Section 4 Strategic moves for the growth of manufacturing industries/ approaches to and challenges for the development of prospective areas

Transcription

1 Section 4 Strategic moves for the growth of manufacturing industries/ approaches to and challenges for the development of prospective areas In times of global recession, it is necessary to pursue strategic initiatives with a view to future growth. It is critical to develop a social environment in which the next generation products which may create potentially large demand, such as next generation automobiles, solar cells, service robots, etc. are born in Japan and spread to the global market. Promising new fields (i) Automobiles In order to enhance Japan s competitiveness and realize a low-carbon society, it is very important to develop and disseminate next-generation automobiles that take advantage of the country s superiority in terms of technology and environmental friendliness. Although Japan is now leading the world with regard to hybrid vehicles and electric vehicles, other countries are catching up fast. Japan needs to continue to develop technology in the relevant fields and to take a comprehensive approach, including in the development of the fuel supply infrastructure. Fiscal year Hybrid cars [Chart 2-59 Roadmap for Technologies Related to Next-Generation Automobiles and Fuels] New hybrid cars Battery Electric cars Electric commuter cars High-performance electric cars Plug-in hybrid cars Plug-in hybrid cars High-performance plug-in hybrid cars Fuel cell cars Fuel cell cars Next-generation fuel cell cars Biofuels Biogasoline Bio hydrofined diesel Cellulose-based biofuels Clean diesel cars Clean diesel cars Advanced road traffic systems ETC VICS Automated driving/fleet driving Source: Compiled by METI based on various data [Chart 2-60 Demonstration Tests for the Diffusion of Fuel Cells] In order to promote the diffusion of fuel cell vehicles and hydrogen stations, demonstration tests have been conducted in which a fuel cell vehicle ran on public roads so that its performance could be evaluated and problems could be identified. Demonstrative research concerning the hydrogen supply infrastructure Kasumigaseki station ~ Hydrogen supply ~ Chubu region Demonstration driving tests for fuel cell buses with an eye on future diffusion (in cooperation with MLIT) Demonstration tests for fuel cell buses City gas conversion, off-site hybrid-type hydrogen stations, high-pressure hydrogen stations Common Public relations/ educational activities Formulation of long-term strategies for public relations and educational activities World s first fuel cell limousine service Demonstrative research on fuel cell vehicles Kansai region Demonstration test for a new method of hydrogen use and the fuel cell system Verification of emergency facilities Stations for urban areas Simplified hydrogen supply facilities (satellite stations) 35 Tokyo metropolitan area Demonstration driving tests with an eye on future diffusion Fleet driving of fuel cell vehicles by a third party A variety of raw materials and manufacturing methods and highpressure hydrogen stations Source: Compiled by METI based on various data

2 Promising new fields (ii) Photovoltaic power generation While the market for photovoltaic power generation is expected to expand significantly on a global scale, international competition between manufacturers is intensifying. In order for Japan to effectively promote the introduction and spread of photovoltaic power generation and maintain and enhance the competitiveness of its relevant industries, the country needs to ensure a stable supply of raw materials such as silicon, and pursue further development of electricity generation materials and peripheral equipment. [Chart 2-61 solar cells: Share by World s Major Manufacturers] Others (Japan) 2.7% Schott Solar (Germany) 4.4% Others 33.7% Shell Solar (U.S.) 5.2% FY2004 Solar cell production (1,194MW) Sharp (Japan) 27.1% Kyocera (Japan) 8.8% Sanyo Q-Cells Electric (Germany) 6.3 % (Japan) 5.4% Japan s solar cell manufacturers held over 50 percent of the whole world market in 2004, but diminished to approx. 25% in Other 45.4% Mitsubishi Electric (Japan) 6.3% FY2007 Fuel cell production (3,733MW) Others (Japan) Sanyo Electric 5.0% (Japan) 4.4 % Q-Cells (Germany) 10.4 % Source: Compiled by METI based on PV NEWS Sharp (Japan) 9.7% Suntech (China)8.8 % Kyocera (Japan) 5.5% First Solar (U.S.) 5.5 % Motech (Taiwan) 5.3% [Chart 2-62 Japan s Targets for the Introduction/Diffusion of Photovoltaic Power Generation Systems] 13 million kl (53 million kw) 3.5 million kl (14 million kw) Non-household sectors accounting for around 20% The household sector accounting for around 80% Household use: About 5.3 million households 7 million kl (28 million kw) About a 20-fold increase from million kl (1.4 million kw) 3 to 4 years earlier that previously planned Start of the subsidy program for household photovoltaic power generation Implementation of a new purchasing system The household sector accounting for around 70% Non-household sectors accounting for around 30% Source: Compiled by METI based on various data About 40-fold increase from 2005 Promising i new fields (iii) Energy-efficient homes Amid the growing need for measures to deal with global warming, it is important to expand the housing market with a focus on energy conservation with regard to both existing and new homes. In order to promote energy-saving efforts in the housing sector, it is necessary to pursue an appropriate combination of support measures and regulations. [Chart 2-63 Design of Model House Meeting Next-Generation Energy Efficiency Standards ] Thickness of high-performance glass wool: 100 mm *Example of the specifications adopted by a housing maker (from the Kanto to Kyushu regions [Region IV)) Ceiling Multi-layer glass for heat insulation/crime prevention + air-tight heat insulation aluminum sash Open apertures Walls Glass wool thickness: 100 mm Polystyrene foam thickness: 57 mm 36 Floors Source: Compiled by METI based on various data

3 Promising new fields (iv) Service robots In the nursing care and welfare sectors, there are growing expectations for supplementation and support of human functions by robots. To realize such services, it is necessary to promote cooperation between the public and private sectors to develop technology that ensures personal safety, establishes safety standards and rules, and is in consideration of standardization (ISO standards). [Chart 2-64 Examples of Life-Support Robots that Support and Supplement the Functions of Humans] (i) A mobile task type (Example) A chair equipped with a robot arm (ii) Wearing type (Examples) Power-assist suits A robot that helps with a transfer from a bed to a chair 業補 (iii) Riding type (Example) Posture control wheel-chair [Progress in international activities] Deliberation toward establishing a standard in 2011 has been proceeding under the theme Robots and robotic devices Safety requirements - Personal care robot. Among the participating countries are Japan, South Korea, the United Kingdom, France, Germany, the United States, and Sweden. Technology to support next-generation industries (i): Micro-Electro- Mechanical Systems (MEMS) Source: Compiled by METI based on information provided on the websites of various companies MEMS is an essential device that supports the creation of high value added (advanced functions, safety measures, etc.) for a variety of products, including automobiles, mobile phones, and medical equipment. The market for MEMS is expected to significantly expand in the future. While MEMS integration technology has already advanced around the world, the importance of activities to realize the fusion of MEMS with technologies in other fields (e.g. biotechnology) is growing (to develop next-generation MEMS). [Definition] Micro-Electro-Mechanical Systems: Miniscule structural parts that are manufactured with fineprocessing technologies, such as the semiconductor processing technology, and that have electrical, mechanical, and optical functions. [Characteristics] MEMS have movable parts and are capable of handling various physical quantities, including electricity, light, and acceleration. MEMS are ultra-small, high-precision, and highly-reliable basic devices that can be used in a variety of products, including automobiles, mobile phones, and medical equipment. [Chart 2-65 Market Development for Next-Generation MEMS and Images of Future Products] Monitor 定常健康モニター of health stability 皮膚下で血糖値を Quick and precise measurement 即時 正確モニタ of blood sugar level just under the 適切な量 タイミング skin Injection でインスリン投与 of insulin in the appropriate amount and at the appropriate time Semi-permeable membrane 半透膜 Biocompatible 生体適合性ポリマー polymer 電源 Power source アンテナ Antenna 制御回路 Control circuits センサ MEMS sensor MEMSポンプ MEMS pump φ5mm 12mm φ5mm 12mm( (one-tenth カプセル内視鏡の the size of a capsule 1/10) endoscope) 37 Blood stream Vein Sustained measurement of the blood sugar level by an MEMS device located within the blood vessel 体内長期間安定モニタ [Intracorporeal long-term monitor] 生体適合性膜 Realized by: 超小型 省エネセンサ Biocompatible membrane 超小型蓄電池 Ultra-small, energy-efficient により実現 sensor Ultra-small storage battery ガンや生活習慣病の早期発見 [Early detection of cancer and lifestyle-related DNA 等を1 diseases] 分子レベルで検出できる 超高感度センサで実現 Realized by an ultra-sensitive sensor that can examine DNA, etc. at the molecular level Source: Compiled by METI based on data prepared by Micromachine Center

4 Technology to support next-generation industries (ii): Power devices As IT and electronics equipment have now spread through our society, the use of green IT will not only enable us to deal with global environmental problems but will also create various types of demand and benefits, and enhance the competitiveness of society as a whole. Semiconductors that are used in automobiles and solar cells and that enable highly efficient electricity conversion (power devices) realize significant energy conservation by enabling energy to be supplied according to necessity. Consequently, there is a need to develop highly efficient power devices that exceed the existing performance limits. [Chart 2-66 Forecast of the Market [Chart 2-67 Forecast of the Market for Solar Cells] for Electric Vehicles, etc.] New vehicle sales in 2008 [Chart 2-68 Rate of Introduction for Power devices in Motors] 90% Power devices have not been introduced Market size in 2007 (5.08 million vehicles) Approximately 1.7 trillion One in 50 new vehicles sold was an electric vehicle, etc. (2%) New vehicle sales in 2020 Half of new vehicles sold will be electric vehicles, etc. Motors account for about 60% of total electricity consumption. However, only 10% of motors are equipped with power devices. Forecast market size in 2030 Approximately 25 trillion (50%) (Action Plan for Achieving a Low-Carbon Society) Introduction of power devices has not advanced in the industrial sector, including plants that use large motors, because of such factors as high costs (initial investment) and reliability issues (the necessity of low loss, large electric current, highspeed movements, high destruction resistance, operation under high temperatures, high pressure resistance). Motors Power devices have been introduced 10% Power devices are mainly used in consumer and commercial products such as air conditioners and refrigerators. (Estimate by Nomura Securities) [Chart 2-69 Loss Reduction Effect Realized by the Introduction of Power Devices in the Industrial Sector] Industrial-use products Electricity consumption can be reduced by around 25-35% by the introduction of power devices comprised of the new material SiC. Inverters Exceeding the performance limits of Si-based power devices The development of SiC-based power devices will realize high energy-saving effects, improved reliability, and miniaturization. In addition, reduction of manufacturing costs will help the spread of power devices. There are expectations for the energy-saving effects, the development of new products enabled by miniaturization and the effects of innovation following the replacement of Si-based Si based power devices with SiC SiC-based based power devices. Power condensers for solar cells Motor drives Uninterruptible power sources Power condensers for wind turbines Technology to support next-generation industries (iii): High-temperature superconductivity International competition is intensifying to develop wire materials for high-temperature superconductivity with a view to the reduction of the environmental load in the form of energy conservation and cuts in CO2 emissions. At the same time, international competition is also intensifying in the development of superconductivity equipment that takes advantage of such characteristics as high currents, strong magnetic fields, and miniscule electric currents. The public and private sectors need to cooperate in significantly enhancing the ability to develop wire materials, developing superconductivity equipment ahead of other countries, establishing international standards (e.g. IEC), and deliberating how to apply existing rules to superconductivity equipment. Superconducting Magnetic Energy Storage (SMES) Superconductin g cable Source: Chubu Electric Power Source: Sumitomo Electric (i) Energy/power sector Supply and management of highly-reliable, high-quality electricity that meets the need for diversified power sources Establishment of a society in which there is harmony between the environment and energy Supercondu cting open MRI Supercond ucting motors Source: Sumitomo Electric Energy decay Discharge heat energy = (electric current) 2 resistance Hitachi Medical (ii) Diagnosis/medical sector Output electricity energy Realization of advanced medical equipment that meets the need for early and precise diagnosis and drug discovery Normal metals (e.g. Cu) Superconductivity (zero resistance) Realization of health and longevity No energy loss Superconducting technology that contributes to society [Concept of a society in 2020] Establishment of a world-leading advanced industrial infrastructure Realization of an advanced industrial infrastructure through reduction of size and weight, higher speed, enhancement of productivity, etc. (iii) Industrial/transportation sectors Technology related to superconducting materials (wire materials, devices, etc,) Input electricity energy Size of the market for the superconducting technology industry (2020) Domestic market: Approximately billion Foreign markets: Approximately 2,511 billion Realization of an advanced information and communications society Comparison of power loss Power loss for existing power distribution (275,000 V) is 740kW/km. Development of information and communications equipment capable of handling growing networks and processing vast information at high speeds Power loss for superconducting power transmission (alternating current) is 200kW/km, or one one--third of the loss for existing power distribution. (iv) Information/communications sector Freezing/cooling technology Source: Adapted from the strategy map for superconducting technology Source: Strategy map for superconducting technology 38 Power loss for superconducting power transmission using direct current is 20kW/km, or one one--tenth of the loss for superconducting power transmission using alternating current.

5 Chapter 3: Strengthening the Manufacturing Base by Developing Human Resources as the Core for Monodzukuri Section 1 Securing and training of core human resources in manufacturing industries In the severe business environment for manufacturing industries, training and securing core human resources at the manufacturing site and succeeding skills are critical challenges in order to meet the need for high quality and accurate products and the delivery of goods within a short duration. 1. Role of core human resources at the monodzukuri sites Regarding knowledge and know-how required of core human resources in the manufacturing sector, companies tend to place a priority on managerial ability to control production lines, such as quality management, streamlining and improving production lines, and maintaining and improving the facilities, whereas specific skills and know-how, such as high-precision machining, electronic/electrical circuits, and mechatronics, are preferred by a relatively small number of companies. By type of core human resources, the need for on-site skilled workers with leadership skills and multiple handling skilled workers are stronger than those for highly experienced workers. [Chart 3-1 Knowledge and Know-How Required for Core Human Resources] Quality control Streamlining and improving production lines Maintenance and improvement of equipment and facilities High-mix, low-volume production (%) [Chart 3-2 Type of Desired Core Human Resources (multiple answers)] On-site workers with leadership skills Multiple handling skilled workers All-around skilled workers (%) Designing High-precision machining Multi-machine handling workers 42.6 Electronic electric circuits 18.0 Highly skilled workers 32.2 Environmental management Mechatronics Measurement/control Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training Techno-workers Workers with managerial skills Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training Note: The types of skilled workers are summarized below: 1. On-site skilled workers with leadership skills: As an on-site production leader, he/she is able to manage production lines including personnel assignment and is responsible for their supervision. 2. Multiple handling skilled workers: A skilled worker who manages various manufacturing process in overall production lines (including changing of preparatory work, facility maintenance, etc.) 3. All-around skilled workers: A skilled worker who can operate in all the manufacturing processes including facility improvement or remodeling as well as participate in test production, development, and designing of new products 4. Multi-machine handling workers: A skilled worker who can operate in a series of manufacturing process, including facility improvement or remodeling by using similar machines in the production line 5. Highly-skilled workers: A skilled worker who can exercise advanced skills in specific areas. 6. Techno-workers: A skilled worker who has acquired advanced technical knowledge based on their experience in basic manufacturing processes and business operations. 7. Workers with managerial skills: A worker who can manage overall production activities and undertake parts of sales operations, financial affairs, and other managerial matters. 39

6 2. Training and securing core human resources About 70% of business sites secure core human resources mainly by training their own employees, while slightly less than 30% do so mainly through other means, such as hiring workers in mid-career. The smaller the employing company is, the stronger the reliance on hiring workers in mid-career. The percentage of companies believing that workers need 5 to 10 years of experience to become core human resources and the percentage of those believing that 10 to 15 years of experience are necessary stood at just over 40% each. Of the business sites that secured core human resources by training their own employees, about 60% selected employees to be trained as core human resources, placing them in leadership positions at an early stage of their careers and assigning difficult tasks to them. [Chart 3-3 Methods of Securing Core Human Resources] All company sizes Companies with a workforce of 29 or fewer employees Companies with a workforce of employees Companies with a workforce of employees Companies with a workforce of employees Companies with a workforce of 300 employees or more (%) Relying exclusively on the training of their own employees Relying more on the training of their own employees than on other means Relying more on means other than the training of their own employees Relying exclusively on means other than the training of their own employees No reply Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training [Chart 3-5 Presence or Absence of the Selection of Workers to Be Trained as Core Human Resources] No reply 1.4% [Chart 3-4 Number of Years of Experience Necessary for Workers to Become Core Human Resources] 20 to 24 years 2.1% 15 to 19 years 10.5% 10 to 14 years 44.4% 25 years or more No reply 0.7% Others 0.3% 0.6% 5 to 9 years 41.4% Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training [Chart 3-6 Measures for Development of Core Human Resources (multiple replies allowed)] (%) Placing workers in a leadership position early 63.1 Assigning workers to difficult tasks 55.3 Not selecting 37.0% Encouraging workers to acquire the ability to identify customer needs Providing opportunities to develop management skills Assigning workers to tasks in fields where they excel Encouraging workers to acquire advanced qualifications Providing opportunities to build human connections Selecting 61.7% Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training 40 Others 1.9 Source: The Survey on the Human Resource Development and Succession of Skills (2009), commissioned by MHLW

7 Slightly over half of the business sites secured core human resources successfully. The rate of securing human resources in medium-sized companies is a little less than that of large-scale companies. Recruiting and retaining competent human resources is regarded as a critical factor for successfully securing core human resources, and this trend is strong particularly among SMEs. Meanwhile, effective implementation of OJT and environment for training skilled workers affect the retention of competent human resources at large companies. [Chart 3-7 Assessment of Procurement of Core Human Resources] (%) Total size Companies with less than 29 employees Companies with employees Companies with employees Companies with employees Companies with more than 300 employees Going very well Going well Not going well Not going well at all No answer Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training [Chart 3-8 Causes for Successful and Unsuccessful Procurement of Core Human Resources (multiple answers) ] [Successful causes] [Unsuccessful causes] (%) Retention of full-time skilled workers Motivation of full-time skilled workers Office atmosphere to train skilled workers Effective implementation of OJT Continuous employment of senior skilled workers Companies with less than 29 employees Companies with between 30 and 299 employees Companies with a workforce of 300 or more employees Total size Recruitment of capable human resources Capability development management of full-time skilled workers Effective implementation of off-jt and support for selfdevelopment Source: Research on Training, Development, and Treatment of Skilled Workers in Monodzukuri Industry the Current Situation in Machines and Metallurgical Industry (2009), Japan Institute for Labour Policy and Training 41

8 3. Skill succession at monodzukuri work sites A little less than half companies feel that they face skill succession problems. In terms of the scale of business, the rate of large-scale companies that feel they have problems with skill succession is higher than that of small and medium-sized companies. Whereas, the latter feel that they will encounter the same problem in the future. The measures taken by small and medium-sized companies to ensure the transition of skills to the next generation include the succession of skills via daily operation and employment extension of veteran employees. In addition, medium sized companies with 200 or more employees tend to adopt a multilateral approach including visualization and standardization of skills and know-how. [Chart 3-9 Skill Succession Problems (Yes or No)] companies in terms mber of employees Size of of num Total size Over (%) Yes No Unknown Source: Basic Survey of Human Resources Development MHLW (2009) [Chart 3-10 Impact of the Loss of Skills Because of Retirement of Veteran Employees] There is not so much impact (40.3%) There is some impact (24.7%) There is no impact at the moment but will become a problem eventually (35.0%) Source: Strengthening the Foundation of Monodzukuri and Skill Succession, Japan Finance Corporation for Small and Medium Enterprise Research Institute (2008) [Chart 3-11 Measures Taken by Small and Medium-sized Companies for the Skill Succession (multiple answers)] Skill succession via daily operation Employment extension for veteran employees Visualization and standardization of skills and know-how's (%) Continuous employment and securing of young human resources Skill succession by designed OJT Development of skills and know-how database Companies with less than 29 employees Companies with employees between 30 and 199 Companies with employees between 200 and 299 Total size Source: The Survey on Human Resource Development and Succession of Skills (2009),commissioned by MHLW 42

9 4. Employment status of regular employees and training of human resources An analysis of the results of a survey commissioned by MHLW indicates that companies with a high percentage of regular employees are more successfully training human resources and enjoying relatively good business management conditions even though their company sizes are smaller. As we have not analyzed the cause-effect relationship, we must be careful in interpreting the results. However, generally speaking, it may be argued that some companies are achieving strong business performance without cutting personnel costs through the employment of non-regular workers despite the general tendency to pursue scale advantages, and are sticking with the policy of employing regular workers and attaching importance to training human resources. This approach may provide clues to some of the companies struggling with problems related to training and securing human resources and succession of skills. [Percentage of regular employees] [Chart 3-12 Situation of Human Resource Development and Business Management by the Percentage of Regular Employees in the Manufacturing Division] Less than 50% More than 80% Less than 50% More than 80% Less than 50% More than 80% 0% 20% 40% 60% 80% 100% 18.4% 46.9% 34.7% 24.9% 41.3% 33.8% 0% 20% 40% 60% 80% 100% 43.4% 51.7% 66.3% 76.8% 28.3% 25.6% 23.5% 0% 20% 40% 60% 80% 100% 28.3% 22.7% 10.2% 18.2% 4.4% 0% 20% 40% 60% 80% 100% State of procurement and development of core human resources Successful in procuring and developing core human resources Failing to procure and develop core human resources Neither successful nor failing Necessity of passing on skills Necessary Rather necessary Not very necessary Not necessary Sales trend Increasing Flat Decreasing Operating profit trend Less than 50% More than 80% 47.9% 58.9% 26.0% 26.4% 26.0% 14.7% Profitable Break-even Loss-making Source: The Survey on Human Resource Development and Succession of Skills (2009), commissioned by MHLW 43

10 5. Challenges to be overcome to develop human resources at monodzukuri work sites Compared with other countries, Japan has traditionally recognized high value in monodzukuri work site operations, manufacturing skills, and hard work, and has maintained and passed on a high level of skills. In order to ensure the further development of the manufacturing industry, the key will be to train and secure core human resources who support it and pass on skills. As it has become increasingly important at monodzukuri work sites in recent years to streamline and improve quality control and production lines, rather than enhancing specific skills, the need is growing for core human resources with onsite leadership skills and workers with skills related to various processes. *SMEs place a priority on recruitment and retention of workers as the keys to securing core human resources, whereas large companies place a priority on effective implementation of OJT and a favorable environment for training skilled workers. Many companies are worried about problems related to skill succession. It is important to engage in visualization and standardization of skills in addition to passing on skills through daily business operations and extending the employment of veteran employees. In I order to secure and train core human resources easily, companies should effectively implement OJT, streamline the environment to train skilled workers, and raise the motivation of skilled workers to develop their ability. Moreover, it is necessary to promote the measures to improve the worksite environment for training human resources and other elements of the work environment to make hiring and retention of competent workers easy. Quite a few companies are currently obliged to suspend business because of the severe business conditions. They should consider now to be the best time to reconsider the best location for future business operation and focus on employee training and education. This can be considered a good opportunity for small and medium-sized companies to obtain competent human resources. 44

11 Section 2 Skill development measures related to monodzukuri (Public job training) As there are few private-sector education and training organizations in the manufacturing sector, including the automobile, electrical equipment, and machinery industries, public job training is expected to play a particularly important role in this sector. Public job training programs implemented by the government are intended to train workers in the use of the kind of sophisticated machinery which has actually been installed at manufacturing sites to have them acquire advanced skills, so that they can serve as core human resources of the manufacturing industry in the future. At the same time, the training programs provide training for existing workers through training courses related to advanced knowledge and skills in a wide range of fields, such as adaptation to new technologies and improvement of production processes. Subjects of training courses for existing workers include the most advanced skills of machining difficult-to-machine materials and new materials, practical skills for lead-free soldering, investigation of the causes of hydraulic system problems and their improvement, and practical on-site management and improvement for efficient production. [Chart 3-13 Examples of Training Existing Workers in Adaptation to Technological Innovations and Improvement of Production Processes] Training course for adaptation to new technologies (Example) The most advanced skills for machining difficult-to-machine materials and new materials Technological innovation spurred by intensifying international competition and diversification of materials associated with an advance in the performance of industrial products (Example) Practical skills for lead-free soldering As the disposal of equipment containing lead soldering causes soil contamination, there are international restrictions on exports of such equipment. To acquire skills that quickly enable processing of difficult-to-machine (e.g. stainless steel and titanium alloys) and new materials (e.g. shapememory alloys) which are diversifying in properties and the production of new products To acquire skills that quickly enable the establishment of a lead-free soldering system in line with a technology shift from lead soldering to lead-free soldering The most advanced skills for machining difficult-to-machine materials and new materials [Training duration] 18 hours [Contents of training] How to select machining tools suited to the properties of difficult-tomachine materials, machining skills, and how to deal with machine problems Practical skills for lead-free soldering [Training duration] 12 hours [Contents of training] Scientific knowledge concerning hand soldering, problems related to leadfree soldering, measurement of temperature changes, causes of defective soldering, and countermeasures Training course in improvement of production processes (Example) Investigation of the causes of hydraulic system problems and their improvement A breakdown in a machine tool caused by a hydraulic system problem leads directly to a decline in productivity. (Example) Practical factory-floor management and improvement for efficient production It is necessary to quickly establish an efficient production system capable of meeting the needs for high-mix, low-volume production and a short lead time. To acquire skills for investigating the causes of frequent problems and making improvements. To acquire manufacturing skills for establishing highly productive production lines that meet the needs for high-mix production, a short lead time, and low cost by taking advantage of process improvements to reduce costs Investigation of the causes of hydraulic system problems and their improvement [Training duration] 30 hours [Contents of training] Assembly and dismantling of a machine tool *Special practical training, hands-on training for making practical-use circuits, and practical training for trouble-shooting Practical factory-floor management and improvement for efficient production [Training duration] 12 hours [Contents of training] Practical training for establishing a production line (e.g. efficiency evaluation) and practical training for factory-floor improvement with the use of a machine tool 45

12 (Skilled worker registration system and application program) The government operates the skilled worker registration system and application program in order to support skill succession at SMEs. Under this program, people with skills that should be passed on to others, such as highly skilled workers and 1st grade Certified Skilled Workers, are registered as personnel to support skill succession at SMEs and to train young skilled workers by providing hands-on guidance. As of March 2009, 5,194 people were recognized as highly skilled workers related to 31 types of job in 14 business sectors. Active recognition and utilization of baby-boomers is expected to contribute to smooth human resource development and skill succession at SMEs struggling to train skilled workers, including core human resources. [Chart 3-14 Skilled Worker Registration System and Application Program] Japan Vocational Ability Development Association Prefectural vocational ability development associations Recognition of highly skilled workers Skilled workers with abundant experience (more than 20 years of experience) Skilled workers To register and actively utilize baby- boomers, including highly skilled workers and Zengiren Meisters Dispatch of experts (i) Guidance on skills: to help improve techniques and skills (ii) Support for passing-on skills: to put advanced skills to practical use (iii) Support for training of successors: to train young skilled workers Planning/coordination Advisers on the development of manufacturing human resources Companies Industry associations Vocational training schools [Photo 3-15 Giving Hands-on Guidance ] 46 People recognized as highly skilled workers are making significant contributions to securing and training skilled workers to succeed them and the maintenance and passing-on of advanced skills by providing hands-on lessons concerning skills equivalent to Levels 2 and 3 of national technical skills tests, in response to requests from technical upper secondary schools, public job training schools, and SMEs.

13 (Job Card System) The Job Card System was established in April 2008 in order to enable people with limited opportunities for vocational ability development, such as freeters, women who have finished raising children, and single mothers to enhance their capabilities and shift to stable jobs. This system first educates freeters and others about employment and helps them identify tasks through careful career counseling and then provides them with practical job training that combines practice in the workplace and classroom lectures. The evaluation of the training results and work experience are noted on their job cards for use in their job search. [Chart 3-16 Job Card System] People with limited opportunities for vocational ability development [Users] Freeters Women who finished raising children Mothers of lone parent families New graduates Carreerr Counsel lliing Hello Work Job Café Job Card Creation (1) Fill in employment record, education and training background, qualifications Sort out vocational skills, issues to tackle for career development, wishes Confirm one s wish Toward employment and training by a Career Counselor Find a job without training University and colleges Recommend Training Referral trough provision of information Vocational Ability Development Program Fixed-Term Practical Training Practical training in a corporate site + Classroom lectures at education and training institutions [authorized by the Employment and Human Resource Development Organization of Japan] The term of training: Between 3 and 6 months (up to 1 year in the case of training for the acquisition of a qualification) Eligible people: People with limited employment opportunities such as freeters, women who have finished raising their children, and single mothers System to Train Workers in Practical Skills Practical training in a corporate site + Classroom lectures at education and training institutions [authorized by the Minister of Health, Labor and Welfare] Training term: Between 6 months and 2 years Eligible people: People under 40 years of age Japanese Version of the Dual System Practical training in a corporate site + Classroom lectures on a commission basis (companies and education and training institutions) Standard training term: 4 months Eligible people: People with limited employment opportunities such as freeters, women who have finished raising their children, and single mothers Support Practical Education Program Provision of programmes that help for vocational ability development in universities, colleges and miscellaneous schools Issue a Completion Certificate to course completers Support Evaluation by company (Fill in the Evaluation Sh heet) Provision of a certificate of vocational ability Completion Certificate Carreer rr Counsselliing Hello Work Job Café Job Card Creation (2) Evaluation Sheet or Completion Certificate Sort out vocational skills, issues to tackle for career development, wishes again Make vocational choices and career directions Job Card Creation (1) Formally hired by the company that provided training Hired by other companies Utilize for job search Public-private joint planning committee Government Industry Promotion council Labor Education circles etc. [Photo 3-17 Example of Corporate Activity related to the Job Card System ] 47

14 (National Skills Competition) To realize a manufacturing-oriented nation, it is important to foster an atmosphere of respect for skills among all people, from children to adults, and to recognize anew the importance of developing the manufacturing industry and training human resources who support it. To this end, the National Skills Competition is held to provide young skilled workers with goals to strive toward through the opportunity to compete with each other at their own levels of skills on a nationwide scale. The 46th National Skills Competition was held in October and November of 2008, mainly in Chiba City, Chiba Prefecture, with 953 contestants participating in events concerning 39 types of jobs. Contestants with excellent performance, excluding those participating in some types of job-related events, were elected to the Japanese delegation to the 40th World Skills Competition to be held in Calgary, Canada, in September The previous International Youth Skill Olympics was held in Shizuoka City and Numazu City, Shizuoka Prefecture in 2007, simultaneously with the International Abilympics, a skills competition for people with disabilities, as a combined event called the International Skills Festival for All Japan This was the first time that the International Youth Skill Olympics and the International Abilympics were held simultaneously. The Japanese delegation showed a remarkable performance, winning the most gold medals and ranking second in the total medal tally. We hope that the Japanese delegation will be successful in future competitions. [Photo 3-18 National Skills Competition] [Skilled worker participating in the competition of a structural object] [Skilled worker participating in the competition of trimming die operation] [Closing ceremony (awards for the winners in the event for electrical engineering)] 48 [Closing ceremony (awards for the winners in the event for automotive sheet metal processing)]

15 (Abilympics) The 30th National Abilympics was held in Chiba City, Chiba Prefecture, in October This event greatly contributes to the establishment of an infrastructure for realizing a universal society, in which all people, with or without disabilities, can participate and support each other. [Photo 3-19 Competing in the Abilympics] (Skills Grand Prix) [Contestants performing competition tasks] Participants in the Skills Grand Prix, which is held every other year, include people with superior skills such as those with level-1 technical skills. The 25th Skills Grand Prix was held in March 2009, mainly in Kobe City, Hyogo Prefecture. In the 25th Skills Grand Prix, 554 contestants participated, competing in events related to 31 types of jobs, including lathe operation, mounting, the preparation of Japanese cuisine, and restaurant service. This was the first time that this competition had been held outside Tokyo since fiscal 2001, when it was held in Shimane Prefecture. [Photo 3-20 Competing in the Skills Grand Prix] [Skilled worker participating in the competition of machine assembly] 49 [Closing ceremony]