Foreign workers and overseas production for Japanese manufacturing SMEs

Abstract

ABSTRACT The present study builds a theoretical model for Japanese small and medium-sized enterprises (SMEs) for overseas production. Japanese SMEs are faced with two challenges; acute labor shortage owing to an aging society and globalization due to domestic market saturation. To address these issues concurrently, the present study focuses on foreign technical intern training program, and develops a model on how Japanese SME manufacturers conduct overseas production by hiring foreign interns. Under the supervision of Japanese government, foreign interns are employed by Japanese SMEs to receive training to upgrade their skills. However, majority of past studies focus on the negative aspects of Japanese Foreign Technical Internship Program. Our study shows a practical implication that proper usage of this program is a powerful engine for SMEs. In addition, these interns are valuable assets because they might help Japanese SMEs’ overseas production in their home countries.