Japan appears well placed to benefit from artificial intelligence (AI), with the country facing severe labour shortages, an ageing population and persistent productivity problems. However, Japanese workplaces continue to adopt AI far more slowly and cautiously than those in the United States and the United Kingdom.
Japan’s response to AI increasingly resembles one of the country’s traditional Noh plays: everyone agrees that urgent action is necessary and repeatedly stresses its importance, yet little appears to change, reports BBC.
While such caution may create dramatic tension, it does little to tackle Japan’s pressing economic challenges.
Workplace data highlights the gap. Only 8.4 per cent of Japanese workers use AI in their jobs, according to a report published late last year by the Organisation for Economic Co-operation and Development (OECD). That compares with 50 per cent in the US and 32 per cent in the UK. Singapore, which reportedly has one of the world’s highest rates of AI adoption and the highest in Asia, has 56 per cent of workers using AI several times a week.
Why is Japan so cautious?
Austin Xu, co-founder of US start-up Kuse AI, attributes the slow uptake to the conservative and risk-averse culture of many Japanese companies. The company recently opened an office in Japan to promote its AI systems to local businesses.
“Some organisations genuinely take a long time to make decisions because of their process and consensus-driven culture,” he says. “Tolerance for AI mistakes is close to zero, particularly in client-facing roles. Some would rather leave a position vacant than allow a machine to handle it.”
Xu says the approach differs sharply from that in the US, where some companies are already giving AI agents greater freedom to boost productivity. American businesses often introduce AI as an assistant before gradually integrating it into routine workflows, with managers prepared to test systems and correct mistakes.
Japanese companies, however, often demand stronger evidence before they are willing to trust AI, he says.
Parrisa Haghirian, professor of international management at Kyoto University of Advanced Science, also identifies risk aversion as a key factor.
“The challenges of adopting AI are similar to those involved in introducing any kind of change in Japanese firms,” she says. “This is why AI use remains limited and cautious, particularly in workplaces.”
Haghirian contrasts Japan’s approach with the more entrepreneurial culture in the US. She says Japanese companies are particularly concerned about mistakes, uncertainty and reputational damage.
As generative AI remains imperfect, Japanese businesses mainly use it for lower-risk tasks, including writing, summarising documents and gathering information. Haghirian says companies use the technology far less for core operations, decision-making and wider business-process improvements.
Healthcare among the slowest sectors
Japan’s healthcare sector is considered particularly slow to adopt AI. Some hospitals have yet to fully digitise patient records.
“Paper documents accumulate at a staggering scale,” an employee at a Japanese hospital, who requested anonymity, says. “It’s like the Stone Age.”
The Japanese government recognises the wider problem and is trying to encourage businesses to adopt AI. Parliament passed the country’s first AI Promotion Act last year, introducing a light-touch regulatory framework designed to encourage greater investment in the technology.
Tokyo has pledged to make Japan “the world’s most-friendly country for developing and utilizing AI.”
The government views AI as a potential means of raising productivity, an area in which Japan continues to lag behind other G7 economies.
Japan’s Ministry of Finance says business adoption of AI has risen sharply, with 75 per cent of companies now using the technology, compared with only 11 per cent five years ago.
Critics argue, however, that the figure does not reflect the extent to which AI is actually being used within companies. Only a small share of employees may use AI, while many of those users apply it to only a limited number of tasks.
Shortage of digital skills
Prof Yasushi Ogasawara, an expert on Japan’s social system and technology at Meiji University, says the country also lacks sufficient workers with strong technological skills.
“Although Japanese people like using gadgets such as smartphones, digital literacy is low here,” he says.
The skills shortage is highlighted by a report published earlier this year that estimated Japan could face a shortage of nearly 800,000 IT professionals by 2030.
Many Japanese companies also continue to depend on outdated computer systems, with around 60 per cent reportedly more than two decades old.
Ogasawara says businesses also face pressure to avoid contributing to unemployment, making them more reluctant to develop AI systems that could replace human workers.
“The government is talking about AI, reskilling and digital skills, but in reality it is difficult to adapt human resources to digital skills because the top priority is maintaining full employment,” he says.
Signs of change
There are signs that attitudes are beginning to shift. Some companies have started prioritising “AI literacy” when recruiting new graduates.
Large private-sector companies, including major trading firm Kanematsu, are hiring graduates with strong AI skills. Uta Yamaguchi, who joined the company in April, says she regularly uses AI at work, as do many of her colleagues.
She uses the technology to draft emails for her boss, summarise complex documents, and record and summarise meetings.
However, she says AI systems capable of independently carrying out multi-step tasks remain virtually unheard of in Japan compared with the US. Her employer, which is regarded as forward-looking, has now started introducing such systems.
Ogasawara says Japan’s pace of change remains limited.
“Japanese society expects painless reform, so I think it can be said that drastic reform is difficult, to say the least,” he says.
Disruption may remain an uncomfortable concept in Japan, but without a greater willingness to embrace change, the productivity gains Japan urgently needs from AI could remain out of reach.
