Generative AI in Japan: Pioneering Efficiency with Responsible Governance

The adoption of Generative Artificial Intelligence (AI) is rapidly growing in Japan, with over 90 percent of major companies either contemplating its integration or already implementing it in their operations. Nevertheless, businesses continue to harbor apprehensions regarding data breaches and authenticity, as evidenced by a survey conducted by a Japanese media company.

Out of the 100 companies surveyed, 41 reported that they are already utilizing generative AI, while 50 others are contemplating its implementation. Interestingly, two companies expressed a negative stance on AI and have either prohibited its usage or are contemplating doing so, while one company stated that it currently has no plans to adopt this technology. The remaining six companies provided other varied responses. The survey was carried out between July 3rd and July 14th.

When the 91 companies using or considering generative AI were asked about their reasons for doing so, the most common response was to improve operational efficiency. The second most popular use case was "summarizing, analyzing, and correcting texts”. Additionally, some companies expressed interest in utilizing generative AI for developing chatbots, which are automated services designed to answer questions.

Generative AI gained prominence in the business world following the success of ChatGPT, a technology released by the U.S. company OpenAI in November. The potential impact of generative AI on business operations has been acknowledged by industry leaders like Koji Nagai, president of Nomura Holdings, which uses generative AI for drafting emails, documents, and text summaries. Other companies, such as Sumitomo Mitsui Financial Group Inc. and Dai Nippon Printing, have also integrated generative AI into their workflows to enhance information gathering, document creation, and meeting minutes preparation.

Asahi Group Holdings initiated a trial project in May, involving approximately 100 employees, to explore the efficiency improvements that generative AI can bring to company operations. Similarly, FamilyMart has plans to introduce a generative AI assistant in 5,000 convenience stores by the end of March. The assistant will help store managers optimize merchandise orders based on weather conditions and sales records from other outlets.

As the use of generative AI continues to gain momentum, the survey delved into the apprehensions expressed by companies concerning this technology. Noteworthy, 95% of the companies expressed anxieties regarding security, with a specific focus on the potential risk of information leaks. Moreover, 85% of the companies raised concerns about ensuring the authenticity of information and preventing the dissemination of false data. Additional worries encompassed copyright issues, cited by 74% of the companies, and the safeguarding of personal information, which was highlighted by 71% of corporations.

Executives from various companies emphasized the importance of ensuring the security and authenticity of content produced by generative AI. For instance, Ryuichiro Nishiyama, president of Seibu Holdings, stressed the primary challenge of guaranteeing these aspects. Companies like Tokio Marine Holdings have adopted generative AI to draft replies to inquiries, but employees carefully review and double-check the responses to ensure accuracy.

While the potential of generative AI is recognized, some companies believe that it will take time before the technology brings about a substantial impact on business operations. Masahiko Uotani, chairman and CEO of cosmetics maker Shiseido, acknowledged the potential of generative AI in multiple aspects but emphasized the need for establishing governance and rules around its usage. Fumiaki Koizumi, chairman of Mercari, predicted that technologies would improve rapidly in the coming years and that companies capable of keeping up with the changes would thrive, while others might face elimination.

Generative AI has been increasingly embraced by Japanese companies for diverse applications, such as enhancing operational efficiency, automating text analysis, and drafting. Nonetheless, substantial challenges concerning data security, authenticity, and governance persist, demanding prompt attention as the technology steadily evolves and becomes further integrated into business operations.

With the widespread adoption of generative Artificial Intelligence (AI) in Japan, companies are eagerly exploring its potential to revolutionize business operations. Already, 91% of major companies are either using or considering integrating generative AI to enhance operational efficiency, automate text analysis, and streamline drafting processes. Nevertheless, amid this enthusiasm, concerns persist regarding data security, authenticity, and governance. To ensure successful implementation, businesses must address these apprehensions, as they seek to fully harness the benefits of generative AI. Striking a balance between reaping the rewards of this powerful technology and implementing robust safeguards against potential risks becomes crucial. As the landscape of generative AI continues to evolve, consumers and employees must reflect on the future of business operations and the role of responsible AI governance in shaping that future.

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