Post Content Japan is also backing this transition at the policy level. The government has set a goal of building a strong domestic physical AI sector and capturing 30 per cent of the global market by 2040. (Image for representation: Freepik)
In many parts of the world, robots are often seen as a threat to jobs. In Japan, the reality is quite different, where machines are stepping in not to replace workers but to take on roles that companies are struggling to fill.
The rise of “physical AI”, robots powered by artificial intelligence, is being driven more by necessity than ambition. With fewer people available to work, businesses across the country are increasingly turning to automation to keep essential operations running.
A shrinking workforce is driving change
Japan’s population has been declining for years, and the impact is now visible across industries. The country recorded its 14th straight year of population decline in 2024, while the working-age population has dropped to under 60 per cent and is expected to shrink further in the coming decades.
This demographic shift is forcing companies to rethink how they operate. Labour shortages have become a major concern, prompting firms to adopt robotics and AI more quickly.
“Physical AI is being bought as a continuity tool: how do you keep factories, warehouses, infrastructure, and service operations running with fewer people?” said Hogil Doh of Global Brain in an interview with TechCrunch.
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Experts say the focus has now shifted beyond efficiency to survival, as companies try to maintain operations despite having fewer workers.
Government push and global ambitions
Japan is also backing this transition at the policy level. The government has set a goal of building a strong domestic physical AI sector and capturing 30 per cent of the global market by 2040.
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The country already holds a dominant position in industrial robotics, with Japanese manufacturers accounting for about 70 per cent of the global market in 2022. Now, efforts are focused on combining that hardware strength with advanced AI systems.
Under Prime Minister Sanae Takaichi, around $6.3 billion has been committed to boost AI development, support robotics integration, and accelerate deployment across industries.
From factories to everyday operations
Robots are no longer limited to factory floors. While industrial automation remains the most advanced area, new applications are emerging across logistics, infrastructure, and services.
In warehouses, automated systems are increasingly handling tasks such as sorting and moving goods. Companies like Mujin are developing software that allows robots to operate more independently, improving efficiency without requiring constant human input.
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Inspection robots are also being used in data centres and industrial sites, reducing the need for manual monitoring and improving safety.
Strength in hardware, race in software
Japan has long been known for its expertise in precision engineering, including components like sensors and control systems. This gives it a strong base in robotics.
However, countries like the United States and China are moving quickly to develop integrated systems that combine hardware, software, and data.
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“In robotics, and especially in Physical AI, it is critical to have a deep understanding of the physical characteristics of hardware,” Issei Takino, Mujin’ sco-founder and CEO, told TechCrunch.
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A collaborative future
Rather than a single dominant player, Japan’s approach is evolving into a mix of large corporations and startups working together. Established companies like Toyota Motor Corporation and Honda Motor bring scale and experience, while startups focus on software and automation innovation.
As investment shifts toward software platforms and integration tools, companies are placing greater emphasis on how robots are deployed and improved over time.
In Japan, the message is clear: robots are not replacing workers—they are stepping in where there simply aren’t enough people left to do the job.
