The Perils of Lifetime Employment Systems: Productivity Advance in the Indian and Japanese Textile Industries, 1920–1938

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Abstract
In the interwar period, Japanese textile firms were able to greatly increase labor efficiency and become the world's main exporter of cotton textiles. Meanwhile, the Indian industry stagnated and was forced to retreat behind tariff walls. This paper argues that the flexibility of the Japanese work force stemmed from its high turnover; the Indian laborers were collectively inflexible in defending lifetime careers against technical changes that reduced labor demand. As the industry requires only a few easily acquired skills, a committed work force was actually a disadvantage to Indian management.