Japan Outsourcing Engineering Along With Manufacturing

According to reports, Yoshio Watanabe, a professor of electrical engineering at Kanagawa University, states that many Japanese companies have outsourced research, development and engineering overseas in the last twenty years.

The same source states that science, math and engineering are unpopular fields of study for Japanese students.

One theory regarding the decline in interest in science in advanced countries states:

“Highly developed countries in science and technology tend to face the problem that science literacy declines. This is because, in highly developed countries, outcomes of science and technology
become a “Black-box” and it's difficult to understand the mechanism behind the phenomenon”.

In an interview in 1998, Professor Ryoichi Ito, the President of The Japan Society of Applied Physics described his view of the “black box” problem:

“I think the reason is quite simple; we are surrounded by “black-box” technology. For example, when you open up a traditional watch you can see the cogs moving around; but nothing moves in modern watches. The fact that a television produces a moving image is taken for granted. In the days of the vacuum tube, if you opened up a radio you could see glowing valves and could see something “working”. These days, equipment is all solid state and it is not possible even to begin to imagine how it might function. The only things that you can still see working are bicycles. It’s becoming almost impossible to carry out basic repair to a car by yourself.

Q: Have you noticed any differences in the students who are entering your university nowadays?

Professor Ito: Yes, there have been many changes in the type of students we teach. One characteristic is that most of them have never carried out any experiments. They’ve never soldered joints or used tools to build equipment-or even repaired a bicycle. It’s very difficult to teach them how to carry out experiments. They have never experienced that “small electric shock” that many people used to receive. when playing with electrical equipment. They don’t have a feeling for what electricity is and how to use it in practice.”

This theory is doubtless partially correct.

A more likely cause of decline of interest in science is that scientific research organizations become large and bureaucratic; slow to absorb new ideas and methods. The application of scientific advancements becomes the domain of multinational corporations and government, which suppress innovations that are not produced within their organizational systems. Students in their later teens can observe this and choose other, more rewarding career paths.

The NY Times reported in July 2010 that “large Japanese companies are increasingly outsourcing and sending white-collar operations to China and Southeast Asia, where doing business costs less than in Japan.” However, the Times reports,

“Japanese outsourcers are hiring Japanese workers to do the jobs overseas — and paying them considerably less than if they were working in Japan. Japanese outsourcers like Transcosmos and Masterpiece have set up call centers, data-entry offices and technical support operations staffed by Japanese workers in cities like Bangkok, Beijing, Hong Kong and Taipei.”
Japan is shipping both jobs and people overseas. Per a 2004 JETRO report (pdf):

Expanding Japanese Presence In East Asia Reflects Shift To Offshore ProductionAt present, 60% of newly established overseas operations of Japanese manufacturers are in China and other parts of East Asia. Unlike Japanese affiliates in Europe and North America, however, these companies tend to sell output to their parent companies in Japan, rather than in the local market.The trend reflects efforts by the parent companies to shift production offshore, particularly assembly and finishing operations to the ASEAN4 nations and China.

It will likely turn out to have been a policy mistake for Japanese companies to have shifted production overseas.