The 2007 problem refers to Japan's baby boomer generation, which has an abundance of knowledge, leaving companies en masse due to retirement. But here, we would like to demonstrate - through student-related data - the biggest problem facing companies employing many science and engineering majors.

As I have no way of knowing how old our readers are, I would like to start by explaining the basics though this may be boring for some of you. First, please refer to the chart below.

The Number of University Applicants, Students Enrollment and Competitiveness of Entrance Exams for the 18-Year-Old Population and for the Year Graduated from High School

Source: Ministry of Education, Culture, Sports, Science and Technology (Basic School Survey)

If you look at the statistics by year, you can see that the external or superficial competition for entering universities has jumped from one successful applicant out of five applicants to one in nine. There are four reasons why competition has heated up. (1) More students are taking entrance exams for multiple universities (2) more students are taking university entrance exams in general (3) universities are accepting fewer students (4) the universities surveyed have become more popular.

If you look at the chart, you can see that the competition is completely different between the time when students were allowed to take entrance exams to multiple universities, and when they were not. For example, look at the difference before and after 1987 - when the administration under Prime Minister Yasuhiro Nakasone reformed the unified college entrance exams and enabled students to take entrance exams for multiple universities. Students can take entrance exams for multiple universities. This means that the superficial competition has surged but the actual competition has not. That's because many successful applicants end up not entering the universities that accepted them. Also, the increasing number of subjects students need to take during exams may require more work on the part of students, but it has nothing to do with the actual difficulty of the exam.

So in order to calculate the real difficulty of a university - and not the superficial competition - I will define what is called the "latent competition to university entrance exams." This refers to the size of the 18-year-old population divided by the number of students entering each university. This shows what the competition would be like if all 18 year olds at the time wanted to enter university.

If you look at the numbers calculated in this way, you can see that entrance exams have become easier since 1991. Competition is now down to just one successful applicant out of two applicants now compared with one in roughly four in 1990. That's why I can appreciate the talents and understand the comments of soon-to-retire middle-aged men who complain that (for example) "past graduates from Kyoto University Faculty of Engineering's chemistry division weren't like this." The ratio of students in this generation who go on to an ordinary high school will affect my calculation of "latent competition to university entrance exams" because it will determine the number of students who do not plan to take university entrance exams. However, the number of students who don't pursue a college education has been small since 1970, the year the chart begins to show stats. (And it complicates the chart, so I have refrained from including such numbers.)

Then why did university entrance exams become so much easier overall in 1991 and onward? The reasons have to do with (2) the number of students taking university entrance exams, and (3) the number of students the universities are accepting. If you look at the population first, you can see that the population of 18-year-olds began to fall in 1993. This means that students who take university entrance exams already have 20% less competition. This makes a huge difference. Next, please refer to the chart showing the number of students universities accept.

 

Number of University Students Enrolled, by Academic Department

Source: Ministry of Education, Culture, Sports, Science and Technology (Basic School Survey)

You can see from the chart that universities have steadily increased the number of student enrollment, but the figure has jumped significantly starting in 1985. Indeed the enrollment has doubled from that of the year before. We believe it is safe to assume that these two factors are the reason why university entrance exams are easier, and why the quality of university students and university graduates is deteriorating. Of course the society at large has been blaming many other factors for the falling quality of students - such as the deteriorating quality of teachers, or bad academic curricula. But the declining population cannot be ignored as a factor. The biggest suspect behind "university students not being able to do common fraction" is probably the population factor.

Let's now look at the chart separated by academic departments.

Departments defined as science- and engineering-related departments in the chart are the total numbers of the departments of science, the departments of engineering, and the departments of science and engineering. Economics-related departments are defined as the total numbers of the departments of economics, the departments of commerce, and the departments of management. As the chart shows, student enrollment in the science and economics departments has been declining slowly starting from about 1997. That's because unpopular academic divisions like construction and agriculture have had their names switched to contain buzz words like "environmental..." Economics departments have also had their names changed to "management..." and "international..." - the buzz words in this field. These name changes have nothing to do with the main topic of this column. But please remember that the number of students admitted into economics- and science-related departments have remain unchanged, and that because of the rapid increase in departments that cannot be categorized as either, the number of students admitted into universities has almost doubled compared with the early 1980s.

Next, let's look at the number of students applying to each university department.

Number of Students Applying to University Entrance Exams, by Academic Department

Source: Ministry of Education, Culture, Sports, Science and Technology (Basic School Survey)

This chart clearly demonstrates the sudden decline in the popularity of science- and engineering-related departments starting in 1986. If you thought, "But the number of students applying to science- and engineering-related departments has bounced back recently after the popularity of economics departments began falling in 1991 and onward," you've jumped to conclusions. Please refer to the following chart.

Schools (Private Universities) That Under-Enrolled

Source: The Promotion and Mutual Aid Corporation for Private Schools of Japan
[The trend of students applying to private universities and two-year colleges]

 

As this chart demonstrates, a whopping 40% of private universities fail to enroll as many students as they want. Because the university entrance exams themselves were getting so much easier, the truth is that by the end of the 1990s there was much less competition to get into universities in all academic departments, though I won't go as far as to say that anyone can get into college.

Of course, the situation is not the case for top-class universities, it you look at things collectively, difficult academic departments are disappearing regardless of the quality of students. (Another factor could be that for the past few years, medical and pharmaceutical departments have become popular, causing the so-called "shift to medical." But statistically speaking, the medical and pharmaceutical studies boom seems to be quieting down since last fiscal year.)

If you calculate the percentage of people who pass the entrance exams to certain university departments, it becomes even clearer how students are steering away from science- and engineering-related departments.

 

Competition to Get into Each Academic Department

Source: Ministry of Education, Culture, Sports, Science and Technology (Basic School Survey)

This chart more clearly demonstrates how economics departments became popular in the early 1990s. In other words, it was true when a character in the popular manga comic called "Dragon Zakura" about entrance exams said that "If you want to get into the (nation's top) University of Tokyo, it's easy if you aim for the science I department." (In the final episode, just released the other day, one of the main character's students passes the exam to University of Tokyo's science I department.)

I graduated from college in 1986 so I remember those days very well. The students in the economics-related departments were partying like crazy (Regardless of what the truth was, that's what people said they were doing.) Meanwhile, the science- and engineering-related majors had to spend a lot of time on classes and experiments. (This part is definitely true.) When we began visiting companies as part of our job hunting efforts and meeting with our university alumni who had joined these companies, (Back then, for students in my department - University of Tokyo's Department of Information Science - the job market was a workers' market though not as much as it is today. So we began job hunting in the spring of our senior year.) an alumnus from my college who joined Hitachi and worked in a research lab deep in the mountains (studying artificial intelligence) said to me, "Do you know how many people commit suicide here each year?" At NEC, one alumnus said, "Even if you make difficult software and microprocessors here (At the time, NEC had developed and was selling the V series that was compatible with Intel CPUs) you don't get positive evaluations within the NEC group firms." I also got some weird advice (not only from NEC alumni in Fuchu City and Mita City but also in Hitachi City) to "not break up with your girlfriend because manufacturers only have male employees." I didn't bother visiting Fujitsu because everyone was avoiding that company. They thought that "member firms of the "Electric Appliances Workers Union" offer low pay", that Fujitu's corporate culture did not accept rebellious people, and that the work seemed boring because it was all about DRAMs. (The company's exam to become section chief was already famous back then.) When I visited IBM Japan, I was happy to get a clear folder with the logo and catch phrase from those days called "Think," but was disappointed when I found out that the Roppongi and Hakozaki offices were merely sales offices. Meanwhile, students in my department often talked about how it was wiser to get a PhD then join Daiwa's research lab. (In my department, most people who eventually got jobs did so after obtaining a Masters or PhD then got a research position. Leaving school with just a Bachelor's Degree was rare.) I avoided Ricoh's research and development center because I felt that it would disappear after a while. (Those desks situated in a radial pattern were there already, and the center still exists today.) I was slightly attracted to Sony, (There was such an atmosphere of freedom. An alumnus working at Sony brought on a skiing trip a video camera still under development.) But I thought Sony was dangerous. I thought about Yamaha (back then, they were making PCs, and MIDI was even older.) and both the company and the alumni I met were wonderful, but Hamamatsu was too far away. I admired an alumnus who joined the National Police Agency (The NPA was a major employer of many graduates from the University of Tokyo's Department of Information Science. It was perhaps the role model for the C.A.R.A.S. monitoring system that appears in a cop movie called, "Odoru Daisosasen the Movie 2.") But in the end, I figured that I would only be an engineering official there, so I decided against applying. With all of this advice from so many honest recruiters, (although many pre-Internet age science and engineering students were typically honest and cowardly) it would have taken a lot of courage to actually work at manufacturers no matter how enthusiastically we were lured by the companies. I thought, "I'd be better off gaining experience in a different field than going to graduate school." That's when I started job-hunting on a full scale. (I am one of those guys who would - I'm sure you'd recognize me if you were a part-timer/recruiter working at Recruit G8 building - do a "banzai" cheer at an in-house announcement. But this experience made me a rare job hunting expert in my academic department.) I ignored advice from professors who insisted that I quit job-hunting and apply to graduate school. (I now believe I should have gone on to graduate school and am grateful for my professors' advice. But imagine how many professors tried to stop me from job hunting and how hard they tried!) Against my professors' wishes, I visited banks and trading companies (I visited two trading firms and two life insurance companies but did not get any further contact from the companies perhaps because I wasn't talented enough.) but did not like the atmosphere that so obviously gave preferential treatment to jocks who played on varsity teams and those who had applied for the civil servant exams. (The following year I would find out the truth as a recruiter.) I was still naïve, so I just decided to work for a company that gave me a job offer because I was too lazy to do anything else. (This is how I am different from liberal arts majors.) When a friend of mine who was a liberal arts major told me, "I can't believe you accepted a job offer from that tough company," (back then there was a brokerage firm that had the same kind of awful reputation) I was a bit disappointed. (But it was too late!) I told myself, "At least I didn't get a job at Hitachi," and tried to make myself feel better. (Back then, I had a half-hearted plan to go to graduate school as a back up if my job-hunting failed, so I was okay with a job offer from a less-than-ideal company.) Then in the summer of my senior year, I got too lazy to study for my graduate school exams. And because the bank I got a job offer from featured such good food at get-togethers - a huge difference compared with the cheap wine bought at Akafudado (a ten-minute walk from Yayoimon) that were always in the fridge in the students' lounge at school and served in plastic cups - that I decided to forget about graduate school and simply graduate with a Bachelors and start working...That's how I remember it. Back then, people were trying hard to work their way up to the economic bubble. And people were worshipping money to a point where new words created to mean rich and poor became popular words. People also said that your income would ultimately determine whether you would become popular with the girls, although there was a word called "Sanko" referring to three "high" things about men that would attract women - height, academic background and income. (These are important factors for people now in their 20s who are seeking work.) People actually pitied students who graduated from science- and engineering-related departments and landed jobs at manufacturers. On the other hand, science and engineering majors who chose to work at Tokyo Electric Power Co. (I was able to visit so many different companies because a person who worked at Tokyo Electric Power Co. had arranged for so many visits and I got to listen to stories about Central Research Institute of Electric Power Industry) or Tokyo Gas (I went to Hamamatsucho for the same reason) seemed very confident.

Of course, now that I look back on it 20 years later, I believe I was very naïve at the time. And many of my forecasts were completely inaccurate. But I can say this: Students who chose science- and engineering-related departments even under these tough circumstances in the early 1990s and onward were something. Regardless, many smart students strayed into economics departments instead of science- and engineering-related departments... in mad torrents, too. This change started in 1988, when a change in college entrance exam structures allowed students to take exams to multiple state universities and banks began hiring a massive amount of science majors. At first glance, this trend is hidden behind stats showing the shrinking population of 18 year olds and the increase in the number of students universities accept. But the trend continues today.

Finally, let's look at the last chart showing the number of students enrolled in Masters programs.

 

Number of Students Enrolled in Masters Programs

Source: Ministry of Education, Culture, Sports, Science and Technology (Basic School Survey)

After the Japanese government implemented a plan to double the number of graduate students, an extraordinary change occurred in Japanese graduate schools - on a level surpassing that of the previously mentioned changes. The change is this - with the number of students entering graduate schools quadrupling now compared with the early 1980s, the quality of graduate students has dropped significantly. In other words, you could say that the quality of graduate students in the past was high.

There is a word called "academic record laundering," referring to an action similar to money laundering. It might be difficult to enter the University of Tokyo as an undergraduate but it's easy to enter the university's graduate programs. So if you want your resume to have a well-known school as the last school you attended, you should try and enter the University of Tokyo's graduate programs. That's what "academic record laundering" refers to. But human resources personnel can see right through such efforts to polish one's resume. To weed out the superficial candidates, HR personnel often ask students where they got their Bachelors' Degrees or what year they got their Bachelors as if they were looking for vintage wine. This kind of reality never makes the headlines. That is why so many people make ridiculous statements like, "Companies should evaluate PhD students more positively."

To summarize:

• Companies that have been regularly hiring students from the same domestic universities might be feeling that the quality of the younger generation is deteriorating because the quality of students in general is on the decline.
• This trend might have a bigger effect on companies regularly hiring science and engineering majors as well as companies regularly hiring graduate students.
• Companies might be able to avert the adverse effects of the two problems above if they hire more economics majors and shift their hiring targets by dispatching employees elsewhere.

This column was about the current plight and future of engineers, but we can make many theories out of this. For example, we can ask "Do junior high school entrance exams - which have been heating up recently - mean anything?" But since this is off topic, we will not pursue it any further. Below are a few more deeper theories based on the content of this column.

• Japanese companies that have relied on rigid domestic hiring procedures - especially companies that hire many science and engineering majors - might be maintaining an inefficient economy within themselves that continuously deteriorates the quality of workers. And since these companies are private-sector firms, and not government entities, we don't believe an inefficient economy will last long.
• Massive numbers of engineers exist in the software subsidiaries of traditional domestic companies. Many engineers from India's Infosys and other companies are being increasingly dispatched to the systems divisions of financial institutions who are these traditional companies' clients. Nishi-Kasai is now full of Indian restaurants.
• Wouldn't this mean that companies that have traditionally hired large numbers of IT engineers will face some tough restructuring in the near future? Companies are expected to hire more foreign workers instead. If labor unions resist, companies may even end up collapsing.

How do these theories sound? I don't think I am the only person who feels this way. Recently, there was an article that said, "When speaking to the top management teams of major software companies, many people say they fear that at the current rate, Japan's software industry is going to fall into a structural recession."(Source: "Aratamete Shgogeki - Nihon no Sohuto Sangyo wo Tokei Bunseki Suru" roughly translated as "A New Shock - Analyzing Japan's Software Industry by Statistics") When I attended a class reunion for my university, I found out that the computer makers where some of my former classmates work are now suffering and will be launching joint ventures with rival companies. My former classmates working for such companies are forced to relocate to a new company and are all suffering from depression. They can get their bosses to praise them just by showing up at work... Have you heard of similar stories around you?