Report: Japan in 2025 - Market Opportunities for EU Companies

About the Report 

In general, the Japanese market will most likely continue shrinking in the upcoming years. However, there are fields in which the market’s demand is expected to increase or remain high, mainly fields connected to the social problems Japan has been facing in the past decades, and is keen to solve them in order to be able to keep or improve its economic status.

Japan`s main issues can be briefly described as follows: an aging society, a need towards digitalization (to increase productivity), and a need to strive for carbon neutrality. Japan is the most aged society in the world with 30% of its population above 65 years old. While a digital shift is inevitable, the change itself seems to happen at a rather slow pace.

The year 2025 marks important milestones in both the field of aging society and digitalization, also often called together as “The 2025 Problems”. In a demographic sense, Japanese “baby boomers” are going to reach the age of 75 years in 2025, and one-third of Japan’s society will be older than 65 years old.
In an IT technological sense, the Japanese government refers to this year as the “Cliff of 2025”, meaning that the support for old (legacy) systems ends, and companies still using these systems will start to face difficulties. The economic loss could be an annual 12 trillion yen (8 billion EUR) onwards from 2025.

However, this does not mean that business chances will disappear altogether. Japan is actively seeking solutions to its key challenges including labour shortage, an aging population, digitalization, and the pursuit of carbon neutrality. Both private and public investments will increasingly focus on these areas, leading to the emergence of new markets and opportunities for European companies as well.

About the Expert: 

Daniel Vuleta has 10+ years’ experience with Japan, including 3 years spent in the country for his university studies. For the last 5 years, he has been working as a Business Consultant at Sudy & Co., a Hungarian consulting company specializing in supporting business between Japanese and European companies. Daniel has taken part in many companies’ Japanese market entry processes, including food, IT, green tech, fashion and health tech sectors.