More than 80% of Japanese companies use artificial intelligence in only a limited capacity in their operations or not at all, a Reuters survey showed on Thursday, a trend that could hinder official efforts to boost productivity.
About 60% of respondents said AI is being used only in some parts of their companies or in other limited ways. Another 18% said they have not decided whether to introduce AI into the workplace while 6% are not even considering AI adoption.
The remaining 16% have deployed AI company-wide as an integral tool, the survey showed.
“We have started using it company-wide, but its use is limited to tasks such as document creation,” a manager at a wholesaler wrote in the survey.
Separately, a real estate firm official said, “We don’t know how to put it in use.”
A government report this year showed Japan lagged other industrial powers in AI adoption, with 86.4% of local firms using generative AI for at least one task, compared with China’s 98.1%, Germany’s 91.6% and the United States’ 90.9%.
Asked in the Reuters poll about their AI budgets for the next one to two years, 4% said they expect annual growth of 50% or more, 21% said the increase will likely be somewhere between 10% and 50%, and 30% projected single-digit expansion.
Another 14% said their AI budgets would likely remain largely unchanged, while 31% have not decided yet. None of the respondents said they will be spending less on AI.
The poll was conducted by Nikkei Research for Reuters from July 29 to August 6. Nikkei Research contacted 510 companies, of which 219 responded on condition of anonymity.
Investment Destination
On resource allocation, 82% of respondents said they favoured domestic investment over overseas investment, a preference that broadly aligns with Prime Minister Sanae Takaichi’s growth strategy.
In an effort to revive the Japanese economy, Takaichi has vowed to put an end to “excessive austerity” and to boost domestic investment, with a focus on key areas such as AI, semiconductors and quantum technology.
“We already have our major production facilities concentrated in Japan and export products from there. Given the continued weakness of the yen, we see little merit in investing overseas,” an official at a machinery maker said.
A softer yen helps boost Japanese exporters’ earnings, while making overseas investment more expensive in yen terms.
Some managers among the 18% of respondents who place greater emphasis on overseas investment said they see stronger growth potential abroad than in Japan, which is saddled with a shrinking population.
About 41% of respondents said they would increase domestic investment in the business year to March 2027 from a year earlier, while 9% expected a year-on-year decline. The remaining 50% plan to keep the level of domestic investment unchanged.
(Reporting by Kiyoshi Takenaka; Editing by Sam Holmes)
