Japan – watching disruption adoption to deal with its aging population

In Japan, the number of elderly people aged 65 or older accounts for roughly 27%  of the country’s 127.1 million population and by 2050 it’s expected to reach 40%. This data from World Population Review suggests Japan is the oldest country in terms of aged population and will remain so. For us here at Tematica, it means watching the rollout and adoption of disruptive technologies that will help stem some of the pain points from an Aging Population. Examples include autonomous cars, robotics, artificial intelligence and the Internet of Things as well as worker re-education. How these are embraced, or not, could be signals for adoption in the US and EU in the coming years as those populations age as well.


Japan’s aging population will require more investment in technology such as artificial intelligence and robots to make up for a decline in the labor force for economic growth, according to a government report released Friday.

The report warned that the country is also experiencing the worst labor shortage in a quarter century, and some industries such as transportation services and construction may already be seeing earnings suffer as a result.

“Amid an aging population, (Japan) needs to drastically strengthen the supply side of the economy in order to deal with the labor shortage and realize sustainable growth,” it said.

“It is crucial that we invest in human resource development and implement features of the fourth Industrial Revolution such as AI, IoT (internet of things), and robots.”

The report, which Toshimitsu Motegi, minister of economic and fiscal policy, submitted to the Cabinet on Friday, paints a future where traffic accidents decline thanks to self-driving cars, automated translation removes language barriers, and people can receive medical care remotely.

Japan is already a leader in industrial robotics, the report said, but falling behind elsewhere. Only around 20 percent of Japanese companies currently make use of IoT compared with more than 40 percent in the United States, and the use of AI is likewise still largely limited to the financial sector and some manufacturers, it said.

The country will also need to make better use of its shrinking population by training more tech-savvy workers, the report said, pointing out such workers make up a much smaller portion of the workforce than in other advanced economies including Britain and France.

Source: Japan economy needs AI, robots to offset aging population: white paper

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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