Japan is globally leading in terms of operational industrial robots stock in the country and most of its robot market revenue are from industrial sector.
As of 2018, Japan leads the segment with 20% of market share in manufacturing of industrial robots closely followed by US and China respectively. However the service sector is expected to become the largest in 2025
- Definition / Scope
- Market Overview
- Market Risks
- Top Market Opportunities
- Market Drivers
- Market Restraints
- Industry Challenges
- Technology Trends
- Regulatory Trends
- Other Key Market Trends
- Market Size and Forecast
- Market Outlook
- Distribution Chain Analysis
- Competitive Landscape
- Competitive Factors
- Key Market Players
- Strategic Conclusion
Definition / Scope
The Ministry of Economy, Trade and Industry defines robots as an intelligent mechanical system that incorporates three technological elements: sensing, intelligence and control, and drive.
Japan was one of the most progressive countries and early adopter to venture into robotics technology and ever since the technology has remained dominant across field’s research and manufacturing sector of the country. At present the country has about 300,000 operation robots across various sectors.
The robotics market in Japan is utilized across three major sectors which are follows:
- Industrial robots: Some of the common application of the industrial robots are: welding, painting, assembly, pick and place (such as packaging, palletizing), product inspection, and testing. The industrial robots are able to lift tons of weight and control algorithms are used to perform positioning tasks perfectly. Some of the subsectors of industrial robots under operation in Japan include, automobile manufacturing robots; Electrical/Electronic Appliance Manufacturing robots, Cargo/Transportation robots, Arc & Spot Welding robots and Wafer Transfer robots among others.
- Service Robots: In plain words, Service Robots assist human beings by performing mundane day-to-day chores that are dull, dangerous or repetitive. They are autonomous in nature and have a built in control system, with the option to manually override certain behaviour. The sub-sectors of Service robots include, Medical Robots; Nursing Care Robots, Rescue Robots; Facility Inspection Robots, Floor Cleaning Robots, Communications / Entertainment Robots among others.
- Robotech: Commonly called “RoboTech” or also known as robotic components, is the field of high-precision servomotors, cables, many different types of sensors and other parts or products used to build and maintain robots. These include several controller, arms, effectors, motors and sensors. The sub-sectors in the RoboTech section are: Servo Motors, FA cables, Close Control Reduction Gear, Robot Vision Systems and Automatic Tool Changers among others.
- The three major factors that have contributed to emergence of robots in Japan are:
- Advance technologies including sensors, AI and data processing
- New needs arising from society structural changes such as ageing population and decreasing workforce
- The advancement of telecommunication technology.
- Japan is globally leading in terms of operational industrial robots stock in the country and most of its robot market revenue are from industrial sector. As of 2018, Japan leads the segment with 20% of market share in manufacturing of industrial robots closely followed by US and China respectively. However the service sector is expected to become the largest in 2025.
- Some of the popular robots in the industrial robotic segment include: dual armed robot by Kawasaki, Fanuc’s factory automation system with 2.4 million CNC (computer numerical control) and Yasakawa’s collaborative robot “Motoman” among others.
- The service sector comprises robots and systems designed for service in offices, homes & public facilities. It is even forecast to overtake in market size the industrial robot sector by 2025. Within the service robot market, most popular category is health monitoring where the market size is expected to reach $1.35 billion by 2020. Other important categories include, mobility support and food industry related.
- Some of the popular robots in the service segment include: food handling robot by Faunc, Cooking robot by Yasakawa and mobility robot by Toshiba among others.
- As of 2018, the industrial robotics market is valued at $10.9 billion and the service robotics market is worth $8.1 billion. However, according to the forecasts, the industrial robotics is going to reach $13.7 billion and service segment is expected to overtake the industrial by reaching $ $23 billion by 2025.
- In Japan, potential users are rather excited about the use of service robots in their daily life especially for disaster prevention, home care and medical sectors, however child education is not well received with people concerned about moral issues and safety.
In 2019, Japan announced that it will call for more controlled regulations on ‘killer robots’ . Tokyo publicized its intention to raise the issue of international rules on lethal weapons equipped with artificial intelligence (AI). Japan has taken a stance on this and is concerned about the possibility that autonomous machines could start wars, cause accidents and could even decide on who gets to live or die which should be a concern for entire humanity.
Weapons that are built with AI have the potential to target automatically without human control while some weapons also have ability to kill based on their programming. Several countries including Russia, China and America are said to be currently developing “lethal autonomous weapons systems” (LAWS). However, Japan has no immediate plans to develop such weapon systems at present.
Top Market Opportunities
- The next-gen technology such as nanotechnology has allowed manufacturers to substantially create miniature robots, making them suitable for home applications. Similarly, the nanotechnology also provides more accurate sensors that could lead to more elastic, visco-elastic and other types of joints, resulting into robots that can “walk” in a more natural way through the additional degrees of flexibility. The technology eventually allows to construct robots in cheaper way. Thus, as the service robot market opens up, the consumer would demand for more cost-friendly products and companies that find the right balance between price, quality and durability have opportunity to increase their sales.
- Another exciting outcome of the miniaturization driven by nanotechnology is the development of microscopic robots which can be injected into human body. Already experiments are being conducted in Europe and new fields are evolving such as medical oncology where miniscule devices are guided inside human body to conduct small scale surgeries or simple medical examination. The Japanese government has also placed a priority on developing and distributing medical equipment that utilizes robotics technology. The government is providing subsidies on product development and implementation of innovation that is expected to reduce the burden of medical professionals and patients. Thus, companies looking to manufacture robots in general can invest their money and resources in building medical robotics has it has high scope to grow in future.
- Similarly, adding the emotion factor to humanoid robots also makes them diverse and increases their scope in fields such as education for toddlers, children and adults. As recently, the Alderman from France has introduced the humanoid robot called Peeper, other western robot manufacturing companies can play a key role in the field of English language training in Japan. The market of language training is worth $4.2 billion in Japan and companies can tap onto the opportunity to make communication robots and build them with engaging skills to tap onto the market.
- Aging population: Japan’s society is aging faster than that of any country in the world, which also poses threat to the economic prosperity and further accentuates problem of labor shortages. 25% i.e. 32 million people in Japan are older than 65. In addition, the life expectancy of the Japanese people remains highest in the world. Also, the statistics combined with the low birth rate of 1.2 births per woman, the country is unable to keep up with the rate of people entering old age. The country also has low youth population who are not able to take care of the growing number of senior citizens or to contribute to Japanese economy as viable workforce. Through robotics, Japan is trying to create a digital health solution to take care of its greying population and thus, these robots are being designed to meet the demand to take care of its aging population. Mostly, the robots developed in the healthcare industry fulfill the purpose of serving the age old population.
- Severe labor shortage: This is leading to the need for robots, particularly, in the nursing field. Robots are being partly used as substitute for foreign labor, as immigrant caregivers are scarce in Japan. Japan also has strict immigration restrictions due to which there is shortage of labor. In addition, the government in Japan has decided to expand a six-year-old guest-worker Programme for nurses and care workers from the Philippines and Indonesia, but this is unlikely to address the existing labor shortage. Thus in response to the crisis, government is trying to speed up development and adoption of nursing technology. To stimulate the reduction in the cost of nursing care robots it has started offering $20 million in subsidies to developers who aim to build care robots priced less than $794.
- Cultural influences: In Japan, robots are generally viewed positively. The culture to do so is credited to ancient Japanese religion, Shinto, in which objects (as well as people and other natural phenomena) are believed to possess a spirit. Although, this is partly why people like robots and consider them important in their daily lives. Another reason is Manga comics and animations that have had a much stronger cultural influence on interest in robotics. Robots are often portrayed as children’s’ friends in these comics. The post generation of 1950’s who gew up with these comics learned about friendship, courage and charity through stories that included robots.Thus, Japanese people in general tend to have friendly feeling towards robots and are comfortable living with them alongside. A number of researchers of robotics in Japan also found their passion after being fans of the famous ‘Astro Boy’ manga in their childhood days.
While Japanese manufacturers are tech-savvy and focused much on advance level, they are restricted by other several factors such as high prices, lack of standardization which is creating barriers for the industry in general.
- High costs: High costs of production have led Japanese companies to re-direct their strategies to niche products rather than developing products that are providing range of domestic services. As robotics is an early stage industry, it is likely to have high introduction costs and less market penetration. Also, due to the end consumers are less aware about how much is cheap or expensive in terms of pricing which seems to be challenging companies to determine fair price. Another related problem arises from the over-engineering during product development process. The engineers are not aware about what they want to develop and what is actually needed. The Japanese government further asserts that some robots that are developed domestically are too costly and large to actually consider for buying which further hindering the commercialization of such robots.
- Standardization: As robotic devices are built in small quantities, there is lack of standardization. An increase in demand and commercial utilization is necessary to allow for mass production and standardization. The absence of standards, however, prevents the commercial market from reaching an effective size and reducing costs. Despite of government initiatives to establish standardization in the industry, a single company within the industry has advanced technology making it difficult to make adjustments within the industry. In addition, Japanese businesses typically face a complicated bureaucracy when it comes to innovative approaches or new technologies.
- Lacking interest in commercialization: Japanese companies operating in the robotics market are putting more money and resources into technological development and less into market deployment which is putting lots of pressure upon sales. As the market is still in a growing phase, the manufacturers are unable to identify the market potential of their robots dampening their interest in pursuing commercialization.
- Slow move towards exporting: In Japan, the product development cycle of robots is very slow which in turn is limiting firms to take exports aggressively. Thus, more companies are focused on leveraging domestic market first to international. A further influencing factor is also demand of human assistance robots which is low in overseas market than in Japan this is also limiting factor to export particularly service robots foreign market.
- Demand limited by development: One of the reasons of failure of demand of certain robots is also the developers and manufacturers. Japanese companies tend to develop robots independently of existing needs. Rather than coming up with a technological solution to a problem in form of robots, they regard the scope of application as a secondary interest. The lack of user involvement in R&D process further accentuates the problem. It is one of Japan’s bigger problems to anticipate situations in which their robotic solutions could actually play a role.
- The RoboTech subsector that covers wide range of components and parts used to build and post-maintain robots is of much importance than the application of robots itself.The Japanese RoboTech subsector is highly established and further expected to be boosted by the shift towards nanotechnology. Its introduction not only allows for even smaller components, but thus for miniaturized robots that are suitable for the application in home environment which is also highly desired in human assistance robots.
- In Japan, compared to hardware components, software is considered a market weakness. As Japan is a manufacturing nation and still leads in industrial robotics, it still lacks development in other subsectors such as service robots and robotech. However, in 2015, for the second time Toyota Motor Corporation held a “Hackathon” to jumpstart innovation in regard to its Human Support Robot (HSR). Teams from academia, research and corporate entities competed to create the most innovative application for the robotics device. Also, Toyota planned to loan HSRs to Japanese partner organizations, mainly in academia and research, to allow them to share their software development plans.
- In addition to private entity initiatives, METI has also established an action plan to foster core technology development for next-generation robots in a period of 2015-2019. Focus is predominantly placed on core technologies, such as artificial intelligence (AI) and technology for automated behavior based on human behavior and the environment. Similarly, the future vision of the organization is to incorporate more advance technologies in robotics such as, sensor and cognition systems, mechanisms, actuators and their control systems, as well as platform technologies.
- In Japan, before the robots can be launched officially in the market they have to go through strict testing procedure. In Japan, these standards for service robots were proposed by the Ministry of Economy, Trade and Industry (METI) and the New Energy and Industrial Technology Development Organization (NEDO). In addition, the standards apply to typically four types of robots that include, Mobile servant robots with manipulator, Mobile servant robots without manipulator, Person carrier robots and Physical assistant robots (including rehabilitation). Thus, the safety requirements that has been mandated are following:
- ISO 102180-1:2011 – Robots and robotic devices — Safety requirements for industrial robots
- ISO 13482:2014 – Robots and robotic devices — Safety requirements for personal care robots.
- ISO 13849-1:2006 – Safety of machinery — Safety-related parts of control systems
- To establish the global standard for service robot safety, ISO 13482, METI and NEDO worked together on the Project for Practical Application of Service Robots. Together these entities have been conducting research and development of methodology for safety verification test by collecting and analyzing data from different types of robots.
Other Key Market Trends
- Every trend has often a counter-trend. Due to progressive development in the robotics industry in Japan, the trend to replace humans with robot was prevalent as robots are most cost effective. However, more recently some companies in Japan are replacing robots with humans and promoting their workmanship at their manufacturing plants. For instance, Toyota is that the company that believes in the need to sharpen the manual skills of the workers and further develop them, so they can figure out ways to improve production lines and the car-building process which generally robots cannot do.
- Members of Professor Mamoru Mitsuishi’s and Professor Naohiko Sugita’s laboratory in the University Of Tokyo School Of Engineering’s Department of Mechanical Engineering are conducting robotics research with a special focus on the medicine and industrial processing. The university lab is currently conducting development of robot and its application in surgery.
- In the laboratory of Professor Atsushi Yamashita at the University Of Tokyo School Of Engineering’s Department of Precision Engineering, progresses are being made in the research on solving communal issues through use of robots. The image processing technology is utilized to create a mimic version of human eye and other human interfaces with hope to utilize such robots in areas of disaster response and welfare in near future.
Market Size and Forecast
- As per a research by the New Energy and Industrial Technology Development Organization (NEDO) and the Ministry of Economy, Trade and Industry (METI), the robotics market was valued around $ 12.3 billion in 2018 and is expected to reach $27.28 by 2020. As the technology advances new products are expected to appear on the market fuelling further growth of 10-15% a year over the period 2020-2035.
- The industrial robot subsector is the most prominent among all the robotic sectors in Japan. The estimated size was about $8.1 billion in 2018 and by 2020 the market is expected to increase by another 25% to $9.7 billion. Also for the 2025-2035 period the market is expected to grow at a strong pace.
- The sub-sector of Service Robots was worth $672 million in 2018 and is expected to grow fivefold by 2020 to about $2.8 billion. Further, the market is expected to triple in size between 2020-2035 periods and also have strong growth.
- Finally, the RoboTech sub-sector was estimated to be worth $1.96 billion in 2018. By 2020 the market is expected to triple in size to around $4.16 billion. Also for the 2025-2035 period the market is expected to grow at a very strong pace.
- The projections for the market size in Robotics industry in Japan aim at $27 billion in 2020 and $90 billion in 2035, a very bold and aggressive prediction, indeed.
- The Japanese government have issued its robot strategy, the “New Robot Strategy”, to help the development of the robot market in Japan by 2020.
- The three main goals that the Japanese government expects to achieve by 2020 in the industry are:
- Enable a total Investment of $867 million in government and private robot related projects to reinforce creativity, robot innovation and standardize technology with an eye on global expansion.
- Raise the robot market to 20.75 billion
- Set up a new robot field test area in Fukushima.
Besides these, some of the positive outlook that is likely to follow in the robotic segments in the industry include:
- Industrial: Creation of the service robots 100 best practices, improvement of AI, sensors and introduction of robots for set-up tasks and back office operation of service business
- Infrastructure: Lead intelligent construction and introduction of robots to check and renovate 20% of aging infrastructure.
- Day care medical: Government is providing implementation support to more than 100 medical robots projects.
- Agriculture: The movement is set to implement auto-driving tractors by 2020 and also lead introduction of more than 20 different labor-saving robots
Distribution Chain Analysis
- In service robotics segment, the distribution is undertaken directly from manufacturers to stores or the consumers. It is common for manufacturers to sell through first-tier, second-tier and other intermediary wholesalers to medical institutions as direct transactions are less prevalent in Japan. However in the case of high-priced medical equipment, transactions are generally direct. Sometimes, wholesalers sell to retailers from where the consumers also buy robotic products.
- Whereas in industrial robotics, there are primary and secondary wholesalers who then supply the robots to the other manufacturing companies using it in their factories. The robots are mostly used in factory automation and assist in production of range of goods and operated by humans.
- In all cases, establishing trust through product quality and certification of safety will be essential to open up business, as the utilization of robotics involves a close proximity to humans. For the same reason after-sale services is also provided.
- There are approximately 300 companies in operation under the industrial robotics in Japan. With that number, Japan also has the highest number of industrial robotics manufacturing companies closely followed by US and China. Whereas, in service robot segment less than 50 companies are involved. The Japan is the fourth largest manufacturer in the world in this segment, the leader being the US.
- There are around 21 major foreign players and 20 major domestic players operating in both Industrial and Service robotics segments of Robotics industry in Japan.
- The three key Japanese telecom operators namely (NTT, KDDI and Softbank group) have been working on partner robots by partnering with players from the robot industry. NTT is leading operator with 55% market share followed by KDDI and Softbank. These three operators are also competitors in the robotics industry.
- NTT has recently tied up with robot developer Vstone to launch a service robot targeting the elderly. The desktop robot Sota is designs to communicate with smart devices in home and assist seniors with e-health services and to control appliances.
- Simialrly, KDDI has invested through its corporate venture fund KDDI Open Innovation Fund, in the US robotics startup called Jibo. The robot is named after company itself and the functions include: face recognition, email notifications, camera and cloud apps among others.
- Softbank established robot business subsidiary Softbank Robotics in Jul 2014. The subsidiary also has giant investors including Foxconn and Alibaba are investors. The main robot that the company is featuring is the humanoid robot Pepper.
- There are effective options available for foreign companies entering the Japanese market by forming partnerships with research institutions or local manufacturing companies through three ways that include:
- Technical partnership: US-based AI startup, Skymind, formed a partnership with Japanese based SoftBank to develop a prototype for a robot which can identify and locate moving objects within a room –the application is set to have high scope across various fields including factory work
- Production partnership: A US company AKA announced to sign a MoU with Vaio for manufacture and maintenance Vaio’s AI robot, Musio. Further, the company also announced that they will join forces with Kashiwazaki US TEC and will manufacture Musio in Japan.
- Sales Partnerships: Tokyo-based Creek and River joined with Taiwanese AI and robotics startup, Intumit, to allow Creek and River distribution rights in Japan for Intumit’s AI platform, Smart Robot.
- Hitachi has unveiled “Ropits”, which is a single person autonomous vehicle meant to travel on footpaths rather than roads. The robot is inbuilt with cameras and 2D/3D laser distance sensors to avoid pedestrians and other obstacles and relies on Gyro sensors help it stay stable on uneven surfaces. Ropit is used to pickup and drop off passengers autonomously.
- Panasonic also developed a medical robot that dispenses drugs to patients. Initially, the robots are meant to operate in Japanese hospitals and later will be marketed across US and Europe. The price of the new robot is undisclosed but will most likely cost around several thousand dollars. Pharmacists can put drugs into the robot, which stores medical data for patients, then it sorts out drugs for each patient and places it in the respective drawers bearing their names.
- The Japanese telecom group SoftBank and Aldebaran Robotics from France partnered and entered the robotics market with a robot called Pepper, a tripod-based robot that can read human emotions. The robot is humanlike and is designed to live with humans, it is more than human because of its ability to communicate with humans through voice, touch and emotions.
- Faunc has developed a function in its injection molding machine that uses deep learning to assess how worn down a part of machine has become, and will alert users before the part breaks down. Up until sight was used to judge the parts condition.
- Deep learning technology makes sophisticated analysis possible, and notifies users of appropriate timing for replacement. Yashkawa Electric has deployed cloud to share information necessary for solving any problems that arise (name of robot model, product specifications, alarm number, inquiry history, etc.), making it easier to send information and reduce interruption. It uses cloud across several of its electric robotic machines.
- Terra Drone KDDI is currently developing operations control system that associates drones to 4G LTE networks and uses 3D maps to prevent crashes with other drones and buildings. In addition, a cloud technology is also exploited that accumulates/analyzes data gathered by drones.
- Softbank Robotics is utilizing two-way communication in its reception robotics application which is used to provide guidance to visitors, such as determining contents of digital signage depending on greetings and customers’ reactions. In addition, it also links up with sensors on automatic doors to determine when someone has entered or left a room, and with sensors on shelves to provide product explanations, etc.
- Through chat, Fujisoft’s communication robot, PALRO, accumulates a lifelog on the user’s actions and ideas, etc., to continually deepen its knowledge of the user. In addition it also provides weather and news insights.
Key Market Players
The Japanese robotic companies are not only competitive in their domestic market but also are popular internationally. As of 2018, more than 70% of the robotics market in Japan is captured by the industrial robot segment.Among the top 21 in the world there are 10 Japanese Industrial robotics companies that have found their lead.
According to the revenues earned, the key players in the robotics market include:
- Mitsubishi Electric
- Omeron Adept
- Denso Corporation
Some of the Key players in Service Robotics sub-sector are follows:
- Toyota Motor Corp.
- Honda Motors
- Hitachi Ltd.
- Fujitsu Labrotaries Ltd.
- Cyberdyne Inc.
Some of the Key players in Robo-Tech sub-sector are follows:
- Omron Corporation
- Sanyo Denki Co. Ltd.
- Fuji Electric Co. Ltd.
- Nippon Liniax Co. Ltd.
- Nessei Electric Co. Ltd.
The performance of Japanese robotics market is exceptional and the market is further expected to grow exponentially. Although, Japan’s robotics is predominant in industrial sector, the service robot solution is particularly expected to grow in 2019 and later years.
Mostly, the continuous growth in demand for alternatives stemming from emerging digital transformation, growing aged population and decline in labor forces will be the factors to encourage the IT and robotics in the Japan commercial robotics market.