Japan and the Advanced Technology Revolution
"Japan has no fear of AI. Machines will snatch away jobs? Such worries are not known to Japan. Japan aims to be the very first to prove that growth is possible through innovation, even when a population declines," Prime Minister Shinzo Abe proclaimed to an enraptured audience at a Hannover trade show in 2017.
Japan is betting big on being at the forefront of the advanced technology revolution (e.g. big data, artificial intelligence, etc.). Unlike many of its Western counterparts, who must contend with questions around the potentially debilitating effect of new technologies on the job market (particularly in manufacturing), Japan has no such fear. As Prime Minister Abe notes, the country, still coping with the effects of an ageing population, views the technology revolution as a major disruptor that can continue to foster growth.
In particular, two Japanese companies have embraced Prime Minister Abe’s call to welcome advanced technology by aggressively focusing time and investments on it. Softbank, a multinational tech giant, set up its Vision Fund in 2016 to “invest in a wide range of companies spanning agriculture, transport, satellites, payments, computer chips, and e-commerce.” While these companies may seem to span a breadth of industries, in reality, they are linked through their emphasis on AI. Softbank’s founder, Masayoshi Son, has increasingly focused on AI and robotics, as can be illustrated through Softbank’s partnership with IBM. Through this partnership, Softbank aims to introduce the Watson AI system to diverse industries such as education, banking, healthcare, etc. in an effort to streamline and improve decision making and information gathering.
Toyota, a major Japanese automotive manufacturer, has been targeting investments in robotics and AI for years. It launched Toyota AI Ventures, a $100M VC arm that focuses on artificial intelligence (AI), cloud, data, autonomous mobility, and robotics. Outside of this VC arm, Toyota’s car division is also focusing on AI to improve the overall safety and driving experience for its ‘conventional car’ customers. Specifically, the car manufacturer is working on technology that will enable older drivers to drive by themselves for longer periods of time by introducing technology that can catch their mistakes. By focusing on its conventional cars first, Toyota can test its new technology in a more cautious, considered fashion before jumping straight into the autonomous vehicle space.
Japan’s focus on advanced technologies like AI and robotics can only bode well for its close strategic partners like India. India’s burgeoning talent pool in the technology and innovation spaces can prove to be a powerful resource for Japanese companies looking to expand their knowledge and expertise in these spaces. Where possible, companies from both countries should aim to partner more often and deepen their relationships to be one step ahead of the advanced technology revolution. Disruption is the key to future sustained growth for both countries.