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Japan Software
Japan is a world leader in many areas—but not in the software business. Japan’s GDP ranks third in the world and is home to some of the most famous brands, including Toyota, Nissan, and Sony but the Japanese firms’ success is in embedded software and in the gaming industry rather than stand-alone software products.
Japan is known for its trust on perfection and is known for building great products, but software in Japan is set up as a support industry rather than a profit centre.
In this article, we investigate the reasons Japanese companies have been slow to realise the importance of software products and how things are now changing.
Sakura Linkage use native Japanese language speakers together with digital marketing specialists to develop an ongoing SEO approach that provides consistent and results by improving your search rankings and driving your organic traffic.
Our Japanese SEO experts have experience in a wide range of industries to help you overcome Japan’s languages and cultural complexities.
Why Is Japan Behind the Curve in The Software Businesses?
- These are the chief reasons are behind the lack of software expertise in Japan:
- Manufacturing is perceived as a more attractive career.
- The business environment has not been supportive of new software ventures.
- There is a software talent gap attributed to language, culture, wages, and skilled labour.
- In general, access to funding is harder within Japan than other countries.
- Many of the leading coding languages were developed in English to cater to an international audience
- There has been a slow adoption of enterprise software and state-of-the-art software development.
Other Asian countries, such as Singapore and South Korea, have been growing their investments in high-tech sectors and have been more receptive to globalisation.
The Growth of Software Businesses in Japan
Japanese businesses are now starting to focus on working with established software companies from Europe and the US to provide the insights needed to develop software products.
The business model is now shifting towards licensing, upgrading, or SaaS (software as a service) which will create investment and interest in the software business.
Start-up funding has risen during the last few years, and the Japanese government is increasing investment to improve global competitiveness, including a $1.2 billion fund through a shared government-owned and private-company vehicle, Japan Investment Corporation.
Popular areas for investment include robotics, cybersecurity, and AI.
Tax Incentives Open to Foreign Investors
- Japan offers several national and local tax incentives that are available to foreign investors in Japan. These incentive schemes have been created for the benefit of both foreign investors and Japanese companies. These incentives include the following:
- Tax incentives for comprehensive special zones - The government offers tax benefits in the form of special depreciation rules and other deductions related to investment in equipment and plant related to special sectors.
- Tax incentives for strengthening local business.
- Tax incentives for wage and productivity improvement. These programmes offer tax incentives to increase employees' salaries and for investing in information technology.
Advantages of Foreign Investment in Japan
- These are the main advantages for foreign investment in Japan:
- Japan has very strong purchasing power and therefore strong domestic demand.
- As a leader in technology, research and development, Japan has had a growing economy and a stable political environment.
- Its location gives an easier entry to other Asian markets.
- It has a highly skilled and dedicated workforce.
- The ageing population opens opportunities for products and services geared towards older age groups
Invest in Japan
At Sakura we are working with Japanese organisations who understand the need to change to a more global software development perspective.
If you are thinking about introducing your software product to the Japanese market, then please contact us for some impartial advice on the best way to proceed.
