How Japan’s Economic Challenges are Driving Demand for AI and Robotics

News on Japan’s economy is often pretty gloomy to say the least – in the past 10 years, Japan’s annualized GDP has shrunk in a staggering 14 quarters and has experienced three technical recessions (as of June 2018).

I have worked with many global startups looking to enter the Japan market and am often asked why, that despite such economic news, Japan’s labour market remains the most competitive in world. One of the reasons, but certainly not the only reason, is due to Japan’s rapidly ageing population. Japan’s over 65s now make up over 27.7% of the population – the highest of any country – and has one of the oldest populations in the world with an average age of 47.3 years. To give that statistic some context, the average ages of the US and China are 38.1 and 37.4 years respectively. By the government’s own estimations, the working age population specifically is set to decline by 800,000-1,000,000 people every year for the next two decades.

Such a rapid decline in the working age population has contributed to a lack in manpower in almost every sector from Agriculture to Nursing, Construction to IT and whilst Japan has opened itself up to migrant workers, the supply of labour simply cannot keep up with demand meaning large swathes of Japan’s economy are really struggling.

However, such unique economic and social challenges have presented a great opportunity for new technological innovation and a massive catalyst to Japan’s rapidly growing Startup scene.

Investment from Venture Capitalists has poured into Japanese A.I. and Robotics startups, but rather than being a bubble fueled by speculation, these startups are actually already experiencing huge demand from customers.

Demand for AI/Robotics tech means Japanese Startups have more potential than US Startups

And it’s demand that really matters for Startups to be successful. Naturally there are startups all over the planet developing such technologies, particularly in the US, but no other country has such a ready level of demand than Japan. Although US startups may be better funded and have access to a wider pool of highly skilled talent, unless there are customers willing to dip into their pockets and cough up the money buy AI/Robotic technology, they will forever struggle to compete.

Despite a reputation for a slowness to adopt new technology, major Japanese corporations are ordering AI and Robotics solutions at a faster rate than perhaps any other country. Stagnated by their inability to hire new staff, Japanese companies have created a thriving economy for robotics, automation technology, NLP and Machine Learning.

I’ve been privileged to see first hand some of the exciting technologies being developed by Japanese Startups that are creating great excitement amongst the industries they look to support. Robotics to carry out the heavy lifting of patients in hospitals, image analysis algorithms to detect early stage cancer, handwriting recognition to help de-bureaucratise the insurance industry and public sectors, NLP technology for call centres and the finance sector, AI to help farmers maximise crop yields, human controlled Robots that allow doctors to perform complex surgery on patients remotely… the list goes on.

The Startups developing such technologies have grown at a phenomenal pace which has resulted in a huge demand for AI Research Scientists and AI Engineers. Ph.D. graduates are the main target for these roles, but unlike other industries, these startups have tried to stay nimble and open by operating English-speaking development environments to make it easier for non-Japanese researchers to enter.

Spotted Recruit is currently working with a plethora of AI Startups, all actively hiring, and there is a particular demand for recent Ph.D. graduates and Post-Doctoral Researchers.

If you are interested in exploring opportunities with Tech Startups developing AI solutions, feel free to get in touch by clicking the button below.

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