The Headquarters for Industrial Structural Reform
and Employment Measures

Interim Report

Decided by the Headquarters for Industrial Structural Reform and
Employment Measures on June 26, 2001

Embarking on the 21st century, Japan now stands at an important crossroad where it must decide whether to break away from the economic stagnation that has followed the bursting of the economic bubble and build a truly affluent nation or to allow the entire nation to decline in power.
The very step Japan is required to take now is to resolutely carry out structural reform from two approaches: "liquidating the past" including final disposals of bad loans and "challenging the future" in establishing a competitive economic system appropriate for the 21st century. In this process, it is important to adequately deal with the changes in the economic situation that are likely to occur in the course of making the final dispositions of bad loans, and to resolutely implement the reform by overcoming the pains.

Therefore, under a philosophy to resolutely carry out structural reform while holding nothing sacred, the Headquarters for Industrial Structural Reform and Employment Measure gathered together the wisdom of all Cabinet members in order to vigorously discuss on the following matters toward the materialization of concrete measures, and recently drew up an interim report concerning the basic policy for such measures:
(1) Creation of employment by fostering new markets and industries;
(2) Promotion of personnel training and skill development;
(3) Establishment of work environments in which people can work with peace of mind; and
(4) Establishment of an employment safety net suitable for reforming the structure of the labor market.
Based on the policy indicated in this interim report, the Japanese government will lay the foundation for innovations that would bring about development, conduct research and development in key strategic fields, and encourage venture businesses, while also creating new markets and job opportunities by making regulatory and institutional reform in respective fields. Furthermore, it will drive forward the reform of employment systems and establishment of a safety net. These efforts include encouraging personnel development, creating diverse modes of employment, and promoting smooth job gaining.

At the same time, in order to materialize the content of this interim report into concrete measures, the Headquarters will continue its efforts to thoroughly identify items that require measures by also considering enhancing Japanese companies' international competitive strengths and creating new jobs. Furthermore, the Headquarters will commit itself to making the contents more specific and determining the schedule of the required measures. It will then summarize a comprehensive policy package and decide on the specific measures for creating new markets and jobs by around September of this year.

The Headquarters for Industrial Structural Reform
and Employment Measures

Outline of the Interim Report

I. Creation of Employment by Fostering New Markets and Industries

1. Laying the foundation for innovation and fostering venture businesses

O Laying the foundation for innovation
- Promoting the transfer of technology from the academic to the industrial sector (1,000 venture start-ups deriving from universities within three years)
- Promoting appraisals and information disclosures of universities, thoroughly permeating competitive elements among universities such as making the organizational structure more flexible, and focused investment in the top 30 universities
- Strengthening ties between the industrial, academic and public sectors

O Focused investment in strategic fields of basic and convergent technologies
- Focused investment in four priority strategic fields: life science, telecommunications, environment, and nano-technology/materials

O Fostering venture businesses ("Doubling start-ups" program)
- Facilitating fund procurement and personnel recruitment by measures including enhancing the flexibility of stock options and reviewing the regulation of stock sale before public offering
- Forming regional industrial agglomerations

2. Regulatory and institutional reform in fields including health
care/welfare, environment, physical distribution, cities/land/housing, and

O Health care, long-term care, and childcare
- Promoting competition among medical institutions by establishing information disclosure rules and medical assessment systems
- Fostering private long-term care service providers
- Promoting the entrance of private companies in the childcare service market by popularizing services that are financed by the public sector and managed by the private sector

O Environment and energy (conversion into a growth thrust)
- Environmental considerations toward building a recycling society
- Technological development for creating new energy resources and improving energy efficiency
- Preparing for and building a society in which various measures are implemented to reduce emissions of greenhouse gases

O Establishment of advanced and efficient physical distribution systems

O Cities, land, and housing
- Establishing and improving facilities that would contribute to revitalizing urban-related industries
- Efficient use of land and space in urban areas and the creation of greater liquidity in land transactions
- Enhancing housing-related industries such as the existing-home market and renovation market

O Information technology
- Promoting the e-Japan Strategy and the e-Japan 2002 Program

- Fostering NPOs as new economic agents

II. Promotion of Personnel Training and Skill Development

O Skill development based on individuals' own initiatives
- Increase career counseling services
- Emphasized and flexible utilization of the education and training benefit system

O Diverse vocational training programs utilizing private organizations
- Drastic expansion of vocational training programs provided by private organizations
- Provision of support for formulating vocational skills assessment standards

O Advanced personnel training utilizing undergraduate and graduate schools
- Increased admission of workers in universities (One million workers' career improvement project)

III. Establishment of Work Environments in which People can Work with
Peace of Mind

O Upgrading women's work environments (Remedy of the M-shaped curve
phenomenon and promotion of bottom-up awareness raising)

- Driving forward the strategy to null the number of infants waiting to enter a day-care center

O Improving work environments for the elderly
- Rectifying age limit upon job offers and recruitment

O Improvement of work environments so as to correspond to the diversified types of employment
- Reviewing limited term employment systems
- Improving work environments for part-time workers and dispatched workers
- Steady advancement in settling individual labor-management disputes

IV. Establishment of an Employment Safety Net Suitable for Reforming the Structure of
the Labor Market

O Enhancing labor re-channeling
- Reviewing the worker dispatch system and employment placement system
- Strengthening ties between the employment placement section and the vocational training section
- Securing the portability of pension funds

O Establishment of a safety net
- Encouraging job-gaining to correspond to disposals of bad loans
- Implementing adequate financial measures for SMEs such as prevention of chain reaction bankruptcies