Artificial intelligence (AI) is hailed as one of the most important technological developments in modern history. To take advantage of it, experts say that these three elements are needed: entrepreneurs to bring about breakthrough innovations, companies to provide financial resources and infrastructure, and government policies that provide the appropriate environment.
Japan is a prime example of this synergy. When the nation transformed itself into an economic powerhouse after the second world war, it was driven by the belief that industry and government should work together as partners, rather than viewing each other as adversaries. Japan’s breakthroughs in innovation have demonstrated the value of this approach, and the country continues to produce leadership in major industries worldwide.
Now, in a strategic move to address its shrinking workforce caused by a declining birth rate and ageing population, Japan is embracing a future powered by digital technology and groundbreaking tools that utilise AI.
This technological shift not only offers new prospects within Japan but also opens doors for foreign companies to collaborate in this new “industrial revolution” – with the aim to transform Japanese society.
AI applications in various fields
Healthcare, which is facing critical staff shortages as an ageing population requires higher levels of medical care, is seen by industry experts as a key target area.
Perceptions towards AI in Japan are already changing quickly. A survey of companies in Japan by the consulting group PricewaterhouseCoopers (PwC) found that in the spring of 2023, only 10 per cent of respondents said they had used generative AI in applications such as ChatGPT. Just six months later, the number had jumped to 73 per cent.
Japanese information technology company NEC has developed its own enterprise-focused generative AI system called cotomi, with plans for additional versions for specific industries such as manufacturing and healthcare. Japanese start-up Preferred Networks is designing customised chips for the machines that will power generative AI.
In the public sector, the city of Yokosuka in Kanagawa Prefecture has become the first municipality in the country to run a trial of ChatGPT for administrative operations in 2023.
Mr Sega Cheng, co-founder and CEO of iKala, a Taiwan-based firm that helps companies implement AI solutions, says: “I think Japan has a very good business structure. Customers in Japan are willing to pay the right price and are seeking long-term relationships with their suppliers. This kind of business practice is invaluable for any company seeking to enter the Japanese market.”
Global companies play a key role
Major global players are also paying attention to the opportunities. US software company Nvidia, the world’s leading maker and supplier of AI chips, has announced plans to work with Japanese partners to build an AI tech-related ecosystem in Japan.
As part of its efforts, Nvidia will establish a research lab and invest in local start-ups. Sakana AI, established in Tokyo by Mr David Ha and Mr Llion Jones of Google in the US, is engaged in the development of generative AI with Nippon Telegraph and Telephone (NTT) and others. The company is also a founding member of the AI Alliance, an international group founded by IBM and Meta that has more than 50 companies, universities and scientific organisations to help foster open software programs to develop generative AI. The alliance, which includes Keio University, Sony and the University of Tokyo, aims to improve the capabilities, safety, security and trust in AI.
Japanese government programmes are helping to foster an AI environment and working to ensure that Japan has the resources required for this digital transformation (dubbed DX in Japan). These include plans to introduce a national institute to ensure the safety of AI technologies.
“Given the potential of generative AI, it is essential for companies to use it not only as a tool to improve operational efficiency and productivity but also to gain a competitive advantage by transforming their products, business models and corporate organisations,” says Japan’s Ministry of Economy, Trade and Industry in an August 2023 report on the promotion of digital transformation in Japan.
In addition, the leaders of Japan and the other G7 nations have launched the “Hiroshima AI Process”, which aims to create a common vision and goal of safe, secure and trustworthy AI. The group agreed on the International Guiding Principles for AI at an online G7 Digital & Tech Ministers’ Meeting in December 2023.
Japan’s initiatives are also built on the concept that no single company or nation can supply all the answers that will be needed to keep up with this fast-evolving technology. Therefore, key parts of the government’s policies are to work with countries, corporations and entrepreneurs from around the world to bring this new industrial revolution to fruition.
Says iKala’s Cheng: “Whether in terms of regulation compliance or in terms of research funding, the Japanese government is moving really, really fast.”
