Today, despite the overall effects caused by the COVID-19 pandemic and the economic slowdown that dates back to the 1990s, Japanese industries are still amongst the highest-ranking industries globally that employ advanced innovations. This is more so the case in the automotive and electronics manufacturing industries, where the name “Japanese” is synonymous with technologically advanced and quality products. Apart from the two thriving sectors, the Japanese industrial sector is versatile and offers new and old investors incredible options to make a return on investment even under the recession brought about by the prevailing pandemic. Below is a list of plausible industrial niches in Japan every smart investor should consider reviewing in 2021.
ICT
The Japanese IT industry is the driving force of its economy. With the expansion of cloud services and the introduction of advanced smartphone technology, there is no denying that the industry has been doing better over the years than initially anticipated. Although the industry is facing stiff competition from foreign firms, the Japanese ICT industry has broadened its scope of activities to focus on activities beyond manufacturing to include B2B solutions, management services, system constructions, as well as the creation of print, audio, video, and digital content. Reforms in the industry are anticipated to introduce new opportunities in Japan in the new decade.
Renewable Energy
To counter the effects of global warming, countries worldwide are implementing various actions to promote renewable energy. Following the catastrophic Tohoku earthquake and tsunami of 2011, energy issues have become a prominent topic in Japan that warrant mitigation. The use of renewable energy resources such as hydropower, geothermal, wind, biomass, and solar was proposed as possible solutions to solve the energy crisis. The proposed idea focused on creating an energy self-sufficiency system with low carbon emissions. So far, the approach has proven effective to the extent that it is fully supported and subsidized by the Japanese government. The industry is expected to grow in the coming years to replace the earthquake-stricken source of power as well as reduce the 80% energy import dependence.
Automotive
For many years, the automotive industry has been the core of the Japanese manufacturing industry. It is estimated that approximately 8.3% of the country’s population is employed in this sector and accounts for about 47.3 trillion yen. Despite the Japanese local market unfaltering loyalty for ‘Japanese cars’, the demand for these cars is increasingly shifting to other countries. Influenced by environmental standards, exports and imports of these cars are on the rise, especially in the EU, making Japan the third-largest automotive industry globally. While the COVID-19 pandemic has massively impacted Japan’s automotive sector, the introduction of renewable, green technologies will spur the growth of the sector and benefit the automotive industry in the long run.
Gaming
The Japanese gaming sector has multiple projects for the new decade under its belt. This includes an arcade, e-sports, Japanese legal bookmakers, pachinko, lotteries, among others. The gambling landscape in Japan is gradually shifting as the nature of professional gaming evolves. As it stands, this industry is welcoming, especially for businesses that understand Japanese consumers’ varying tastes. According to Statista’s list of global smartphone users, over 73 million people in Japan own smartphones. Mobile video games have gained popularity because the device is easily portable and convenient to carry and use anywhere and at any time. Additionally, the adoption of emerging technologies such as AR, VR, 5G, and cross-platform during the Covid-19 health crisis points to the dawn of a new era in the gaming industry. There is no denying that the future will offer unlimited opportunities for developers and global powerhouses such as Apple, Amazon, Sony, etc.
Electronics
Before the Coronavirus pandemic, Japan’s electronics industry was a dominant sector across the globe. It was the richest and most innovative industry until it started losing its competitive advantage in recent years, partly due to the inability to implement hard changes as well as the crisis that has hard-hit the whole world. However, the good news is that with the resurgence of the economy after the Covid-19 pandemic, there will be an increase in demand for electronics in the country as it prepares to host the Tokyo Olympic Games. The government is playing a vital role in ensuring that electronics companies collaborate with Japanese universities to maintain their investments in the long-term instead of the short-term. Besides, new technologies in fast-rising industrial niches such as online gaming, communication, and computing will open the doors for the industry to thrive once again.
Life Sciences
Japan’s population consists of a higher percentage of the old with fewer youths than other developed countries. The aging population is more susceptible to diseases that necessitate the need for advanced medical and pharmaceutical products. If lessons from the Covid-19 pandemic are anything to go by, the elderly were at risk of encountering complications than the young. Having survived, and with the possibility of finally getting a working vaccine, the world’s number two market next to the U.S will have to significantly invest in medicine-related fields in the future in preparation for such kind of diseases that target the majority in the society.
