AI-Powered Localization Lessons from Asia

Asia is undergoing a quiet revolution in the localization space, driven by economic shifts, technological innovation, and rapidly evolving markets. Japan, a country known for its meticulous craftsmanship and tradition, now faces unique challenges as it adapts to population decline and stagnant domestic growth. Meanwhile, countries like India and China are thriving, with burgeoning middle classes consuming content at unprecedented rates. At the heart of this transformation lies the integration of AI-powered solutions and collaborative workflows that enable businesses to reach global audiences faster than ever.

In this issue of the AI in Loc Newsletter, we sit down with Hiroki Kudo, a visionary entrepreneur and the founder of the Fintech Association of Japan. With experience spanning startups, fintech reform, and localization, Hiroki offers a unique vantage point on how technology is reshaping not only Japan but the entire Asian region.

As an advisor to multiple startups and the face of Yaraku, a Japanese CMS provider, Hiroki is deeply involved in helping businesses adopt cutting-edge localization solutions to meet the evolving demands of today’s markets.

Stefan Huyghe: Asia's localization markets, like the rest of the world, have seen significant transformations recently. What trends do you see shaping translation across the region, especially in Japan?

Hiroki Kudo: That’s a great question, Stefan. Content creation is booming, whether it's video, music, or other forms of digital content and the demand for localization is increasing accordingly. However, localization trends vary from country to country across Asia. In Japan, for instance, the economy has been stagnating, and the population is shrinking due to low birth rates. As a result, Japan’s domestic market is contracting, and the government is now encouraging businesses to go global.

I can share two specific examples. The Tokyo Stock Exchange recently announced that, starting in March 2025, all public companies will need to make their investor relations (IR) materials available in English. This is part of a broader strategy to attract more global investors.

Another example is in the education sector. With fewer students, universities are merging and being encouraged by the government to globalize their programs. This requires translating academic materials into English to attract international students. These developments aren't driven by market growth, rather, they reflect Japan's need to adapt to a shrinking market by expanding internationally. This situation is quite unique compared to other growing Asian countries.

Stefan Huyghe: That’s a fascinating dynamic. It sounds quite different from how things are developing in the West. Would you say there’s a fundamental difference in how localization is approached in Japan compared to Western markets?

Hiroki Kudo: Yes, definitely. In the West, the localization market is growing steadily, but the focus is shifting toward emerging markets like Asia. Companies from developed regions, such as the U.S., Canada, and Europe, are investing heavily in these markets. They’re building factories and expanding operations in Asia, which contributes to the rapid growth in the region.

Stefan Huyghe: In my recent conversations with localization leaders in the U.S., I’ve noticed a strong emphasis on faster delivery times. Is that a trend you’re seeing in Asia as well? Are turnaround expectations changing, and how are localization providers in Japan adapting to meet those demands?

Hiroki Kudo: Absolutely. Just like in the U.S. and Europe, people’s attention spans are getting shorter, and there’s a growing expectation for content to be available immediately. If something is published in English, audiences want it in their local language right away. This rapid consumption of content whether it’s entertainment, data, or corporate information puts a lot of pressure on localization providers to deliver quickly.

To meet these demands, companies are relying more on automation and technology to speed up the translation process. Without these tools, it would be nearly impossible to keep up with the pace of content consumption today.

Stefan Huyghe: As technology continues to reshape the localization industry, what innovations have you seen that help simplify tools, making them more intuitive and easier to adopt for both LSPs and translators?

Hiroki Kudo: Large language Models are constantly evolving, with new features and capabilities emerging almost daily. This puts a lot of pressure on language service providers (LSPs) to adopt these technologies. However, many LSPs don’t have the resources to develop or maintain their own tech stacks.

That’s where out-of-the-box solutions come in. For example, at Yaraku, we offer YarakuZen - a CMS solution that helps LSPs stay on top of the latest technologies without needing to build everything in-house. These kinds of tools allow LSPs to provide cutting-edge services while keeping their operations streamlined.

Stefan Huyghe: Collaboration also seems to be becoming more critical translators now need to work together seamlessly, often in real-time through cloud platforms. How do you see this trend shaping the future of translation workflows?

Hiroki Kudo: Collaboration is essential, not just within CAT (computer-aided translation) tools or translation management systems (TMS) but across entire workflows. Take the music industry, for example: if a company releases new songs, their content needs to integrate smoothly with translation tools. These systems must connect seamlessly whether it’s a CMS, TMS, or CAT tool through APIs that allow them to talk to each other.

Integration is becoming non-negotiable. Different industries require unique workflows, and technology needs to accommodate those needs. Being able to connect tools across the board ensures that content moves smoothly through the localization process without bottlenecks.

Stefan Huyghe: And this integration enables real-time, cloud-based collaboration?

Hiroki Kudo: Exactly. Tools like YarakuZen enable translators and LSPs to work in the cloud collaboratively. Traditionally, TMS platforms were designed for professional translators and large teams, offering complex workflows with extensive features. But today, we’re seeing a shift toward more lightweight users, people who don’t need the full suite of features but still want effective tools. YarakuZen caters to this shift, providing accessible solutions for a wider range of users.

Stefan Huyghe: What do you see as the main challenges companies face when modernizing their localization strategies?

Hiroki Kudo: To understand today’s challenges, it’s helpful to look back at the history of localization technology. Translation management systems (TMS) first emerged in the 1980s—about 40 years ago. At the time, these systems were built using the best technology available, but now, in 2024, those technologies are outdated.

Many older systems struggle to meet modern demands such as privacy compliance, seamless API integration, and intuitive user interfaces. Think of it like this: if you built a beautiful house in the 1980s, it served its purpose perfectly back then. But today, if you wanted to turn that house into a high-rise building, you’d quickly run into problems. The original foundation isn’t designed to support a high-rise, and the architectural structure isn’t suitable either.

The same is true for legacy software, it was great when it was created, but it wasn’t designed to meet today’s needs. You can't just layer modern features onto outdated technology. It requires a complete re-architecture to meet current demands. I’ve seen this challenge firsthand, especially during my time with IBM, where legacy systems, particularly in the banking sector, became more of a burden than an asset. What was once cutting-edge technology has now become a liability for many companies.

Stefan Huyghe: That’s a great analogy. So how can LSPs effectively tailor their technology and services to meet the unique demands of today’s diverse markets? How is it different from how software was developed in the past?

Hiroki Kudo: Today, it’s critical that services are tightly integrated with software. It’s no longer enough to deliver a service independently; you need to offer it in conjunction with technology. LSPs now face a choice: they can either develop their own software in-house or leverage existing solutions.

Building software internally comes with significant challenges. It requires a specialized team, ongoing maintenance, and a deep understanding of software development something that can be overwhelming if the organization doesn't have prior experience in this area. Alternatively, LSPs can adopt third-party solutions, which is the route Yaraku offers through YarakuZen.

With YarakuZen, LSPs gain access to a powerful tool that allows them to stay ahead of the curve, especially in areas like AI integration. This technology not only helps LSPs deliver better services but also strengthens their relationships with clients.

Here’s the critical part: companies can switch between LSPs regularly sometimes as frequently as every month—based on pricing or performance. However, switching software solutions is much more complicated. Once a client adopts a software platform, it becomes "sticky," making it more challenging to change providers. This creates a deeper relationship between the LSP and the client, with the software becoming a key part of the service strategy.

Stefan Huyghe: Hiroki, we’ve touched on the evolution of localization in Japan, but since you’re an expert on the broader Asian region, I’d love to hear your thoughts on how localization is evolving in other countries across Asia.

Hiroki Kudo: Thank you, Stefan. Outside of Japan, the general trend across Asia is one of rapid growth. Most countries are experiencing economic expansion, population growth, and increasing investment, particularly in Southeast Asia. We’re seeing factories being built, economies developing, and a growing middle class. This younger, tech-savvy population is consuming more digital content, which drives demand for localization especially in local languages for entertainment and other services.

India, in particular, stands out as a unique case. It’s a massive market with incredible linguistic diversity, which the government is actively working to preserve through its “Digital India” initiative. India isn’t just focused on content in Hindi or English; the government mandates that content be translated into multiple local languages. This means that a single piece of content often needs to be localized into ten or more languages. The scale of demand for local translation in India is enormous and quite distinct from other Asian countries.

Stefan Huyghe: Would it be fair to say that while Japan tends to be a more closed society, India’s linguistic diversity creates significant localization opportunities? Would you consider India a front-runner in terms of localization potential across Asia?

Hiroki Kudo: It really depends on the industry, Stefan. However, India’s population boom and increasing middle class certainly make it a key player in the region. It’s worth noting that China has also emerged as a localization powerhouse Chinese-language content has now surpassed English content in volume, which says a lot about the shift we’re seeing.

India, with its massive population now rivaling China’s, is also seeing an explosion of content consumption. The entertainment industry in both countries is thriving China and Korea, for example, are major hubs for entertainment, while India produces a vast number of films.

The demand for localization is being fueled by these factors population growth, rising wealth, and increased consumption of local content. While each country has its own unique landscape and cultural nuances, the overall trend across Asia is clear: localization is becoming essential to meet the needs of these diverse, growing markets.