Once the undisputed world leader in robotic technology, Japan's supremacy in the field is being challenged by rival robot producing countries.

Now the government is pouring money into regaining that place to ensure the robot age starts in Japan.

Pepper is the world's first emo robot and represents a huge leap in artificial intelligence. It can read facial expressions, voice tones and body language and then respond.

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At Omotosando, an upmarket shopping district in Tokyo, Pepper works in a mobile phone store doing market research.

Pepper told one woman: "You're very lovely - do people say that to you often? Now it's your turn to compliment me! What do you think of my face?"

And then later joked with a male customer: "So you want to become Pepper? Well you've got shave off your chest hair and smear white paint over your body and then strip off your clothes."

Pepper is designed to be cute. He stands about 120 centimetres tall and has big puppy dog eyes.

On sale for $2,000 from next year, Pepper is sure to be big seller. As a household robot, Pepper will do the washing, the vacuuming and all the mundane chores with a smile.

But Japanese industry and government have serious plans for Pepper and robots like him. They want to build 30 million Peppers to create a workforce that can make Japan the world's number one manufacturer again.

On the outskirts of Tokyo is the factory of the future, Nextage. Robots control the floor making ATMs and vending machines.

At the Nextage factory on the outskirts of Tokyo, robots control the floor making ATM and vending machines. They do the work of three humans, 24 hours a day. ( ABC News )

They do the work of three human beings 24 hours a day, they do not take sick days or suffer fatigue. A perfect labourer perhaps?

The company introduced the robots so they could have a cheap, reliable source of labour in Japan and cut the costs of overseas operations.

Nextage manager Toshifumi Tsuji said productivity had increased five-fold since the factory introduced the robots two years ago.

"The companies that want to use these kinds of robots are increasing rapidly, so these humanoid robots will keep evolving, become faster and even more efficient," Mr Tsuji said.

The human workers at Nextage look like the robots' assistants. They run around to ensure the robots have everything they need for proper functioning.

Part-time worker Kimie Aoki said she saw the robots as colleagues and was not threatened by their presence.

"The robots have cameras and they can find defects which are hard to find for humans. I think they are helping us make better products," she said.

Will robots be a hindrance or a help?

Theorists said robots like Pepper could mean an end to menial labour and usher in a new age of creative work, while others believe they will lead to unemployment and more inequality. It is a debate keeping academics and analysts busy.

The robot suit, developed by Professor Hiroshi Kobayashi from Tokyo University, makes lifting heavy weights easy for humans. ( ABC News )

The Japanese government sees robots as not only helping resolve its labour shortages in industry, but also in aged care.

There are 31 million people over 65 years old in Japan. That number will grow rapidly, as will the demands of looking after the elderly.

The robot suit, developed by Professor Hiroshi Kobayashi from Tokyo University, has already helped elderly Japanese live independent and self-sufficient lives.

The device is strapped around the back and under the arms to make lifting heavy weights easy for humans.

"It will help elderly [people] work for longer and help them in the home so it will have a significant economic impact," Professor Kobayashi said.

Japan wants to increase the use of robots twenty-fold in just five years, with hopes the next industrial revolution - after the internet age - will arrive first in their country.