SMART ROBOT MARKET

• Japan ranks number one in robot operations and more than 50% of robots are manufactured in Japan. Japan has one of the largest number of service robot manufacturers (4th place) in the world.

1. Market Size and Growth Rate

• Japan smart robots are categorized under industrial robots and services. It has a growth rate of 13.9%.
• Japan industrial robots sales increased by 34% and exports are sold thrice when compared to domestic sales.
• According to the Japan Robot Association (JARA), 168,342 smart robots were produced in 2018 which account for 744,444 million yen (USD 6,917,931,981) with a growth of 4.7% compared to 2017.
• In 2017, Japan smart robots export growth rate increased by 28.9%.

2. Growth Factors and Opportunities

• Factors influencing growth of smart robots sector in Japan includes cultural influences such as Manga comics, historic robot adoption, labor shortages, increased stats of aged generation, and government promotional activities such as New Robot Strategy.
•  New Robot Strategy was launched in 2015 by the government of Japan to improve opportunities for robot production which aimed at encouraging investments around 100 billion yen by public and private sectors and planned to expand up to 2.4 trillion yen by 2020.
• Japan government also proposed a new robot test field at Fukushima with the aim of reducing the cost of producing robots.
• Major sectors of smart robot sales include material handling robots and robots in the painting category.

BIOPHARMACEUTICALS MARKET

• Japan has taken second place in the biopharmaceuticals market (Biologics) across the globe. About 70% of Japan biopharmaceuticals market was dominated by foreign companies.

1. Market Size and Growth Rate

• As of 2018, Japan biopharmaceuticals market had a growth rate of 7.5%.
• In 2020, Japan biopharmaceuticals market is projected to reach 500 billion yen (USD 4,646,000,000).

2. Growth Factors and Opportunities

• Biopharmaceuticals contribute to 17% of healthcare expenses in Japan.
• The government recently launched Honebuto Policy to develop biosimilar productions and promote National Health Insurance schemes, high-cost medical care benefit programs and other reimbursements which will improve the use of biopharmaceuticals which in turn increases the market size of biopharmaceuticals/biosimilars.
• The government of Japan provides feasible procedures to market biopharmaceuticals by offering opportunities such as minimizing clinical trial, ease in drug approval procedure, subsidies, and tax incentives for new investments.
• Japan Government also created multiple bio-clusters for R&D cost reduction.

LIFE SCIENCES MARKET

• Major sub-segments in Japan life sciences market include pharmaceutical and medical device market. Japan ranks second in life sciences markets after the United States.

1. Market Size and Growth Rate

• According to the International Trade Administration, in 2017, the Japanese pharmaceuticals market size was around $95 billion.
• The Japanese pharmaceuticals market has a growth rate of 3.3% from 2017 to 2022.
• In 2018, Japanese medical device market was $54.5 billion and is projected to reach $74.7 billion in 2025 with a CAGR of 4.6%.
•  Major medical devices include pacemakers, orthopedic implants, and PTCA catheters.

2. Growth Factors and Opportunities

• There is an increase in the number of chronic diseases among Japan's aging population (25%). This is acting as one of the prominent growth factors and paving way for opportunities in pharmaceuticals and medical device market.
• Japanese government initiatives such as streamlining regulatory approval, quick review process, reimbursement system, National Strategic Special Zones, tax benefits are enhancing the opportunity for life sciences companies in Japan.

SMART AGRICULTURE IN JAPAN

• Available data estimates that the size of the domestic market for smart-agriculture in Japan was ¥9.72 billion in 2015, ¥11.05 billion in 2016 is set to grow to ¥33.19 billion by 2022.
• Several sectors, such as agriculture, fisheries, forestry, and the food industry, have experienced a severe shortage of labor in Japan due to declining farming population and the effect of aging. This declining farming population will present a market opportunity as smart agricultural equipment will be needed to augment the efforts of the declining farming population and aging workers.
• However, future improvements are expected in Japan due to the anticipated growth of smart agriculture.
• As of 2017, Japan's agriculture focused on "cultivation support solutions," such as production/control of farm products. By 2018, the sales and operational support solutions expectedly increased. Besides, precision farming expectedly expanded from 2018, as more systems implemented interworking between manned and unmanned agricultural machinery. Agricultural systems that operate unmanned are expected to become more popularized in Japan.
• According to Reuters, some smart (unmanned) agricultural equipment getting popularized in Japans smart agricultural system include drones, which now offer high-tech assistance to Japan's aging farmers.
• The next-generation farm workforce in Japan may be a drone. A 2018 Reuters publication reveals that Nileworks planned to commence the sale of drones in May, with an annual sales target of about 100 units within the first year and achieve a sales of 4,000 within five years.
• A recent Science Direct journal reveals that Japan is one of the countries contributing the most significant number of scientific studies to the field of research and development in smart agriculture and this could indicate that it will become one of the countries that will become known as "leaders in smart farming."
• The market size of the Japanese smart agriculture segment is expected to reach a value of ¥33 billion by 2023.

2. VIRTUAL REALITY/AUGMENTED REALITY (VR/AR) IN JAPAN

• The 2017 to 2023 market analysis by PRNewswire reveals that Japan is one of the few countries that currently represent a significant demand for the global augmented reality gaming market and will remain in this position up to 2023.
• As of 2016, the size of Japan’s Virtual Reality/Augmented Reality market was about ¥14.1 billion and is projected to grow to ¥211.1 billion by 2020.
• Experts revealed that the Japanese VR/AR market is expected to grow more than ten times (exceed a multiple of ten) within five years, counting from 2016.
• The most significant use of VR/AR is for entertainment in Japan. However, an analysis of the coming years reveals that the VR/AR technologies will serve a wide variety of industries, including medicine, tourism, retail, and manufacturing.
• The governments of Japan is attracting more foreign tourists, and several indigenous bodies in Japan are creating smartphone apps that feature virtual reality videos and target foreigners. Virtual reality is an initiative of the Japanese government to spur tourism and create new industries. The high volume of visitors to enter Japan (about 40 million by 2020), during the Olympics and Paralympic games will present significant market opportunities and unprecedented growth for the VR/AR industry in Japan.

3. TOURISM IN JAPAN

• A principal Japanese travel agency, H.I.S., recently launched an augmented reality travel pamphlet that requires users to possess a smartphone to enjoy its contents.
• The Japanese tourist industry is set to grow significantly for the period between 2017 and 2020.
• The number of incoming tourists into Japan reached the highest ever figure (28 million) by 2017. Significant business opportunities are coming up across several sectors in Japan, including tourism. The Japanese tourism industry will see substantial activities due to the market opportunities from the upcoming Tokyo Olympics games and Paralympics scheduled for 2020.
• The 2020 Olympics and Paralympic games will attract more visitors to Japan and create a market opportunity for the tourism industry, which is projected to grow to about 40 million visitors by 2020 from 28 million in 2017.
• Indeed, inbound tourism is well-positioned to be a vital element of the Japanese government in its efforts to achieve the economic GDP growth of ¥600 trillion by 2020 (from the present ¥500 trillion).
• Facilities in Osaka Japan will draw about 2.2 million visitors by 2030 to Japan and create an economic impact of ¥760 billion yearly.

METHODOLOGY

RENEWABLE ENERGY

• When an earthquake and tsunami significantly damaged the Fukushima Daiichi nuclear power plant in Japan in 2011, Japan's power sector was marked by significant turmoil. Japan turned off its entire nuclear network, creating a severe energy supply challenge that also spurred an important and unprecedented opportunity for renewable energy developers throughout the country. Since then, Japan's Renewable Energy industry has become a growing market. And while the market has always been important, a decision to use policy incentives to adjust Japan's energy mix meant that growth was all but assured.
• A "Feed-in Tariff (FIT) system was implemented in 2012 to promote renewable energy deployment," and the generation capacity by renewable energy has increased steadily. The FIT rates are reexamined and revised annually and have been decreasing year by year.
• Japan currently generates most of its energy needs from fossil fuels. They plan for that figure to fall to just over 50% by 2030, reinforced by energy efficiency policies to reduce demand. "The Japanese Government has pledged to boost the amount of energy coming from renewable sources to 22-24% by 2030 from the current level of 15%."
• Japan's reliance on coal increased after the 2011 Fukushima disaster. With the recent market liberalization, Japan’s energy market is transforming itself gradually, towards more renewables.
• The hope for the future is high with some challenges as Japanese entrepreneurs and corporate leaders check out the latest advances in solar panel technology, wind turbines, biomass generation, battery storage technology and smart grids. Renewable Energy is a trendsetting market that provides learning opportunities in order to be more competitive at home. Japanese companies are eager to collaborate with overseas firms and conduct pilot tests all over the world.
• The total revenue from energy sales in Japan for 2018 was 18,023,581 million yen which is $167 billion USD.

ELECTRICITY

• The total electricity production has been decreasing, but the government expects growth in electricity demand, as an effect of continued economic growth. After the oil crises in the 1970s, Japan has expanded its energy sources through increased use of nuclear energy, natural gas and coal, as well as the promotion of energy efficiency and conservation. Japan’s electric power companies are fully committed to implementing the closed nuclear fuel cycle and plutonium utilization consistent with all domestic laws and international nonproliferation standards.
• The government has decided to aim to maintain the energy demand in 2030 at the same level as it was in 2013. In order to achieve this, the Japanese government is proceeding with energy saving regulations. According to the Government, the "transmission and distribution lines will be unbundled by 2020." The market has been growing positively to ensure competitive neutrality. This is monitored by the former ten General Electricity Utilities, which consistently handle all functions from power generation to distribution.
• The Japanese electricity market is undergoing deregulation, and several opportunities will arise when the market is fully deregulated, scheduled in 2020. In 2016, full electricity deregulation of the retail side was completed. However, the last step in the deregulation is remaining and will mean a full unbundling of power generation and transmission as well as full deregulation of the electricity price. After the end of Feed-in Tariff, experts predict "profit opportunities for new electricity service companies" in Japan. With the three goals of ensuring supply stability, suppressing electricity rates to the maximum extent possible, and expanding the options for consumers and the business opportunities for operators, the government is planning to advance the reforms in three phases. These would be through the three key measures of enhancing nationwide grid operation, full deregulation of the electricity retail and generation sectors, and further ensuring neutrality in the transmission / distribution sector through the legal unbundling.
• In 2016, the Liberalized Electricity Market in Japan was worth $140 billion.

INFORMATION & COMMUNICATION TECHNOLOGY (ICT)

• Japan is home to huge multinational ICT conglomerates. These include Sony, Panasonic, Fujitsu, NEC and Toshiba among many other globally acclaimed brands. However, though there are some key players operating here, many of the enterprises are still struggling especially amidst international competition. This is where the latest and most innovative ICT solutions can make all the difference by playing a vital role to stay above the competition.
• Japan was placed 10th in a global ranking that assesses nations on their level of development in information and communication technology, moving up one spot from last year, according to an annual United Nations report. Japan is an ICT leader, and also an active participant in international standards.
• The government is steadily coming up with innovative ideas and efforts to significantly impact and contribute on a global scale. The industry is expected to exceptionally boom in the upcoming years. Both the public and the private sectors are aware of the importance of the latest, most innovative ICT solutions to advance the economy and are taking steps towards this. Hence, this sector holds immense business potential.
• Japan’s government planning, investment in research and development, and sophisticated consumers have contributed to its rapid adaptation of the latest ICT. There is an increase in the Development of IoT in the Information and Communications Industry in Japan. "The number of IoT devices, which connect things to the Internet, is increasing more sharply compared to smartphones, and is expected to reach 30 billion units by 2020." As a communication technology to connect these devices, Low Power Wide Area (LPWA) networks are attracting attention, in addition to 5G.
• Based on the country data of Japan, there are various opportunities in the ICT Sector. First, the country ranks 3rd as the biggest market with average revenue per user in Asia. Based on the forecast, the country has a projected 160 million number of mobile phone subscribers which will be even more by the year 2019. Second, Japan has a relatively high ARPU and data share of ARPU compared to countries like Germany and United Kingdom.
• The Information and Communications Technology (ICT) industry in Japan is touted to be the top industry in the country. In 2011 this sector was worth USD 1.2 trillion. The Japanese government aims to take this number to 2.4 trillion by 2020.