Proposal on the Digital Infrastructure for Promoting Job-Based Employment Ver. 1.0

Outline of This Proposal

The Need for Human Resource Development and Smoother Labor Mobility

Amid industrial transformations driven by digital technology, there is a growing need across society for enhanced human resource development and smoother labor mobility. The rise of generative AI technologies such as ChatGPT has significantly accelerated digital-driven environmental changes, further promoting industrial shifts and increasing the necessity of adapting work styles. This is a shared concern not only in Japan but also across Europe and the United States.

In Japan, the impact of social structural changes—such as population decline and aging—is manifesting more rapidly than in many European countries, creating an urgent need to establish policies that support not only the development of new industries but also the sustainability of existing ones. In this time of change, it is crucial to establish an environment in which individuals can secure employment based on their own choices and build autonomous career paths aligned with societal shifts—ensuring they receive appropriate treatment and compensation for their work.

Developments in Europe and the United States

In Europe, skills are positioned as one of the key areas within its broader data strategy. Since 2022, the European Commission has been advancing the “Data Space for Skills” initiative and implementing a project on the European Digital Credential for Learning. This system enables the independent electronic issuance of diplomas, transcripts, and various other types of learning achievement certificates, which are then stored and managed through Europass. Alongside these technological and data-driven developments, the EU has also set an ambitious goal for digital human resource development: to equip 80% of adults with basic digital skills by 2030(1).

In contrast, the United States has taken a different approach by leveraging digital tools to significantly enhance domestic labor mobility. In 2019, under the Trump administration, the concept of Learning and Employment Records (LER) was introduced, followed by the launch of pilot projects(2). The main entity leading these efforts is the T3 Innovation Network, a public-private partnership organized by the U.S. Chamber of Commerce. Practical demonstrations have included cybersecurity initiatives led by IBM and the implementation of Skill-Based Hiring in the retail sector by Walmart—aimed at optimizing employment through verified skills.

The Path Forward for Japan

In enabling individuals to autonomously shape their careers, it is crucial that the skills they acquire are linked to specific job functions and that they can be evaluated by employers based on those functions. This linkage represents the essential relationship between job-based employment (i.e., performance evaluations tied to job roles) and learning (i.e., skills acquisition). Accordingly, it becomes indispensable to define the skills required for job performance and to ensure that individuals can prove they possess those skills.

To properly realize the connection between job-based employment and learning, skill records—systems that demonstrate who (Identified) can do what (Certified) and can be verified (Verified)—are vital. The concept of "skill record-based matching in the labor market" is thus central. To achieve this, public-private collaboration is needed to standardize and build digital infrastructure for data distribution and to promote digital transformation.

It is important that job roles be standardized beyond the confines of individual companies and tasks, and that the required skill standards for those roles be defined at a reference level that is accessible to many companies within the same industry. This is especially critical for ensuring smooth cooperation across the broader labor market and human resource development systems, particularly with respect to the interoperability of information and data. A trusted and high-quality system of data portability, centered on the individual, must be established.

Examples of Challenges Expected to Be Solved Through Digitalization: Benefits and Risk Considerations for Individuals, Companies, and Society

As one example, digitalization is expected to offer solutions to representative challenges such as the following:

i. Individuals often struggle to determine which jobs they should aim for based on their own skills and experience. However, through digitalization, data on jobs and skills in the labor market can be analyzed to suggest optimal career paths and several reasonable options. This enables personalized career information to be provided. Moreover, the cost of career counseling can be significantly reduced, making support more accessible and tailored to each person.

ii. Information provided by job seekers has typically relied on self-reported documents such as résumés and CVs, requiring costly background checks to verify employment history and accomplishments. Through digitalization, however, such information can be guaranteed to be authentic, thereby reducing recruitment-related costs.

From the perspectives of individuals, companies, and society, the following benefits can also be anticipated:

◎ Individuals can expect to have their skills and experiences assessed more objectively and fairly, increasing opportunities to find employment that better suits them.

◎ Companies may expand their capacity in various recruitment processes—such as job postings, candidate selection, search, and verification—and allocate more time and resources to the most critical aspects of hiring.

◎ Society as a whole can expect labor mobility to become more fluid in response to changes in industrial structure, leading to more resilient employment systems and strengthened international competitiveness.

While these benefits are promising, it is crucial to consider risks as well. A Security and Privacy by Design approach is required from the planning and design stages, and it is important to evaluate both the advantages and the associated risks. For example, using data to broaden individuals' career options is desirable. However, if such data is used in unintended ways that result in unfair disadvantages to individuals, it is essential to identify those risks and take appropriate countermeasures.

Current Status in Japan (Public Sector)

While Japan is only beginning to develop nationwide efforts such as the promotion of job-based employment, there is concern that a major structural transformation driven by digitalization may appear to lack short-term rationale. As a result, the country may be compelled to accelerate labor mobility under time constraints, while still relying on the existing structure centered on membership-based employment, job postings, and self-reported résumés and CVs.

In 2022, a technical proof-of-concept and prototype were implemented under the Trusted Web initiative, focusing solely on the exchange of personal identity verification and employment verification data during recruitment activities.(3) Regarding skill definitions, the Digital Skill Standard v1.0 was published by the Ministry of Economy, Trade and Industry (METI) in December 2022. Furthermore, for the first time, the Council for Science, Technology and Innovation (CSTI) has selected a humanities-related field—“New Ways of Working and Education”—as one of the 14 focus areas under the SIP (Cross-ministerial Strategic Innovation Promotion Program), with a planned implementation over three years.(4)

Thus, while basic technical validations for functions such as authentication are progressing and certain aspects of digital skill definitions are being developed, Japan has not yet established a clear overarching goal, a long-term framework, or an integration of these various initiatives.

Current Status in Japan (Private Sector)

As of FY2021, a market of approximately 9.5 trillion yen has formed, consisting of three major sectors: staffing services (9.2 trillion yen), recruitment services (0.3 trillion yen), and reemployment support services (0.03 trillion yen), with staffing services accounting for 97% of the total.(*5) However, since this figure reflects revenue, and staffing services operate at an operating profit margin of around 1%, the presence of recruitment services is also significant.

Currently, individual companies within these sectors collect and manage their own data in different ways, resulting in fragmented systems. In addition, many private entities, industry groups, and expert organizations have independently developed countless frameworks for jobs and skills, often tailored to specific or limited purposes. Given this landscape, integrating and connecting all such systems is an extremely complex task, and it is not realistic to advance progress across the board simultaneously.

Therefore, during this period of transition, it will likely be necessary to begin with areas that are easier to address or considered high priority. Striking a contrast between “what should remain unchanged” and “what must be transformed” will be essential (see Figure 1).

（Figure 1）

Figure 1. Areas of Continuity and Transformation in the Japanese Labor Market

Left (Unchanging Areas):

• Existing Job Categories
  Listed in jobtag (Japanese version of O-NET)

• Current Labor Market
  Job postings × résumés × work history × interviews

Right (Areas Undergoing Change):

• New Job Categories
  Digital, Green, etc.

• New Labor Market (DX)
  Skill records

Note: A portion of existing job categories will gradually transition to new ones. Likewise, the current labor market will be progressively replaced by the new digital labor market.

Proposal

The concept of "matching based on skill records in the labor market" forms the foundation of a digital infrastructure to promote job-based employment, representing the final major digital infrastructure alongside people, goods, money, and information. In developing this foundation, it is essential to draw a clear contrast between the "areas to be transformed" and the "areas to remain unchanged" within the labor market. Transformation should begin with job categories in the digital and green fields (for DX and GX), and is expected to expand to socially vital occupations such as essential workers.

In the EU, 2023 was declared the “European Year of Skills”(*6), with efforts underway to establish skill standards. Similarly, Japan should launch its own initiatives and declare 2023 the “First Year of Skill Records.” To move forward, it is necessary to develop a reference architecture for the desired future state, as seen in smart cities, and conduct practical demonstrations in parallel. With respect to matching, it is important that individuals be able to carry their job and skill information across workplaces and educational institutions—this portability will be key. Demonstration projects should ideally focus on specific job types, with digital-related roles such as UX designers being a suitable starting point. In the future, the framework could be extended to include regional professionals such as essential workers.

Examples of proposed demonstration projects include:

A) Digital sector (e.g., UX designers, cybersecurity professionals)

B) Green sector (e.g., Ministry of the Environment’s certified decarbonization advisor system)

C) Startups × Regional areas

As outlined above, this paper recommends that Japan begin cross-sectoral initiatives—both public and private—in 2023, the first year of skill records, to support the government's goal of investing ¥1 trillion over five years in digital human resource development and reskilling. In doing so, Japan should build a digital foundation to promote job-based employment, beginning with occupations in the digital and green sectors.

1. Introduction – Changes in Japan’s Social Structure and the Shifting Nature of Work

Japan is facing a more rapid population decline and aging society than other countries, and this demographic shift is expected to lead to an unprecedented gap between commercial markets and industrial structures. For example, in some regions, the disappearance of shopping centers, financial institutions, and infrastructure industries such as railways may result in the loss of related jobs. This phenomenon is not limited to rural areas. According to population decline projections by the Ministry of Land, Infrastructure, Transport and Tourism based on 500m x 500m grid units, similar localized effects are anticipated even in major metropolitan areas like Tokyo.

Globally, the software services sector is experiencing significant growth, and a similar industrial transformation is taking place in Japan. As industries with labor demand evolve, the types of jobs in demand—such as software engineers—are changing dramatically. Furthermore, the transformation of services and work structures driven by digital transformation (DX) is expected to further accelerate the shift in required job functions.

As these changes intensify, it becomes increasingly uncertain whether individuals can remain in the same job for years or decades. In such a context, facilitating smooth labor mobility becomes crucial to adapt to industrial transformation. Consequently, there is a growing need across society to promote both human resource development and the smooth transition of labor.

2. The Relationship Between Job-Based Employment and Learning, and the Role of Digitalization

In times of such transformation, it is essential to establish an environment in which individuals can secure employment based on their own choices and form autonomous careers in line with societal changes, thereby receiving appropriate compensation. Merely advocating the importance of learning is insufficient; it must be accompanied by economic incentives such as improved compensation and opportunities for self-fulfillment.

To ensure that learning leads to better treatment and self-realization, it is crucial that the skills acquired by individuals are linked to specific job roles and that those individuals are evaluated by companies and other organizations based on those roles. This reflects the fundamental relationship between job-based employment (evaluation based on defined roles) and learning (acquisition of skills). Therefore, clearly defining the skills required to perform a given role is essential.

To properly realize the relationship between job-based employment and learning, collaboration between the public and private sectors is necessary to standardize various elements and facilitate data distribution, thereby promoting digitalization. It is vital that job roles are standardized beyond the scope of individual companies and that skill standards required for each role are defined at a reference level applicable across multiple companies within the same industry. This standardization ensures interoperability of information and data, and enables smooth collaboration between labor markets and human resource development systems. If job definitions and training programs vary significantly by company, this will continue to result in significant mismatches between talent and available jobs, leading to missed opportunities and posing a major barrier to smoother labor mobility.

Among the elements of people, goods, and capital, the “people” domain remains the most delayed in digitalization, yet it holds the greatest potential and expectations.

3. International Developments

In Europe, the skills domain is recognized as one of the pillars of the broader data strategy. Since 2022, the European Commission has been advancing the Data Space for Skills initiative and operating a project called the European Digital Credential for Learning. This project enables the issuance of diplomas, transcripts, and various other learning achievement certificates in a digital format, which are then stored and managed on Europass. Alongside these technological and data developments, the EU has launched the “European Year of Skills 2023,” with the aim of establishing skill standards. As part of its digital talent development goals, the EU has set a target for 80% of adults to acquire basic digital skills by 2030.(*7)

In the United States, digital measures to enhance domestic labor mobility have also progressed significantly. Under the Trump administration in 2019, the concept of Learning and Employment Records (LER) was introduced, and pilot projects have since been launched. A key driver of this effort is the T3 Innovation Network, a public-private partnership led by the U.S. Chamber of Commerce. This initiative has included demonstration projects in skill-based hiring practices, such as those involving cybersecurity roles spearheaded by IBM and retail hiring optimization by Walmart based on skill certifications.(*8)

4. Matching in the Labor Market Using Skill Records

As noted in Section 2, the standardization of jobs and skills, combined with smooth data circulation through digitalization, is expected to bring about significant changes. For example, in the job market, there will be less reliance on traditional résumé formats. Instead, systems will better match employers with the most suitable candidates based on standardized data. Job seekers will also benefit by clearly identifying the gap between their current skill sets and the requirements for desired roles, enabling them to understand what steps are needed to achieve their career goals.

In a system where “who someone is (Identified), what they can do is certified (Certified), and this can be verified (Verified),” individual skills can circulate as Skill Records. These records serve as a value metric, making it easier for individuals to be compensated fairly for their skills. Skill records will be traded in the labor market and become the starting point of employment transactions. These matching activities (i.e., successful transactions) will occur on a digital labor market infrastructure. This represents a key conceptual shift in the functioning of the human resources and labor markets.

In the past, qualifications served a somewhat similar function. However, qualifications are typically certificates representing a collection of skills required for a given job and are issued, validated, and circulated as bundled credentials rather than at the level of individual skills. To ensure authenticity, they often took the form of hard-to-forge physical certificates, which had to be physically submitted and verified—an approach with high transaction costs. As a result, qualifications have not been issued for every conceivable job. A similar historical challenge was seen in the trade of goods and money, where large transaction units and costly trust mechanisms dominated.

With digitalization, the labor market—like markets for goods and financial instruments—can shift to instantaneous, cross-industry, and skill-level matching, enabling a variety of new employment connections. This mirrors the ongoing discussions and developments around digital platforms for contracts and payments in the world of commerce and finance (see Figure 2).

(Figure 2)

*Figure 2. The Impact of Digitalization on Transactions(9)

A) Importance of enabling cross-industry, real-time, small-scale, and high-frequency transactions

• Cross-industry / Real-time

• Small-scale Transactions

• High Frequency

B) Importance of enabling dynamic pricing decisions incorporating not only supply-demand information but also non-price factors

• Dynamic pricing requires overcoming constraints in information cost

• Digitalization enables decisions based not only on price-related data, but also on non-price-related data

Price-related (e.g.):

• Information related to supply and demand

Non-price-related (e.g.):

• Rating information

• Aggregate values from environmental indices or mixed data

• Statutory or regulatory information

Traditional examples (static pricing):

• Year to month: Public infrastructure

• Day: Retail

• Hour: Auctions

In the current environment, where jobs and skills are not yet standardized nor digitalized through skill records, several representative challenges exist. Although the following are just examples, digitalization is expected to help resolve such issues.

◯ [Job-based Employment]

ⅰ. Job applicant information is mostly self-reported, such as through resumes and work history documents, which imposes a significant cost for background checks such as employment and performance verification.

(With digitalization) – Information authenticity can be ensured, and recruitment-related costs can be reduced.

ⅱ. For roles lacking empirically established selection methods (particularly cutting-edge positions such as in the digital sector), it is difficult for anyone other than those currently performing the job to make hiring decisions.

(With digitalization) – A larger portion of evaluation can be handled via skill records linked to job roles, with HR officers focusing primarily on aspects like personality.

◯ [Learning]

ⅰ. The learning goals are often vague, especially in terms of what jobs or salary levels one can expect to achieve by acquiring a given set of skills.

(With digitalization) – Necessary skills for each job can be defined based on actual labor market data, and wage levels for jobs or individual skills can be referenced through data.

ⅱ. Individuals often struggle to determine which jobs they should pursue based on their skills and experience, and career counseling tends to require intensive interviews and communication.

(With digitalization) – Data on jobs and skills in the labor market can be used to suggest optimal career paths and several feasible options, offering personalized guidance. Additionally, the cost of career counseling can be significantly reduced, allowing for more human-centered support.

Therefore, deriving skill standards from job standards while ensuring the alignment between jobs and learning is essential, and skill records will be key from both the job-based employment and learning perspectives. A framework for continuously updating the standards must also be established.

However, in reality, numerous frameworks related to jobs and skills have already been developed separately or for limited purposes by companies, private organizations, expert groups, and government agencies. Integrating and connecting all of these will be extremely difficult, and it is not feasible to pursue everything at once. In fact, there may be industries or occupations where, based on experience, both employers and learning providers have incrementally improved systems over time, and where current mechanisms are functioning without significant issues. As such, during this transitional period, it will likely be necessary to start with fields or areas that are easier or should be prioritized.

Nevertheless, there is no need for pessimism. On the contrary, the very concept of digitalization and skill records is especially promising for advanced fields such as digital and green industries, where implementation is more feasible despite the current lack of structure. It is also expected that this framework will eventually expand to roles that are especially important in local communities, such as essential workers.

5. Digital Infrastructure to Promote Job-Based Employment (A To-Be Conceptual Vision)

In order to standardize jobs and skills and realize skill records, it is essential to design an overall labor market architecture that spans both learning and jobs. Equally important is the establishment of a data linkage infrastructure that enables individuals to carry their personal information—including skills acquired through work—in a reliable and trustworthy manner (data portability).

To support future discussions, Figure 3 is presented along with the following key points.

(Figure 3)

Figure 3. Conceptual Architecture for the Digital Infrastructure to Promote Job-Based Employment

[Learning (Education/Employment)]

• Learning Evaluation and Management of Cost and Time

• Skill Standards

• Skill Record

[Job]

• Job Standards

• Corporate Jobs

• Job Evaluation: Performance, Time, Cost

① Learning Management System

• Learning DB

② HR, Performance, and Labor Management System

• Job DB

③ Evaluation and Data Sources

• Learning Side:

  Teacher Evaluation

  Course Evaluation

  Test Results

  Learning Materials

  Workshops

  Peer/Manager Evaluation

• Job Side:

  Salary Level

  Skill Matching

  Working Hours

  Performance Evaluation

  Job Placement

④ Individuals manage their own information and can decide which evaluations to carry with them (Portability)

1. The systems that allow individuals to assess the extent to which they have acquired skills through learning, and that provide learning environments and content, are collectively referred to as Learning Management Systems (LMS). These systems enable the collection and management of data in accordance with standardized skill frameworks.

2. Human resource, performance, and labor management systems—many of which are already widely adopted—will also enable data collection and management based on standardized job frameworks.

   Among the information typically confined within organizations and not necessarily structured or normalized for job evaluation, the correlation between specific skills and job performance—such as the degree to which a skill influences job execution—is initially considered critical. In the realm of learning, it is generally difficult to uniformly and objectively measure outcomes through standardized tests alone. Instead, individuals are often evaluated by others on their level of proficiency or mastery of specific learning objectives. For example, teacher assessments or peer evaluations are common in educational settings. Currently, such evaluations tend to remain within individual organizations and are not widely shared. Nonetheless, recognizing and assessing skill acquisition in the workplace is also of vital importance.

3. Among the types of information that are not necessarily structured or standardized for job evaluation—and which typically circulate only within individual organizations—those that indicate the degree to which specific skills impact job performance, namely the correlation between jobs and skills, are initially crucial. In the field of learning, it is often difficult to assess outcomes uniformly and objectively using paper-based exams alone. Instead, it is common for individuals to be evaluated by others on their proficiency or mastery of particular learning items. For instance, evaluations by teachers or peer assessments are widely used in educational settings. However, such evaluations are often confined within organizational boundaries and are not externally shared. In the workplace as well, the ability to evaluate acquired skills is of significant importance.

   To ensure that individuals possess the appropriate skills for specific jobs, a system that enables them to manage and carry their information independently—referred to as portability—is essential. This requires mechanisms that support data management and authentication for fundamental information such as educational background and work history, as well as standardized certification data for qualifications and skills specific to each industry or occupation.

4. To ensure that individuals possess skills appropriate to specific job roles, it is essential to establish a system that enables them to manage and carry their own information—this is referred to as portability. Such a system must include mechanisms that guarantee data management functions and authentication for basic information, such as educational background and work history, as well as standardized certification data for qualifications and skills by industry and occupation.

For successful implementation, it is important to draw on lessons learned from Japan and other countries in pursuing initiatives such as smart cities. Specifically, a dual-track approach involving both architectural design and real-world testing is essential. The following key points are presented for future discussions:

• Assemble experts with cross-cutting knowledge of human resource development and labor markets to conduct interviews and preliminary drafting. Develop an initial reference-level architecture, clarify the current situation, and identify validation points.

• Emphasize testability and identify job roles (or occupational units) for which standardization of learning and job elements and related data collection are feasible, and where stakeholder cooperation is more easily obtained.

• Bring together experts who can examine both learning and job elements for the selected role, and create draft standards for jobs and skills as well as individual architecture designs.

• In parallel, collaborate with stakeholders to conduct demonstration tests to verify whether matching is possible based on actual learning and in-company performance/evaluation data aligned with those standards.

• Based on the results, revise the standards and architecture for the selected role and provide feedback to the reference-level design. If needed, proceed with the next phase of testing. Simultaneously, extract insights and possibilities for expanding the model to other roles.

• Carry out the above process with an agile mindset and at a rapid pace. Ideally, multiple roles—not just one—should be validated to build a reference model that can encompass as many job categories as possible.

６．Technological Feasibility, Prototype Verification (Trusted Web), and the Importance of Risk Assessment

In Japan, the technological feasibility and operational testing of a transaction infrastructure for the labor market are expected to advance under the initiative of the Trusted Web Promotion Council, organized by the Digital Market Competition Headquarters of the Cabinet Secretariat. The Trusted Web initiative aims to establish a trust framework for various social activities in a digital society, thereby enabling the creation of new value through multi-stakeholder collaboration.

One of the use cases under consideration is “Management and Verification of Personal Attributes Related to Employment,” which addresses the following issues, technological possibilities, and prototype developments. Most recently, a public call for participation began in April as part of the FY2022 Supplementary Budget “Use Case Demonstration Project Toward the Realization of the Trusted Web.” (The following is quoted from Trusted Web White Paper ver. 2.0)

〇Challenges:For hiring companies, verifying the identity of applicants or their references—such as confirming their identity or employment status at current or previous companies—poses significant hurdles. Ensuring the reliability of these verification methods remains a challenge. Furthermore, when handling sensitive personal attributes, it is essential for hiring companies to enhance the trustworthiness of their data handling practices. Creating an environment where individuals involved can feel secure in voluntarily providing their personal information is also a critical requirement.

〇Technological Possibilities and Prototype:The feasibility of leveraging Verifiable Credentials (VC), a W3C standard, is being explored. The prototype, though simple, is designed to clearly demonstrate to the public that "verified data can be selectively shared and received." It is implemented as a browser-based application that incorporates the four core functions of the Trusted Web. This marks the first attempt to visually represent the concept of the Trusted Web in an accessible and tangible way.

As an advanced use case, the concept of exchanging skill records—similar to the exchange of identity verification data—is also being considered, and continued technical validation is expected.

In establishing this digital infrastructure and implementing skill records, it is essential to adopt a Security and Privacy by Design approach from the planning and design stages, such as that promoted through the Trusted Web initiative. This means that, in addition to exploring the potential benefits, thorough risk assessment is also crucial. Key considerations include:

– To what extent should processes be automated using data and AI algorithms?

– Are mechanisms in place to prevent human rights violations?

– Is the information personally identifiable, and if so, is it managed properly?

– Can individuals easily open or close access to their data when they desire?

While it is desirable for data to be used to expand individuals’ career options, measures must be taken to identify and mitigate risks that could lead to the misuse of such data and result in unjust disadvantages to individuals.

7. A Short-Term Project Image to Address Current Issues

As discussed above, while medium- to long-term concepts and the importance of technical feasibility and risk assessment are essential, real-world changes do not always progress in a linear manner. It is therefore necessary to advance efforts by linking solutions to current issues with long-term visions. In some cases, technological breakthroughs may also rapidly bring the envisioned future closer.

This section proposes a short-term project model that addresses current challenges while leading toward the longer-term concept.

• [Premise] As shown in Figure 4, under the current structure, employers face high costs in verifying job seekers’ actual skills and work experience, which poses a significant challenge.

① Design the project by narrowing the scope to a specific job.
It is preferable to choose a job category with relatively few job postings but with strong growth potential. It is also essential that stakeholders on both the employment and human resource development sides can cooperate and collaborate effectively.

② Formulate a hypothesis of the job standard.
Define job levels (e.g., junior, mid-level, senior) and descriptions, and establish a corresponding skill standard. Since junior-level positions are easier to categorize in terms of required skills, a validation plan focusing on juniors is more practical. Based on this, a third-party entity should collect and manage data on employers' job postings and individuals who possess the necessary skills (or those who, upon learning about the requirements, undertook training to qualify). Ideally, this third-party body should serve both training and job placement functions.

③ Operate the system up to the point of matching (successful hiring) and assess outcomes from both employer and job seeker perspectives.
Steps ① to ③ could also be tested internally by treating job seekers as employees and employers as HR departments.

From interviews conducted in the course of preparing this paper, it was found that even industry-leading companies are facing serious challenges in hiring for roles such as UX designers, and that job and skill definitions are still in progress. Discussions are underway among employers about collaboration in this area. A project could be executed in close coordination with relevant stakeholders by limiting the scope to such job types. Regional frameworks may also be leveraged.

The following are three illustrative types of such projects:

• A) Digital field validation (e.g., UX Designer, Cybersecurity)

• B) Green field validation (e.g., Ministry of the Environment’s Certified Decarbonization Advisor system)

• C) Startup × Regional collaboration

As a visual reference for job and skill standardization, Figure 5 is presented below. It is taken from materials developed by SkillsFuture Singapore—an initiative under Singapore’s Ministry of Education—and includes job architecture for software engineering, as well as a job description and skill standard for software engineers.

(Figure 4)

Figure 4. Current Matching Mechanism Between Employers and Job Seekers

[Left side]

• 求職者 = Job Seeker

• 職務経歴 = Work History

[Center]

• 仲介者 = Intermediary (e.g., recruitment agent or platform)

[Right side]

• 求人条件 = Job Requirements

• 企業 = Employer

• 書類確認・面談 = Document Screening & Interview

Arrows and notes

• Matching is based on “written self-reports” (e.g., resumes and work history)

• Intermediaries are burdened with verification and interpretation tasks

• Employers face high costs to confirm actual skills and employment history

Caption:
Figure 4 illustrates the current matching structure between employers and job seekers. It highlights the heavy reliance on self-reported documents and intermediaries, leading to significant verification costs for employers in confirming applicants’ actual skills and work experience.

(Figure 5)Excerpt from the Skill Framework (Note 12)

8. Benefits of Digitalization for Individuals, Companies, and Society, and the Need for Adaptation

Individuals are expected to gain greater opportunities to secure jobs that are better suited to their abilities, as their skills and experiences are evaluated more objectively and fairly. It is also important to ensure that individuals have the option not to disclose their personal information unless they choose to. As companies and the labor market transition to a job-based employment model, individuals will need to take greater initiative in designing their own careers and engaging in learning, independent of any specific organization. Therefore, enhanced support for individuals will be needed in the following ways:

• Basic-level support for those who have not developed a concept of career design, having grown up under traditional employment practices such as simultaneous recruitment of new graduates and lifetime employment.

• Support for those seeking to design their careers, including assistance with information gathering through dialogue with career support professionals.

• Further support for learning through self-study, educational services, in-house training programs, and learning opportunities provided by industry associations and public institutions.

Companies are expected to benefit from greater efficiency and effectiveness in various recruitment processes such as posting job openings, candidate selection, talent search, and background verification, allowing more time and resources to be devoted to critical areas. Similar benefits are expected in the context of internal staff reassignments. To realize these gains, it is essential for companies to first establish a human resources strategy framework that is compatible with job-based employment within their organizations. Moreover, particularly in cutting-edge fields such as the digital sector, there is a need to promote the standardization of jobs and skills across companies. This standardization process will require coordinated efforts that maintain inter-company competitiveness, and cannot be achieved by individual companies alone. Therefore, it is necessary to advance these efforts in collaboration with government support and through the creation of forums for joint discussion.

At the societal level, digitalization will enable more flexible labor mobility in response to shifts in industrial structure, contributing to more resilient employment systems and enhanced international competitiveness. As individuals become less dependent on a specific organization for their work, it will also be important to allow them to independently access social security and labor-related services—such as pensions and health insurance—that were traditionally provided through employers. While maintaining the same public-private contribution ratios to social security costs, frameworks must be established that allow individuals to access benefits more easily and autonomously. Under the former model that emphasized lifetime employment, it may have been rational for employers to manage these processes on behalf of employees. However, in a future shaped by job-based employment, it will be crucial to ensure that individuals can access labor-related and social security services independently and securely.

9．Proposal

（Figure 6）

Figure 6. Transition from the Current Labor Market to a Digital Labor Market
This figure illustrates the transition from the current labor market—centered on resumes, job postings, and interviews for existing occupations listed on jobtag (the Japanese version of O-NET)—to a new labor market supported by digital infrastructure (DX). It shows how emerging roles in the digital and green sectors are gradually replacing traditional job categories, and how the labor market is shifting toward one based on skill records.

The concept of “matching in the labor market through skill records” represents the final major piece of digital infrastructure—alongside people, goods, money, and information—necessary to advance job-based employment models. In developing this foundation, it is essential to emphasize the contrast between the elements of the labor market that should remain unchanged and those that must evolve (see Figure 6). The transformation should begin with emerging roles in the digital and green sectors (for DX and GX), with the expectation that it will eventually expand to encompass socially essential occupations such as essential workers.

To support the government's policy of investing 1 trillion yen over five years in digital human resource development and reskilling, it is proposed that a digital infrastructure promoting job-based employment—centered on the concept of skill record matching—be built first for job categories in the digital and green sectors. We propose designating 2023 as the “first year of skill records” and launching a cross-sectoral initiative involving both the public and private sectors.

(1)https://ec.europa.eu/commission/presscorner/detail/en/IP232246

(2)A white paper from the American Workforce Policy Advisory Board Digital Infrastructure Working Group “Learning and Employment Records”
https://www.commerce.gov/sites/default/files/2020-09/LERwhitepaper09222020.pdf

(3) https://www.kantei.go.jp/jp/singi/digitalmarket/trusted_web/pdf/trustedweb.pdf

(4)https://www8.cao.go.jp/cstp/stmain/pdf/230201besshi4.pdf

(5) Yano Research Institute, Survey on the Human Resources Business Market (2022)

https://www.yano.co.jp/press-release/show/press_id/3118

(6) https://ec.europa.eu/commission/presscorner/detail/en/IP232246

(7) https://ec.europa.eu/commission/presscorner/detail/en/IP232246

(8) A white paper from the American Workforce Policy Advisory Board Digital Infrastructure Working Group “Learning and Employment Records”
https://www.commerce.gov/sites/default/files/2020-09/LERwhitepaper09222020.pdf

(9) Discussion Paper on the Digital Market

https://www.meti.go.jp/press/2020/01/20210108002/20200108002-1.pdf

(10) https://www.kantei.go.jp/jp/singi/digitalmarket/trusted_web/pdf/trustedweb.pdf

(11) https://www.imda.gov.sg/-/media/IMTalent-Portal-Revamp/3-Guidances/Skills-Planning/SF-ICT/ICT-Navigation-Tool-2020.pdf

Contact Information

For general inquiries regarding this policy proposal, please contact:

Atsumi & Sakai – Prototype Policy Research Institute

Email: public-inst.contact@aplaw.jp

(Published on May 19, 2023)