Japan AI Adoption
Japanese firms are slow to adopt AI due to conservative and risk-averse culture
Japanese companies are facing acute labour shortages, ageing demographics, and chronic productivity problems, yet they are slow to adopt artificial intelligence (AI). According to a report by the Organisation for Economic Co-operation and Development (OECD), only 8.4% of Japanese workers use AI as part of their job.
Comparison with other countries
The adoption rate of AI in Japan is significantly lower compared to other countries. The following table shows the percentage of workers using AI in different countries:
| Country | Percentage of workers using AI |
|---|---|
| Japan | 8.4% |
| US | 50% |
| UK | 32% |
| Singapore | 56% |
Reasons for slow adoption
Austin Xu, co-founder of US start-up Kuse AI, attributes the slow adoption of AI in Japan to the conservative and risk-averse culture of Japanese companies. He says that Japanese companies are hesitant to trust AI due to the risk of mistakes, especially in client-facing roles. Xu also notes that Japanese companies need more proof before they trust AI enough to use it.
Parrisa Haghirian, professor of international management at the Kyoto University of Advanced Science, agrees that many Japanese companies are too risk-averse to adopt AI. She contrasts this with the more entrepreneurial culture of the US, where companies are more willing to take risks and adopt new technologies.
Government efforts to promote AI adoption
The Japanese government is aware of the low AI adoption rate and is trying to encourage companies to invest more in AI. The government has passed the AI Promotion Act, which aims to use light-touch regulation to encourage businesses to invest more in AI. However, critics argue that the increased use of AI is not being felt on the ground, with only a tiny proportion of staff actually using the technology.
The Japanese Ministry of Finance reports that 75% of companies are now using AI, up from 11% five years ago. However, experts argue that this does not necessarily translate to widespread adoption, as many companies are only using AI to a limited extent. Prof Yasushi Ogasawara notes that there is a shortage of tech-savvy people in the workforce, with Japan facing a shortfall of almost 800,000 IT professionals by 2030. Many companies are also struggling with out-of-date computer systems, with around 60% of systems more than 20 years old. Uta Yamaguchi, a graduate hired by Kanematsu, a major general trading company, uses AI quite often at work, but notes that AI systems that can autonomously handle multi-step work are still virtually unheard of in Japan.
