However, their labor force participation rates cannot exceed 100 percent. What we need to do now is to improve the productivity of the overall economy. I will come back to this later. C. Changes in Firms' Behavior Thus far we have looked at changes in the household sector, focusing on labor market conditions. Signs of change have also been seen in the corporate sector.
Firms have proactively responded to labor shortages. Amid tight labor market conditions, firms have increased labor-saving investment to save human resources and have used capital as a substitute. In Japan's manufacturing sector, there has been active labor-saving investment.