Why a Japanese city is betting on immigrants to revive its economy

Why a Japanese city is betting on immigrants to revive its economy

Hamamatsu, a factory belt to Tokyo's west, is home to iconic brands such as Honda, Suzuki, Yamaha and Kawai. But with 770,000 people and projected to drop by 10 per cent by 2040, the city is experiencing a population crisis. Mayor Yusuke Nakano says he has prioritized reversing such decline, sounding a warning that falling numbers threaten jobs, competitiveness, and the city's long-term future, the Financial Times reported.

Immigration as a solution

In a departure from tradition for Japan, Nakano openly is seeking foreign workers to stabilize the economy of Hamamatsu. Immigration has always been sensitive in Japan, but shortages have forced the shift. Already the city counts around 30,000 foreigners, many of whom came in earlier waves of industrial growth. Now authorities are attempting to bring in a new generation of foreign qualified personnel — engineers, programmers and technicians — to fill jobs being left vacant by Japanese workers.

Lessons of history

Hamamatsu's reliance on immigrants is nothing new. In the 1970s and 80s, successful industries brought Brazilians and other foreign workers into its supply chains by the thousands. Even automatic teller machines offered Portuguese-language service. But since the 2008 financial crisis, the government also lured many to leave with cash incentives, fearing mass unemployment. Nowadays, things are different: instead of seeking to manage excess labour, the city has to compel immigrants to prevent economic stagnation and offset the out-migration of youth Japanese to Tokyo.

Indian workers on the rise

The Indian community is one of the fastest-growing groups of immigrants in Hamamatsu. Suzuki has recruited more than 200 engineers from its Indian subsidiary and now directly recruits from Indian universities. Executives in the firms describe the motivation as a desire to strengthen know-how in new technology, above all software, which Japan's traditionally mechanical industries lack. Local officials hope the new arrivals will provide a source of innovation and help Hamamatsu compete in industries being reshaped by digitalization.

Challenges of assimilation

Even with recruitment drives, holding onto immigrants in Hamamatsu in the long run is becoming tough. The majority arrive on a contract and plan to return home after two years. Families cite the absence of international schools and other essential infrastructure, as a major reason not to stay back. The city is now subsidizing language classes, cultural outreaching and interpreter services to get foreign labourers to feel a little at home. International schools are under planning, though these are still under consideration.

National policy shifts

Japan's national administration has quietly unveiled "skilled worker" visas for larger numbers, enabling more immigrants to stay in the long term. It is a major shift in a country where foreigners make up hardly 3 per cent of the population, much less than Western nations. Specialists indicate that Hamamatsu's method could be followed by other regional towns, a lot of which are afflicted similarly by population pressure. The success of the experiment may have implications for how Japan responds to its overall population crisis.

Social and political tensions

Immigration remains a politically sensitive topic. In recent elections, parties blasted the impact of rising foreign populations. Experts warn that while labour shortages make immigration more acceptable to the public now, attitudes may shift as the economy falters. For now, Hamamatsu residents appear to be firmly in favour, conscious of the dire need to import workers. But municipal officials know social tolerance will be an equally important factor as economic necessity in determining whether the strategy is a success.

Holding Japanese youth

Hamamatsu also has to deal with losing its own youth. Like many other towns, a large number of 18- to 22-year-olds migrate to Tokyo in pursuit of opportunity, few of them ever returning. Local students complain that the city doesn't offer appealing jobs and culture when compared with the capital. Nakano wants to reimage Hamamatsu so that young people will one day return to settle down, to take advantage of the experience of urban life as well as the stability of provincial living.

Hamamatsu's forceful immigration policy is a reflection of Japan's nascent population crisis. For the city, immigrants are not only an addition to the labour force but a potential source of economic renewal. But it will be the city that has to build the infrastructure, schools and cultural tolerance necessary to convince newcomers to stay on. As Japan wrestles with how to deal with its shrinking population, the success in Hamamatsu might serve as a model for the rest of the nation.