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You appear to have written a lot. Without understanding anything.

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"would put it to good use - including tackling the deterioration of water pipes"

There is your faith in action. Zero concrete promise, no accountability.

You would be surprised to see how much the japanese IT industry is behind the times (a decade at least IMO). There is only a very limited startup culture here (both in size and talentpool and business ideas), there is no real risk taking venture capital market here (maybe Masayoshi Son is the exception here, but again he tends to invest in the US mostly) and most software companies use very very very outdated management practices. On top of that most software development had been/has been outsourced to India, Vietnam, China, etc, so management see no value in software talent... SW engineers' social recognition here are mostly on the level of accountants. Under such circumstances japan will never have a chance to contribute to AI meaningfully (other than niche academic research)