This week, while in Japan for a sold-out KubeCon + Cloud NativeCon, I had the great privilege of presenting our latest research to an audience of leading Japanese technology companies. As someone who has long admired Japan’s reputation for precision, quality, and innovation, it was especially meaningful to share insights that could help shape the country’s digital future.
The 2025 State of Tech Talent Japan Report offers a timely and honest look at where Japan stands today on its modernization journey—and what must happen next to accelerate it. Based on a survey of Japanese organizations conducted by Linux Foundation Research, the report explores the current state of technical hiring, AI disruption, and skills development across the country.
At a time when nearly every organization globally is racing to modernize, our data reveals that Japan is at a crossroads—eager to innovate, but constrained by a persistent talent shortage and uneven cloud and AI adoption. Yet within these challenges lies a major opportunity: upskilling.
Let’s start with infrastructure. The world is rapidly moving to the cloud, and Japan is no exception. Our report shows that 45% of Japanese organizations plan to increase cloud adoption in the near term—a clear signal of momentum. However, only 34% of workloads in Japan currently run in public clouds, a rate notably lower than in other regions.
Why the lag? It’s not a lack of ambition, but a shortage of skilled professionals. More than 70% of Japanese organizations report being understaffed in key areas like cloud and infrastructure. That figure is 52% higher than global averages, indicating a national-scale workforce constraint.
Without the talent, modernization stalls. Cloud transformation doesn’t happen in a vacuum—it requires people who can rearchitect systems, manage complexity, and ensure security. The message from Japanese enterprises is clear: they know where they want to go, but they need help getting there.
AI is another bright spot—but one where challenges mirror those seen in the cloud space.
97% of organizations in Japan expect AI to deliver significant strategic value. That’s an incredibly high level of awareness and enthusiasm. But here’s the catch: even basic AI skills are present in fewer than 40% of organizations. When it comes to advanced AI capabilities—like building or fine-tuning models—many companies are struggling to move beyond standardized tools and solutions.
Here too, the skills gap will have consequences. Without internal AI talent, companies are limited in how they differentiate or scale their AI initiatives. The risk is that Japan becomes a consumer of AI, rather than a leader in shaping it.
Yet the outlook isn’t all bleak. In fact, it’s hopeful—because many Japanese organizations are already embracing a solution that works.
Across every region we study, upskilling has emerged as the most effective, scalable, and sustainable way to close the tech talent gap. In Japan, this trend is even more pronounced.
94% of organizations in Japan now recognize upskilling as a strategic priority. Why? Largely because it works. Upskilling takes 124% less time than external hiring and onboarding. It retains institutional knowledge, improves morale, and strengthens company culture.
And the results are measurable:
This approach is also cost-effective. Instead of waiting six to nine months to hire scarce AI or cloud talent, organizations can empower their existing teams with the tools and training they need to grow.
At the Linux Foundation, we’re proud to support this journey. Our certifications and training programs—many of them free or low-cost—are designed to help individuals and organizations build the skills that matter most in today’s technology landscape. Whether it’s Kubernetes, cybersecurity, or machine learning, we aim to make these pathways accessible and impactful.
While the rise in upskilling is encouraging, one concerning trend also emerged in this year’s report: a decline in entry-level hiring. As AI automates routine tasks, many companies are reducing early-career roles—often unintentionally.
This presents a risk. Without a strong entry-level pipeline, organizations will struggle to nurture the next generation of cloud engineers, DevOps leaders, and AI practitioners. For a country already facing demographic headwinds, this trend could further narrow Japan’s talent funnel.
It’s critical that organizations think beyond immediate needs and consider long-term workforce development. Internships, mentorships, and partnerships with universities and vocational programs must be part of the solution.
Being in Tokyo this week to deliver these findings was a career highlight. Speaking directly with Japanese technology leaders, I was struck by their hunger for insight and their openness to collaborative solutions. The spirit of kaizen—continuous improvement—is alive and well in Japan’s tech sector.
And that’s what is so encouraging. Japan has the vision, the values, and the will. What’s needed now is a bold commitment to workforce development and a recognition that people, not just platforms, are at the heart of modernization.
I am all the more excited about the 2025 State of Tech Talent Japan Report for its potential to inspire action for employers, strategists, educators, and policymakers to work together to build the workforce that Japan—and the world—needs.
Hilary Carter is Senior Vice President of Research at the Linux Foundation. To access the 2025 Tech Talent Japan Report in English or Japanese, and dozens of industry- and domain-specific research, visit linuxfoundation.org/research.