the Role of Business in Overcoming the Low Fertility Rate and Depopulation Seminar