Digitalization and SaaS
what
Japan is lagging behind in its digital transformation, both in the private and public sector. Paper-based, manual processes are abundant, with the average time to for example approve an invoice reaching almost an hour. Overall labour productivity in Japan is around 60% per hour worked than that in many other developed markets, and the problem is especially acute in the service sector.
Japan is ranked #32 in the world on digital competitiveness by the IMD, and dead last (64/64) in terms of availability of digital skills, use of data and corporate agility for change. Japan has a very low number of startups per capita, and a generally small software sector domestically, meaning that a lot of support is needed from international players. The trade deficit for digital services (imports minus exports) exceeded 5,5 trillion yen iin 2023, up 16% YoY.
There is an increasing interest and need for Japanese organizations to adapt modern software solutions to increase labour productivity, especially in the face of a gradually worsening labor shortage and shrinking working-age population. The use of digital systems, especially SaaS, is growing rapidly from a low level. The number and attendance of software-related trade fairs and events is exploding in recent years, with events such as SusHi Tech seeing massive attendance.
How
Swedish software companies, SaaS players and other companies with a strong digital/efficiency-enabling component in their offering have a huge business opportunity in Japan, given the massive demand created by an aging population and shortage of digital talent domestically, as well as lacking local competition in the software and digital space.
There is also a large potential for Swedish startups and other companies to attract investments from Japanese companies looking to jumpstart their digital journey through investments abroad.
No activities planned, but the Business Sweden Tokyo office has experience from many SaaS- and software related market projects and market entries and are well positioned to help any Swedish digital player who see potential in the Japanese market.
Contact us
If you are interested in understanding or exploring an entry into the Japanese software or SaaS market, please do reach out to us at Business Sweden Tokyo. We have long experience with Japanese digitalization and the Japanese software ecosystem, including common pitfalls, barriers and shortcuts into growing on the market. We can help with quantifying your market potential, identifying high-potential customer segments, finding distribution and integration partners, and boosting visibility for your product in a crowded market.
Please reach out to tokyo@business-sweden.se and we would be happy to discuss your market interest and how we could potentially support.