"Japanese rugby is at the stage where it can really progress or it can stagnate and go down," Jones told reporters in Tokyo on Friday after watching Japanese Super Rugby franchise the Sunwolves train ahead of Saturday's game against the Waratahs.
"The whole structure needs to be more professional," added the man who masterminded Japan's best ever World Cup campaign in England last year, where they won three matches for a first time, including a stunning 34-32 victory over South Africa.
"You need business men running the business side of things and professional rugby men running the rugby side. The JRFU (Japan Rugby Football Union) is an amateur organisation and that is its challenge moving forward."
Jones cited England's impressive forward Maro Itoje, who shone in both the Six Nations and the tour of Australia, as example of how Japan should integrate young players into a professional environment and the national team.
"We have a young lock who is just 21. He studies full time at university and plays professional rugby," Jones added. "Japan needs to be more aggressive in selecting young players and bringing them through."
Jones was also critical of the JRFU's failure to replace him immediately, using two interim coaches until New Zealander Jamie Joseph was confirmed to be taking over at the end of the Super Rugby season, putting Japan a year behind in preparations for the next World Cup.
"Timing is so important as Japan needs to rebuild," he said.
"At the present rate, by 2019 just 25 percent of the 2015 squad will be in the team. It's going to be a big job (for Joseph) rebuilding as you need an experienced side to play in a World Cup."
Jones said that while the Super Rugby franchise would help players gain some of that valuable experience, a packed fixture list could have a detrimental effect on the national side in the long term.
"Japan needs to work out the structure of their season. You can't have players playing Top League and Super Rugby continuously. You have to ensure the players are in their optimum condition," he said.
(Reporting by John O'Brien in Singapore; Editing by Sudipto Ganguly)
