TOKYO - Japan's population is shrinking and graying, at a rate probably unprecedented in history, and there is no sign the trend will stop soon: the nation's birth-rate figures for 2005, due to be released shortly, are expected to hit a new record low. Not only is Japan's birth rate already among the lowest in the industrialized world, but its pace of decline is the fastest, raising grave concerns about a possible erosion of the economy's international competitiveness as the population thins out.

In response, a number of Japanese firms have started to improve their child- and elderly parent-care programs, driven not only by concerns about a possible labor shortage after the baby-boomer generation starts retiring next year but also by growing awareness of the need to secure qualified workers, especially women, over the long term amid the dwindling working population. Some electrical appliance manufacturers have even introduced programs granting their employees leave to receive fertility treatment.