TT-574 -- Internships -- Evil or Worthwhile? e-biz news from Japan

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General Edition Sunday, July 18, 2010 Issue No. 574


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A major staffing company called FujiStaff Holdings has just
set up a new subsidiary, called Inter Agent, which will
find internships at Japanese firms for foreign
students. Inter Agent is apparently wanting to take
advantage of the fact that there are around 130,000 foreign
students studying in Japan at any given time and many of
them want to stay on and get jobs after they graduate.

The timing is such that those larger companies which are on
a major globalization push are obviously going to be
looking for Japanese-speaking foreigners who can learn the
company's methods and processes, and eventually get
assigned positions in that firm's holdings abroad. As an
example, Panasonic has said that next spring it plans for
80% of its new hires to be from applicants who are

Actually, staffing giant Pasona Group started a similar
business back in 1988, helping westerners studying in Japan
to find work experience at Japanese firms. In 2007 they
moved to take applications from China and Taiwan, and in
2009, 620 of those applying for internships came from those
two countries -- although only 8 were accepted to finally
take up actual internships. The reasons for the low
acceptance rate were as always, language and prior work

But while FujiStaff and Pasona are still looking for the
right formula to get more foreigners into the workforce
via internships and trainee positions, there are already
plenty of companies tapping into the foreign student
resources pool. According to the Immigration Bureau,
10,277 foreign students in 2008 changed from student
status to either an engineering visa or a humanities visa.

We don't know how many of these were achieved by
internships and trainee positions, but knowing that
Japanese companies are typically cautious about bringing in
foreign staff, we imagine that many of these students
changing status are doing so after becoming known to their
future employers by some low-risk means such as doing an
internship. Indeed, in our opinion, internships are an
ideal method for foreigners to segue into a job with a
Japanese employer, because the initial shock of having a
foreigner in the ranks is soon overcome by growing
familiarity and support from co-workers who generally
respect a newcomer for having the gumption to do something
challenging in their lives.

[Continued below...]

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[...Article continues]

Internships mean different things to different people.
Conventionally for westerners it is a non-paid opportunity
for a student or new-to-Japan young person with little or
no work experience to work in a company for 1-3 months,
with the objective of either gaining recognition on their
resume or to eventually gain employment at the company they
are doing the internship for.

Since the 2008 Lehman Shock, most larger firms (foreign
firms in particular) are more reluctant to give
internships, because they realize that the real expense of
having an intern is not the cost of the desk and
infrastructure, but instead lies in the care and attention
the intern needs from existing personnel in order to get
trained. This means that internships with foreign firms are
more typically found with smaller firms that are looking
for a helping hand in return for providing training and
experience. However, as FujiStaff and Pasona believe, there
is an increasing number of Japanese companies who are
committed to going global and therefore have made foreign
interns part of their strategic action list.

Last month, Mitsui Chemical announced that has started an
internship program for Indian post-grad students in
chemistry-related courses to work at company plants in
Tokyo and Osaka. Unlike internships at other companies, the
Mitsui opportunities will be just 4 weeks a year, but come
with a daily "salary" of JPY3,000 as well as a flat
JPY300,000 payment to cover air travel, accommodation, and

Another company that has an internship program is Rakuten,
which last year took on 300 new graduates. In their case,
the internships are available for certain job
classifications while the students are still at school.
Their main requirement is that if a foreign student is
applying, that they are able to communicate in Japanese -- an
interesting requirement, given that the company has now
committed to making all internal communication in English by

We have seen a number of less well-known companies work
aggressively to bring in foreign students in Japan with the
intention of signing them up as employees. One major SI
firm we are familiar with has dozens of Chinese trainees
and some full-time employees, with the stated goal of
sending them back to China in the future to represent the
company with their Japanese customers in that country. We
imagine that this same scenario is happening amongst the
hundreds of Japanese corporations who are now expanding
breakneck into Asia and elsewhere. It's not hard, then, to
see who is hiring those 10,000 foreign students a year.

Within the LINC Media and Japan Inc. Holdings groups of
companies, we offer 5-10 internships are year and most of
these interns enter the business during the Northern
hemisphere summer break and/or immediately after the
graduation months of April and October. We typically take
on interns for 2-3 months and go on to hire about 20% of
those people who want to stay after completing their term.
Of the remaining 80%, most are just interning for the
summer holidays, and go back to school after they are

Like most smaller companies, we do not pay our interns, but
do provide commutation and other allowances depending on
circumstance and the duration of the internship. So,
needless to say one of our most important questions when
getting an internship request from abroad is to ask the
person if they have some means of support, or family to
stay with, while they are in Japan. If they do not, then we
are unable to take them on.

Then there is the "other" definition of internship in
Japan: which is one of virtual slave labor. We are
referring to the foreign trainee and technical internship
program established by the government some years ago to
allow 200,000 young people from developing countries to
learn on-the-job at Japanese companies. After three years
of such "work experience" these workers are supposed to
return home again, armed with their new-found knowledge.

Of course the reality is sadly different, as was exposed
through the death through overwork ("Karoshi") of a 31-year
old Chinese trainee in June 2008. Last week the Ibaraki
Labor Standards Office found that the trainee died from
overwork, after having done over 100 hours of overtime
every month in the three months prior to his death. The
Japan International Training Cooperation Organization
reckons that 35 trainees died during FY2008, with 16 dying
of causes symptomatic of karoshi. In FY2009, 27 such
trainees died.

These government-sponsored traineeships/internships do come
with salary, which we suppose makes them marginally better
than a standard internship -- except for the fact that they
run for years versus weeks. But the amounts paid are so
low, typically around JPY100,000/month for the first couple
of years, that they can hardly be conducive to learning on
the job. Rather they create an atmosphere of desperation
that obviates any original purpose for people coming in on
the program. Instead, the interns become a source of
underpaid labor for small manufacturers who would otherwise
go out of business.

Genuine internships on the other hand are supposed to be a
fair and reasonable trade of personal effort by the intern
over a short period of time in return for training and work
experience by the company offering the internship. While
some people think that 3-4 weeks should be long enough for
an internship we think that three months is a more
reasonable exchange. Our reasoning for this is simple: if
the purpose of the internship is to gain meaningful
experience and to perhaps prove oneself to a future
employer, anything that can be taught in less than 2-3
months is probably not going to amount to much of value to
either the intern or the employer.

There has to be a limit, of course, and rationally, this
would be the amount of time that it takes for a potential
employer to decide that the intern is the right material
for a hire. 2-3 months is plenty of time to make this
decision, and by no coincidence is also the same amount of
time given to a company to decide whether or not to retain
or fire a new employee. It also happens to be the amount of
time most students have off before having to return to
school after the summer break.

The question inevitably comes up of whether interns should
be paid, especially since regular new employees are paid for
their services. Our response is that if the person applying
for the internship has no obvious skills or experience to
warrant their applying for an open position, the chance of
companies even interviewing such people is low. Whereas,
someone starting on an internship is able to show growth
and on-the-job aptitude, and so have a chance to convince
those they are working with that it is worthwhile extending
a job offer to them.

Before anyone complains how evil unpaid internships are,
consider that not only are they completely voluntary, but
that many well-known organizations provide such
opportunities. You may be surprised, for example, to know
that the U.S. government's Foreign Commercial Service in
Japan offers unpaid internships. To see more on this, go

Now that only 80% of this year's university graduates were
able to land jobs before leaving school, maybe it's time
for the unemployed 20%, the government, and smaller
Japanese companies to come up with a standardized
internship/work experience program that will help both
sides. In particular, the government needs to recognize the
difference between internships and paid employment, so that
issues of compensation are dealt with and all parties to
realize the full value of the internship system. They also
need to introduce a more specific type of visa for foreign
interns, who otherwise have to come in either on a visitors
visa (in which case they definitely can't get paid) or they
are forced into one of the above mentioned much abused
trainee visas.

...The information janitors/


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+++ NEWS

- NTT buys Dimension Data
- Tesla/Toyota RAV4 slated for 2012
- New condos on market jump almost 67%
- People staying in Japan for summer?
- Big demand for new Mitsubishi electric car in Australia

-> NTT buys Dimension Data

Not one to do things by halves, NTT has announced that it
will buy South African SI company, Dimension Data, for a
whopping US$3.2bn). NTT has been out of the M&A market for
sometime after the debacle with its purchase of Verio some
years ago. Once again we feel that NTT has overpaid, and
believe that it will find the acquisition of Dimension Data and
its various holdings to be more than a mouthful. ***Ed: This
acquisition is of particular interest to those of us in the SI
business here in Japan, since Dimension Data owns Datacraft,
a significant player in the bilingual IT market in Tokyo.** (Source:
TT commentary from, Jul 17, 2010)

-> Tesla/Toyota RAV4 slated for 2012

Well it didn't take long for Tesla and Toyota to find
common ground, and the pair have announced that they will
make an all-electric RAV4 available in 2012. Apparently
Tesla has already built a test unit, and Toyota is believed
to be considering using the same power train that is
currently used in Tesla's sports car and soon to debut in
its Model S sedan. ***Ed: This is big news because it will
catapult Toyota back into the electric car race against
Nissan, just in case full electrics turn out to be more
popular than their existing hybrids (Prius, etc.). We guess
that one more oil shock similar to that of 2008 would just
about do it.** (Source: TT commentary from, Jul
16, 2010)

-> New condos on market jump almost 67%

The building boom that started in early 2008, with land
being purchased and contracts being drawn up, is now
starting to hit the marketplace in the form of a slew of
condo building projects in Tokyo. The Real Estate Economic
Institute Company says that there were 66.6% more new
condominiums being offered for sale in June versus the same
time last year. Luckily, demand has also been brisk, with
4,303 units (83.9%) being sold. This is a 13.7% better take
up than the same period last year. (Source: TT commentary
from, Jul 15, 2010)

-> People staying in Japan for summer?

According to a Nikkei survey, the level of rental car
bookings in Japan during the August school break are up by
20-40%, indicating that more people are staying inside
national borders this summer break, and taking advantage of
reduced freeway tolls. Okinawa in particular is a
population destination, with Orix reporting holiday car
rental bookings up some 72%. (Source: TT commtentary from, Jul 16, 2010)

-> Big demand for new Mitsubishi electric car in Australia

The newly released in Australia Mitsubishi i-MiEV has
struck a chord with companies all over the nation and has
resulted in more than 300% more orders for the vehicle as
Mitsubishi is actually shipping. Currently there will be 40
vehicles in the first shipment and these will be leased to
primarily regional government bodies and companies.
(Source: TT commentary from, Jul
16, 2010)

NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.


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In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to

In Terrie's Take 573, we wrote that a major contributing
factor to the DPJ's disastrous showing in the recent Upper
House elections was the Consumption Tax issue, and that Kan
got his timing terribly wrong in announcing that the
country would have to hike Consumption Tax to at least 10%.
One of our readers takes exception to this reasoning...

==> Reader's comment:

You have it backwards about DPJ, perhaps looking looking at
things from a parochial, pro-business point of view.

Consumption tax wasn't the issue in the recent elections,
because the LDP also was proposing to increase consumption
tax, a fact you fail to mention.

The issue, aside from DPJ's failure of leadership (which
was your #1 explanation for loss), was precisely that Kan
proposed to lower corporate tax at the same time as hiking
the consumption tax. So DPJ looked like it wanted to shift
burden to ordinary working people, while rewarding
corporations. LDP didn't endorse lowering the corporate
tax. That was a significant substantive difference between

Perhaps your pro-business orientation blinds you to the
fact that many people could object to lowering the
corporate tax. Aside from the fact that when Reagan tried
his "voodoo economics" of lowering tax rates, US revenues
went down. (Real dollar annual tax revenues didn't recover
to 1981 levels until 6 years later, and real dollar
aggregate collections between 1982-1989 were less than if
than if there had been no tax cut and GDP growth had been
zero; whence GWB Bush raised rates again in 1990.) And as
if tax rates are hardly the only or main obstacle for
foreign businesses in Japan.

That the Nikkei, Yomiuri and other local media organs
reported this as a "consumption tax" election may perhaps
be attributed to their continuing incomprehension of
2-party democracy, rather than to their understanding of
voter sentiment. But you should know better.

*** We Respond:

Thanks for your response. We take your point on the fact
that this election was more about fairness than just straight
consumption tax talk timing, but we do, however, still
subscribe to the fact that Kan committed a political sin
by refocusing everyone on the inevitable rise in
consumption tax. True, the LDP is already promulgating a
rise as well, but the DPJ was previously all for delaying it
and of course they won the all-important Lower House
partly because of this reason -- along, of course, with the
LDP's own failure of leadership. Had Kan not suddenly done
the about face, which certainly did catch most of his
colleagues in the DPJ by surprise, then they may have kept
those swing voters who now had no reason not to vote more
traditionally -- i.e., for the LDP.

Ozawa may be a slippery character, but he really
understands how shallow voters are when it comes to tax
talk, and how to handle the media. Kan is obviously still
learning the ropes. He seems like a much more careful
driver than his predecessors were, however, and if he can
resist the calls for his head, he might just be able to
manage the economy during these critical times of change.

/...The TT Janitor.


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Having been on both sides of the internship experience, I have found it to mostly be not worth the time and effort involved for the company and the worker. If it is really a case of looking at a potential hire it may make some sense, but many companies these days operate the internship program outside of and independent of the hiring process. The whole thing becomes a PR exercise, and wastes valuable resources on training someone who will leave shortly anyway. Furthermore, if it is the case that no job is on offer, very often the intern will spend most of the time looking for ways to pad his/her resume, instead of focusing on the work given to them, and the chance to learn valuable skills, and make contacts. It is unfortunate as the idea is good on a conceptional level, but it rarely works out that way.