The ‘Who’ Question of Strategy

Prime Minister Takaichi wants to spend ¥370 trillion. The government’s own numbers say she doesn’t have enough people to spend it well.

That’s not a footnote. It’s the story.

Takaichi’s cabinet has approved a long-term blueprint for public-private investment across seventeen strategic sectors — AI, semiconductors, quantum technology, defense, biotech, shipbuilding. The claim is that this level of government-directed capital will double Japan’s real GDP growth rate, from 0.7% a year over the last decade to 1.4% through 2040. The pitch includes “knock-on economic benefits” running up to twenty times the investment itself.

Meanwhile, the same policy apparatus projects a shortfall of 6.4 million workers by 2030. Not by 2040, when the growth plan is supposed to have paid off. By 2030 — while the seventeen sectors are still standing up their supply chains, training their engineers, and competing for the same shrinking labor pool as everyone else in the economy.

Most of the coverage treats this as two separate stories: an ambitious growth plan, and a demographic headwind Japan has been managing for years. I’d argue they’re the same story, and the government is telling only half of it.

The assumption nobody is examining

Every strategy rests on assumptions. The work of strategy isn’t picking a bold target — it’s identifying which assumptions the target depends on and testing whether they hold. I’ve made this argument before in the context of individual companies: firms that get blindsided by supply chain shocks or geopolitical shifts usually aren’t victims of surprise. They’re victims of assumptions they never stopped to examine, because the assumptions were convenient and nobody in the room had an incentive to challenge them.

Takaichi’s plan runs on one large, convenient, unexamined assumption: that capital deployed into a sector converts into growth more or less independently of who is available to execute the work. ¥370 trillion goes in, human capital sorts itself out, 1.4% growth comes out the other end.

That assumption doesn’t survive contact with the government’s own labor data. Semiconductors, defense, and biotech aren’t sectors where you can paper over a talent shortfall with automation or overtime. They require specialized engineers, PhDs, and multi-year training pipelines — precisely the kind of labor that’s hardest to manufacture on demand and slowest to scale.

The fix being offered doesn’t match the clock

The government’s answer to the shortage is AI-driven productivity and workforce upskilling. Fair enough as a direction. But upskilling a workforce for advanced semiconductor fabrication or quantum research is a multi-year undertaking, and the sectors in question need that talent now, not in 2032. This is a timing mismatch dressed up as a solution. It’s the policy equivalent of promising a client a delivery date your production schedule doesn’t actually support — technically a plan, not actually a plan.

There’s a version of this I often see in client organizations: a growth target gets set, resourcing gets waved at in general terms, and the org discovers eighteen months later that the constraint was never capital. It was always people — the ones you have, the ones you can hire, and the ones you can develop in the time available. Companies that get this right build the workforce plan first and size the ambition to match it. Companies that get it wrong announce the ambition and hope the workforce plan catches up. Takaichi’s blueprint reads like the second kind.

The government is throttling the one lever that could close the gap fast

Domestic upskilling is slow. There is a faster lever available — skilled immigration — and rather than pulling it, the government is actively tightening it.

The Engineer/Specialist in Humanities/International Services visa, historically the fastest route for foreign technical talent into Japan, now requires JLPT N2 Japanese proficiency as of April 2026. That is precisely the visa category through which semiconductor, AI, and biotech talent would enter. Permanent residency eligibility has been pushed back from a three-year to a five-year visa requirement, effective April 2027, lengthening the runway before skilled foreign hires can commit to staying. The Business Manager visa’s investment threshold has sextupled to ¥30 million, raising the bar for the foreign entrepreneurs and executives who’d build these businesses in the first place, not just the engineers who’d staff them.

This isn’t neglect. It’s active throttling, running in parallel with a growth plan that depends on exactly the talent pool it’s restricting. A company that announced an aggressive hiring target while simultaneously making its own hiring process slower and more restrictive would not be praised for ambition. It would be asked, reasonably, whether anyone in the room had connected the two decisions. That is the question Takaichi’s growth blueprint has not answered.

What this means if you’re running a business here

If you’re a foreign executive watching this from outside the policy apparatus, the ¥370 trillion headline looks like a market signal — seventeen sectors the state has decided to backstop, presumably worth positioning around. That’s the wrong read.

The more reliable signal is sitting underneath the headline: the government’s own labor projections don’t close the gap the plan requires, and its own visa policy is actively narrowing one of the fastest ways to close it. That’s not an oversight to wait out. It’s the state of the constraint for as long as the current policy stance holds, and the gap between announcement and execution is where the real conditions of the next five years get set — not in the press release.

Practically, that means two things. First, don’t take the seventeen-sector list as a guarantee of supply — treat it as a guarantee of demand for talent that doesn’t yet exist and that’s getting harder, not easier, to import, which tells you where wage pressure and competition for skilled staff will concentrate. Second, if your business touches any of these sectors, your own workforce plan needs to be more rigorous than the government’s, not less — because you’ll be competing with a state-backed initiative for the same finite pool of people, under immigration rules working against you rather than for you, and “we have the budget” was never the hard part.

Capital is not a strategy. A workforce plan that can actually deliver the target — inside the constraints the government has itself imposed — is the strategy. Everything else is ambition wearing a strategy’s clothes.

And what about your business? Does your workforce plan meet the demands of your growth strategy, or is it ambition in disguise?

Good strategies answer questions of what, why, how, and when. Yet in many cases, the most important question is who.