The Productivity Research Center of the Japan Productivity Center for Socio-Economic Development (Mr. Tsuneaki Taniguchi, President) published the result of Survey of Productivity in Companies that was collected from listed companies. The result of the survey is as follows. (The full result of the survey will be available in the report to be published this fall.)

1. More companies predicting the decrease in the rate of productivity growth

In this year's survey, 34.7% of the responding companies said that the growth rate of labor productivity will decrease as compared to last year (June 2007.) The number was 28.0 points higher than last year's figure of 6.7%. Companies that expected higher growth rate was 18.9%, the decline of 34.3 points as compared to 53.2% in 2007.

2. About 40% said their productivity growth rate increased but 50% said this year growth rate will be flat

43.2% of the responding companies said that the growth rate of labor productivity increased last year. This figure compares to 53.9% in last year's survey. As for the prediction of this year's productivity growth rate, 37.8% said that it will increase over last year (21.6 points less than last year) and 48.0% said that it will be about the same, the increase of 18.1 points.

3. Factors that improved productivity are increased revenue, higher value-added and investment in facilities

As for the reasons of productivity increase, 59.3% quoted "revenue increase," 37.2% quoted "higher value-added," and 36.0% quoted "investment in facilities." As for the reasons of productivity decrease, 60.5% quoted "slow growth," 51.2% quoted "increase of employees/work hours," and 46.5% quoted "higher cost of material." Among the external factors, manufacturers quoting "higher cost of material" increased by 9.3 points and non-manufacturers quoting it increased by 6.6 points.

4. Future focus will be on "intangible assets"

Regarding management issues in focus for the last three years and into the future, "higher value-added of product/service" and "strengthen marketing and sales" were number one and two answers for both questions. Regarding other future issues, 40.3% quoted "improved motivation of employees" and 33.8% quoted "strengthen R&D." Both answers recorded increase by 11.9 points and 7.4 points, respectively, over the figures for the past three years. This fact indicates that intangible assets as human capital and intellectual capital are the future focus areas.

5. The reasons of low productivity in service industry are "labor intensive" and "over-regulation"

Asked why productivity is low in the service industry in Japan, 67.2% quoted "(it is because) the industry is labor intensive and difficult to mechanize." 44.8% quoted "too much regulation" a 6.2 points increase. 29.9% quoted "insufficient accumulation/development of know-how" and 24.9% quoted "not enough training of people after recruitment."