【Generative AI】The End of Overseas Japanese Consulting Firms

“Will I be able to sustain a consulting business for Japanese companies abroad in the years to come?”

If you are involved in an overseas Japanese consulting firm, have you ever felt this sense of anxiety while reading articles like this?

With the widespread adoption of Generative AI such as ChatGPT and DeepSeek, demand is plummeting in several industries—and overseas Japanese consulting firms are no exception.

* In this article, “overseas Japanese consulting firms” refers to business entities that provide comprehensive support in areas such as HR, labor, accounting, and legal affairs.

In this post, we will examine the characteristics of the industries and sectors most impacted by the rise of Generative AI.

Industries and Sectors Replaced by Generative AI

With the spread of Generative AI, industries and sectors undergoing replacement share several common characteristics.

• Jobs that only provide simple information
• Jobs primarily focused on routine content creation
• Jobs characterized by repetitive tasks that require little critical thinking or ingenuity
• Jobs relying on shallow expertise or knowledge that AI can master in a short period
• Jobs that function solely as intermediaries or brokers without assuming any risk or responsibility

Major Industries and Sectors

Why Overseas Japanese Consulting Firms Are Disappearing

Historically, overseas Japanese consulting firms thrived by meeting the need for “peace of mind” among Japanese clients expanding abroad. These clients preferred to entrust local incorporation and operations to fellow Japanese firms that shared their language and culture. Even at a higher cost, Japanese business practices and language support were often contracted as a “security fee.”

However, because starting such a firm requires minimal capital or advanced technology, low barriers to entry have led to a saturated market. In China specifically, labor and legal services must be performed by locally licensed entities. Consequently, many “Japanese consulting firms” are merely intermediaries between clients and local Chinese agencies. Some even charge exorbitant fees for simple introductions and business matching.

Under these circumstances, continuing to target only Japanese companies abroad leads to a war of attrition in an increasingly shrinking market. Furthermore, the rise of Generative AI is fundamentally undermining the raison d’être of the traditional “Japanese consulting firm.”

Only a select few will survive, while the rest will inevitably face natural selection.

Does the Same Apply to Overseas Japanese IT Consulting Firms?

Unfortunately, these firms face a similar risk. If their services are limited only to “initial system implementation and business process design support,” they are equally susceptible to being replaced.

The combination of Generative AI and SaaS tools is rapidly advancing the automation and standardization of business operations. Consequently, the value proposition of firms that merely provide basic setup or manual creation is fading. For clients, it is more cost-effective to contract directly with SaaS vendors and leverage AI to reduce both implementation and operational costs.

Furthermore, a common challenge among overseas Japanese IT consulting firms is their limited expertise, often restricted to “Western” systems like Google or AWS. In China, however, local services such as Alibaba and Tencent are widely integrated. Successfully implementing and operating systems locally requires proficiency in these Chinese technologies; clinging exclusively to Western IT expertise is no longer a viable strategy.

What About IT Firms Capable of Custom System Development?

Conversely, IT firms like ours that specialize in custom development are positioned to leverage Generative AI as a “weapon.” By utilizing this technology rather than being replaced by it, we remain highly resilient against automation.

The reason is simple: a client’s core need is always a “system uniquely optimized for their specific business operations.”

For instance, countless intricate business requirements and system integrations cannot be addressed by SaaS alone. Generative AI and standard tools often operate only within “existing frameworks”; deep customization still demands the expertise of skilled engineers. We believe that firms capable of “creating technology” will remain indispensable across China, Japan, and the global market.

Summary

In today’s AI era, the simple equation that “Overseas Japanese Consulting = Being Japanese” is no longer a source of value.

It is an era of binary choice: “become a true professional or disappear.” Consulting firms that lack the “resolve to change” will likely vanish from the market within the next few years.

Supplementary Note

With the advent of Generative AI like ChatGPT and DeepSeek, the use of traditional search engines is steadily declining.

In traditional searches, users are often overwhelmed by SEO-optimized content, requiring significant effort to filter through various sites and verify the accuracy of information.

While some point out that “AI provides incorrect information,” the reality is that the internet itself is already rife with inaccuracies.

As long as the internet remains the primary source, there is fundamentally no difference between gathering information via AI or manual search. The true priority lies in leveraging AI as efficiently as possible.

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