Japan Unleashes a Robot Revolution

Its domination of the industry is challenged by Korea and China

Humanoid Robots

Humanoid Robots

A new greeter at the entrance of the Mitsukoshi department store in central Tokyo has caused a stir. The worker, dressed in a kimono and cheerfully welcoming shoppers in honorific Japanese, is a robot made by Toshiba and shows how lifelike these machines can be.

This latest example of Japan’s skill comes just as Prime Minister Shinzo Abe is calling for a “robot revolution.” Advances in robotic computing power, the ability to recognize voices and images, and machine learning could help the country overcome the handicap of a fast-aging populace and a declining workforce.

At the opening of Japan’s Robot Revolution Initiative Council on May 15, Abe urged companies to “spread the use of robotics from large-scale factories to every corner of our economy and society.” Backed by 200 companies and universities, the five-year, government-led push aims to deepen the use of intelligent machines in manufacturing, supply chains, construction, and health care, while expanding robotics sales from 600 billion yen ($4.9 billion) annually to 2.4 trillion yen by 2020.

In factory robots, Japanese companies including Fanuc, Yaskawa Electric, and Kawasaki Heavy Industries command 50 percent of the global market, according to the Ministry of Economy, Trade and Industry (METI). The nation’s companies also enjoy a 90 percent share in parts such as precision gears, servo motors to move robotic limbs, and specialized sensors.

Yet the government says Japan’s premier position is at risk. China has 530 robotic companies, and its market share on the mainland grew from 4 percent in 2012 to 13 percent in 2014, a worrisome trend for Japanese companies that have enjoyed solid profits there.

“China is catching up fast,” though quality remains an issue, says Wang Tianran, a robotics specialist with the Chinese Academy of Sciences. He thinks China will close the quality gap with Japan and South Korea by specializing in simple, smart, and flexible factory robots similar to Boston-based Rethink Robotics’ Sawyer, a small, mobile factory model. South Korea has doubled the size of its robot sales since 2009 to 2.4 trillion won ($2.2 billion) in 2013. The country is working on service robots for health care and other markets. Unlike factory robots, “where Japan, Germany, and the U.S. are dominant players, the intelligent service robot industry is still at a nascent state,” says Jeong Man Tae, a senior researcher at the Korea Institute for Industrial Economics & Trade.

Japan is closely monitoring the progress of the industry in the U.S., where big defense budgets during the 2000s financed the deployment of thousands of robots, including unmanned aerial and underwater vehicles. Two years ago, Google acquired Schaft, a startup founded by two University of Tokyo professors who’d developed a robot that walks on two legs. Schaft failed to line up local venture funding before turning to U.S. giant Google. “If we don’t create a culture of [venture] investment, there will be a lot of similar examples,” says Waseda University mechanical engineering professor Atsuo Takanishi.

Japan has a built-in edge over its rivals, starting with a deep and sophisticated domestic robotics industry, says Hal Sirkin, a senior partner and managing director at Boston Consulting. In factory robotics, “they can pretty much easily produce what they need.” Cheaper sensors, motors, and computing power have driven the cost of some industrial robots to as low as $25,000, down from $100,000 just a few years ago. That means small and midsize companies can afford advanced machines. With Japan’s declining workforce, job displacement won’t be as much of a barrier to rolling out more machines as it would in the U.S. By 2025, Japan’s robots could shave 25 percent off factory labor costs, says BCG.

Japan’s inefficient service sector—it’s only about 60 percent as productive as its U.S. counterpart, says METI—could benefit. The government wants machines to provide logistical support, perform surgery, and work in disaster recovery in the quake-prone nation. Other priorities are commercial drones and nurse robots. Panasonic has developed a robot that transforms from a bed to a wheelchair, while a startup, Cyberdyne, has created devices that help the infirm move around. Says Yoshiko Yurugi, a robotics expert at the New Energy and Industrial Technology Development Organization: “We are entering an era when we will definitely have to rely on the help of robots.”

—With Isabel Reynolds, Ting Shi, and Rose Kim

The bottom line: Japan hopes its advances in robotics will compensate for its elderly population and aging workforce.