Japan’s rust belt counts on ‘robonomics’ to run assembly lines

Bloomberg

A withering factory town in Japan’s Rust Belt is looking for revival through a dose of Prime Minister Shinzo Abe’s “robot revolution.”
Kadoma’s population has declined 13 percent as the nation ages, prompting mergers among elementary schools and emergency services departments. Factories can’t find enough people to run assembly lines, further threatening an industrial base that includes titan Panasonic Corp. and smaller businesses like Izumo Co., a maker of industrial rubber.
Yet Izumo President Tsutomu Otsubo doesn’t believe the solution involves finding more people. He’d rather find more machines to do the work so his company can capitalize on Abe’s plan to quadruple Japan’s robotics sector into a 2.4 trillion yen ($20 billion) industry by 2020.
“We want to create a mass-production system run by robots and tap into the global market,” said Otsubo, in the prefabricated office that’s tacked to the side of his aging factory. “We are a small company, but that’s the kind of perspective we have to have in this era.”
The open embrace of robots in Japan’s rust belt is in stark contrast to other parts of the industrialized world like the US, where automation is seen as yet another threat to working class-jobs in manufacturing. It also reflects Japan’s aversion to immigration, and a hope that machines can keep its factories competitive versus rivals like China with lower labor costs.
Japan’s unemployment rate of 3 percent is the lowest since 1995, making it a challenge for businesses to find workers. The ratio of available jobs per applicant rose to 1.4 in October, the highest in more than 25 years, according to the labor ministry.
Abe called for a “robot revolution” last year, urging companies to distribute the machines into “every corner of our economy and society” — including the manufacturing, health-care and service industries. His government aims to double the market for manufacturing robotics to 1.2 trillion yen by 2020. For service robots, he calls for expanding their market 20-fold to 1.2 trillion yen.
Japan also could export its robot revolution to China, which has made robotics a focus of its industrial policy and is the world’s biggest buyer of the machines. China, host to manufacturing giants such as iPhone assembler Foxconn Technology Group, wants to employ 150 robots for every 10,000 factory workers — triple the current ratio.
The development and deployment of robots — and the software to control them — is expected to save 5.7 million Japanese jobs through March 2031, according to the economy ministry. Robots also could shave 25 percent off factory labor costs in Japan, according to a report by Boston Consulting Group Inc.
“Japan’s robot technology is advanced compared with other nations, so expectations are high for that to fill the hole of a declining labor force,” said Toshihiro Nagahama, chief economist at Dai-Ichi Life Research Institute in Tokyo. “Having robots is likely to boost Japan’s productivity.”
Two of the world’s top four industrial-robot makers — Fanuc Corp. and Yaskawa Electric Corp. — are in Japan, where cultural affection for anime characters like Astro Boy help make machines more acceptable as part of the workplace, said Hirofumi Katsuno, an associate professor of anthropology at Doshisha University in Kyoto.
Astro Boy, a child android who fights evil and injustice, first appeared in manga series in 1952. He starred in several TV series and feature films, and is cited by SoftBank Group Corp. founder Masayoshi Son as inspiration for the company’s humanoid robot “Pepper.”