Software industry in Japan - statistics and facts
Japan’s economy and the daily lives of its citizens are increasingly influenced by technological developments that are inextricably linked to software products and services: The increasing adoption of cloud services enables companies to cut costs and react flexibly to changing market conditions, the growing interconnectedness of devices and appliances makes it necessary for users to protect themselves against cybercrime, and the boom in generative artificial intelligence (AI) and ongoing digital transformation (DX) initiatives at companies and institutions change the way people work and communicate. Consequently, the value of the Japanese software market, which encompasses application development and deployment, applications, and system infrastructure software, is expected to grow from about 4.7 trillion Japanese yen in 2023 to more than 7.3 trillion yen by 2028.
Even today, Japan’s software engineers often do not enjoy the same degree of recognition as their counterparts in other countries, which is in part a result of the prevalence of subcontracting. In addition, a widespread lack of English proficiency often makes it necessary to translate code into Japanese, leading to significant delays in the adoption of newer global developments. On the upside, the Japanese software industry is usually highly regarded when it comes to embedded software used in key industries, such as the automobile industry and the consumer electronics industry. An additional area of success is gaming software, as Japanese companies have exerted a tremendous influence on the global video game market since the 1980s.
Strengths and weaknesses of the Japanese software industry
Despite its size and importance, the Japanese software industry has been perceived as lacking in international competitiveness, although this perception does not apply to all areas equally. Historically, the development of the industry was partly hampered by the high prestige of the domestic hardware and manufacturing industries, which excelled internationally and were able to pay better salaries to young talent. Software-related tasks were often outsourced to other companies or handled by subsidiaries, leading to a high degree of customization that hindered the development of widely applicable software products.Even today, Japan’s software engineers often do not enjoy the same degree of recognition as their counterparts in other countries, which is in part a result of the prevalence of subcontracting. In addition, a widespread lack of English proficiency often makes it necessary to translate code into Japanese, leading to significant delays in the adoption of newer global developments. On the upside, the Japanese software industry is usually highly regarded when it comes to embedded software used in key industries, such as the automobile industry and the consumer electronics industry. An additional area of success is gaming software, as Japanese companies have exerted a tremendous influence on the global video game market since the 1980s.
