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Japan Advanced Manufacturing

As part of its fiscal year 2022 (April 2022 – March 2023) spending budget, the Japanese government has allocated $1.62 billion to support Japanese SMEs. Specifically, it will assist businesses upgrade their manufacturing plant equipment, develop digital transaction infrastructure, develop new sales channels, and hire specialists to help with business succession matters. The government spending on upgrades offers new opportunities for U.S. advanced manufacturing companies.  

Japanese manufacturing companies are estimated to have spent $890 million on digital infrastructure. This figure is estimated to grow to $4.1 billion by 2030. For the past decade, value-added manufacturing in Japan has accounted for more than 20 percent of Japan’s GDP. In addition, capital investments to upgrade manufacturing facilities, including incorporating advanced manufacturing technologies, has grown steadily. While the Japanese industrial machinery market is expected to continue to grow, Japanese machinery manufacturers are approaching capacity. In addition, only 51 percent of Japanese companies collect data on their manufacturing lines to maximize efficiency of their manufacturing process. This situation presents an opportunity for U.S. suppliers in certain niches of the Japanese market.

Japan is home to some of the world’s leading manufacturers. After China, Japan has the second highest number of existing industrial robots in operation, about 355,000 units in 2019 or 1 robot for every 190 workers. By comparison, the United States has a smaller industrial robot market with about 300,000 units or 1 robot for every 490 workers.

Furthermore, there is an urgent need for advanced manufacturing technologies, namely automation, robotics, and industry 4.0 and related solutions, to address acute workforce shortages in Japan. According to the OECD, Japan has the world’s “oldest” population. Japan’s population has declined by more than two million in the past 10 years. By 2065, the country’s total workforce is expected to decrease by 40 percent. Advanced manufacturing technologies increase productivity at manufacturing sites, consume less energy, and lead to fewer product defects. Advanced manufacturing technologies also allow for the implementation of clean technologies that can help with the U.S. and Japanese governments’ priority of achieving carbon neutral societies.

To maximize success in the Japanese market, U.S. firms should partner with local agents or distributors with deep industry knowledge and sales networks to market their products to end-users in Japan or establish their own Japan office to have representatives on the ground.

Opportunities:

Japan International Machine Tool Fair (JIMTOF) 2022
Dates: November 8-13, 2022
Venue: Tokyo Big Sight
http://www.jimtof.org/en/index.html 
Description:  JIMTOF is a biannual trade show. Over 1,000 exhibitors and 153,000 machinery business professionals attended JIMTOF 2018, while about 400 exhibitors and 52,000 professionals participated online for JIMTOF 2020.

Factory Innovation Week 2023
Dates:  January 25-27, 2023
Venue: Tokyo Big Sight
https://www.fiweek.jp/hub/en-gb.html
Description: Despite the COVID-19 pandemic, over 1,000 exhibitors and 32,000 machinery business professionals participated in Factory Innovation Week 2022.

If you have further questions, please contact Office.Tokyo@trade.gov.

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