Report

Japan's Artificial Intelligence market has been witnessing notable progress. The Japan Artificial Intelligence market is estimated to achieve a value of USD 15.84 billion by the fiscal year 2031, showing substantial growth from USD 5.95 billion in FY2023. This growth is projected to be achieved with a CAGR of 13.02%. Japan's dedication to technological innovation and research has created a favourable environment for AI development. Additionally, the government's support through policies and funding initiatives has fostered the growth of AI-related industries. Furthermore, the increasing adoption of AI technologies across various sectors, such as healthcare, finance, manufacturing, and transportation, is propelling the market expansion.
Japan is actively leveraging AI technology in the healthcare sector to revolutionize patient care and improve overall healthcare outcomes. The country has witnessed significant advancements and initiatives in applying AI in healthcare. AI-powered systems are used for medical imaging analysis, early disease detection, personalized medicine, and drug discovery. In medical imaging, AI algorithms assist in diagnosing diseases by analyzing and interpreting complex images, such as X-rays, CT scans, and MRIs. This technology enhances accuracy, speeds up the diagnostic process, and supports healthcare professionals in making informed decisions.
For example, on October 25th, 2022, Nikkei Asia announced that, a consortium in Japan, consisting of companies like Hitachi and Microsoft Japan, planned to utilize AI to support doctors in making diagnoses by leveraging cloud-based data sharing, eliminating the need for specialized terminals. This user-friendly service aims to benefit smaller hospitals and rural areas with limited access to doctors, providing them with diagnostic capabilities comparable to urban facilities.
Advent of Machine Learning (ML) Programs
Machine learning (ML) programs have emerged as a significant component in the Japan Artificial Intelligence market. ML programs utilize algorithms and statistical models to enable computer systems to learn from data and make predictions or decisions without explicit programming. Their introduction has brought significant advancements to various industries, including healthcare, finance, manufacturing, and more.
On April 19th, 2023, Daiwa Securities Group, decided to embrace AI-powered chatbots. As Japan's second-largest brokerage company, Daiwa intended to implement ChatGPT technology from April 2023, making it available to all its 9,000 employees nationwide. This decision aligns with a trend observed among other major Japanese financial institutions. Similarly, Mitsubishi UFJ Financial Group planned to adopt chatbot technology to draft approval requests and address internal queries. The shift towards AI-powered chatbots in the Japanese financial sector highlights the market's recognition of the potential benefits such technology can bring to their operations.
Presence of Highly Advanced Cybersecurity Facilities
The Japan Artificial Intelligence market boasts highly advanced cybersecurity facilities. Japan recognizes the critical importance of protecting AI systems and data from cyber threats. The growing threat of cyber-attacks causing physical damage to social infrastructures has become a significant concern in recent years. Hence, to mitigate these problems, the Japanese government introduced cybersecurity centers all across the country.
For example, on April 2017, IPA (Information-technology Promotion Agency) Japan, launched ICSCoE (Industrial Cyber Security Center for Excellence) to develop human resources, organizations, systems, and technologies dealing with cybersecurity risks for social and industrial infrastructures through various activities, such as exercises utilizing the simulated plants, practical experiences of cyber-attack defenses, and research and analysis for the latest information on cyber-attacks. Hence, it has become necessary to greatly enhance safeguards against cyber-attacks on Japan's critical and industrial infrastructures, which serves as the foundation of the country's economy and society.
Government Regulations
Government regulations have significantly impacted Japan's development and adoption of Artificial Intelligence (AI). The Japanese government has implemented policies and initiatives to support AI innovation while ensuring ethical and responsible AI usage. These regulations focus on data privacy, security, and transparency. They aim to balance promoting AI advancements and protecting individuals' rights and interests. By providing a regulatory framework, the government fosters trust in AI technologies, encourages industry growth, and ensures that AI is utilized for the benefit of society. For example, AI Strategy 2022 by the Japanese government is an updated strategic policy that builds upon the previous AI strategy to address the current circumstances. It considers various emerging risk factors like the COVID-19 pandemic and geological movements. The main objective of this strategy is to tackle global challenges and present a comprehensive package of policies concerning AI. These policies aim to address Japan's social issues, enhance industrial competitiveness, and improve overall societal well-being.
Impact of COVID-19
The COVID-19 pandemic had a significant impact on the Japan artificial intelligence market, both in the pre-COVID and post-COVID scenarios. Prior to the pandemic, Japan had already been making notable strides in AI adoption across various industries. However, the outbreak of COVID-19 accelerated the need for AI-driven solutions to address emerging challenges. In the pre-COVID period, industries like healthcare, manufacturing, and transportation gradually integrated AI technologies to enhance efficiency and productivity.
Post-COVID, the demand for AI solutions surged further, particularly in remote healthcare, contactless operations, and data analytics for crisis management. Moreover, the pandemic highlighted the importance of AI in enabling digital transformation and resilience. As a result, the Japan artificial intelligence market experienced increased investments, research collaborations, and government initiatives to support AI innovation, positioning it for continued growth in the post-pandemic era
Key Players Landscape and Outlook
The AI industry in Japan is experiencing significant growth, with leading Japanese companies emphasizing advancing their AI technologies and developing sophisticated AI platforms. Furthermore, these companies are allocating more resources to enhance energy resilience, invest in research and development, and expand their distribution networks. Additionally, they are actively pursuing strategic mergers, acquisitions, partnerships, and joint ventures to consolidate their position in the market and drive further progress in the AI sector.
In April 2023, Fujitsu launched an AI platform called "Fujitsu Kozuchi" to simplify the utilization of AI and ML solutions, fostering progress towards a sustainable society. This platform empowers customers across diverse industries, including manufacturing, retail, finance, and healthcare, to expedite the testing and deployment of advanced AI technologies to address their specific business challenges.
In March 2022, Mitsubishi Electric Corporation unveiled a new AI technology capable of identifying individuals captured by multiple surveillance cameras significantly faster than traditional AI systems. This breakthrough was achieved by implementing specialized compression technology that eliminates unnecessary data, resulting in highly efficient and accurate reidentification, tracking, and searching processes.