Often we have written about the shortage of talent across various growth segments of the energy sector. This is a global challenge, with LinkedIn sharing in a report that the increase in job postings requiring at least one green skill was 22.4% in 2023, compared to a 12.3% increase in talent with said skills.
In Japan, the challenge is compounded by language barriers, and low mobility of talent compared to European markets. At the micro level, we can solve talent shortage issues for individual companies by headhunting experienced talent. This has various implications on the wider industry, companies and professionals including:
- Vicious competition for talent;
- Increased cost of hire for experienced professionals;
- Challenges for firms to avoid having employees poached by competitors.
When we zoom out and look at the wider industry, and look beyond the immediate needs and then project forward, it becomes clear that much wider, systematic change is required.
Rate of demand will continue to grow
Over the past decades, skills directly related to renewable energy deployment have grown steadily in Japan. Engineers, construction managers, project managers and finance professionals have been moving from other industries into the renewables space as Japan has boosted its renewable energy capacity from nearly zero in 2011 to over 65 GW today.
As Japan plans to increase the share of renewable power in the energy mix from today’s 22% to 36~38% by 2030, this growth will accelerate. Beyond renewables though, the demand for ‘green talent’ is expanding with increased complexity in our energy mix; and as energy related business seeps into wider industries new skill needs are created.
Some notable areas of growth include:
- Carbon and GHG accounting;
- Energy procurement and energy efficiency planning;
- Supply chain management and Scope 2 & 3 emissions measurement;
- Data science and machine learning operations;
- R&D and manufacturing of cutting edge technologies.
Educate the next generation
METI has taken steps to invest into the next generation of young Japanese coming through the university system. In June of this year, METI announced that offshore wind power generation will be added into the National Institute of Technology (KOSEN)’s COMPASS 5.0 initiative.
The goal is to set up a new curriculum for ‘next generation core technology education’ that includes battery technologies, AI, semiconductors, data science, among others. METI has also established the Education Council for Offshore Wind (ECOWIND) which is a group of Japanese power generation and EPC companies, as well as key educational institutions.
Japan’s education system for clean energy and sustainability has lagged compared to other advanced global peers; this has resulted in many Japanese professionals seeking higher education from overseas educational institutions. This seems to be changing, however. One of the nation’s leading university preparation schools, J-PREP, is significantly investing into and developing research papers, educational materials focused on energy, as well as energy systems to give high school students a strong foundation early on.
Green reskilling
Better university education is great, but we need people now – cries the industry! As automation, artificial intelligence and other technologies continue to mitigate labor demand in certain sectors or even make jobs redundant, there is a need to reskill mid-career professionals into new areas.
Nagasaki Ocean Academy (NOA) is one of the pioneering institutions for ocean energy, and it predicts that the demand for engineers and technicians will rise from the current 2,000 to over 8,600 by 2030, especially as the Round 1, 2 & 3 offshore wind projects come online. NOA provides various courses on project management, development, HSE etc. including on site programs.
Green Talent Hub, a startup that focuses on green reskilling business, runs programs for mid-career professionals, leveraging experts from industry and academia focused on various topics such as carbon management, renewable energy development, decarbonisation and more.
These are positive steps, but the challenge is speed and scalability as these are smaller, industry specialized players offering solutions. Japan will need to see more mainstream educational institutions developing postgraduate programs.
Industry driven investment
The energy industry seems to be in a comparable situation to the software engineering boom of the early 2000s. At that time, companies fought over the little talent available by offering higher salaries, free relocation, increasingly attractive fringe benefits and long-term incentives.
As in the Japanese energy industry today, this only served the software companies with the will and resources to attract experienced talent. But it failed to solve the underlying shortage. As a natural evolution, companies started to hire less experienced talent, footing the bill for their training, education and also creating in-house apprenticeship style programs.
In Japan, global firms can leverage their overseas expertise to educate and train local talent, potentially setting up local or regional centers of excellence. On the other hand, Japanese firms facing the same challenges can look to the global marketplace to hire experienced talent, and invest time and money into supporting their language education to allow qualified, highly skilled foreign workers to operate smoothly in Japan.
Both require Japan to be an attractive place to work in the long-term; however with a weak yen and increasing number of young Japanese looking to work abroad, this is a bigger challenge and a topic for another day.
In summary: Invest for the future
The current supply demand challenge in the talent market for energy or green skills is but a symptom of a larger, underlying and systemic issue.
Without focused investment in education and skills development from all levels of industry, academia and government, Japan’s skill gap is only going to increase.
Andrew Statter is a Partner at Titan GreenTech, an executive recruitment agency focused on the clean energy space.
