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Employment Outlook: Tokyo

2016-04-26
by Mary Anne Thompson

Japan’s megacity continues its job growth, low unemployment and overall optimism, according to Mary Anne Thompson, President and Founder of GoinGlobal.

Tokyo, Japan’s capital, is a megacity with a population of 37 million people. Until recently, it was the world’s largest megacity (now overtaken by China’s Pearl River Delta). Tokyo also has the world’s largest city economy; its Gross Metropolitan Product (GMP) is equivalent to the Gross National Product (GNP) of countries such as Korea and Mexico. Currently approximately 400,000 foreigners from about 200 countries live in Tokyo.

About 250,000 companies operate in Tokyo, with about 2,700 being large companies valued at more than 1 billion JPY (yen, the national currency).

  • About half of Japan’s large companies are headquartered in Tokyo.
  • Nearly 99 percent of Tokyo’s companies are SMEs (small and medium-sized enterprises).
  • Nearly 2,400 foreign companies are located in Tokyo, the vast majority of Japan’s foreign companies.
  • Tokyo has 38 Fortune Global 500 companies.
  • As the country’s capital city, Tokyo is also home to numerous government ministries and agencies.

Tokyo is divided into four major areas:

  • Center – Most headquarters are located here, and this is the center of economic activity.
  • Jonan and Joto – These are manufacturing districts, especially for metal products, industrial machinery, printing, and leather bag and shoe manufacturing.
  • Johoku and Josai – These are home to advanced manufacturing, including optical instruments and lenses, photo engraving, printing and book binding, and precision machinery. Josai is a global hub for anime productions.
  • Tama – This is a hub for high tech manufacturing, including transport machinery, IT devices, electronic parts and devices, electrical machinery and precision machinery. There are about 3,100 companies active in Tama, including many research-and-development-oriented SMEs.

Unemployment in Japan has been historically low and has been steadily decreasing over the past few years. The unemployment rate is currently 3.3 percent.

The job market performed well last year, and large companies added to their staff. The mood continues to be optimistic among both businesses and jobseekers this year. Fluency in Japanese is a requirement for most jobs, and demand is high for professionals who are fluent in English and Japanese.

Key Industries

  • Electronic device manufacturing industries
  • Financial and insurance industries
  • Publishing and printing industries
  • Restaurants and bars
  • Retail
  • Transport and communication industries
  • Wholesalers

Certain areas in central Tokyo have been designated as a Special Zone for Asian Headquarters, a municipal investment project that aspires to bring more than 500 foreign companies to Tokyo this year, including 50 regional headquarters or research and development (R&D) centers. So far, most companies established in the Special Zone are active in IT, medical/health care and clean tech/environment.

With 138 universities and research institutions, Tokyo has a strong research environment. Academic-industry collaborations are numerous, particularly in the Tama region. The Tokyo Metropolitan Industrial Technology Research Institute (TIRI), in particular, serves as an R&D hub for SMEs.

Areas of Job Promise

Tokyo will be hosting the 2020 Olympic and Paralympic Games, which are forecast to generate 1.67 trillion JPY through a ripple effect in the city of Tokyo alone, and create about 84,000 jobs in the city and 68,000 jobs in other parts of Japan.

In-Demand Occupations

Occupation category

Industry

Skilled salespersons

Retail

Chemical, application and sales engineers

Manufacturing

Assurance and regulatory affairs specialists

Health care

Financial planning and analysis, supply planning and internal recruitment specialists

Most industries

Salaries

Workers in Tokyo who are switching jobs can expect the following salary increases:

  • Retail and consumer: less than 5 percent.
  • Health care and financial services: 5 percent to 10 percent.
  • Industrial-sector engineering, sales and supply chain specialists, and IT security and data specialists: up to 20 percent.

Workers in Tokyo earn about 67 percent of the net wages of New York City workers, according to the latest UBS Prices and Earnings report, which uses NYC as the base city.

Workers in Tokyo pay about 13 percent of their wages in income tax and 12 percent in social security contributions.

Average Monthly Wages in Tokyo (in JPY)

Recent university graduate

212,100

Recent junior college graduate

185,000

Recent high school/upper secondary graduate

168,000

Source: Japan External Trade Organization

Conclusion

Tokyo continues to be one of the world’s biggest cities as well as one of its most stable and optimistic in terms of job opportunities. Its low unemployment coupled with growth across numerous job sectors makes Tokyo’s outlook look bright well into the future.

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