The Japanese AI Market Sector for the European Market

Artificial intelligence (AI) is a technology with growing relevance in advanced economies.

AI Statistics in Japan

Artificial intelligence (AI) technologies are becoming increasingly important in developed economies. Because of this trend, global AI revenue is expected to grow quickly over the next few years. Many Japanese believe AI will play a vital role in the development of their country. Japan’s “Society 5.0” plan aims to make a society where the digital and real lines are blurry. AI will be a big part of this effort.

Public and business sectors have increased their investment in AI research to keep up with public interest.

******The goal of Japan’s “Society 5.0” strategy is to create a society where the lines between the virtual and the physical blur and artificial intelligence play a major role in making this vision a reality. *****

After a relatively slow start, the number of patent filings for AI technologies in Japan has seen a meteoric climb since 2014. According to some analysts, this development marks the beginning of Japan’s third AI boom.

Potential in Japan’s Artificial Intelligence Industry

Several technological firsts have been achieved in Japan thanks to the efforts of the country’s Artificial Intelligence Industry, which has been producing robots and cars at an unprecedented rate. But when it comes to creating cutting-edge software, Western European and American firms remain on top.

People’s AI-related concerns and pursuits have shifted since Covid-19. For instance, artificial intelligence that augments human labor has formerly been confined to select domains because people prefer personal interaction in commercial settings. However, these days people choose technical solutions that require less direct engagement.

Since this is the case, Japanese and European enterprises should consider partnering to profit from each other’s strengths. Europe’s AI companies that invented deep learning algorithms can help Japan’s transportation and entertainment industries, especially in games and other software.

Multiple parties working together on AI research and application is more productive, hence open-sourcing software platforms is rising. European and Japanese AI firms will have additional opportunity to collaborate in automated driving, marketing, information services, security, and image recognition.

European AI enterprises can offer Japan appealing solutions because of these factors. Regional business collaborations may be effective.

Challenges of Foreign Business in the Japanese AI Sector

Strategies for breaking into the Japanese market. The most viable options are setting up a subsidiary in the country, selling through a local distributor, or forming a joint venture with a Japanese firm. In the long run, the best approach to entering the market may be to establish a subsidiary and operate there directly. All of the potential outcomes need to be weighed and evaluated.

Having a solid process in place for providing after-sale support is crucial. When it comes to customer support after the sale, Japanese businesses and consumers have high standards. This can present a problem for European SMEs because after-sale services in Japan are typically more expensive than in Europe.

There need to be more qualified who are familiar with AI. Japan has just begun its sprint to catch up to the United States and Europe. According to research, there needs to be more AI industry worldwide. This is also true in Japan, and it could have unfavorable consequences for foreign SMEs with ambitions in the Japanese AI market.

The poor selling point in terms of the brand’s reputation. It may take longer for many European AI start-ups to get into the Japanese market because their “weak” brands are not yet well-known.

Japan needs an adequate framework for regulating AI. Japan’s regulatory structure needs to be updated with state of art in artificial intelligence, which is set to be commercialized. This could be problematic for European businesses because it is sometimes difficult to predict the course of new legislation and the preferences of governments when it comes to policymaking.

"Otsumami" - a bite size snack:

***********European firms offering platforms with unique AI solutions could be one enticing approach for Japanese companies, especially startups, to meet local needs, and this would also enable European AI technology into the Japanese market.*********

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