THE rapid spread of Western business practices in Japan has caused widespread mental illness and is responsible for a deepening demographic crisis, government officials say.

Statistics indicate that 60 per cent of workers suffer from “high anxiety” and that 65 per cent of companies report soaring levels of mental illness.

Meanwhile, the size of the Japanese population is shrinking, and for the first time the Government has acknowledged that the falling birth rate is linked to job-related factors. Directors of the Japanese Mental Health Institute blame the same factors for rising levels of depression among workers and the country’s suicide rate, which remains the highest among rich nations.

Merit-based pay and promotion are of particular concern because they are at odds with the traditional system, built on seniority, that has reigned supreme in corporate Japan. In the harsh new atmosphere of cut-throat rivalry between workers, the Institute for Population and Social Security argues, young people do not feel financially stable enough to start families.

The trend is put down to Japanese companies’ attempts to globalise by adopting working practices more closely in line with US and British models. Larger numbers of temporary staff, a greater willingness to sack people and greater pay disparities are the downside.

A spokesman for the Mental Health Institute said that the emphasis on individual performance was driving Japanese workers — particularly those in their thirties — to mental turmoil. “People tend to be individualised under the new working patterns,” he said. “When people worked in teams they were happier.”