27 October 2008

Demographic Disaster for Higher Ed in Japan? Parts II-III

Demographic Disaster for Higher Ed in Japan? Parts II-III

by Charles Jannuzi, University of Fukui


In early September 2006, I gave a presentation at a conference in Langkawi, Malaysia. The conference, which focused mostly on educational management issues in higher education, was hosted by the South East Asian Association for Institutional Research (SEAAIR) and the Open University of Malaysia. My talk was titled, "Japan's Tertiary Education System: Developments in the Koizumi Era of Reform".

In the resulting paper (which was published in the proceedings of the conference), I attempted to sum up twenty years of university reform with the following:

Those two prior decades of changes in tertiary education leading
up to the creation of the
NUCs [Japan's 87 national universities
were re-chartered as 'national university
corporations' in 2003-4]
comprised many profound developments....:

-the establishment of a handful of new research universities and
institutes, decision-making
at which flows from a central

-the expansion of graduate program and their enrollments,
including American-style
professional schools of business,
law, and accounting;

-growth in doctoral and post-doctoral programs....

-a steady increase in the number of international students
hosted, to over 120,000 annually,
about 25% enrolled in
graduate schools;

-more public funding of the entire tertiary sector...with a
target of 1% of GDP;

-increased funding for research (including more basic
research) to compensate for its decline
in private industry...
with a target of 7-8% of annual national budgets, and a
national goal
approaching 3% of GDP for ALL scientific R&D
(with national government spending
accounting for 1% of GDP);

-legislative and regulatory changes that allowed the national
universities to tie up with other
entities to pursue research and
expand course offerings....

-parallel changes that allowed national university academics
to serve on the boards of NPOs
and for-profit corporations;

-internal and external systems of evaluation, independent of
national government

However, I also pessimistically concluded that Japan's tertiary education sector (four-year universities and two-year colleges) could soon face a student shortage and excess capacity, leading to serious issues (mainly, finances), which the reforms of the Koizumi era of Japanese politics (2000-6) had done nothing to fix.

The idea that many of the so-called solutions were not going to leave higher education in Japan up to meeting the upcoming challenges was based on the following two premises: (1) Many of the changes imposed on national and public universities and colleges were most likely ill-considered--even panicked--concessions made by the national government to the neo-liberal ideology popular in the media and with urban voters. As such, they reflected nothing more than a bankruptcy of realistic and effective alternatives on the role of government in the political economy and hence Japan had lurched into 'reform over-reach'. The reforms, including major ones to education and higher education, would do little to address the actual issues facing post-bubble Japan. (2) Because of drastic declines in the numbers of senior high graduates (from over 2 million in the early 1990s to just over 1 million now), universities and colleges would be unable to find enough students to maintain applications, admissions and enrollments at levels to keep hundreds of tertiary institutions financially viable.

So I made a projection in the conclusion of the SEAAIR conference paper that, in part, read:

[We] predict here that these reforms will not be sufficient to save
the tertiary sector in
Japan from crisis and partial collapse.
The demographic realities are harsh and
inescapable. There
simply will not be enough senior high graduates after the year
2010 to
support the over-built higher education sector.
Attempts at maintaining enrollments with
students (there are now over 120,000 studying in Japan)
will reach a peak
because of the language barriers, since
Japanese universities are incapable of providing
amounts of curriculum in English. An elite group of 50-100
institutions will
emerge, while hundreds of colleges and
universities will disappear-- either absorbed by
successful ones or completely gone from bankruptcy and
disestablishment. It is also
unlikely that the government
will reach its goal of thirty world-class institutions.
If even ten
institutions make lists of world rankings
by the year 2020, and if these institutions are not
limited to old imperial-national universities, these results will,
in historical
perspective, have been a major accomplishment.

The demographic issues

Analysts conjecture that the total population of Japan has stopped growing, peaking at just under 128 million. It has been reported that the total number of males has actually started to decline. Some total growth might still be possible because people, especially women, are living longer, and the number of long-term immigrants is actually growing (foreign nationals make up 1.5-2.3% of the population, depending on whom you count). Still, standard demographic indicators show that

-the birth rate is low (8.8 per 1000) and not much above the mortality rate (8.2 per 100),

-the fertility rate of 1.29 is low and going still lower, lower than Italy's.

Little wonder, then, that the population is predicted to decline to around 115 million by 2030 and 100 million by 2050.

In terms of the dominant capitalist ideology, the gravest effects of such a shrunken population would be decreased overall consumption and a labor shortage, leading to higher wage costs and lower profitability in producing goods and services. According to this scheme of things (barring mass immigration to Japan), capital's profitability would have to fall UNLESS the demographic decline were offset by concurrent increases in labor productivity and per capita consumption (hence the current obsessions over these concepts).

The most obvious solution is to move labor-intensive manufacturing and services to developing countries, where labor's productivity can be bought at a fraction of the cost in an OECD country--and where currency exchange rates are additionally favorable to profitability (even subject to unprecedented manipulation with institutional investment's speculation). The biggest problem for manufacturers with this 'off shoring' solution is that profits are often reduced due to exchange rate volatility, since even huge global companies have a difficult time manipulating the fiscal and monetary policies of other countries--and the counter-bets of other speculators. Also, managing complex operations across different cultures and political boundaries can prove to be fraught with unexpected difficulties and end up being a very expensive proposition for capital.

However, if we keep the current finance capitalism of US, UK, EU, Japan and East Asia in mind, we alternatively might predict capital's shift to still yet higher levels of leveraged speculation in any financial market it has access to in order to make up for the costly and potentially unprofitable production of goods and services--that is, if the current US's bubbles can be sustained much longer by infusions of government liquidity, government bailouts, nationalizations, direct subsidy (such as military Keynesianism), and the recycling of surplus dollars back into American financial markets from most of the US's major trade partners in Europe, the Middle East and Asia. (Note: this was drafted early this year, before so many leveraged speculative financial positions came unraveled in August-September.)

A second long-term negative effect to Japan's demographic decline, according to capitalism's actuarial 'science', would be a smaller tax base for governments, which most likely would be used to justify higher fees for and lower benefits from health insurance and social security pensions. A shrinking, aging population might also be used to justify drastic cuts in all social entitlements, especially if such cuts could help lower corporate taxes. At the same time, spending on Japan's high-tech-dependent but relatively small military (in terms of full-time, careerist personnel) might be increased in order to make hardware and firepower compensate for personnel shortages among the enlisted ranks. Furthermore, more money spent on the military would help appease the fiscally overdrawn US, whose extensive and hugely expensive 'security arrangements' for E. Asia dominate the 'special' bilateral relationship. The US's goal is to get Japan and S. Korea to pay for more and more of US military deployments in the region in order to maintain its 'hard' superpower status.

The demographic issues impacting higher education

Most importantly for anticipating the impact of demographic trends on higher education is the small and decreasing size of cohorts of 18-year olds. This group now at 1.2 million is roughly half of what it was 15 years ago,but it is set for further gradual declines every year for the next decade or more, although much less drastic than the annual decreases in size from 1993-present. To be more specific, the cohort of most significance for higher education admissions is the slightly smaller group of senior high school graduates (around 1.1 million, school attendance beyond junior high is not compulsory but certainly the social norm). This population of senior high graduates is the one from which tertiary institutions must attract most of their 700,000+ intake of first-year undergraduate students.

Senior high graduates as a cohort also make up the demographic group from which the private sector hopes to employ 150,000 - 200,000 full-time, without further formal higher education (though company training for inductees in Japan is intensive). Such close margins worry the administrators of universities and colleges because continuation rates from secondary to the tertiary level have remained at around 50% instead of rising to the hoped-for 65-70%. This disappointingly low and flat continuation rate has been mitigated somewhat by more and more young women choosing to do four-year degrees instead of the traditional two-year associate degrees awarded at junior colleges. Continuance in the higher education sector has also been given a boost by the establishment of 'mass participation', non-elite graduate schools nationwide; the continuation rate to graduate level is now over 12% and some growth is still possible (especially with the influx of foreign students).

In addition to worried administrations and admissions offices at tertiary institutions, profit-conscious companies fret over a tight job market or a disastrous shortage of applicants for full-time employment amongst the youngest workers (18-20 year olds). This is especially true of blue-collar manufacturing and construction. A lack of an excess of senior high leavers going directly into the national job market, could drive up wages across blue collar career structures. And Higher starting wages might create demands for higher wages at all levels of seniority, thereby cutting still yet further into the amount of profits that can flow into ownership's dividends and management's non-salary remuneration (such as variable bonuses or stock options).

Demographic cause to economic effect?

After decades of recording high annual economic growth, the past decade and a half has made Japan look like the G-7's and OECD's 'basket case'. The country's sense of crisis over this economic 'flat-lining' has often been explained as a result of the country losing its economic 'competitiveness' vis-a-vis the supposedly more dynamic, innovative, traits of American capitalism, its NAFTA trade bloc, and its 'post-industrial' workforce (e.g., part-time, temporary, non-manufacturing, lacking health care and retirement plans, etc). Neo-liberal reform agendas in Japan in answer to that sense of national crisis have been focused exclusively on expanding privatization and deregulation of the political economy, including, quite prominently, the national and public university systems.

The free-market neo-liberals and trilateralists argued that the liberalization and deregulation carried out during the 1980s had not actually created Japan's bubble economy, but, rather, had been an example of 'too little too late'. So they persuaded legislators and bureaucrats that the lengthy recession of 1993-present was Japan's last chance to restructure in order to compete, not only with the US, NAFTA, and a coalescing EU, but also with the rapidly growing and industrializing SE Asian 'Tigers' (e.g., Thailand and Malaysia) and China. So the neoliberal and free-market ideology of deregulation, privatization and liberalization, instead of being blamed for causing Japan's economic bubble of the late 1980s, was successfully advanced as a 'progressive' political agenda that would somehow save the country in the bubble's inevitable aftermath.

Unfortunately, deregulation, privatization, and liberalization have done nothing to counter the actual everyday problems that continue to deflate and depress the economy. These real issues would include:

-low interest rates on household savings, which suppress spending,
especially amongst the self-employed and retirees, who deplete their
savings just to get by,

-lowered benefits and higher contributions for both public and
private pensions,

-less coverage and higher fees for public health insurance schemes,

-an overvalued yen, which feeds deflation and cuts profits on
value-added exports,

-US-imposed unilateral trade quotas, restrictions, and exclusions
(on everything from agricultural commodities to computer processor
chips and operating systems),

-and an ongoing speculative financial bubble centered in the US,
which attracts short-term, volatile investments from Japan--
because the US's dollar deficits are E. Asia's dollar surpluses,
and these dollars are recycled on the hope of ever higher returns,

-increases in regressive consumption tax, from 3% to the current 5%.

The constant othering of Japan

Western coverage of Japan in the 1980s tended to emphasize the country as an alternative model for the adversarial trinity of relations across ownership-management-workers. The supposedly better aspects of the Japanese 'approach', although never universally specified in American business journalism, were used to explain the demonstrably superior quality of Japanese manufacturing, especially in automobiles and consumer electronics. It is doubtful that postwar corporate Japan's entrenched practices of male life-long, full-time employment or promotion based on seniority were seen as useful innovations by corporate America.

It seems more likely, though, that the idea of weak, accommodating company unions had great appeal to, for example, American automobile and parts manufacturers. And much of the reported high rate of profits at Japanese companies in the 1980s can be attributed to two causes: One, trade quotas (combined with a relatively weak yen) on much of Japanese manufactured goods helped keep them in short but over-priced supply in the lucrative North American market. Two, as Japan's economic bubble inflated and stock prices rose high and fast, companies reported more than just healthy profits, more than even a rise in profits, but rather they could boast an accelerated growth in profits that, like a sigmoid growth of bacteria in a test-tube, grew with greater intensity until the bubble burst around 1992.

Still, it might be argued that much of the outside world's admiration for Japan's economic prowess during the 1980s was a notably positive development in foreign perceptions of Japan and Asia. On the other hand, it proved a short-lived and still unrealistic form of othering Japan.

More stereotypical (what many in the west call 'critical') perceptions of Japan--regardless of the causes and significance of Japan's economic tumble in the early 1990s--were very quickly combined with nationalist economic agendas in the Anglophone countries and W. Europe to produce a pervasively negative view of Japan. By the end of the 1980s, Japan had come to be presented in the western media as an Asian development state gone off the deep-end. Japan was depicted in books, films and TV reports as some sort of bureaucratic, mercantilist, rogue out land sinisterly bent on economic domination of the world. This apparently was a belief held by many in the Clinton regimes. In the name of 'bilateral relations', its trade representatives would often attempt to force aggressive unilateral trade and monetary re-arrangements on Japan even after an overvalued yen and strangulating high interest rates had brought economic growth to a standstill.

Japan's real estate and stock bubbles of the 1980s and early 1990s burst after the government raised interest rates and severely tightened credit. Then the economy stagnated for over a decade. Annual growth from 1993-2004 was low, zero or even negative year after year, with the exception of the years 1996-7. Interestingly enough, during the time of the so-called Asia Crisis, Japan saw growth in GDP of over 2.5%.

Japan's economy during the period of 1993-present can be characterized largely by very low interest rates, low (or even negative) economic growth, and price deflation of consumer goods, the last of which seemed to have the biggest impact on company profits. When an economy becomes deflationary at the consumer level, capital loses much of its pricing power, which, as Japan of the 1990s shows, hits profits drastically.

The lack of even moderate inflation in the economy would seem to be a result of a combination of a typically strong yen (but with great exchange rate volatility) and, until George W. Bush took office, cheap oil. Paradoxically, because of this extended period of economic malaise and the social and political self-criticism that resulted from it, Japan came to be seen in the western media as a hapless, hidebound nation of political deadlock and managerial ineptitude, collectively unable and unwilling to change even when it was supposed to be on the verge of contraction and even depression.

It is not much of an exaggeration to say that news stories on Japan in the Anglophone world (excluding the required but little-read coverage of party and parliamentary politics) now fall into three general categories: (1) Japan as an ancient, inscrutable, exotic culture beyond 'rational' (=western) comprehension; (2) Japan as a very strange even ridiculously funny country that copies the 'west'; and (3) Japan as a static nation on the verge of some sort of economic and societal collapse, culturally unable to deal with globalization.

Othering Japan's higher education, too

The so-called demographic crisis facing Japan gets a lot of press in the country as well as outside, most importantly in the news media of English-speaking and European countries, who tend to latch on and perpetuate any negative trends in stories about Japan. Some causally link the gloomy outlook over the predicted contraction of population with the long-running crises over the political economy. Analysts and opinion-makers in the west look at the ongoing economic troubles of Japan and conclude that the country lacks the dynamism required to adapt to changes in the world economy precisely because of the demographic factors, such as an aging population, workforce, and even a pessimistic outlook (which is supposed to dampen the desire to have families).

Although there is an extremely limited market for English-language news analysis on most aspects of Japan, this is especially true of coverage of the country's enormous higher education sector of over 1200 of four-year universities and two-year colleges. For one thing, most people in the US, UK, Canada and Australia would automatically assume that their own country's universities and colleges are superior to any Asian country. After all, Asia is a major export market for services in higher education. Also, there is very little exchange of professors and advanced researchers between the US and Japan, the two countries with the world's most developed higher education sector. Advanced degree holders from the US working at a university or college in Japan almost invariably fit one or more of the following three categories: 1) teaching EFL, 2) teaching a basic curriculum subject in English, 3) doing post-doctoral or contractual scientific research. Therefore, there is not much interest in Japan's higher education system amongst academics in the United States (or the United Kingdom, Canada, Australia, for that matter)--except for jobs in TEFL and perhaps Japanese language study. Still, what coverage there is proves no exception to the more general pattern of western journalism depicting Japan as dysfunctional, disastrous and on its way down.

The few stories that have appeared in the most influential newspapers are, just as you might expect, negative in tone and content, making ominous predictions about enrollments and finances because the results of Japan's perennially low birth rates are now manifesting themselves in the demographics of college-age people.

In March 2006 a Financial Times article pointed out that, unlike American institutions, Japanese universities lacked large endowments (which also limits their ability to issue bonds) and lucrative investment strategies, with their money tied up in low-yielding, low-risk instruments, such as certificates of deposit, discount debentures, and national government bonds.

A New York Times article (which also ran in the International Herald Tribune) in mid-2007, in part, read:

...[T]he prospect of universities fighting to win students has prompted
a national
hand-wringing about the future of Japanese higher education.
Since the nation's first
modern university, the University of Tokyo,
was founded in 1877, Japanese universities and
their famously grueling
entrance exams have served as the society's main mechanism
sorting its youth, tracking the brightest into top business
and government jobs. Many fear
that this mechanism could be
impaired if universities lower their entrance standards to get

more students.

Admission to the twenty or so most elite universities (both national and private) has always been extremely selective because of the sheer number of applicants exceeding the relatively small number of slots for first-year undergraduate students. So it is not really plausible to think that this is Japan's "main mechanism for sorting its youth." On the other hand, the main criteria for entrance into lower-ranked universities might depend more on getting an average score in several important subjects on the 'Center Exam', which is a standardized test similar to the ACT in the US. National hand-wringing related to demographic issues is more likely to be about empty elementary schools in both rural and urban districts, a shortage of construction workers or hospital nurses, or the high cost of health insurance and medical care for the elderly. Also, for most students, it is not university entrance exams that serve as the main "sorting mechanism", but rather a combination of household incomes (since private schools are very expensive) and tested academic achievement as determined by the third year of junior high school.

About six months later the UK's top 'liberal' newspaper, the Guardian, followed with an article about the very same topic--the coming demographic crisis of higher education in Japan. Its opening and some of its later content read very much like the NYT piece; it even seemed to be a close paraphrase of the NYT/IHT article in places.

The Guardian piece did veer away from having only the same content and line of analysis as the NYT article in two ways. First, it gloated that the UK's tertiary sector could never suffer the same sort of demographic difficulties. What the Guardian article did not mention, though, was just how dependent higher education in the UK is on making hefty profits from 'exports' (i.e., international enrollments) in order to help maintain institutional finances, especially for programs that the government does not fund sufficiently. Second, it cited a 'Japan expert' on the coming demographic crisis, Oxford University anthropologist, Roger Goodman. The following is an excerpt:

Goodman reveals that 30% of four-year private universities had
failed to fill their student quota in 2004. The figure was 40% for
two-year universities. And this when the real demographic drop
has not yet kicked in....The Japanese government is quite happy to let
the market decide how the system is "hollowed out", says Goodman.
"It has no intention of baling these universities out.

Some in the national government--as well as admissions offices at the upper middle- and high-ranked universities--might welcome a major downsizing of the university sector, a cull of 200-300 of the financially and academically weakest institutions. But in an era of near-open admissions and the still-expanding massification of tertiary education, there may be problems with arguments for Social Darwinism and a survival of the 'fittest'.

First, university and college administrations in charge of institutions which have already been in operation for decades are simply not going to yield to the idea of ceasing operations just because some people think it might be best for the entire tertiary sector to have less competition. Rather it should be expected that they will do everything they can to maintain their existence.

Second, often it is the institutions without a long history from before WW II (and the prestige that comes with it) that create innovative courses of study. It is not that their academic standards are weak, but rather they lack the endowment and reputation to assure their survival when the government cuts subsidies.

In the early 1990s, when senior high populations had already peaked, policy makers even said that if the total of universities went from around 600 to 300-400 it would help assure the overall health of the tertiary sector. However, other dynamics were at work, not just the warnings and wishes of analysts, experts, bureaucrats and administrators of high-ranked universities. Instead of the higher education sector being reduced by 40-50% to match the demographics, the sector actually expanded during the 1990s to the present.

One wild card has been the major shift of two-year colleges (which had been mostly junior colleges for women) into four-year co-educational schools. This made sense from their perspective on survival because it greatly expanded their potential applicant pool and doubled their overall enrollment. Students attended for four years, not two, and both men and women could apply. Whether by accident or design, the result has been an unprecedented feminization of universities in Japan, as more and more young women graduating from high school choose four-year and even graduate-level studies instead of the traditional two-year degrees.

Still yet another factor working against a contraction of tertiary education has been local governments, especially in the more remote regions of Japan. While the national government might embrace laissez-faire policies to appease politicians, big business, and urban voters, local and prefectural governments, for economic and social reasons, will often do anything they can to keep a institution in their jurisdiction.

Oxford University's resident 'Japan expert', Prof. Goodman, pops up again in text bites in a widely syndicated Kyodo News Service article that appeared in February this year, not long after the Guardian piece. According to the Kyodo article, Goodman wrote:

"The Japanese higher education system is facing a contraction,
possibly better described as an implosion, of a type not previously
ever seen before."

It also attributes to Goodman the following:

In a rather pessimistic outlook, he said, "There is little evidence that
the vast majority of the lower-level, private four-year universities
will be able to rise to meet the demographic challenges that currently
face them...."The government has made it clear that, as with many banks,
it has no intention of bailing them out."

On the contrary, local and prefectural governments have scrambled to keep struggling regional institutions operating. It might be worth pointing out that if the Japan's national government subsidized higher education with even a quarter of what it put into managing large bank bail outs, consolidations, and sweetheart takeover deals for private equity groups like it did during the last financial crisis, Japan's many universities and colleges would be more than able to meet the demographic and financial challenges of the next decade.

Goodman goes on to give some of the usual stereotypes about higher education in Japan. These are worth looking at as typical examples of how experts on Japan make begging the question their stock and trade. For example:

"We are...likely to see a vigorous and open discussion about what
is the role of higher education in Japan, and a serious challenge
to the notion that it is primarily a site for social rather than intellectual
or vocational development," he noted.

This is an often-repeated claim made about higher education in Japan. One version of the claim says that Japanese students study very hard during senior high school and then use the four (or more years, now that graduate school is popular) of university to take a break from hard work, before they become workaholic careerists for Japan, Inc. This is begging the question because we are supposed to assume that at least two very questionable assumptions are true before we even discuss what the roles of higher education in Japan actually are (i.e., that university students in Japan do not study, that Japanese universities, desperate for students, have forsaken academic standards and vocational utility so their students can socialize and become conformists ready for life in corporate Japan).

Another commonly begged question is the assumption (Goodman himself makes it) that most university graduates go on to become employees for life at one company. This simply isn't the case anymore for millions of people in their twenties and thirties. Every year, amongst those in their twenties, one in four changes their job. Many in this age group (both young men and women) change companies several times before deciding on a career path. A large and still growing number juggle temporary work, freelancing, self-employment and various part-time jobs in Japan's 'post-industrial' metropolitan economies--huge conurbations like Tokyo-Yokohama, Nagoya-Gifu City, and Osaka-Kyoto-Kobe, which account for nearly half of Japan's total population.

Stereotypical assumptions--such as, Japan's universities are playgrounds, or most Japanese have lifelong employment at one company--lead to weak and even wrong analysis of higher education here for at least several reasons. For one thing, it would be impossible to show any mass higher education system in the developed world where 'social development' was not a major focus, even if one did not embrace social constructivist approaches to education.

Also, during the past 30 years, Japan's universities seem to have made a confusing and still unfinished transition from being a fairly elite, highly selective, partially meritocratic system to being a 'massified' one. That is something of a simplification itself, since the old system clearly favored students of higher socio-economic class. Having a dependent attend academic senior high schools, juku (cram schools) and yobiko (university prep schools) costs households thousands of dollars a year. Still, under the elite system, there was limited access for a relatively select number of senior high graduates who had already demonstrated high achievement in maths, sciences, and native language literacy before they entered university.

All that has changed drastically. Wave after wave of massification of the tertiary sector since the 1970s has created an unprecedented number of teaching and research posts for academics and scientists of elite background. These personnel still educate and train the high-level students that enter their universities and programs; many of their students go on to become civil servants, high school teachers, researchers, and even university faculty. The problem is that far too many teaching at the universities have not been prepared for or responded to the teaching requirements of a mass access system, which admits hundreds of thousands of students who do not have high academic achievement at the senior high level and do not have the same career aspirations as their teachers had.

Goodman makes some suggestions for higher education in Japan to avoid their impending demise. He argues that

...struggling Japanese universities should look to alternative
sources of income by undertaking more research projects and
raising endowments. One way of attracting more students,
Goodman said, is to conduct more lectures in English and
employ more foreign staff.

These suggestions do not seem to be made with strong reasons backing them up. Most private universities and colleges in Japan (of the sort for whom Goodman predicts disaster) are limited to teaching and do little research, unless they had been founded as private institutes of technology after the war. The bulk of public funds for research in science and technology goes to a handful of the top former national universities. Unsurprisingly, it is the same institutions that successfully compete to attract private funds for cooperative research and joint ventures in commercializing new technologies. Outside of graduate level courses, which admit a high percentage of international students, lectures conducted in English will have little appeal to students who have a limited ability in the language. This is true not only of Japanese students but Asian ones from China, S. Korea, and Taiwan, who comprise the vast majority of internationals now studying here.

Based on average TOEFL and TOEIC scores, it can be concluded that the vast majority of university students in Japan could not function in an English-language learning environment, not even for one taught course. English-language content programs are at best a narrow niche market, the demand for which is met by a small selection of courses at universities--typically in faculties of science. The Japanese students who go abroad to learn EFL and experience firsthand another culture do so for relatively short periods; they would have little or no interest in doing this in Japan.

With the exception of a new for-profit distance learning university, private universities and colleges in Japan are chartered and organized as a type of non-profit business. This does not mean that they can not have a surplus of income over expenditure, but there are no shareholders entitled to dividends and owners' equity. Some private institutions are turning to income-generating business operations, such as conference facilities, hotels with hot springs, health services, specialized consulting, and joint ventures with private enterprise.

If there is one sector of education in Japan that can avoid the devastation of the demographics, it is higher education. This is because it enjoys much greater administrative freedom to develop diversified business plans.

Higher education is the one level of schooling that is not locked into a very specific age group or cohort for its enrollment. In any given year there is a population of ronin (literally, master-less samurai) who will at great expense take one or more years off from the rest of life to devote themselves to taking and passing the entrance exams of the highest-ranked, most selective elite universities (with University of Tokyo being the ultimate goal). The number of ronin annually approaches the size of the entire intake of all universities in Japan, exceeding 500,000. Moreover, there are close to one million NEETs (young people Not in Employment, Education or Training).

One reason why so many young people (18-35) do not continue their education is that the cheaper national and public universities do not accept them, but they can not afford the greater expense of a private one. Due to a relatively low level of public subsidy, private universities on average charge around 8000 USD in annual tuition, about 45% higher than the former national universities (which also hiked their tuition by 10% after denationalization in 2004). It costs about 20,000 USD a year to attend a university. Even if NEETs or their parents manage to cover such costs, many doubt that a university degree from a low-ranking institution could ever result in a large enough rise in future income to justify the time and expense.

Conclusion: The future is still contingent

The next decade is sure to be a challenging one for universities and colleges in Japan. While it seems fairly easy to look at some of the facts and make a disastrous projection, it may also be the case that there is some exaggeration in the alarmist prose of Anglophone academics and journalists. If Japan's huge higher education sector contracts by 15% (the lower end of Goodman's prediction), that would hardly amount to an 'implosion', which is a term that evokes the image of some sort of explosive compression or of an edifice falling in on itself. In 2000 I predicted some sort of 'collapse' of two-year colleges because more and more young women were choosing four-year universities instead. Rather than a collapse, I watched as hundreds of institutions transitioned into four-year co-educational ones, many with innovative courses of study that have so far been successful in drawing students.

I predict that the higher education sector has another decade to become something other than what it now is, which admittedly is over-built but undifferentiated for learners. Much of the system's current malaise is that it is run with an elite set of attitudes, expectations and practices while the socio-economic reality is that university-level education has largely replaced the senior high diploma as the minimum for entry into the workplace of post-industrial capitalism. Higher education is now massified, yet institutional consciousness is locked into a false image of its status and roles.

It is beyond my ability to say what higher education in Japan should become or will become, but I predict here that there will be no collapse or implosion. The enrollments and financial stability of non-elite institutions and new courses of study will turn more on the employment rate of their graduates than any other factor that could be added to an analysis of higher education. What follows is not a bullet-point list of predictions but something more like current realities, possibilities, and my own recommendations. Japan's universities and colleges will survive and possibly even flourish if some of the following come to be realized:

1. Teacher training colleges within the former national university system need to be restructured and their missions redefined. As they now exist, they are zombie institutions--they are dead, they just do not know it yet. Their post-war role has been to train annually thousands of teachers and non-teaching public civil servants. There are not enough students at the K-12 levels to justify training so many teachers. And public administration majors from these colleges face a bleak employment picture as well. That is because the national government during the period of 2004-2006 has largely abandoned two of its largest groups of civil servants, jettisoning both its national universities and its postal system (which was a huge government organization that successfully competed with the private sector in banking and insurance as well as its mail delivery operations). With 35 civil servants per 1000 persons, Japan has far fewer national and local civil servants than the US (81/1000), the UK (73/1000) or France (96/1000) and that figure is set to go still yet lower.

2. Two-year/junior colleges will continue the transition towards tighter integration with the more extensive four-year system of universities and colleges. First, the main reason why the total of two-year institutions is now down to 435 from the 559 of six years ago is the conversion to four-year colleges. Second, those that do not become four-year institutions may be able to survive and even thrive by becoming 'feeder' schools for other universities. They may also benefit by establishing more practical programs of study that result in qualifications leading to careers, such as nursing, physical and speech therapy, and medical technicians.

3. Japan's higher education will continue to internationalize. There are now about 120,000 international students studying in higher or further education. There have been calls for expanding this to 350,000 by 2020. This might sound ambitious, but the goal could be reached if universities with engineering programs go abroad. There is a critical shortage of engineers for manufacturing and construction in China, Thailand, Vietnam, Malaysia, Indonesia and the Philippines. For example, some of the numerous Japanese universities with science faculty (singly or in consortia) might establish two-year study programs in Thailand and Malaysia at which students from all over Asia can prepare to complete a four-year degree at a Japanese university.

4. Whether at the national or local (prefectural or metropolitan) level, Japan needs to increase its public spending on higher and further education. Public expenditure on this sector is only around .5% of GDP, which is also less than half of what government in the US spends. Rather than funnel increased spending into further subsidy of scientific research and advanced teaching at elite universities, the government should put forward a plan to help ensure the survival of smaller regional institutions, no matter what their original charter (national, public, private). While small, financially unstable institutions located in 'greenfield' sites (in much the way bubble era golf resorts were) might not be worth saving, many universities and colleges in the remote regions outside the Pacific-Inland Sea conurbations are. If government here could increase its commitment to higher education to a level of 1.0 of GDP, it could have a distinctive, accessible, and more diverse, world-class higher education system for its entire population instead of a small group of world-class universities serving a narrow socio-economic elite in Tokyo.

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