GTalent, a recruiting agency for global IT talents, summarized the market size of the Japanese IT industry based on information from various databases. It is a report based on information and data known in 2019 as of June 2020, such as the market size of the Japanese IT industry compared with the world, the number of IT engineers in Japan and the overseas, the IT field that will grow in the next three years, etc. If you are considering looking for a job in the IT industry in Japan, feel free to use it as a reference.

IT Industry Market Size in Japan

First, we would like to explain about the market size of the Japanese IT industry and the fields in which IT investment will expand in the next three years.

It is estimated that the market size of the IT industry (including hardware, software, and services) of domestic private companies will increase by 2.8% year on year in 2018 to 12.493.0 billion yen. In 2019, it is calculated that the market size will be 12.918 trillion yen by 3.4% increase year on year. In 2020, it’s estimated that it will be 13.124 trillion yen by 1.6% increase year on year, and it will be 13.320 trillion yen by 1.5% increase year on year in 2021.

Because the initiative on the reform of the work style remained firm in 2018, also the large-scale renewal of the system was also notable due to the increasing profitability of privates companies. There is also strong demand for replacement of Windows 10 by the end of support for Windows 7 scheduled in January 2020. These trends are expected to continue in 2019 as well.

Reference: IT Investment by Domestic Companies 2019/Yano Research Institute Ltd
Translated from Japanese to English by GTalent.

As we can see, the market size of Japan IT industry is increasing year by year, and the market size in 2019 will be about 13 trillion yen which is about 122 billion US dollars by exchange rate as of June 2020. It’s one of the largest industry in Japanese economy.

Areas where IT Investment will increase in the next 3 years in Japan

In the next 3 years, ERP will become the most invested software in the IT industry for the first time in 8 years.

According to the questionnaire survey for corporates survey conducted every year, it asked what will be a software that will increase in IT investment over the next three years. According to the results of the survey released in 2019 (482 respondents, Multiple selections up to 3), “ERP” obtained 41.9%, being the highest for the first time in 8 years, equaling “Security-related software” which held the first for a long time.
The background information is update of core system with the same as the change of business environment, the progress of cloud ERP packages, SAP’s ERP maintenance support deadline of 2025 and so on.

Reference: IT Investment by Domestic Companies 2019/Yano Research Institute Ltd
Translated from Japanese to English by GTalent.

Global IT Industry Market Size and Comparison with Japanese IT market

Reference: Gartner Says Global IT Spending to Reach $3.8 Trillion in 2019

World IT spending forecast increased 3.2% year on year of in 2019, amounting to about 3.8 trillion dollars (about 400 trillion Japanese yen). All fields have grown from the previous years, especially corporate software increased a lot in that. It can be seen that there is a high need for investment in fields that can improve the business efficiency of companies, including changes of work styles.

However, since this statistic was released in January 2019, it is thought that the market size estimation from 2020 will be significantly revised due to the spread of coronavirus infection from January 2019. However, the market size is not revised downward in all areas, and it is expected that the promotion of work style revolution will increase the growth rate in some areas.

Looking at these market size data, the result is that Japan’s IT industry market size is about 3.3% of the world market. Given that Japan’s GDP share is about 5.7% of the world (2018), the percentage of the Japanese IT industry market share in the world is still lower than GDP’s. It may mean that Japanese IT industry has high growth potential in the future.

Reference: Japan’s GDP was estimated the lowest “5.7%” in 2018/The Nihon Keizai Shinbun

The Number of Japanese IT Engineers Compared With the World

According to the results of a survey conducted by Human Resocia in March 2020 about the number of IT engineers around the globe, the first place was the United States (4.77 million), the second was China (2.72 million), the third was India (2.12 million) and the fourth was Japan (1.09 million). Japan is among the top five of the list, but compared with India which is in third, the number of engineers doubled Japanese IT engineers.

When comparing the number of engineers, there seems to be a big difference between Japan and other IT advanced countries such as the United States, China, and India. However considering the population of each country, the ratio of the number of IT engineer per population might not be so different.

Reference:
Human Resocia /Number of IT engineers around the world (North and South America)

Human Resocia /Number of IT engineers around the world (Asia and Oceania)

Conclusion

Considering that Japan’s IT industry is about 3.3% of the world, it can be said that it’s a very large market size. However, considering the GDP ratio, it can be said that the industry is expected to grow further. The IT industry is one of the few growth fields in the mature Japanese market, so if you are looking for a job in Japan in the future, why not consider the IT industry as one of your options?

If you are looking for a job in the IT industry in Japan, please register with G Talent, a professional recruitment agency for global IT talents. Our professional consultants will help you with job changes and job hunting for free.