In Japan, the robot doesn’t come to do your job; it fills what no one wants | TechCrunch

Physical AI is emerging as one of the next big industrial battlegrounds, with Japan’s push driven more by necessity than anything else. As the workforce shrinks and pressure to maintain productivity increases, companies are increasingly deploying AI-powered robots in factories, warehouses and critical infrastructure.

Japan’s Ministry of Economy, Trade and Industry announced 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 has a strong position in industrial robotics, with Japanese manufacturers set to account for about 70% of the global market in 2022, according to the ministry.

Based on conversations with investors and industry executives, TechCrunch examined what is driving this change, 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…