Digital Transformation in Japanese Companies: Navigating Cultural Barriers, Leadership, and Innovation in the Era of Society 5.0

Abstract

This article examines the impact of digital transformation in Japanese companies, analyzing how technological, cultural, and organizational factors interact to shape adoption outcomes. Drawing on qualitative thematic analysis of interviews and case studies, the study highlights that while advanced technologies such as AI, cloud computing, and IoT offer significant potential for innovation and operational gains, their integration is often hindered by entrenched hierarchical structures, cultural resistance, and a shortage of digital skills. Government policies, including Society 5.0, have provided impetus for change, particularly among large corporations, yet many small and medium-sized enterprises continue to face challenges related to legacy systems and resource constraints. The findings suggest that successful digital transformation in Japan requires more than technological investment; it also demands strategic leadership, organizational agility, and supportive policy frameworks. The article concludes with practical recommendations for business leaders and policymakers to address these barriers and leverage digital transformation as a driver of competitiveness and sustainable growth in the Japanese context.