You likely would not know it, but Japanese scientists were some of the earliest pioneers in the field of artificial intelligence (AI) and neural network research.
Despite helping to lay the foundation for the global AI race that is unfolding now, by most measures Japan lags in the development and adoption of the technology that is forecast to become a trillion-dollar market.
It seems like every day there is a buzzy new AI announcement from the US or China. The DeepSeek shock put a new spotlight on Chinese innovation. However, even with its historically high-tech reputation, Japanese firms have struggled to keep pace. There were no foundation models from Japan between 2019 and 2023, compared to 182 from the US and 30 from China. The sector made some gains last year, although at a much more limited scope.
Illustration: Yusha
Citizens’ embrace of AI also remains surprisingly low. Just 9 percent of consumers said they have used generative AI, a Nomura Research Institute survey released earlier this year showed. A separate survey of US consumers put that figure at 39 percent.
At the same time, there is a remarkable openness to the technology. The nation had the lowest share of respondents saying that products and services using AI “make me nervous,” an Ipsos survey of 32 countries published last June showed. However, that eagerness is also cut with skepticism: Only 25 percent of Japanese said AI would make the economy better in the next three to five years, compared with 72 percent of Chinese. Japanese were also the most doubtful of its productivity benefits.
It is apparent that some of that stems from an unfamiliarity with the technology. Japan was the only one among the dozens of countries surveyed where a majority of respondents said they did not have a good understanding of AI.
Some of these sentiments are healthy in the long run. The global AI hype train is steaming full-speed ahead without always proving broader utility for everyday people or the ability to turn a profit. However, there is a disconnect in Japan that risks backfiring. Many have blamed a resistance to embracing software as the reason for the decline after being a global leader in hardware. There was an outsized focus on monozukuri, or building physical objects and devices over virtual services. However, the AI revolution provides a new opportunity for the tech sector to get its mojo back.
Some of the most profound opportunities for AI to make a difference are in Japan. The shrinking workforce and aging society provide new urgency for businesses to ambitiously embrace the next wave of technology. Fear of automation taking over jobs is less severe when companies are struggling to find workers.
It is going to take a whole-of-society vibe shift for Japan to not be left behind this time. Successive administrations have spent the past couple of years signaling broad support for AI. However, with trust in the government among the lowest in the world, entrepreneurs and businesses must do more to drive that revolution.
There are ample opportunities for Japan Inc to do what it has historically been very good at — building off tech breakthroughs happening elsewhere and turning them into practical consumer products and services. The more firms can focus on that, the more they can drive AI adoption and awareness. That means showing the real-world benefits of AI to indifferent consumers and grounding it in real-world applications.
Japanese companies are tied with Canada for being the most trusted in the globe; they should now be ambitious in targeting overseas markets the way they did in earlier generations. Fine-tuning and tinkering larger models into consumer products provides a way to stay competitive without needing the same amount of resources to chase artificial general intelligence dreams.
Japan should intensify its AI education efforts to build up the next generation of talent. China is already launching programs for primary and secondary students. Companies and businesses should also invest in training and reskilling programs to build trust and inspire creativity among workers who might angst about that transition.
And there are unique opportunities to welcome engineers and researchers from other parts of the world to beef up the innovation ecosystem. US President Donald Trump’s recent threats targeting immigrants, including high-skilled tech workers and students, should be Japan’s gain. Its global soft power makes it an attractive destination for techies — now Tokyo must do more to clear red tape and welcome global talent.
Finally, to build enthusiasm, firms should showcase their work. I am hesitant to suggest they follow Silicon Valley’s model of over-investing in public relations, but they need to do a better job selling the possibilities of AI locally and sharing their research with the world. There have been several quiet product innovations, such as the cost-efficient tweaking of open-source models for local businesses, but they have not always received recognition. Breaking through the low receptiveness to AI would be crucial to ensure some of the loftier investments pay off.
Japan might seem like it is playing catch-up now, but it has all the elements in place to emerge as an AI leader. Now is the moment for its entrepreneurs to be fearless.
Catherine Thorbecke is a Bloomberg Opinion columnist covering Asia tech. Previously she was a tech reporter at CNN and ABC News.
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