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Challenges of Womenomics:
Interview with Kathy Matsui

Kathy Matsui

Chief Japan Equity Strategist, Goldman Sachs

Japan's Prime Minister Shinzo Abe has adopted a growth strategy that encourages employing more women in positions of power. It's an idea known as Womenomics.

The term was coined more than 15 years ago, by Goldman Sachs executive Kathy Matsui. She argues that closing the gender employment gap could counter the country's shrinking labor force. She published her first Womenomics report in 1999. Since then, she's published three more. And in her latest report, she says by boosting female labor force, that could push up the nation's GDP by nearly 13%...a figure leaders can't ignore.

NHK WORLD's Ai Uchida sat down with Matsui to ask her what changes she's seen since Abe started endorsing Womenomics.

Among Japanese Prime Ministers, Abe is one of the most vocal advocates of Womenomics. How do you see his efforts?

The fact that the nation's most important leader has for the first time that I can ever recall, even talked about or discussed the issue of half its population in such a spotlight or highlighted fashion, is a very big step forward. It's coming up in conversations within boardrooms, within company factory floors. It's also reality because the labor shortages are very real across many industries in Japan.

I think the challenges to this issue probably has gotten easier because I think 15 years ago there wasn't this sense of the work force population shrinking back then, it's shrinking now. The deficit issue, the fiscal deficit was significant but it's ballooned even further now. So I think the factors that would cause society of the government to focus on the topic of women's participation in the workforce are just that much greater because time has passed, problems have gotten bigger, and the options have become more limited. So I think that's helped bring this topic more into common conversations, womenomics has become part of a vernacular... that wasn't the case 15, 20 years ago.

The Prime Minister appointed five women to his 18 member cabinet. That matches the highest number of female ministers in a Japanese administration.

Of course it's not just a matter of numbers of how much in the cabinet, but symbolically, it's obviously very important. Had he not appointed any women, then people would have questioned him... how sincere are you about your goals?
So at least he's increased the numbers, but the reality, for instance, in the Lower House I believe the female representation is at 8 %, that's lower than Saudi Arabia, Libya, and Iraq. That should not happen for the 3rd largest economy in the world, voters are half the population. If you really want to make politics represent society, we have a long, long way to go.

What does Abe have to do now to convince you that he is "walking the talk"?

I think the whole broad area, when you talk about social infrastructure to help and enable more women to participate in the workplace would include things like deregulating day care, nursing care, because unfortunately in this country a lot of those burdens happen to fall on the women in society. The tax code I think, i.e. incentives, economic incentives to change behavior are also very important as well. I think it's very crucial that the government continues to move forward on this debate and topic of neutralizing the tax code to encourage more women to work full time jobs, not just part time jobs.

And the part time versus full time issue is a big one because as we've seen in countries like Holland, the Netherlands, they've managed to dramatically increase female participation the moment they equalized part time and full time work. If you're doing the same content of work, person A is working threes day of work, versus person B who is doing 5 days' work, it doesn't matter, they are per hourly pay or their benefits are identical, and that's almost unheard of in Japan. But you have to do that, if you really want to get people to be more fluid in the workforce, to increase labor mobility. So some people in Holland work part time for some of their careers, while they are raising children, while they have other caregiving needs. And then once they have more independence and more time, they can go back, ratcheted up to full time and vice versa so there's a lot of flexibility in that system. And that's encouraged and no surprise, increased the level of female participation.

You're seeing companies, very famous ones like Uniqlo converting their part time to full time staff in a very big way. Why are they doing that? Because there are labor shortages, they need to retain staffs. So I think this is already a trend that's occurring, so the companies that grasp that opportunity quicker will be the winners, and I think the government can help to facilitate that by changing some of these laws.

The private sector is echoing Abe's calls to have 30% of management positions be filled by women by 2020. How on track are they to this goal?

Still far away, to be honest. Many women enter the workplace, but after 5 to 7 years whenever that lifecycle kicks in and they start a family, they tend to dropout and they only come back on, say, a part time basis. So I think that the companies need to think, how do you retain your female staff? Are you evaluating them, promoting them on a fair, meritocratic basis, or is it based on time spent in the office? If it is the time spent in the office, you can be sure you're not going to retain a lot of women just by nature. So just overhauling or reassessing the way that you evaluate staff, I know it is a big step, but I think that's a first step that many companies can contemplate, consider.
No doubt that this is not an overnight affair, this will take years to fully penetrate Japanese society. Some companies, some industries will be faster than others, some will stay in the dark ages. There will clearly be bifurcation in terms of the results. But having a handful of companies lead the charge showing examples of success is definitely a huge step forward. And those precedents are exactly what will convince the ones who are left behind.

What are the challenges going forward?

The government can only do so much, private sector can only do so much, society has a responsibility to change it's mindset as well. So this is a three pronged approach, everybody has to stop using excuses. The clock is ticking, the demographic crisis is for real, so we should stop pointing fingers and just get on with it. And there are many best practices around the world of societies and countries that have promoted diversity in a very positive way, not all of them will fit Japan, but Japan should think about what are some of those best practices that would fit Japan, and experiment. You don't know if you don't try.

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