japan manufacturing

Japan leaning heavily on robots to fill its vast labour shortage

Robots are set to take on a wide variety of roles in Japan including manufacturing, earthmoving and hotel room service as small and medium sized companies struggle to find labour.

Companies with share capital of 100 million to 1 billion yen (£680,000 to £6.8m) plan to boost investment in the fiscal year that started in April by 17.5 percent, the highest level on record, according to a Bank of Japan survey,

It is unclear how much of that is being spent on automation, but companies selling such equipment say their order books are growing and the Japanese government says it sees a larger proportion of investment being dedicated to increasing efficiency. Revenue at many of Japan’s robot makers also rose in the January-March period for the first time in several quarters.

“The share of capital expenditure devoted to becoming more efficient is increasing because of the shortage of workers,” said Seiichiro Inoue, a director in the industrial policy bureau of the Ministry of Economy, Trade and Industry, or METI.

If the investment ambitions are fulfilled it would show there is a silver lining as Japan tries to cope with a shrinking and rapidly aging population. It could help equipment-makers, lift the country’s low productivity and boost economic growth.

The government predicts investment in labour-saving equipment will rise this fiscal year, Inoue said.

The way Japan copes with an aging population will provide critical lessons for other ageing societies, including China and South Korea, that will have to grapple with similar challenges in coming years.

“More than 90 percent of Japan’s companies are small- and medium-sized, but most of these companies are not using robots,” said Yasuhiko Hashimoto, who works in Kawasaki Heavy Industries robot division. “We’re coming up with a lot of applications and product packages to target these companies.”

Among those products is a two-armed, 170-centimeter tall robot. Kawasaki says it is selling well because it can be adapted to a range of industrial uses by electronics makers, food processors and drug companies.

Hitachi Construction Machinery says it is getting a lot of enquiries for its computer-programmed digging machines that use a global positioning system to hew ditches that are accurate to within centimetres and can cut digging time by about half.

“We focus on rentals and expect business to pick up in the second half of the fiscal year, which is when most companies tend to order construction equipment for projects,” said Yoshi Furuno, a company official. Hitachi Construction declined to provide figures.

Mid-sized companies are planning on increasing spending much more than large-caps, which are projecting just a 0.6 per cent increase in the fiscal year, according to the Bank of Japan. Smaller companies tend to have less flexibility in overcoming labour shortages by paying workers more or by moving production overseas.

Some companies could end up spending less than originally planned. But with demographics only worsening, companies will need to continue to search for solutions to the labour shortage problem. Japan’s working-age population peaked in 1995 at 87 million and has been falling ever since. The government expects it to fall to 76 million this year and to 45 million by 2065.

Robots and labour-saving gear aren’t just found in manufacturing and construction. They are also being sought by property developers, food and beverage makers and hotel chains.

The Hen na Hotel, or the “Odd Hotel,” near Tokyo Disneyland, for example, bills itself as a robot hotel because it uses 140 different robots and artificial intelligence to serve guests in its 100-room hotel and can operate with as few as two to three people, according to the manager Yukio Nagai.

tapia robot

Tapia hotel robot

Each room contains an egg-shaped robot, or personal assistant, called Tapia (pictured), that uses artificial intelligence to recognize people’s faces and respond to their voice commands. It can wake you up, manage your schedule and control other Internet-linked devices like the TV and air conditioning. Other robots can carry bags and take out the trash.

“Originally we sold this product for use in the home, but now we are getting a lot of enquiries from companies,” said Sayaka Chiba, a director at MJI Co, which makes the Tapia. “Banks, hospitals, and hotels are interested in using Tapia for reception work and communicating with customers.”

“Companies say they are interested in Tapia because of labour shortages. Nursing homes are also interested,” she said. “We’ll continue to sell this for use in the home, but all the interest from companies show that the market has shifted somewhat.”

According to jobs site Adzuna, two-thirds of the fastest-declining jobs are linked to increased automation and technological advances.

In contrast, there are a number of other occupations that are growing, including nail technicians and retail security officers the report found.

Doug Monro, co-founder of Adzuna, said: “The robots are not just coming, they are here already - in our pockets, workplaces and homes.

“Automation is already replacing jobs and could be set to replace some roles, like translators and travel agents, entirely. But, at least in the short term, artificial intelligence advances seem to be creating new jobs just as fast.

“Tech is changing the shape of industries in more complex ways than previously predicted. For example in the creative and design fields, previously feted as ‘robot-proof’, we are seeing that software and technological tools can help even the most creative of professionals automate tasks, find efficiencies in workflows, and change the way they work.

“Employers and jobseekers alike will need to anticipate and react to this high rate of change or they risk being left behind.”

The Reform thinktank predicted in February that 250,000 public sector jobs in the UK could be lost to robots and computers over the next 15 years. 

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