Japan is no stranger to being a global trend-setter when it comes to a multitude of the media, food culture, and electronics we consume in the West. From people’s favorite anime, Ramune (Japanese lemonade), novelty Kit Kats, or sushi, Japan’s global soft power appeal is undeniable. Everyone knows about Japan. But what trends are happening right now?
The Society 5.0 revolution that promises the great convergence of technology and humanity has ironically been slow to take off in Japan. That is until now. Not only has the government been taking strides to loosen up restrictive legislation to meet ambitious Sustainable Development Goals (SDGs), but they have begun the process of freeing up the market and thereby allowing for emerging technologies to set new molds in Japanese society.
It has been very difficult to gauge the Japanese public’s overall response to emerging technologies. Overall Japan has strengths in a variety of high-tech industries, largely thanks to large public investment in risky areas that the private sector is unable to fund on its own. Japan has also been able leverage its ability as a homogeneous society thereby streamlining the process of research, business, and government approval. Thanks to this process Japan has found great success in commercializing new technologies. Just how successful you may ask? Let’s find out!
In this article we have listed up some of the tech trends to keep your eye on in Japan 2021!
Japan is famous the world over as the only developed nation with a rapidly aging society in conjunction with steep population decline. Rural areas are no stranger to transportation challenges often with one bus or train arriving an hour to take passengers to where they need to go. However, what if this process could be automated? We are seeing a push in rural areas of Japan to field autonomous vehicle technology. The first of which was tested in Eiheiji Town, Fukui Prefecture in late 2020. The public roads, used primarily for bicycles and pedestrians, were determined to be safe by the National Institute of Advanced Industrial Science and Technology. The success in Fukui has spurred on a second project under much warmer conditions in Chatan Town, Okinawa Prefecture. In both projects the two vehicles will be operated by one driver, with the technology being the equivalent of a level 3 on the autonomous scale.
This chart illustrates the different levels that must be cleared to go fully automated.
In fact level 3 autonomous technology is fast becoming commercially available with Honda announcing in March of this year that the reimagined Legend sedan would be updated to include autonomy under certain conditions. The rollout will be slow with only 100 units being promised to be offered domestically including a maintenance package that will ensure proper upkeep for the new and remarkable features it promises.
Behind the sleek design an array of sensors will work tirelessly to ensure driver safety.
As the technology becomes miniaturized and easier to produce, the overall costs of autonomous vehicles are likely to go down meaning the hefty price tag of 11 million yen ($103,000) is likely to become much more affordable. Until then, level 3 autonomy is the benchmark Japan will have to clear to reach its Society 5.0 goals. How human error will be reduced over time with the integration of automation on Japan’s roadways is anyone’s guess. Regardless, the road trip we are on is sure to be one to remember!
Japan has had no shortage of struggles when it has come to defining what blockchain should mean for the average investor. Since new regulations in 2020, the term holds new meaning for investors looking at cryptocurrency or business leaders contemplating how to better reshape their e-commerce platform.
In fact, cryptocurrency has finally been officially defined under Japanese law. However in determining whether cryptocurrency is considered an asset or not has been a bit harder to describe. On the other hand, the law is concrete when it specifies that crypto trading companies must establish a Japanese branch office in order to do business in Japan.
The Financial Services Agency is the cryptocurrency regulatory body of Japan.
Since the pandemic started, the Japanese government has approved yet another crypto exchange bringing the total number of approved firms up to 23 in total. This trend will likely increase as the Japanese government streamlines the approval process thereby allowing more options for investors to choose from. In addition, as investors become more accustomed to crypto trading as a financial option, the likelihood of crypto taking off in Japan can become a reality.
The crypto market in Japan still is full of high trading volumes.
As more cryptocurrency providers are approved the number of exchanges will increase leading to greater profits. This will encourage other crypto exchanges to set up shop in Japan and continue to grow the market. Time will tell if this will take off in Japan but the most recent interest is a strong indicator that the Japanese financial system is modernizing quickly.
Along with many consumers going cashless, companies are taking advantage of the booming financial technology market in Japan. Online sales in Japan have also gone up since the pandemic started by 33%, and online sales channels have increased from 19% to 31% going into 2021.
Steady growth in investments into Japanese Fintech have been increasing since 2016 with no signs of slowing down despite the pandemic. According to a 2019 Yano Research Institute Report the Fintech market in Japan will be worth an estimated $11 billion (￥1,210,200 million) by 2022.
This forecast shows promise with legislative changes opening up the market.
Current growth trends in the Fintech market have been steadily climbing since 2016 with the revision of the Banking Act by the Financial Services Agency being a driving factor towards innovative strides among financial institutions in developing an interconnected API (Application Programming Interface). This continuing financial infrastructure development has spurred job growth, investment, and cooperation between banking and IT firms to better integrate API in the modern Japanese financial landscape.
The easing of restrictive business procedures as Japan has gone more online has made the country far more accessible than ever before. Accounts can now be opened online via app or smartphone allowing more foreign investment than ever before. Additionally, a single license from the Japanese government has eased bureaucratic red tape considerably with the introduction of the Financial Service Intermediary license. In short, this allows for a more streamlined intermediation between insurance, banking, and securities firms. This makes Fintech the hot new market to invest in as Japan continues to open up its economy more and more in a bid to drive growth.
With COVID-19 keeping consumers indoors for over a year it should come as little surprise that the e-commerce market has flourished globally in the wake of the pandemic. Japan has been no exception with remote work become the new normal for countless business professionals across the country. In fact, Japan’s booming e-commerce market is the second most developed in Asia behind China with projections for 2024 putting the projected market value to be 263.5 billion USD.
According to this data even elderly internet users are shopping more online.
However this trend should be hardly surprising. Japan’s aging population has enthusiastically embraced the internet age. This has largely come out of necessity, especially as they are considered at high risk for COVID-19 after the pandemic started. Japanese households often hold 3 generations of family allowing for the younger generation to teach their grandparents how to shop safely online without having to leave their home.
Unsurprisingly, with multiple states of emergency issued from the Japanese government, the average Japanese consumer has had to change their buying behavior. This has led to the popularization of the phrase “stay home” to be a part of daily life. In fact, in a surprising move, auto giant Toyota began offering permanent work from home options for its employees from late 2020, citing greater productivity following reduced commuting times.
Despite the numbers you might be surprised at how many people are out and about.
This shows that people are spending more time at home for work as well as leisure. So naturally this also translates to consumer trends as well. Of course that puts more delivery trucks on the road leading to more fuel costs and a larger carbon footprint.
Which brings us to e-commerce giant Rakuten Inc. Since 2019 Rakuten made a pledge to achieve 100% renewable energy. To honor this pledge, Rakuten has stated that as an organization they have already achieved 51.4% renewable energy. This effect is sure to be compounded by the recent announcement that they have been considering seriously switching all of their delivery vehicles to electric while also looking at solar, wind, and geothermal energy as a means of achieving their 100% renewable energy goals.
Either way you slice it the e-commerce game in Japan is an exciting place to be!
When people think of IoT they are most likely thinking of it in the context of the Internet of Things. What that means is that human beings can have access to virtually unlimited information, goods, and services at the touch of a fingertip through the internet. While this definition holds true in 2021 there still is a desire to push the boundaries of how to streamline the digital world to make it more efficient. In order for Society 5.0 to work we will have to embrace the emergence of A.I. and its ability to interface not only with humanity but also other types of A.I. as well. This may change the definition of IoT more toward becoming the Intelligence of Things as Artificial Intelligences interact with one another to connect existing systems thereby making them more efficient.
So what is happening with IoT in Japan exactly? Well the National Institute of Information and Communications Technology (NICT) has recently approved a grant for innovative technology development facilities to act as testing sites for the next generation of IoT solutions. The grant was totaled at 10 million yen or roughly $92,000. This funding is expected to strengthen Japan’s technological edge in the race toward 5G and eventual 6G applications for commercial use.
Pictured is an example of what an IoT Testbed System looks like.
However the discussion in 2021 has not been limited to R&D. Creative IoT solutions have been popping up at the B2B level as well. Take for example, Japanese firm JIG-SAW INC., an edge-to-any cloud IoT framework provider, announced that its IoT module called Bridge Wi-Fi is now certified and available on the AWS IoT marketplace. This module integrates itself with AWS IoT marketplace initiatives seamlessly. Software features of the module also includes a SaaS cloud component as well as device and enterprise-level cloud management.
IoT clouds make what would be a logistic nightmare smooth sailing.
As more and more consumers continue to shop online following the beginning of the COVID-19 pandemic the IoT infrastructure necessary to keep supply chains intact and operating smoothly has never been more important. As necessity breeds innovation, it is good to know that Japan is still living up to its reputation as a technological innovator.
2021 has seen the slow beginnings of a recover from the pandemic with Japan being no exception. As the world at large continues to weigh the option of opening back up fully to the possibilities of allowing international travel again, Japan has continued to tirelessly improve upon its digital infrastructure. With a wide variety of trendy technologies being researched and implemented it seems that Japan is embracing Society 5.0 change in earnest.
Japan’s ability to implement these trendy new technologies is already paving the way for new legislation across the board. Once most of these trends become mainstream there will likely be a cultural shift as processes that normally would require tremendous human cost and resources become more manageable. With the proper channels and legal frameworks in place, foreign investment as well as domestic industry players can develop their own unique approaches to meet demand, The digital landscape is changing right before our very eyes! Would you like to be a part of it?
Bigbeat Inc. helps foreign businesses aiming to enter the Japanese market. If you need detailed information or assistance in participating in an event in Japan or for organizing your own event, please do not hesitate to contact us using the contact form here!
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