Even Japan's Automated Factories Can't Fix Its Productivity Problem

Mitsubishi Heavy Industries Ltd. has cut the number of workers on its turbocharger production lines west of Tokyo by more than 80 percent, as Japanese manufacturers from carmakers to electronics producers push further into automation.

Such advances explain why Japan’s factory productivity growth ranked highest among Group of Seven nations over the two decades to 2014. Yet the nation’s overall productivity ranks worst in the G7, dragged down by a lack of progress in the services sector, where the white-collar work culture demands long hours rather than efficiency.