Japan tries tax breaks to get companies to hire more PhD students

Tax breaks set to be put in place by the Japanese government could encourage companies to hire more PhD students – but they betray a continued lack of appreciation for higher degrees by corporations, according to academics.

In April, Japan is due to establish incentives for companies to hire more doctoral students, with eligible businesses receiving a 20 per cent tax credit on labour costs of hires, Nikkei Asia reported. The incentive is valid for those who earned a PhD in the past five years.

Hiroshi Ono, professor of human resource management at Hitotsubashi University Business School in Tokyo, noted that the subsidy “may help” to place doctoral students, but was wary of the message it sends.

“It is a sad situation when the government has to intervene to help PhDs get jobs by providing incentives for companies,” he said.

He suggested that the policy could have the opposite effect and “demotivate some PhDs”, causing them to believe that government intervention is necessary for their employment.

The problem is not a new one, noted Akira Mori, a professor at the Research Center for Advanced Science and Technology at the University of Tokyo.

“Both private and public sectors in our society tend to lack recognition and appreciation for PhD holders,” he said. “This is a major factor contributing to the stagnant number and proportion of PhDs.”

Kazuki Tsuji, professor of evolutionary ecology at the University of the Ryukyus, traced the problem back to the 1990s, a time when Japan’s government sought to boost the country’s research output.

In 1996, Tokyo set a goal of developing 10,000 postdoctoral students in the country, raising graduate school capacity and creating new scholarship programmes – but the number of job opportunities for PhDs did not go up, leaving many without jobs, he noted.

Not long after, government austerity measures led to a decrease in posts at public universities, even as “the benefits of employing PhD graduates were not well understood by the Japanese private sector”.

Professor Tsuji welcomed the decision to give tax breaks, saying it could prove a “catalyst for new investment in technological development”.

“We won’t know until we try,” he said.

Aki Tonami, associate professor of international relations and economics at the University of Tsukuba, said the move made sense given Tokyo’s recent emphasis on defence technologies.

“You see this particularly in the latest national defence strategy documents, where there is a real push for dual-use technologies for military and for export potential,” she said.

But she was sceptical that the top-down nature of the push by the Kishida administration would work. She noted a similar scenario previously, in which the administration tried to encourage businesses to hire people with disabilities.

Later, reports emerged of companies using loopholes, such as employing disabled workers through temping agencies.

“It would not surprise me to see less reputable companies using similar tactics in order to achieve tax breaks,” she said.

But even if companies try to truly engage PhDs, they are not assured of attracting researchers, said Dr Tonami.

“The big question is whether the academics are prepared and willing to work in the private sector, and whether the private sector is willing to show the flexibility and open culture necessary to integrate people from outside the sector. Sadly, on this, I am less optimistic.”

pola.lem@timeshighereducation.com