WHITE PAPER Information and Communications in Japan mentioned the Market size of Artificial Intelligence related solution as follows.
<Global Market>
184 billion USD in 2024 and expected to be 826.7 billion USD by 2030.
<Japan Market>
89 billion USD in 2024 and expected to be 279 billion USD by 2029.
Japan is lagging behind in AI whilst the market size is huge. According to Human-Centered Artificial Intelligence published by Stanford University, Japan was ranked No.9 in AI utilization.
Below is my considerations.
<Automotive Industry dependance>
Automotive OEMs, who is on top of the hierarchal industrial structure have a strong influential power across Japan economy. Chemicals, electronics, iron manufacturings, machinery and processing industries are depending on Automotive Industries to some extent.
To put it another way, manufacturing industry in Japan had been comfortable with depending automotive industries for many years. Automotive Industries had advantages in quality but had not been agile, and supporting industry had hesitated to introduce innovative technologies unless it had requested by their buyers.
<Lack of competition in telecommunications Industry>
In terms of number of telecommunication companies, yes, there are some at this moment. But, as known, NTT had been the only telecommunication companies for a long time until DDI was born in 1984.
NEC, Fujitsu and Oki had supplied telecommunication components to NTT. As a result, information communication technologies had lead by these a few companies. Even after KDDI, SoftBank and Rakuten established telecommunication infrastructure, these a few companies have had several advantages cultivated during the relationship with NTT group. Destructive changes has not happened in this area unless foreign investments enhance its presents in Japan Market.
<Traditional technology oriented companies are conservative>
There are lots of innovative technology resources in heavy industry companies, such as Hitachi, Toshiba, Fuji Electric, Sumitomo Heavy, Mitsubishi heavy and Mitsubishi Electric. While the U.S. and Europe based heavy industry company such as GE and Siemens introduced AI to public in early stage, Japanese heavy industry companies have kept its resources inside its organizations until the final products is completed.
Although there are several companies in Japan who have minds to introduce innovative technologies in consumer electronics industries and robotics industries, the resources in each consumer electronics companies and robotics Industries are too limited to compete with big tech companies in the US and China.
<My conclusion>
Automotive companies and heavy industry companies hold the key to increase AI competitiveness in Japan. It is necessary to restructure the hierarchy in Japan Industry. NTT and Toyota might work for heavy Industry in future. Some changes in industrial structure had already happened such as the collaboration between Sony and Honda. Once industrial restructure is done, I am sure there will be new Japan new origin AI innovations as “AI Application”.