In Japan, the robot isn't coming for your job; it's filling the one nobody wants | TechCrunch

Physical AI is emerging as one of the next major industrial battlegrounds, with Japan’s push driven more by necessity than anything else. With workforces shrinking and pressure mounting to sustain productivity, companies are increasingly deploying AI-powered robots across factories, warehouses, and critical infrastructure. Japan’s Ministry of Economy, Trade and Industry said in March 2026 that it aims to build a domestic physical AI sector and capture a 30% share of the global market by 2040. The country already holds a strong position in industrial robotics, with Japanese manufacturers accounting for about 70% of the global market in 2022, according to the ministry. Based on conversations with investors and industry executives, TechCrunch explored what’s driving that shift, how Japan’s approach differs from the U.S. and China, and where value is likely to emerge as the technology matures. Driven by labor shortages   Several factors are driving adoption in Japan, including cultural acceptance of robotics, labor shortages driven by demographic pressures, and deep industrial strength in mechatronics and hardware supply chains, Woven Capital managing director Ro Gupta told TechCrunch. “Physical AI is being bought as a continuity tool: how do you keep factories, warehouses, infrastructure, and service operations running with fewer people?” Hogil Doh, Global Brain general partner, also said. “From what I’m seeing, labor shortages are the primary driver.” Japan’s demographic cru...