JAPAN - TARGET OF 10 million ROBOTS BY 2040 - Filenews 17/7
Japan is implementing a 14-year national investment strategy, amounting to 370 trillion. or about 2.3 trillion. seeking to strengthen its position in the global technological and industrial market by 2040.
The plan envisages combined public and private investments in 17 strategic sectors, including semiconductors, artificial intelligence, robotics, biopharmaceuticals, quantum computing, nuclear fusion, aerospace and shipbuilding.
Central to the strategy is the development of so-called "natural artificial intelligence", i.e. systems that can operate in the real world, managed factories, warehouses, restaurants and hospitals.
On June 30, Japan's Ministry of Economy, Commerce, and Industry commissioned startup Noetra to develop a domestic core model of natural artificial intelligence. The company is backed by SoftBank Corp, Sony Group, NEC, and Honda Motor.
The government will allocate up to one trillion yen over five years, equivalent to about 6.2 billion. dollars. Of these, €387.3 billion. yen are planned to be made available in the first year.
The goal is to develop 10 million Robots
The Japanese government plans to deploy 10 million cubic meters. AI-powered robots in 18 different sectors by 2040. The initiative is directly linked to demographic shrinkage and growing labour shortages.
Japan's birth rate has fallen to historically low levels, with more than 36 million. residents are over 65 years old. According to the ministry's calculations, by 2040 the country may face a shortage of 3.39 million. skilled workers in the fields of artificial intelligence and robotics.
Automation is seen as a means of maintaining the country's productive capacity, as demographic policies and limited immigration are not sufficient to meet the needs of the labour market.
Semiconductors, artificial intelligence and biopharmaceuticals
The largest share of the investment program, amounting to 68 trillion yen, is directed to the semiconductor sector. At the center is Rapidus, which seeks to develop advanced two-nanometer logic circuit manufacturing technology.
Investments of 10.5 trillion yen are planned for natural artificial intelligence, for biopharmaceuticals 20.8 trillion yen and for nuclear fusion three trillion yen.
The strategy also includes quantum computing, aerospace, shipbuilding, defense, as well as the anime and film sectors. The government is aiming for annual exports of Japanese content to reach 20 trillion. yen, approaching the value of car exports.
Japan does not appear to be seeking to directly compete with companies like OpenAI in developing large language models. Instead, it focuses on areas where it already has strong expertise, industrial infrastructure and data.
The country produces about 38% of the world's industrial robots, while its industries have data from factories and production lines that can hardly be replicated by software companies.
The strategy is based on the assessment that the next phase of AI development will focus on the physical world, where hardware, sensors, accuracy, and industrial data will play a key role.
Annual audit of funding
State funding to Noetra will be subject to annual evaluations. Only the funds for the first two years are considered committed, and the continuation of the programme will be conditional on the achievement of specific objectives.
The system allows the government to limit or discontinue funding if the program does not show the expected results, reducing the risk of long-term support for inefficient projects.
Weaknesses in the financing of start-ups
Despite its strong scientific and technological base, Japan faces perennial problems in financing startups during their later stages of development.
The domestic venture capital ecosystem is struggling to provide the large sums needed for a promising startup to turn into an international competitor.
The state-backed Japan Investment Corporation manages growth funds and has a dedicated vehicle for secondary trading before companies go public.
In March, it published a standard of investment terms, aimed at attracting more institutional investors to Japanese venture capital.
At the same time, investment firms such as Khosla Ventures, NEA and Bessemer have begun to directly fund Japanese startups. Andreessen Horowitz has also opened an office in Japan in search of investment opportunities.
A new legal framework now allows start-ups to use intangible assets, such as know-how and customer relationships, as collateral for loans. This is a significant change in a market where banks have traditionally required collateral.
Stricter criteria on the Tokyo Stock Exchange
Along with investing in innovation, the Tokyo Stock Exchange is tightening the criteria for companies listed on the Development Market.
In the past, many Japanese startups were quickly listed on the stock market with a relatively low market capitalization, without subsequently managing to attract the interest of large institutional investors.
Since 2022, the stock exchange has been applying stricter standards, on the grounds that the IPO should be a starting point for the further development of a company and not its final goal.
Last November, 161 companies did not meet the new standards, while delistings from the stock exchange began in March.
Japanese stocks moved near all-time highs during the first half of 2026. However, only 17 to 18 initial public bids were made, which is the lowest number since 2011.
During the same period, Hong Kong raised nearly $44 billion. from stock issues, with a significant portion of the capital coming from Chinese AI company imports.
The example of PayPay
The tightening of conditions in the domestic market is prompting some Japanese companies to consider listing on US stock exchanges.
In March, PayPay, Japan's largest mobile payment platform and a company in the SoftBank group's portfolio, was listed on the Nasdaq.
The company raised $880 million, at a valuation of $10.7 billion. making the largest public offering of a Japanese company in the US in nearly a decade.
PayPay's listing differentiated from previous presences of Japanese companies on the Nasdaq, which mainly involved small-cap companies. The size of the supply enabled institutional investors to acquire significant positions.
The change in the labour market
The investment and industrial changes are taking place at a time of transformation in the Japanese labour market. The post-war model of lifetime employment is weakening, with non-permanent workers expected to exceed 40% of the workforce for the first time.
Japan has a strong industrial base, technological expertise, and a significant presence in the international robotics market. However, the success of its investment plan will depend on whether the financing system, the capital market and the corporate culture can adapt at the same pace to the new industrial aspirations.
Forbes
