Japan's biggest companies plot 16 percent jump in tech investment

Aug 10, 2020 | News On Japan

Aug 10, 2020 (Nikkei) - Despite uncertainties from COVID-19, top Japanese corporations plan to invest 15.8% more in information technology in fiscal 2020 to keep up the wave of digitization across industries.

A total of 765 enterprises aim to spend 471.8 billion yen ($4.45 billion) on tech, shows a Nikkei survey of publicly traded companies and those with 100 million yen or more in capital. This marks a second straight year of double-digit growth.

Manufacturers are on track to a record 20.3% jump, while nonmanufacturers plan a 13.1% increase.

But overall capital investment is set to fall 1.2% to 19.24 trillion yen across a broader swath of 948 companies -- the first decline since fiscal 2016, when the U.K. voted to leave the European Union.

With the pandemic disrupting flows of people and goods, companies are turning to technology to adapt sales and distribution channels to the new normal.

Seven & i Holdings, the company behind 7-Eleven convenience stores, plans a 19.9% increase in tech investment to 121.2 billion yen -- the largest sum of anyone on the list. It aims to introduce dynamic pricing for home deliveries and to reduce the burden on delivery staffers.

Kubota will invest 20.8 billion yen, or 140% more, in tech, partnering with Microsoft to globally manage production and sales for its farming and construction equipment. General contractor Taisei will spend 17.1% more so that it can track construction projects remotely, reducing the need for workers.

Investment in technology is only accelerating, given that businesses that have embraced digitization are the ones doing the best in this pandemic.

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