Market Intelligence
Environmental Technology Information and Communication Technology Public Sector Japan Environment and Natural Resources Information Management Business Management

Japan Smart Cities

Japan’s rapidly expanding smart city market presents significant opportunities for U.S. companies offering cutting-edge technologies and solutions. According to Statista, the market for smart city technology and infrastructure in Japan is projected to reach approximately $2.30 billion by 2025, with an anticipated annual growth rate of 9.36% from 2025 to 2029, resulting in a market volume of $3.29 billion by 2029. These cities leverage advanced digital technologies in infrastructure with the aim of creating efficient, energy-efficient, and livable urban spaces. For example, in February 2025, Toyota completed Phase 1 of the $10.1 billion Woven City, Toyota’s experimental smart city, at the base of Mount Fuji. Such projects are of increasing interest by municipalities in Japan as the country faces increased urbanization, population consolidation and a need for autonomous systems and disaster management processes.

According to Japan’s Cabinet Office, the Government of Japan allocated $225 million in FY2025 to promote advanced smart city technologies, with additional substantial investments underway at the prefectural, municipal, and private-sector levels.  

Select Smart City-Related Projects FY2025:

 

Cabinet Office

(Secretariat for Promotion of Regional Revitalization)

Ministry of Internal Affairs and Communications

(Information and Communications Bureau)

Ministry of Land, Infrastructure, Transport and Tourism

(City Bureau)

Ministry of Economy, Trade and Industry

(Manufacturing Industries Bureau)

Ministry of Land, Infrastructure, Transport and Tourism

(Policy Bureau)

Project Name

Future Technology Social Implementation Project

Regional DX Promotion Package Project

Smart City Implementation Support Project

Regional New Mobility as a Service (MaaS) Development and Promotion Project

Japanese-Style MaaS Promotion and Support Initiative

FY2025 Budget

Yen 70 million

Yen 850 million

Yen 240 million

Several hundred million yen

Yen 32.6 billion

 

Support social implementation of future technologies such as AI, IOT, automated driving, drones, etc.

Support maintenance cost of Communication infrastructures including local 5G/LPWA.

Support experimental projects for urban service implementation based on regional smart city implementation plan

Demonstration experiment of new business model using mobility service

Support all the effort to solve the regional issues by improving mobile environment and integrating mobile applications. 

The Japanese Ministry of Land, Infrastructure, Transport and Tourism (MLITT) and the Cabinet Office have emphasized the need for technology in:

  • Energy efficiency and decarbonization (e.g., renewable energy, carbon capture and storage, smart grids, control electronics, and HVAC systems)
  • Mobility innovations (e.g., autonomous vehicles, MaaS—Mobility as a Service)
  • Disaster resilience (e.g., AI-powered early warning systems)
  • Data-driven urban planning (e.g., digital twins, AI-based urban management)
  • Aging society solutions (e.g., robotic healthcare, telemedicine)
  • Network Access (e.g. Local 5g, Low Power Wide Area)

Smart City Projects in Japan

  • Aizuwakamatsu Smart City (Fukushima) – Focuses on energy management, healthcare, and education.
  • Woven City (Toyota, Shizuoka) – Toyota’s experimental smart city testing autonomous vehicles and AI-driven urban services. Panasonic and other companies are also working on smart and connected cities initiatives.
  • Kashiwa-no-ha Smart City (Chiba) – A model for sustainable urban planning integrating energy, mobility, and healthcare. Developed under Japan’s National Strategic Special Zones.
  • Tsukuba Science City (Ibaraki) – A hub for AI, robotics, and smart transportation research.
  • Kitakyushu Smart Community – One of Japan’s pioneers in energy-efficient urban systems.
  • Sendai Smart City – Implements IoT and AI for disaster prevention and management.
  • Takamatsu Super City – Aiming to implement advanced urban technologies and digital services such as AI, big data and automation.

U.S. cutting-edge companies are encouraged to explore opportunities related to smart cities in Japan. To work with the Japanese government, it is generally necessary to have a subsidiary, or a partner company established in Japan. To learn more about smart city opportunities, please contact U.S. Commercial Service Japan at Office.Tokyo@trade.gov.