Japanese entrepreneurs have shown interest in the Information Technology (IT) sector here, saying that there is no service provider in Nepal and they are looking for a partner for innovation. They say that Nepali engineers and companies need to strengthen the culture of cooperation, trust and long-term partnership along with technical ability to make their place in Japan's IT market.

The Japanese entrepreneur who came to Kathmandu to participate in the Japan-Nepal IT Forum responded that they wanted to open an 'innovation' center in Nepal and that the Nepalese engineer worked efficiently on their AI project. 

'We are not looking for IT companies and entrepreneurs in Nepal as service providers, but as partners,' Yohi Tsukamoto, manager of Japan's 130-year-old Nankai Electric Railway, who is currently active in the digital infrastructure and technology sector by building and operating railways, said, 'Nepali engineers can do world-class work by staying in Nepal. An example of this is our transportation AI project in Tokyo. The work of the project was done by Nepali engineers in Kathmandu.

They said that they will emphasize research and development by establishing an innovation lab in Nepal. Nankai has also been collaborating with Nepali engineers through the 'Japal' project for two years. 

Japan's communication and information technology market is estimated to be worth 470 million dollars, while the size of the IT service sector has reached 90 billion dollars, according to the Japan-Nepal IT Association. The annual growth rate of the IT services sector there is around 8 percent.

The share of Nepali IT professionals currently working in such a huge market is 0.1 percent. Sharad Rai, president of the association, said that there are now more than 20 Nepali IT companies (from small startups to medium-sized organizations) and more than 500 IT professionals in Japan. He said that this number is increasing annually. 

In Japan, there is a high demand for technology services such as software development, including web and mobile applications, artificial intelligence, system integration and cloud management, data analytics, cyber security, and embedded systems used in manufacturing and automotive, Rai said. "There are about 7,000 Nepali-Indian restaurants in Japan now. When you say Nepali, many people think of curry or vegetables," he says. A brand of coding should be created from Kari. There are currently about 250,000 Nepalis in Japan. 

Japan, which was once active in technology development, has recently slowed down. Vietnam has been providing services in the IT sector there. Vietnam, which has had a strong presence in the Japanese IT sector for a long time, has now turned to new markets such as South Korea, Taiwan and America after becoming economically strong.

The director of Japan-Nepal IT Association, Aadhaar Lamichhane, points out that Japan, which previously partnered with China in technology, then moved to Vietnam and is now looking for another partner after Vietnam. His analysis is that if Bangladesh and the Philippines are rapidly expanding the market, Nepal should also take the lead in this. 

Lamichhane also submitted the argument that Japan is in dire need of young manpower due to the aging and declining population and that is an opportunity for Nepali manpower. 

"Currently, more than 30 percent of Japan's IT workers are over 50 years old, due to aging, it is estimated that 1.2 million positions will be vacant by the year 2030," Lamichhane said. It is not possible to do it alone, collective effort, diplomatic initiatives are all needed. As for us entrepreneurs and IT workers, it is necessary to communicate with the Japanese and learn their culture of working.

Takahiro Otsuka, CFO of Nankai Electric Railway, explained that they do not have a 'charity' but a 'future-oriented business' approach towards Nepal. He said that the 'Japal' project, which was started two years ago, has given Nepali engineers an opportunity to become future 'leaders' in Japan rather than as workers. "These engineers have impressed us with their creativity and problem-solving abilities, imbibing Japanese work culture and quality standards," he said.

Comparing Nepal with Bangalore 20 years ago, Jan B. Park, an expert in Silicon Valley who has been a product manager at Google, said that international exposure is necessary to increase the current success in service exports.

Nepal is earning 68.76 billion rupees annually from the export of information technology services and many Nepali youths from Silicon Valley are returning to their country to work. MP Swarnim Wagle also said that due to the aging population and labor shortage, Japan must make leaps in technology such as robotics and AI. He said that Nepal's IT sector has great potential if it understands its needs and provides services. 

CEO of Omiba Pvt. Ltd. Sandeep Dhungana opined that since the technology infrastructure has been strengthened in Nepal, it is possible to become a partner like the Japanese are looking for. But he says that some practical and policy obstacles are yet to be resolved. "When I brought the Japanese client's computer to Nepal, which had to be returned after the work was done, I had to pay customs duty," said Dhungana, "I did not bring the computer to sell." But the customs said that the tax must be paid. Such political and practical complications are causing inconvenience in international business.'