Japan’s Economy – The Balance Between Tradition And Technology

Japan is unquestionably a beautiful country. Hard work and tradition are the bedrock upon which this country’s success has been built.

A visitor to Japan cannot help but marvel at the balance that exists between technology and tradition. On the one hand, the country is dominated by some most advanced cities in the world. On the other hand, it retains and values traditional architecture.

Japan is equally known for anime, Hello Kitty, J pop, and Kawai culture as it is for its greenery, ceremonial tea parties, and traditional life. Both technology and tradition have played a vital role in defining this country’s growing economy.

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Managing Japan’s Shrinking Workforce With Robots

There are two forces in Japan that are leading to a rapid push toward automation. The first is the rapid decline in the labor force. The second is the limited influx of immigrants.

In 2017, Japan’s estimated population fell by 264,000 people. Deaths outnumber births in Japan by 1,000 people per day. There are parts of Japan that have fewer inhabitants now than in 1950. Nearly a third of Japanese citizens are over 65. These factors point to Japan’s population falling below 100 million by the mid-21st century.

What is even more worrisome is that Japan’s domestic labor force, which are individuals between the ages of 15 and 64, is projected to fall quicker than the overall population. This means that Japan’s prospects for future productivity and potential outcome look bleak.

Japan is no stranger to automation. Automation played a key role in the automotive and electronic industries from the 1970s through the early 2000s. This means that Japan is in an excellent position to make the best of artificial intelligence and other technologies from now on.

The future wave of automation technology powered by artificial intelligence offers Japan the ability to replace or augment a shrinking labor force, especially in the nonmanufacturing sector. These include things like communications, retail service, transportation, storage, and others.

This means that soon it is possible that when you read Japan casino reviews, restaurant reviews, or hotel reviews, a major factor will be the integration of artificial intelligence and automation. Businesses that have been able to ride the automation wave to provide customers with a high level of service while strategically using its human capital will be the ones that will attract more business and thrive. Those that are slow to embrace automation and AI will quickly find themselves outpaced and outmatched.

Japan is moving toward automation and AI and the use of robots in business and in daily life at a quicker pace than any of the other advanced economies on the planet. Their shrinking population, shrinking workforce, aging population, and declining quality of services are all contributing factors to this move.

This has had an unforeseen effect on how the Japanese government currently approaches and plans to approach the economy. Greater emphasis is being put on education and skill development being equally distributed throughout the population. More effort is being put into creating equality in the labor force, between regular and nonregular employees and between men and women. These efforts are being seen across regions. The goal is to balance out the benefit/risk factor of automation throughout the country.

Tradition, The Economy, And The Treatment Of Employees

Japan’s brutal workweeks are the things of legend. Employees who may get up to 20 days of annual leave may find themselves using only a handful of those days off.

Japanese workers feel that taking time off beyond the absolute minimum is not an option. The workplace atmosphere just won’t allow it. There is a fear of reprisal for taking too many days off. It is easier to just work than having someone tell them off.

In fact, according to a report released by the Japanese government, employees only took 52.4 percent of the paid leave to which they were entitled in 2018. The reasons given were guilt, high expectations, and powerful pressure from peers and employers.

The word karoshi, roughly translated “death from overwork”, became part of the Japanese lexicon in the 1970s. It describes individuals who have died because of work-related pressures and stress.

The Japanese government recognizes that overworked, and worse yet dead, employees do not benefit the economy. This is why the Japanese government enacted the Work Style Reform Bill in 2018. The goal is to create a work environment where employees feel freer to take a paid vacation and the needed time off of work.

Technology, COVID-19, And The Japanese Economy

The COVID-19 pandemic gave Japan the opportunity to push the world’s digital transformation forward and gave them time to bolster their own weak economy. Signs of this can be seen when looking at how Japan’s cabinet enacted laws and economic guidelines designed to promote telework and digitization in late 2020.

Japan has a well-deserved reputation for being a technological powerhouse. However, even prior to the COVID-19 pandemic, Japan recognized that it needed to strengthen its weak tech industry. They needed to digitize key services and operations.

However, tradition has presented some obstacles to digital transformation in certain industries. Included in these are traditional geopolitical obstacles with would-be technological and economic trading partners, like China.

Japan is responding by amplifying its voice in digital policy debates. They are looking to encourage investment and trade in the technologies by moving the conversation toward an inclusive governance model that strengthens a free and robust exchange of data. To do this, Japan needs to work past traditional rivalries and work to build strong future cooperation with its ASEAN neighbors.


Japan’s strong work ethic and ability to embrace technology have played a role in making Japan one of the leading economies of the world. As the economy continues to modernize, innovative businesses and industry-leading technologies sit poised to push Japan even further.

There are challenges ahead. Japan will need to embrace automation and AI to supplement its declining workforce. It will also need to break with certain traditions with the goal of ensuring that education and development are dispersed throughout the country so that there are enough skilled workers to help Japan maintain its economic edge through the 21st century.

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