Automated factories can't solve Japan's productivity paradox

Mitsubishi Heavy Industries has cut the number of workers on its turbocharger production lines west of Tokyo by more than 80 percent, as manufacturers from carmakers to electronics producers push further into automation. Such advances explain why Japan's factory productivity growth ranked highest among Group of Seven nations over the two decades to 2014. Yet the nation's overall productivity ranks worst in the G-7, dragged down by a lack of progress in the services sector, where white-collar work culture demands long hours rather than efficiency. Higher productivity is critical to sustaining economic growth and living standards as Japan's population shrinks. One forecast predicts the current labor force of about 77 million could decline by more than 40 percent by 2065.