Japan Natural Language Processing (NLP) Market size is poised to cross USD 10.32 Billion by the end of 2031, growing at a CAGR of 24.5% during the forecast period, i.e., 2022-2031. In the year 2022, the industry size of Japan natural language processing was over USD 0.87 Billion. Natural language processing is a sub-category of artificial intelligence that helps computer systems to understand the ways of human conversations. Therefore, the growth of the market can be attributed to the growing usage of artificial intelligence in the region and the rise in the development of new AI systems. In 2021, the end users in Japan spent almost 2 billion on artificial intelligence systems. Moreover, the expenditure is expected to grow at a rate of 24% and reach to nearly USD 6 million by 2026. In 2020, the Japan Patent Office received more than 5700 applications for patents relating to artificial intelligence (AI).
In addition to these, factors that are believed to fuel the market growth of Japan’s natural language processing include the government’s rising effort for advancing the use of AI in the region which can boost the development and innovation in the country. For instance, the government presented new strategies for AI in the year 2022. It includes establishing a framework to build and boost the human resources suitable for the AI era, followed by building strategies to develop the research, education, and infrastructure network for artificial intelligence. This initiative resulted in the creation of the "Artificial Intelligence Research and Development Network" and the encouragement of information sharing between member companies. Additionally, NLP also allows various voice assistant devices to understand human speech and commands, therefore, the launch of various voice assistant platforms is further expected to augment the growth of the market. For instance, Kore.ai, a leading AI software provider, launched the enterprise-grade virtual assistant platform. The platform includes various conversational AI technologies, such as NLP, machine learning, NLU, predictive analytics, and deep learning.
Growth Drivers
Challenges
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Base Year |
2021 |
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Forecast Year |
2022-2031 |
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CAGR |
24.5% |
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Base Year Market Size (2022) |
USD 0.87 Billion |
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Forecast Year Market Size (2031) |
USD 10.32 Billion |
The Japan natural language processing market is segmented and analyzed for demand and supply by end-user industry into education, BFSI, healthcare, IT & telecom, manufacturing, media and entertainment, and others. Out of all end user industries of Japan’s natural language processing, the BFSI segment is estimated to gain the largest market of USD 4,448.6 million at the end of 2031 by growing at a CAGR of 25% over the projected time frame. Moreover, the segment garnered a revenue of USD 360 million in 2021. The growth of the segment can be attributed to the rise in the number of AI facilities designed exclusively for banking and other financial services. In Japan, there are 24 startups focused on AI in financial services. Furthermore, NLP enhances the customer experience and to automate the vast unstructured data of BFSI sector. The rising number of people creating bank accounts is boosting the segment growth. As of March 2022, around 12 million bank accounts were registered in Rakuten Bank, Ltd., moreover, it was the first digital bank in Japan to exceed the count of 10 million accounts.
The Japan natural language processing market is also segmented and analyzed for demand and supply by application into social media sentiment analysis, text summarization, virtual agents and chatbots, machine translation, and others. Amongst these five segments, the text summarization segment is expected to garner a revenue of USD 3,106.8 million at the end of 2031 by growing at a CAGR of 24.1% over the forecast period. In addition to this, the market generated a revenue of USD 272.6 million in 2021. NLP helps in simplifying complex text and converting and saving the meaning of the text. Consequently, the demand for AI-based technology in libraries is expected to augment the growth of the segment. The National Diet Library of Japan will use the "CLOVA OCR (Optical Character Recognition)" technology, it is an AI-based technology, which was co-developed by NAVER and its Japanese affiliate LINE. Through this technology, the National Diet Library of Japan is undertaking a project to digitally transform more than 223 million of its around 2 million documents.
Our in-depth analysis of the Japan natural language processing market includes the following segments:
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BAIDU Research announced the introduction of the world’s first knowledge enhancing multi-hundred billion models, PCL-BAIDU Wenxin (ERNIE 3.0 Titan). It is a pre-training language model that has 260 billion parameters. The model is best at both natural language generation (NLU) and natural language understanding (NLU).
JSOL Corporation announced to deliver the advance natural language processing technology that is incorporated into the AI System to Sumitomo Mitsui Financial Group, Inc. This technology is built by JSOL Corporation with the collaboration of SMBC Group and The Japan Research Institute, Limited.
Author Credits: Abhishek Verma
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