No. 7 — February 18, 2000

Feature Article


Hiroyuki Takahashi

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The Internet has altered our world in countless ways. In particular, it has contributed to the rise of English as the lingua franca of computers and the de facto standard for human communications on the World Wide Web. The Internet bridges great cultural and geographic boundaries and brings together people who never before have had the opportunity to link up. But just as a personal computer must be equipped to handle the Internet networking protocol, people need to speak English to communicate with others around the globe.

The dominance of English on the World Wide Web is just the latest phenomenon that has reinforced the need for businesspeople competing in global markets to be comfortable using the language. Japanese companies, which traditionally have employed large numbers of workers unable to communicate in English, are keenly aware of this need. Increasingly, such firms place a premium on employees able to conduct business in English, and this language ability is becoming more important in hiring and promotion decisions by Japanese employers.

Corporate Japan long has valued proficiency in English. Many companies have encouraged, and even paid for, their employees to study the language. Although various arrangements are available, most workers who study English do so at an independent language school. While the bursting of the "bubble economy" has meant that Japan has suffered work-force reductions and belt-tightening measures in the postbubble recession, the independent English-language schools have had to grow to meet increased demand. This phenomenon has become known as the "English boom," and has been characterized by efforts to obtain measurable improvements in students' listening and speaking skills.

The forces responsible for the growing demand for English-language skills are operating at different levels. While companies are working to cultivate English proficiency among their employees, students entering the work force are struggling to boost their English comprehension scores on employment tests. Both groups realize that Japanese employers need competent English-speakers to work in an increasingly competitive global market. This effort is taking place even in the midst of Japanese companies' recession-induced, cost-cutting measures and the general feeling among workers that it is time to tighten belts and reduce consumption.


Standardized Testing For Listening As Well As For Reading Comprehension

One criticism leveled at the traditional English-language curriculum used in Japan's middle schools and high schools is that it overemphasizes reading and writing, and in particular, the memorization of arcane rules of grammar. The result is a nation of English students who possess some degree of reading comprehension and writing ability, but little or no speaking and listening skills. The current "English boom" has spurred efforts to correct this imbalance. One solution has been to implement a standardized test that measures listening comprehension as well as reading ability. The idea is that the Japanese, who are avid test takers, will adjust their study habits to meet the new test criteria.

About 20 years ago, many Japanese had their first opportunity to test their listening skills when the U.S.-based Educational Testing Service, the world's largest educational measurement organization, brought its standardized English comprehension test to Japan for the first time. The Test of English for International Communication,    or TOEIC, is a proficiency test for people whose native language is not English. It is a two-hour multiple-choice test that consists of 200 questions divided into listening and reading comprehension sections. The TOEIC is offered in about 50 countries, mostly in Asia and Europe. Since its introduction in 1979, more than 5 million Japanese have sat for the TOEIC, including approximately 800,000 in 1998. The evaluation methodology combines listening and reading scores to arrive at a single standardized score that measures English communication skills (see Table 1).

Table 1: Test of English for International Communication,
Interpretation of Test Scores

Range of Points

Level of English Skill

860 to 990

A: Communicates at level comparable to native command

730 to 859

B: Able to communicate in any situation

470 to 729

C: Able to secure daily needs and limited ability to conduct business

220 to 469

D: Minimal ability to carry on ordinary conversation

10 to 219

E: Unable to communicate

Source: TOEIC Steering Committee


The "English Boom" And Fujitsu's Requirement That All Employees Take The TOEIC

Not only do many individuals sit for the TOEIC exam at public exam centers across the nation, more than 2,000 Japanese companies use the TOEIC institutional program for in-house testing. Firms use the test as part of new employee entrance exams, as an integral part of in-house English studies programs or as criteria for decisions about sending workers to work and study abroad.

Despite the TOEIC's widespread use, many people were surprised when the president of Fujitsu, Ltd., Tadashi Sekizawa, announced in 1996 that all 30,000 of the firm's employees would take the test. In a top-down approach that began with Fujitsu Chairman Takuma Yamamoto and Mr. Sekizawa himself, the test was administered to every employee. The reason for this dramatic effort was simple. Fujitsu realized that the traditional marketing approach of Japanese computer companies was no longer practical given the rapid globalization of the personal computer market and, furthermore, that the widespread use of the Internet reinforced the need to communicate in English.

For years, Japanese product development took place in two stages. First, a company would design a new product and market it solely in Japan. Then, if the product did well, the company would tinker with it to meet foreign consumer tastes and launch the product worldwide. This two-step marketing approach, which worked wonderfully for years, was predicated on two assumptions. One, that the domestic market would insulate product development from foreign competitors' prying eyes and, two, that there would be time to test a product in the domestic market until it succeeded before marketing it internationally.

However, the Japanese market is no longer isolated from Western exports. New computer products are developed and marketed in Japan and in other parts of Asia, North America and Europe simultaneously. Japanese companies no longer have the luxury of test-marketing their products at home. To survive in the new global economy, computer companies, for example, must design products to be introduced immediately into global markets, a process that requires integrating English-specific characteristics — as in operation manuals and user dialogs — and the preferences of English-speaking consumers from the start.

Fujitsu recognized that it needed to revamp its approach to product design and marketing. In addition, the firm realized that the rapidly developing Internet, would provide it with new opportunities to communicate with and keep track of customers, business partners and competitors. But approximately 90 percent of Internet communications take place in English. English also is the native language of a number of Fujitsu's strategic business partners such as the British company, ICL PLC, and the U.S. firm, Amdahl Corp. To take advantage of the Internet and to communicate successfully with its customers and business partners, Fujitsu concluded that cultivating the English skills of its work force was crucial.

Fujitsu took the first concrete steps to address this problem in 1995 by surveying its managers to determine how many spoke English proficiently enough to be sent on overseas trips or to work abroad. The survey results revealed a dramatic shortfall: An additional 3,500 English-speakers would be needed by Fujitsu over the next three years. The company spent the following year designing and implementing the "Special Program for English Education," its in-house training to develop internally the English-speaking personnel necessary to fill this deficit. At the same time, Fujitsu adopted the TOEIC to measure English proficiency, but its ulterior purpose was to reinforce in the minds of its employees the crucial need to improve their English proficiency.

Fujitsu has continued to offer the exam biannually to be taken on a voluntary basis, and about 5,000 employees take the TOEIC each year. Fujitsu's top management is committed to improving its workers' English proficiency as demonstrated in the opening remarks at Fujitsu's 1998 New Employee Welcome Ceremony by then-President Tadashi Sekizawa:


You no doubt remember that we had all of you take the Test of English for International Communication [TOEIC] during the hiring process. This is because about 90 percent of global Internet content is written in English. So, English has clearly become an indispensable tool for carrying out your work at Fujitsu, whether for information exchange or customer contact. With this in mind, I would like all of you to continue to work on your English so that you can communicate in it comfortably, as you do in Japanese.1


How English Is Used Within Japanese Companies

The issue of how English is used within Japanese firms is complicated by changes in a corporate community whose homogeneous characteristics once earned it the nickname, "Japan, Inc." Foremost among those changes is the growing presence of foreign owners and managers inside what were once exclusively Japanese companies. For example, in 1996, Mazda Motor Corp. accepted a new capital infusion from Ford Motor Co. in return for a 33.4 percent equity stake in Mazda. This transaction led to an influx of American and other foreign managers, including a new chief executive officer, Mark Fields.

At present, approximately one-fourth of Mazda's executives are non-Japanese and about 100 foreign workers, including Ford employees on extended assignment, are working at Mazda headquarters. What this means in terms of internal communications, including written reports, is that both English and Japanese are used. Some reports are distributed only in English. At least in certain jobs, the ability to communicate in English is necessary for Mazda's Japanese workers. For parts-suppliers as well, a successful business relationship requires speaking English and providing important documents in that language. As a result, English-language schools in Hiroshima, home of Mazda corporate headquarters, are said to be extremely profitable.

At the same time, however, English is not the predominant language at Mazda. Mr. Fields and the other foreign workers at headquarters rely on a cadre of translators, who provide simultaneous translations in both languages during important meetings. Mazda's philosophy is simple: Let everyone speak his or her native language and use translators to bridge the gap.

Sony Corp., whose global successes have caused it to embrace an international business culture,2 has on its 10-member board, one non-Japanese director: Peter G. Peterson, Chairman of The Blackstone Group. The Sony board meets 12 times a year, but Mr. Peterson attends only one or two of those meetings. When he attends, he receives a written translation of the meeting's highlights only, but simultaneous translation is provided. Similarly, Komatsu, Ltd. has appointed the head of its U.S. subsidiary, Arlie G. Tucker, to the Japanese parent company's board of directors. Simultaneous translation and translated documents are provided at the board meetings attended by Mr. Tucker as well as written translations of meeting highlights.

Surprisingly, Nissan Motor Co., Ltd., which recently turned to France's Renault S.A. for a badly-needed cash infusion (see JEI Report No. 41B, October 29, 1999), also holds its executive board meetings in English. Nissan's Chief Operating Officer, Renault-appointed Carlos Ghosn, exemplifies the globalization of key personnel. Born in Brazil of Lebanese ancestry, the Paris-educated Mr. Ghosn is a French citizen heading a French company's operation in Japan. The firm recently issued its "Nissan Revival Plan," a business strategy designed to solve its pressing financial and business problems. The plan not only was announced in a press statement by Mr. Ghosn in English, but was drafted in English and explained to Nissan's workers in a presentation — again, in English.

These examples, although somewhat reflective of management's embrace of non-Japanese managers in response to serious economic problems, illustrate the situation found in Japan's elite multinational companies. It cannot be said, however, that the efforts of these firms to integrate English-speakers into their internal corporate communication hierarchy is representative of what is happening everywhere.

In 1998, the Japan Overseas Enterprises Association surveyed 361 of its members with overseas subsidiaries to ascertain how they were using English internally. The JOEA survey results from 131 respondents indicated that many Japanese companies had not developed the ability to communicate adequately in English with their foreign employees overseas.3 Of course, many of these firms are quite adept at communicating with overseas partners in English. Outside partners aside, business with overseas affiliates also requires Japanese companies to communicate in English.

The JOEA survey classified communications with affiliates according to whether the recipient was Japanese or a local. The rather unsurprising result was that 79 percent of documents sent to Japanese employees at overseas affiliates were in Japanese; only 1.5 percent were in English. When the recipient was either Japanese or local management, however, the share of correspondence in English jumped to 29 percent. Some 22 percent of the firms surveyed responded that they communicated mainly in Japanese and translated important points into English. Surprisingly, however, 17 percent of respondents answered that they used Japanese exclusively for correspondence to local and Japanese recipients. This last figure indicates that some companies still are unprepared to use English for internal communications.

Japanese companies provide information in English to their stakeholders outside of Japan (see Table 2). The fundamental usefulness of the annual report, along with the fact that it is distributed to foreign shareholders and foreign visitors, explains why it is the most frequently translated document. Therefore, the fact that about 30 percent of companies with overseas stakeholders were not translating their annual report is a bit surprising.4 With the exception of Japan's corporate powerhouses, many Japanese firms have not yet put up an English home page on the Internet. Even when a firm does, a comparison of its Japanese and English home pages reveals a paucity of information displayed on the latter.

Table 2: Japanese Business Publications Translated Into English

Type of Document

of Companies

Annual Reports


Corporate Mission Statements


Presidents' Speeches


Corporate Web Sites


Internal Information


Technical Journals


Business Reports


Periodic Bulletins for Overseas Japanese Employees


Source: Japan Overseas Enterprises Association

Although foreign directors on Japanese corporate boards remain scarce, the number of foreign employees and visitors attending important corporate meetings is increasing. A look at how English is used in the materials distributed at such meetings reveals various approaches. The JOEA survey showed that approximately 40 percent of companies use only English, 22 percent use both languages and 11 percent use mostly English but provide a Japanese language overview of the main points.5 Although these approaches differ, all emphasize English as the medium of communication. It should be noted that firms use simultaneous translation at some meetings and that firms may use different approaches depending on the nature and size of the meeting.

Indeed, in the related area of encouraging Japanese workers to use English, it is difficult to make generalizations about Japanese firms because of the diversity of approaches. It can only be said that the general consensus is that English proficiency is a desirable skill that workers should be encouraged to develop. Firms use diverse methods to cultivate their employees' English-speaking skills (see Table 3). Most companies provide some means for workers to practice conversational skills. What is even more noteworthy is that some firms have designed programs to teach higher-level communication skills — presentation skills, speech making and debating — that are critical to conducting business in English.

Table 3: Employer-Provided English Education Programs

Type of Program

of Employers

In-House Conversation Classes


Subsidies for Conversation Classes


Study-Abroad Program


"Use English in the Office" Policy


Linking Promotions to TOEIC* Scores


Presentation and Speech-Making Courses


Debate Courses




*Test of English for International Communication
**Category includes: Business writing classes, use of comprehension exams other than TOEIC, reimbursement for educational materials used in broadcast courses and mandatory TOEIC exam for job applicants.

Source: Japan Overseas Enterprises Association


Internationalization Of Japanese Firms And Efforts To Improve English Proficiency

The effort to improve employees' English proficiency across the board is a relatively recent phenomenon in Japan. Of course, even in the 1950s and the 1960s, firms needed English-speakers to deal with export customers. The number of people with English proficiency needed then, however, was quite limited, and many firms were content to rely on a trading firm or other exporter to handle communications with foreign customers. It was not a problem that most workers could not conduct business in English.

The situation changed in the late 1960s and in the 1970s, when Japanese manufacturing firms began moving production facilities offshore. This shift meant that Japanese managers and technicians were sent abroad to oversee these facilities, and the need for English-speaking staff suddenly grew. The Japanese practice of rotating workers in and out of foreign plants on a periodic basis required a new crop of English-speakers for every rotation. This additional need led to the development of in-house language programs, which first appeared at Japan's automotive and electronic firms and spread throughout corporate Japan.

During the 1970s and the 1980s, various approaches to English education — in-house classes, outside classes, broadcast classes and other methods — sprouted up everywhere. However, a problem remained: There was no way to measure the effectiveness of the different programs. The introduction of the TOEIC in 1979 was a fortuitous event for Japanese firms looking for a way to measure their employees' English comprehension. The TOEIC provided a standardized score for managers and its use spread rapidly. The institutional program was introduced to Japanese firms in 1981. By 1989, over 500 Japanese firms were using the TOEIC, and by 1998, the number had jumped to over 2,000.

The need for English-speaking Japanese employees for assignments abroad was boosted in 1985. That year, the Plaza Accord ended the strong dollar and bolstered the value of other currencies. The yen took a sharp rise as a result, making domestically produced Japanese goods more expensive to export. Japanese manufacturers responded by accelerating the expansion of their offshore production facilities, which again boosted the need for English-speaking workers. It became increasingly clear to Japanese managers that they no longer could rely on a few sales people, managers and technicians to interface with overseas affiliates, but needed people from every corner of the business who could correspond with their counterparts abroad. Top management began treating every worker, new and old alike, as a possible candidate for overseas duty. Corporations that previously had sponsored English study only for special job categories began to encourage all workers to improve their proficiency.

The internationalization trend spread from the manufacturing sector to the financial services firms, which also introduced English education programs. At the height of the late 1980s "bubble economy," it was not unusual for a company to pay the entire cost of an employee's language education expenses. Workers were earning large bonuses and many firms were offering courses as an extra perk, so it was not uncommon to find students participating in company English classes more out of a desire to be entertained than to studiously improve their language skills. For dedicated students, a number of options were available. English-only training sessions and even language camps could be found. Although the opportunity for English education had been opened up to all employees, Japanese firms were concentrating more than ever before on developing a pool of dependable English speakers to meet international business needs.

The bursting of the bubble led to a restructuring within the Japanese corporate system. As some experts have explained, doubts about the efficacy of many English-language courses, suspicions that had been present throughout the 1980s, took on a new significance in the face of postbubble downsizing and corporate cost-benefit analyses. Companies began demanding employee attendance reports and class grades, and in many cases, also began shifting the cost of English lessons to the employee.6

Traditionally, training for Japanese workers has been an expensive, intensive process predicated upon the lifetime employment system. Worker education begins with formal training for new employees and the so-called OJT, or on-the-job training. On top of this, midlevel and top managers receive special training tailored to their particular job functions. Additionally, the company periodically provides courses that are open to all workers interested in upgrading their skills. Recently, however, Japanese firms have passed the primary responsibility for skill-improvement training on to the worker, while continuing to play a backup role.

Firms still encourage large numbers of employees to improve their English, but during the cost-conscious 1990s, arranging for lessons was left to employees; employers supported those efforts by subsidizing the cost. In-house programs tended to be more narrowly tailored to meet the company's need for workers with special language abilities. The shift to worker-financed training is a predicable consequence of the decline of lifetime employment and the increasing probability that workers will take their new skills to other companies.

For example, the purpose of Fujitsu's international education program is not to improve every employee's English. Each worker must study English until a TOEIC score of 600 is achieved. The company sponsors English classes, which are offered on weeknights and Saturdays, but picks up only one-third of the cost. Fujitsu also reimburses students who take broadcast classes. Employees slated for overseas assignments also must make a minimum score of 600 on the TOEIC. After attaining that score, a worker whose job requires English can participate in a number of in-house courses tailored to specific business needs. Fujitsu offers two fundamental high-level English courses in business English and technical English as well as special courses in international presentations, international negotiation, international meetings and discussion, cross-cultural communication and writing. The courses run three hours a week for 12 weeks with a one-month break between courses.

Another aspect of Japan's cost-cutting measures is increasing the need for competent English-speakers. Most affiliates rely on their home office for management directives, and the intermediary responsible for communicating important management issues to the home office often is a Japanese worker sent from the home office. The cost of sending a worker with a family to work overseas, however, is reaching $450,000 or more per year. To reduce this expense, many firms are scaling back the number of workers sent abroad and eliminating unnecessary overseas visits.

Affiliates as a result, are gaining managerial autonomy. As the number of Japanese in place at the affiliate drops, more local workers are moving into higher management positions. This means it is crucial for the Japanese workers who remain abroad as well as the home-office workers in charge of relations with the affiliate to be able to talk with local upper management in English. For this reason as well, Japanese firms now must cultivate English-speakers who understand the company and can communicate effectively with overseas workers.


How Companies Use TOEIC Scores

About once every two years, the TOEIC Japan Steering Committee surveys its institutional clients to evaluate how well its test is meeting their needs.7 In 1997, the committee interviewed 1,700 companies, of which 67 percent used TOEIC regularly and 73 percent paid for the entire cost of the test. Most companies reported using the score to evaluate workers' English study efforts. The next most common use was as a factor in making decisions about whether to send a person abroad on a trip, for an extended stay or to study.

The committee also looked at the types of workers taking the exam. The biggest category was technical workers, followed by managers and researchers. This ranking reflects the strong demand within Japanese companies for experts who are qualified to manage overseas technical facilities. Despite the need for English-speaking technicians, that group's average score was low among the 13 job categories surveyed. Not surprisingly, the highest average test scores were earned by workers employed in companies' overseas sections, who scored on average more than 600 points out of a possible 990 — significantly higher than the overall average of 450. Technical workers recorded an average score of 442, lower than the overall average and second from last. This score is a good bit lower than the score of 500 to 650 expected by Japanese companies (see Table 4).

Table 4: Test of English for International Communication,
Expected Scores by Job Category


Range of Points

Overseas Section

600 to 730


500 to 650

Technical Workers

500 to 650

New Employees

400 to 500

Source: TOEIC Steering Committee

The survey also looked at the study methods used. The most frequent was for the company to bring outside teachers into the office to hold classes once or twice a week. Among the survey respondents, 47 percent of companies held less than 47 hours of class per year and 36 percent provided 50 hours to 99 hours. A narrow slice of 2.5 percent of firms fell into the top tier, scheduling more than 300 class hours per year. The majority of companies use the TOEIC to measure progress by conducting the exam twice, once before beginning a program and then after completing it. Most companies look for a 100-point improvement and would like workers to score at least 600 points. The steering committee also asked companies if they were happy with their English-study programs. Although 37 percent were at least satisfied, an overwhelming 63 percent expressed dissatisfaction with the programs and, presumably, with their results.

Some firms, however, are integrating in-house English study and TOEIC scores into their personnel decisionmaking in new ways. For example, employees of Toyota Motor Corp. are encouraged to get a TOEIC score of 600 or better to be considered for promotion to kakaricho (assistant manager). At Toyota, that position generally requires a college degree and tenure of about eight years.

Management at Matsushita Electric Industrial Co., Ltd. requires TOEIC scores for all promotions to shunin (group leader), a position usually held by 28-year-old college graduates. A candidate for a position involving overseas business must score 650 or better. Candidates for other positions must score at least 450 points. In 1998, construction equipment giant, Komatsu Ltd., began requiring all workers seeking promotion to kacho (manager) and higher positions to take the TOEIC exam. The company does not look at the score, but any worker who fails to sit for the exam is automatically disqualified from promotion. Beginning this year, however, all candidates for kacho must score a 500 or more. Komatsu has established similar standards for workers studying such other languages as French, German and Chinese. Teijin Ltd., a textile company, also requires its candidates for kacho and higher positions to take TOEIC, but imposes a minimum score of 500 if the candidate is seeking a position as bucho (department head) or above.

The latest survey of 130 major companies conducted by JOEA, showed that only one-fourth of the respondents take the employee's English ability into consideration in promotion.8 However, for all those elite companies, English ability has become a factor in promoting candidates, and many other big companies eventually will follow them. Indeed, if this trend continues, those who excel at speaking English may find themselves on the fast track to success, while those whose speaking skills lag may face dwindling opportunities.

According to a survey by Toyo Keizai Inc., a respected business publisher, Japanese companies want their workers to be able to engage in everyday conversation and to have at least limited ability to conduct business in English. In TOEIC terms, this means earning a C or better. At Kawasaki Kisen Kaisha, Ltd., a large shipping line, approximately 20 percent of all white-collar workers are overseas at any given time. Consequently, the firm requires all workers seeking a job position of kacho or higher to score 730 or more on TOEIC.9

The TOEIC also is being used among Japanese companies with foreign-held ownership. Employees of GE-Yokogawa Medical Systems, Ltd., a joint venture between General Electric Co. and Yokogawa Electric Corp. are strongly encouraged to take the TOEIC at least once every three years. In 1993, the company established English-proficiency targets for various management positions. A score of 450 points on the TOEIC is required for full-time employees, 650 for managers, 730 for senior managers and 800 for directors.

These requirements are not absolute — an employee who cannot attain 800 still can be a director. The targets, nonetheless, are an enormous incentive for workers to improve their English. As a further motivation, the company awards a special bonus to each worker who improves his or her score by 50 points or more. Employees who improve their scores by 150 points get a reward of about $300. Although not a huge sum of money, it certainly is an incentive for workers to increase their test scores.


Growing Interest In Studying English Among College Students

After a decade of unprecedented economic stagnation, Japan's companies have tightened up their hiring policies as a way of cutting costs. According to a survey by Recruit Research, the number of openings available to college graduates has fallen dramatically. In 1990, there were 2.86 openings for each job-seeker with a college degree, but this number fell to 1.25 in 1998 and to 0.99 in 1999. Another survey of private-school graduates last year showed that students' number-one fear was not finding a job. To increase their chances, 27 percent of private-college students attended a vocational school to obtain some type of technical training or other employment-enhancing certification. The most popular classes were those that prepared students for examinations to be certified public accountants or lawyers. In second place were language studies.10 This trend reflects the desire of students to enhance their employability by bringing valued skills to the workplace. Thus, the growing need of employers, including increasing numbers of foreign firms, for English-speakers has resulted in increased interest among students in improving their language skills.

This interest is understandable in light of the fact that 60 percent of employers surveyed by the TOEIC Steering Committee stated that they considered job applicants' TOEIC scores in hiring decisions and 20 percent reported that they planned to do so in the future. English skills, therefore, will be an increasingly important factor in hiring decisions. That fact apparently has not been lost on young people — more and more college students are sitting for the TOEIC. The number of test-takers jumped from 180,000 in 1990 to more than 1 million in 1998.

Colleges and vocational schools also are aware of the value of an English education. The number of schools that participate in the TOEIC institutional program has increased from 13 in 1990 to 211 in 1998. Those 211 schools accounted for more than 50,000 test-takers that year. A March 1999 Ministry of Education announcement that endorsed the test as a valid measure of English aptitude has led more schools to grant foreign language credits for high TOEIC scores. Nagoya University, for example, gives four credits to any student who scores 586 points to 786 points and six credits to those who score 787 points or more. However, students also must pass the university's written and oral exams.

Again, at the college level, greater interest in English proficiency has led to greater use of the TOEIC score as a measure of English aptitude. Although students realize that getting a high TOEIC score makes getting a job easier, on average, their English comprehension skills have not improved much. Employers would like to see applicants with scores of around 600 points, but students continue to score about 450 on average. Despite all the noise and excitement, Japanese students' actual ability in English is not keeping up with their professed interest in the language.

A satisfactory score on another ETS measurement, the Test of English as a Foreign Language, known as TOEFL, usually is a prerequisite for Japanese students seeking to study in the United States. On average, TOEFL scores of Japanese students are not improving but are getting worse. In 1960, Japan ranked in the middle compared with other Asian countries, however, in recent years, it has dropped to a position where it shares the last place with North Korea.11

One explanation for the falling test scores is the explosion in the number of Japanese students applying to study abroad. In the past, only exceptional students earned this privilege and choices were limited, but now, many more parents can afford to send their children abroad and can choose from a variety of institutions of varying quality. In this atmosphere, the explanation goes, a new class of unambitious and often ill-prepared test-takers is bringing the average TOEFL score down. While Japan's economic prosperity has unquestionably enabled more students to study abroad, recent economic growth in other Asian countries has produced the same trend without the drastic drop in TOEFL scores.

Of course, average scores do not tell the whole story. Some firms have personnel with excellent English skills. For instance, new employees at IBM Japan, Ltd. score on average over 700 on the TOEIC. For the time being, though, IBM Japan remains one of the exceptions.

The lack of results in Japan's efforts to increase English skills has produced numerous proposals. Yoichi Funabashi, editorial writer for Asahi Shimbun, has put forth the radical recommendation that Japan make English its official language and require that beginning in elementary school, students receive their entire education in English. He also has recommended that the college English entrance examinations be replaced with the TOEFL scores and that English teachers also be required to take the TOEFL. Takao Suzuki, a professor at Keio University, has decried what he describes as a superficial attempt at English education for everybody. However, he also has called for a concerted effort to upgrade the English skills of those in leadership positions.12 While it is unlikely that the Japanese will adopt such a dramatic measure as replacing their native tongue with English, new efforts at revamping the system of language education are underway.


Where Do Japanese Companies Want To Go With English Education?

Japan's elementary schools soon will implement a national English education program that will enable students to begin the learning process when their minds are most able to absorb new words and new grammar. Meanwhile, efforts must be made to improve the language skills of today's workers and to tap into new sources of language ability.

The best example of an effective method of instilling language skills can be seen in Japanese workers' children who have been raised in other countries. Children and adult dependents of Japanese workers sent abroad often possess language skills far more developed than their counterparts who have grown up in Japan. Yet, foreign-raised job applicants historically have faced difficulties in securing desirable employment. Their foreign language skills may be excellent but they lack the advantage of a Japanese education, and, as a consequence, generally get lower scores on college entrance exams and sometimes speak Japanese imperfectly.

When current Mitsubishi Corp. Chairman Minoru Makihara was company president, it was widely rumored among employees that Mr. Makihara, a consummate English speaker, would declare English the company's official language as a rather radical way of improving his workers' English skills. As Mr. Makihara's colleagues probably pointed out, requiring workers to conduct business in English might have forced them to improve their language skills, but until they mastered the necessary legal and technical terms, learned how to negotiate and make presentations, and could write clearly and accurately, it would be difficult for them to do their jobs.

An advisory panel to Prime Minister Keizo Obuchi suggested in its report this January that to obtain the various high-level skills necessary to do business in English, the Japanese need to revamp their approach to English education in practical ways. Its major suggestion was that Japan should make English its official second language.13

Such recommendations are not practical solutions for corporate Japan, however, because their implementation would take too much time. Businesses need to act now. First of all, companies need to focus on recruiting workers who already possess English language skills, rather then trying to develop English speakers across the board. Secondly, companies must concentrate on cultivating the language skills of those who already exhibit some capacity in the language. To enhance the usefulness of these workers, English classes should be made available, but on a selective basis.

Firms can avoid wasting resources on students who are not motivated or capable of succeeding at this difficult task, by requiring each worker to bear all or part of the cost of the study until that worker demonstrates a level of proficiency at which the company can obtain tangible benefits by using the worker's language skills. At that point — or in instances where the need for that particular worker to communicate in English is crucial — the company can step in and take complete responsibility for the cost as well as content of further language studies. At the same time, however, the company also must ensure that workers do not become obsessed with improving their language skills at the expense of their job performance because English is a corporate tool, not a corporate goal.

The growing consensus among the Japanese is that English-speakers have an edge in today's global markets. Efforts are underway to cultivate English-language skills among Japanese workers in order to give Japanese companies that competitive advantage. In effect, the value of conducting business in English has forced the Japanese to look at ways to improve the system of teaching English in Japan and at the problems of implementing needed changes. So far, results are mixed, but there are signs that the cost-conscious, results-orientated approach of Japanese companies to language education may pay off in the long term.

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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1aa The English translation of his remarks is available at Return to Text

2aa For a discussion of Sony's corporate reforms including the shake-up in its board of directors, see Hiroyuki Takahashi, "Corporate Governance In Japan: Reform Of Top Corporate Management Structure," JEI Report No. 28A, July 23, 1999. Return to Text

3aa Nihon Zaigai Kigyo Kyokai (Japan Overseas Enterprises Association), "Kokusai bijinesu no tsuuru = Eigo wo kangaeru (Thinking of English as an international business tool, A Survey)," Nichigaikyo Monthly, January 1999, pp. 14-22. Return to Text

4aa Ibid. Return to Text

5aa Ibid. Return to Text

6aa International Business Communications Association, TOEIC Newsletter, No. 66, June 1999, p. 7. Return to Text

7aa International Business Communications Association, TOEIC Steering Committee, TOEIC Katsuyo Jittai Houkoku (Report on the use of TOEIC), March 1999. Available at Return to Text

8aa "English ability hardly affects promotion at Japan firms," Japan Economic News Wire, January 14, 2000, p. 10. Return to Text

9aa "Ankeeto de miru shuyo kigyo no Eigo e no torikumi (How Major Companies Are Coping With English, A Survey)," Shukan Toyo Keizai, September 6, 1997, pp. 18-23. Return to Text

10aa "Shikaku, gijyutsu shutoku Daigakusei hashiru (College Students Seek Technical and Vocational Degrees)," Nihon Keizai Shimbun, December 7, 1999, p. 34. Return to Text

11aa Educational Testing Service, TOEFL Test and Score Data Summary 1998-99 Edition. Available at See also "Giving English Education a Firmer Focus: An Interview with Suzuki Takao," Japan Echo, XXVI, No. 5, October 1999. Available at Return to Text

12aa Takao Suzuki, "Eigo ga Nippon wo sukuu (English will save Japan)," Ronza, (Tokyo: Asahi Shimbun, December 1999), pp. 12-27. Return to Text

13aa "Panel urges Obuchi to emphasize English, allow immigrants," Japan Economic News Wire, January 18, 2000, p. 11. Return to Text

The views expressed in this report are those of the author
and do not necessarily represent those of the Japan Economic Institute

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