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Strong year ahead for language schools

18 Comments
By Jason de Luca

With the craziness and uncertainty of the past few months, it seems unlikely that much silver lining can be found in these gray (err… really gray) skies ahead of us. Many businesses are looking to let people go, credit is tough to get, purchases orders are requiring more signatures and checking, which slows down product sales and new project initiatives, yen is stronger against the dollar (hooray for my student loans!), which makes for bad export outlook, but good for overseas traveling locals. For those in recruitment, any hiring that does happen, must go through more hoops, extra sign-offs. Not much is moving it seems.

In the midst of this slowdown, car crash or whatever you want to call it, I see some service offerings that look set to make a solid score during the next 6 to 18 months: small to mid-sized language schools, certification courses and overseas study programs. I am speaking mostly about Tokyo, Osaka and Nagoya, but I am sure to a lesser degree, this applies elsewhere here in Japan.

Why do I feel this way?

The reason is twofold: From a customer perspective, if you have the time due to a layoff or inability to get a job, what the heck, why not ride out the waves while learning CAD, VBA, English & Chinese, or dropping off the map completely in another country where your currency is stronger and stretches a bit further than normal?

Others, having been given a severance package, will look into a new job, but need to get into a daily schedule again and may look to Japanese/English study or other certification courses to stay the boredom that sets in after the first two weeks of resting at home.

Trust me, having been a job agent (temp and perm) for a long time, telling a new employer 18 months from now that your company folded and you decided to learn web programming, English and Chinese overseas in Beijing is not going to look bad on a resume. This was not true a few years back when gaps where usually frowned upon by perspective employers as being “language study vacations.”

Also, it’s not a surprise to readers of this website that most locals here have big cash stores in their bank accounts, often live at home with their parents well into their 30s (basics like rent and food have been taken care of for the previous 10 years in some cases…) and as such, they usually save a lion’s share of their salaries every year.

With the world’s lowest birthrate and late marriage age where it is, many of these cash heavy metro-sexuals are free to worry about numero uno only. My contacts at Shogakukan and Diamond Publishing say self-help and improvement/study books are enjoying great sales for those who are choosing to DIY to a better skill set. Also, manuscripts from first time writers (lots of free time perhaps) are flooding their editor’s tables.

It seems people have the time and money for skilling up.

From a service provider perspective, you have an interesting influx of new possible clients, individuals and corporate company tie-ups (many local companies from products to services firms are forced to reach out to new markets in a panic, requiring language and other new skills, but no extra headcount, thus must train up their current staff), outplacement/retraining needs, high-caliber recent layoffs from finance firms who need visa support to stay in-country and are desperate to get any type of paying work (and out of the house!).

Small/mid-sized language firms can quickly adjust staffing levels, bring in some additional resources quickly (snatch up a native Chinese speaker with import/export experience to help them write up a Chinese lesson curriculum for a local trading company for example), completely overhaul or tweak curriculum to fit the niche needs of corporate clients and individual students alike, create intense “boot camps” in whatever language, on the fly, etc. These firms can arrange unique payment schedules and with lower overhead, snap up smaller, irregular contracts and with the abundance of extra resources in the market, go for the “shrimp vs whale” model.

Be positive, stay focused, look for opportunities and tie the features of your services to the benefits for prospective clients and together you will both be successful.

The writer is managing director of Smart Partners KK, a company that offers sales training, consulting, business strategy and financial planning advice.

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18 Comments
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Huh? So people are going to go spend huge amounts of money on going to language schools because they are no longer employed? Yeah, great article...

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Wrong. Schools are closing, tutition is dropping so schools are hiring non-native, non qualified workers. These folks will get what they pay for. No jobs and no money means no lessons.... No idea where they get these writers from.

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Actually, I have heard a number of people say that education will be a growing industry despite the economic downturn.

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Solid insight...quite savvy about this market.

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This seems to be mainly the writer's 'feelings' on the subject, I don't see any data here to support the headline of the article. (These make the best JT articles, after all....)

My own 'feeling' would be that much of the above could apply to those being laid off with a decent severance package from the finance-industry, who may be able to afford 6 months of riding out the storm, but in the wider context of, say, Japanese language schools (where I understand the majority of students are Chinese numbering in their 1000s) I'm curious as to the net effect. 500 people leave Goldmans or Morgan Stanley and decide to go to school? How many schools in Tokyo? 10 new students each for 50 schools? 5 for 100? Doesn't seem like a drastic market mover.

I'm curious to know if our writer has has any figures, data, etc. to support his thoughts.

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hmmm, good point, why don't you contact him and ask?

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Mao, I expect he'll post a comment. One of the few writers who does (fair play to him)

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Where does G Communication fit into all of this?

( I stole that from another JT poster who asked that same question on another thread - can't remember who it was - sorry! )

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well i think the writer owns one of these shcools and has some wishful thinking.... makes sense, but most of the people getting laid off are temp workers who didnt get paid much, so i dont see them chumping out thier savings for language lessons ( even though it could improove thier situation

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From a personal viewpoint, I can say my experience concurs with the author's perceptions. I've noticed an increase in the number of people who are serious and aggressive about improving their skill set and are willing to pay more for private lessons with qualified teachers to get them.

Also, keep in mind that the government supplements the expenses of certain types of study including English study. I don't recall the exact information, but I believe they will pay 50% of the tuition for one year of study out of every three. Many companies will match the investment of an employee in his English study so between these two supplements, English study (and other skill building) can be very cheap for people interested in building skills.

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Itd be nice if authors responded to comments sometimes,ive never seen it on this site.

Moderator: We don't encourage it because too many readers are ill-mannered and insult the writers.

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Very good commentary, Jason De Luca. Im predicting a bumper year for that well-run Eikaiwa, NOVA. Really seems to be going places.

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Nova? Ha!ha!ha! Maybe they shouls change that stupid pink "bunny" with a beak mascot into a Panda? Just start teaching mainly Chinese (Mandarin, Cantonese etc..) with maybe a new pink and white off the wall Panda to help boost their sales? (I thought good old Nova was bankrupt?) Well, maybe the good old English teacher's union could come up with some better ideas?

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500 people leave Goldmans or Morgan Stanley and decide to go to school? How many schools in Tokyo? 10 new students each for 50 schools? 5 for 100? Doesn't seem like a drastic market mover

clearly not a math class

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Looking at his website, he has nothing to do with any language schools. Actually, in a somewhat similar vein, I just saw on the news that self-help books are flying off the shelves.

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Actually, this trend is real - during a recession people with decent savings will retrain, even go on vacations. Then get a job when companies start hiring like crazy.

Works like clockwork - a year or two after a recession there's usually a big hiring craze. It's actually less desireable to take your vacation/study during an economic boom.

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BurakuminDes Very good commentary, Jason De Luca. Im predicting a bumper year for that well-run Eikaiwa, NOVA. Really seems to be going places.

Who said anything about Nova?

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First thing I did after I was dropped was sign up for Japanese lessons and am looking into courses at Temple for January

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