World Economy

Japan Embracing the Rise of Robots

Japan Embracing the Rise of RobotsJapan Embracing the Rise of Robots

The rise of the machines in the workplace has US and European experts predicting massive unemployment and tumbling wages.

Not in Japan, where robots are welcomed by Prime Minister Shinzo Abe’s government as an elegant way to handle the country’s aging populace, shrinking workforce and public aversion to immigration, Bloomberg reported.

Japan is already a robotics powerhouse. Abe wants more and has called for a “robotics revolution.” His government launched a five-year push to deepen the use of intelligent machines in manufacturing, supply chains, construction and health care, while expanding the robotics markets from 660 billion yen ($5.5 billion) to 2.4 trillion yen by 2020.

“The labor shortage is such an acute issue that companies have no choice but to boost efficiency,” says Hajime Shoji, the head of the Asia-Pacific technology practice at Boston Consulting Group Inc. “Growth potential is huge.” By 2025, robots could shave 25% off of factory labor costs in Japan, according to the consulting firm.

 Worker Replacement

Automation also has huge potential for distribution. Toho Holdings Co.’s 10 billion yen distribution center, which became fully operational in January, employs about 130 workers, roughly half the number at another one of similar size. Productivity per worker is 77% higher with robots handling 65% of item-picking, the drug wholesaler says.

“We wanted to lower manpower requirements by using robots because we already found it hard to recruit people, including part-time workers,” says Mitsuo Morikubo, the company’s executive managing director.

Japan has been a leader in factory robots, especially in the car industry, for decades. Now, with China and South Korea making automated machines of their own, the new focus is on service robots. It’s a market the government aims to expand 20-fold to 1.2 trillion yen by 2020 while planning to double the market size of manufacturing ones to 1.2 trillion yen.