Repositioning Japan as a Technology-Based Nation

Japan’s dominance as a manufacturer has waned in recent decades due to a number of factors, but as a way to try and regain this position, there has been a trend towards embracing advanced technology such as IoT and AI, Society 5.0 being a key example. In your opinion, what do you see as the greatest challenge or barrier to Japan regaining its status as a dominant nation for manufacturing?

Our company focuses on factory automation what we do is make our clients’ factories efficient. Japanese factories tend to be designed decades ago. If you develop a new factory, then you can choose the latest technologies, but if the factory is already designed, then you need to upgrade and work within the limits of the factory. Upgrading takes a lot of time because of the allocation of people. This is something we want to change, and it is how we assist Japanese companies in becoming more competitive. If you want to be competitive in your market, you need to face a lot of competition, particularly in regard to cost and production efficiency, so this is the area we want to help customers.

Autonomous mobile robots, for example, are running in Japan, but their numbers are very limited. This is because factories need to be redesigned, and this is an area where we can assist Japanese firms. I think, however, that Japanese firms need to act quickly, as many did not anticipate the population issues becoming as severe as they are. The population is declining rapidly, and to add to this issue, we have regulations such as the 2024 Logistics Problem, putting limitations on the amount of time drivers can work. Drivers don’t have time to deliver products, so they just place the box on the floor and rush away as fast as possible. This issue needs to be addressed, and society needs help. It is our belief that rather than reacting to societal changes, we feel that decisions regarding automation can be made before societal change happens, lessening the burden when that change does occur. The Japanese mindset, in essence, needs to change, and we as a people need to be less afraid of failure, as this fear is leading to a lack of action. It's ironic because what I am suggesting is essentially the Kaizen philosophy of continual improvement. An employee doesn’t bring value simply by driving from A to B, and I feel that tasks such as this can be done by machines. Big change, however, will always take time.

LINX Headquarters

You mentioned a key component there, compatibility, which is always going to be an issue with older factories. A big criticism leveled at Japan is that during the 1980s, the country was 20 years ahead, but now that we are in the 2020s, Japan is still stuck in the 2000s. The reality is that large companies are often very good at automating, but SMEs cannot afford to create smart factory environments. How do you think this issue of cost can be overcome?

Those SMEs have options to automate, but they are often hesitant and do not focus on this topic. Honestly speaking, major companies have yet to fully implement automation. This is something that is still in progress. In particular, for automated mobile robots, I think they are not doing enough, especially when compared to China.

China is amazing, and their companies are creating factories in very smart ways. Japanese companies are late-comers to such activities. That is the reason why we are doing business as a trading company, and they wouldn’t actually need us if they were able to catch up with the latest technologies. We are here to fill the gap.

What Japanese companies really do is what I consider craftsmen work, and the Japanese people are in possession of great skills as well as attention to detail. What we do is bring together hardware and software to provide a complete package. The way I compare it is that what we provide is a foldable phone, and the European approach is a smartphone.  If you select Mitsubishi, everything is Mitsubishi, and if you select Yaskawa, everything is Yaskawa, because platforms are essentially self-contained. This isn’t ideal, this monopoly approach. A European company agreed and began work on an open standard, basically boiling it down to a communication standard and a programming standard. This allows the choice of the best for each component. This is where you can understand my analogy of the foldable phone versus the smartphone. Now, with that analogy in mind, you can start to understand why Japanese companies feel stuck in the 2000s.

Japanese people like the Kaizen philosophy, but honestly speaking, the mindset of the country needs major surgery rather than just improvement. For developers, there are always major risks associated with big changes, so Japanese developers are looking to keep the status quo as much as possible. I think the strength of Japanese companies is that once we take a leap at something, we can do it to the ultimate degree, but the weakness is the hesitancy to take risks, hence the feeling that companies are stuck 20 years behind the times. That said, Japan is not a country that evolves continuously but rather one that achieves transformative, non-linear advancements. A prime example of this is the Meiji Restoration. For approximately 260 years during the Edo period, Japan maintained a policy of isolation and built a relatively stable society. However, the arrival of Commodore Perry’s Black Ships in 1853 catalyzed dramatic changes across all aspects of the nation, including education, the military, industrial structure, and international relations. In a remarkably short period, Japan modernized and emerged as a nation on par with Western powers. This ability to undergo rapid, transformative change in response to external pressures or crises is a defining characteristic of Japan’s history.

At present, Japan’s industrial sector seems to be in a period of stagnation. However, I believe we are approaching a pivotal moment for transformative change. Japanese companies have consistently demonstrated their ability to achieve extraordinary advancements, and I am confident that they will once again elevate their technologies to an ultimate level in the next stage. At LINX, we see it as our mission to support them in this journey and help drive this leap forward.

When looking at your customer base, we found a lot of automotive makers, electronic component makers, and semiconductor equipment companies. When looking at all these different industries, which do you think has the highest growth potential for your business?

Semiconductors have huge potential, particulary for machine vision. For example, Our customers in the semiconductor manufacturing equipment industry integrate machine vision technology into their equipment. We are talking about image processing technology, which is very complex. The rhetoric for semiconductors also applies to electrical component makers. AI has gained a lot of traction over recent years, and deep learning runtime license sales are now at 26%. With machine inspection, in the past, a lot of clients wanted to know how the software makes decisions about what is good and what is not. At some point, however, the decisions became so good that they stopped asking. Deep learning also solves issues that image processing used to be unable to solve.

We’ve talked about your trading activities, but you also bring a strong engineering background to your business, developing in-house products such as the TRITON. Looking to the future, are you planning on leveraging this side of your business more?

Yes, it is, and if we have good technology outside of Japan, we plan to bring it into Japan. If there is nothing outside, we develop our own. Having our trading business allows us to keep on top of what is happening globally. If customers have certain problems, we can then develop a customer solution for them. Having two functionalities is important.

Does this create a conflict of interest with your suppliers?

No, it is so much better if we distribute it if the product is ready. We aren’t looking to reinvent the wheel.

If we look at Japan's decreasing demography, there are a lot of operators who are getting quite old, and when those people retire, all of that knowledge they accumulated may just vanish if measures are not put in place to secure skill inheritance. We saw that your company has established LINX DAYS, where you invite your customers to learn more about your technologies. Can you tell us more about LINX DAYS and the role it plays in educating your customers?

Well, LINX DAYS isn’t necessarily about education; rather, it is about putting a spotlight on certain technologies. We bring success stories from Europe and China and propose those technologies and solutions to Japanese companies.

As you said, people in Japan are getting older, and the birth rates are low. The younger generation is going to need different techniques. For example, old programming languages need to be replaced. By continuing to train young people on outdated practices and programming languages, we risk missing significant opportunities, and this mindset needs to change.

At LINX, we actively provide training sessions to ensure that essential skills are passed on effectively, especially to address these generational challenges. Our training initiatives play a vital role in this transformation by empowering companies to stay competitive in a rapidly evolving industrial landscape.

LINX DAYS

We understand that one core piece of your business is identifying technology partners and bringing those technologies to Japan. This partnership model is obviously critical to your business. Looking forward, which particular areas are you seeking to develop further partnerships?

We are conducting research in various areas, and a core focus is bringing technologies to market. If the market is already in a growth phase, we are too late. Additionally, if there is a lot of talk regarding “ten years later,” we are too early. What we are looking for is the sweet spot. One example of a technology we avoided was the AI implementation in cameras placed on forklifts to help in reversing since by the time we discovered this technology, it was too late to capitalize on potential growth.

Take machine vision as an example. It has already been 50 years since the technology was first invented as academic research in the form of papers, but advancements have only come with the CPU developments of personal computers in the 1990s. There are many technologies that are similar in nature. Industrial purposes need faster speeds, so we look at the technologies present in the consumer markets and see which can be applied for industrial purposes.

We’ve talked about the Japanese market, but we also know that you’ve expanded into overseas markets, with subsidiaries in Taiwan, Singapore, Malaysia, and Thailand. Could you tell us more about your international strategy going forward? Are you looking to continue this expansion even further in the future?

The purpose behind our overseas expansion was to create synergies outside of Japan. While we haven’t fully realized all the expectations we initially had, we are starting to see meaningful progress in certain areas. For example, our overseas subsidiaries have enabled us to build relationships with key vendors who now play an important role for our headquarters in Japan. Additionally, we’ve leveraged the experience and technologies cultivated in Japan’s industrial sector to support our global operations. In particular, the semiconductor sector in Taiwan occasionally presents more advanced customer needs compared to Japan. These situations have provided valuable insights that sometimes inspire new business ideas and innovations at our headquarters.

From a talent development perspective, we’ve also been able to provide young employees in their 30s with opportunities to manage subsidiaries, giving them invaluable hands-on experience and a broader perspective on company management.         

LINX was established in 1990, and by European standards, you would be considered an old company, but by Japanese standards, you’re still quite young. Could you run us through some of the key milestones in your company’s history?

Our company didn’t start with factory automation; instead, we focused on workstations for very complicated mathematical calculations. Basically, it was similar to the MATLAB software. We shifted to machine vision in 1997, and ever since then, we’ve added more and more products. I’m the second-generation president of the company, and the founder is my father.

Looking at the next five years, are there any specific objectives you would like to achieve?

Obviously, a core goal will be to strengthen our capabilities in machine vision, but we are also looking to grow in more fields, particularly smart factories and industries. We need to be mindful of what is happening in the world and see if we can apply it to our business model. The ultimate goal is to make Japan number one once again for manufacturing.

In terms of what I am most proud of during our company’s history, I think globalization comes to mind. When we started the company, there were only 10 employees, but now we have over 200 people. Machine vision has also expanded to more fields, scaling up our business.

For more information, please visit their website at: https://corp.linx.jp/en