According to Tokyo Shoko Research, there were 857 corporate bankruptcies in May, the highest number this year. By industry, the information and communications industry (ICT) saw 35 bankruptcies, up 25.0% from the same month last year. This is the fifth consecutive month of bankruptcies compared to the same month last year.

By the way, there were 34 bankruptcies in April, up 3.0% from the same month last year, and 45 bankruptcies in March, up 50.0% from the same month last year.

The company analyzed that while the ICT industry has low barriers to entry and is an industry where it is easy to enter with small capital, such as by supporting startups, the industrial structure with many subcontractors makes it difficult to pass on price increases, and many companies have been slow to improve their performance.

The world today is dominated by DX, and talk of the latest technologies such as AI and quantum computers is everywhere. Future demand for ICT is also on the rise. It is surprising that the number of bankruptcies is increasing in such a glamorous industry.

In fact, in 2024, selection progressed mainly among small and micro-sized software development companies. As is well known, the ICT industry is an industry where technological progress is rapid. In particular, in recent years, technological innovation has been tremendous in areas that were previously seen as future technologies, such as AI and quantum computers, and technological progress has accelerated extremely.
In this environment, small and medium-sized enterprises that cannot plan future strategies are falling behind in technological innovation and are unable to compete. This trend will continue in the future, and the selection pressure on small and medium-sized enterprises will likely increase.
Adding to this is the labor shortage. The software industry is facing a serious shortage of engineers, and an increasing number of companies are going bankrupt due to the labor shortage.
The fact that even businesses that are supposed to be good at ICT are going bankrupt because they cannot keep up with technological advances suggests that ICT may be quite difficult for ordinary people.
I am not saying that the speed of technological innovation should be stopped, but there may be a renewed need for a comprehensive system that allows everyone to benefit from technological innovation. Such a system will also be necessary to strongly promote the implementation of ICT in society.(Kitajima Kei)

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