Asian Students’ Brain Circulation and Japanese Companies: An empirical study to explore the relationship

Sato, Y. (2019). Asian students’ brain circulation and Japanese companies. Asian Education and Development Studies. Vol. & No. ahead-of-print. DOI:


Dr Yuriko Sato, Tokyo Institute of Technology, Japan

Return of the international graduates to home countries has been called brain circulation in contrast to brain drain/gain, the traditional one-way mobility from developing countries to developed countries. Brain circulation is said to bring benefits to both their home countries and study destination countries. However, the role of study destination companies in relation with students’ brain circulation has not been studied enough. In this regard, this paper explores the benefits and constraints of study destination companies in relation with international students’ brain circulation based on empirical study, picking up the case of Japanese companies.

Japanese companies are picked up considering their strong overseas business expansion tendency: the number of Japan-affiliated companies overseas has increased by 42% from 2008 to 2017 and the overseas production ratio of Japanese manufacturing companies rose to 25.4% in 2017. This has been promoted by the prospect of shrinking domestic market because of the aging of population. This business tendency created the greater need of personnel who manage overseas subsidiaries in close communication with the headquarters in Japan; graduates of Japanese universities who understand Japanese culture and language will be ideal staff in such positions. Japanese government has also prompted the employment of international students by Japanese companies. Japanese government’s “Revitalization Strategy 2016” set a goal of raising the international student employment rate in Japan from the current 30% to 50%.

This paper focuses on the Chinese, Thai, Indonesia and Vietnamese students who graduated from Japanese universities and now work for Japanese companies after graduation. Chinese students have constituted the largest groups in Japanese universities, followed by other Asian countries including the three remaining target countries. Their home countries have also hosted large number of Japan affiliated companies.

To explore the reason of their choice of workplace, satisfaction with working environment and future plan, online questionnaire survey was conducted to them from 2016 to 2018. 283 responses were collected and compared among the four country graduates and among those who work for Japanese companies in Japan and in their home countries. Interviews of some of these graduates and human resources (HR) managers of Japanese companies who hire them in Japan and in their home countries were also conducted.

As the result of the analysis, it was found that these graduates tend to choose to work for Japanese companies with the expectation of career development. Japanese companies have a tradition of spending considerable amounts of cost, time and energy to train new recruits; it is natural for the international graduates to choose employment at Japanese companies in order to develop their career and capacity. However, more than two thirds of them who are employed in Japan don’t plan to work there for a long time. This is partly because of the slow promotion derived from Japanese style HR management.

Satisfaction with working environment of those who work for Japan-affiliated companies in their home countries tends to be higher than those who work for Japanese companies in Japan. Since there is not much difference in actual salary considering the commodity price level, or even higher as is the case in China, it is natural for the graduates to choose to return home and seek employment in their home countries, where they can have better prospects of promotion, better care for their parent(s) and less work stress. They can also directly contribute to the development of their home countries. So, in the countries which enjoy economic development and increase of Japan-affiliated companies, a mobility of Japanese university graduates from Japan to their home countries has been prompted by the above factors.

Then, does this kind of brain circulation benefit both home countries and study destination country? If the returned graduates are willing to seek employment in Japan-affiliated companies in their home countries, it could be the case. However, the choice of workplace in their home countries includes not only Japan-affiliated companies but also other multi-national companies and local companies. Since many Japan-affiliated companies still adopt semi-Japanese style HR, it is not easy to adopt “fast track” system, which would enable the recruitment and retention of returned graduates of Japanese universities. A Thai graduate who had worked for Japanese companies and now work for a Thai company, an affiliate of a Thai financial combine, attested that his company offers a better salary and position than Japan-affiliated companies. Another Thai doctorate degree holder of a Japanese university, who now work for a Japan-affiliated company in Thailand, says that she is looking for another job since she is not happy with the unpaid overtime, which seems to be transplanted from the head office in Tokyo.

The above analysis indicates that Japanese companies which have expanded overseas business and recruited Asian graduates of Japanese universities need to provide better working conditions to secure their retention. Since it is not easy to change the Japanese-style HR management at head offices for a short period of time, it is suggested that the HR management of Japan-affiliated companies overseas should be reformed first to provide more attractive working conditions for the talented local staff, including the returned graduates. It will also facilitate the earlier overseas assignment of Japanese university graduates recruited at head offices in Japan by decreasing the possibility of friction with the local staff employed at the overseas subsidiaries. Earlier overseas assignments will also increase their retention rate since it is an ideal career path envisaged by many international graduates. By taking these measures, it would be possible to realize the brain circulation which is beneficial for both Japan and their home countries.

Author Bio 

Yuriko Sato is an Associate Professor at the School of Environment and Society, Tokyo Institute of Technology, Japan. She works in the fields of educational sociology and development economics, with specific interests in the intersections of international student policy, migration policy, and economic development.

She received her Educational Engineering from Tokyo Institute of Technology. She is currently the principal investigator of a research project on “International Comparative Study on the Mobility and Career Development of International Students: Considering the Relation with the Overseas Expansion of Study Destination Companies” supported by Grant-in-Aid for Scientific Research of Japan Society for the Promotion of Science (JSPS).

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