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Japan, a nation grappling with significant labour shortages and an ageing workforce, finds itself in a paradoxical situation regarding the adoption of artificial intelligence (AI). Despite the pressing need to enhance productivity, the integration of AI technologies in Japanese workplaces is markedly slower than in Western nations. With only 8.4% of Japanese employees utilising AI, compared to 50% in the United States and 32% in the United Kingdom, the question arises: why is Japan lagging in this critical technological evolution?
A Cultural Stalemate
The response of Japanese firms to AI has been described as reminiscent of the country’s traditional Noh theatre, where characters engage in solemn discussions yet fail to take decisive action. This slow-moving cultural dynamic is evident in the reluctance of many businesses to embrace AI. Austin Xu, co-founder of Kuse AI, a US-based start-up, highlights a conservative mindset prevalent among Japanese companies. He points out that the risk-averse nature of these firms often results in a preference for human oversight over automated solutions.
“There are organisations where process and consensus culture genuinely slow things down,” Xu explains. “Some would rather leave a role unfilled than let a machine handle it.” This cautious approach starkly contrasts with the United States, where firms are increasingly allowing AI systems to become integral to their workflows, often adopting a ‘trial and correct’ strategy.
The Role of Risk Aversion
Professor Parrisa Haghirian from the Kyoto University of Advanced Science echoes Xu’s sentiments, noting that the challenges surrounding AI adoption mirror those encountered with any substantial change in Japanese enterprises. “Japanese firms are highly sensitive to error, uncertainty, and reputational risk,” she states. This aversion translates into a limited application of AI, which is often confined to low-risk tasks like writing and summarising, rather than core operational functions.
The healthcare sector exemplifies this slow uptake; reports indicate that many hospitals have yet to fully digitise patient files. “Paper documents accumulate at a staggering scale,” laments an anonymous hospital employee, illustrating the outdated practices that persist in the industry.
Government Initiatives and the Future
In response to the stagnation in AI adoption, the Japanese government has launched initiatives aimed at fostering a more conducive environment for AI development. The AI Promotion Act, passed last year, seeks to encourage businesses to invest in AI through light-touch regulation. Tokyo has ambitious plans to position Japan as the “world’s most-friendly country for developing and utilising AI,” believing that enhanced AI use could significantly boost productivity, which remains the lowest among G7 nations.
While the Ministry of Finance reports a remarkable increase in AI adoption—rising from 11% to 75% over the past five years—critics argue that this statistic is misleading. They point out that the actual utilisation of AI among employees is minimal, with many firms still relying on outdated technology. Professor Yasushi Ogasawara from Meiji University highlights a significant shortfall in tech-savvy workers, predicting a deficit of nearly 800,000 IT professionals by 2030.
Outdated computer systems also pose a major hurdle, as approximately 60% of firms operate on systems over 20 years old. Ogasawara notes that the prioritisation of job preservation over technological advancement complicates the landscape further. “The government is talking about AI and re-skilling, but in reality, it is difficult to adapt human resources to digital skills because the top priority is to maintain full employment,” he explains.
Shifts in Recruitment and Attitudes
However, a gradual shift is occurring within the recruitment practices of some larger firms. Companies like Kanematsu are recognising the importance of “AI literacy” in their hiring processes, actively seeking graduates who are comfortable with technology. Uta Yamaguchi, a recent hire, reports that AI is commonly used among her colleagues for tasks such as drafting emails and summarising documents. Yet, she notes, the advanced AI systems that can autonomously manage complex tasks remain largely absent in Japanese workplaces.
Ogasawara observes that change in Japan is often perceived as needing to be painless, which hinders significant reform. “Japanese society expects painless reform, so I think it can be said that drastic reform is difficult, to say the least,” he asserts.
Without embracing disruption, Japan risks missing out on the productivity enhancements necessary to address its demographic challenges.
Why it Matters
Japan’s slow adoption of AI presents a significant barrier to overcoming its pressing economic challenges. As the country faces a declining workforce and stagnant productivity, the reluctance to embrace technology not only hampers individual businesses but also threatens the nation’s economic future. For Japan to remain competitive on the global stage, it must address its cultural and structural barriers to innovation, allowing AI to play a transformative role in its economy.
