Japan’s Digital Transformation: Industry Advancements and Government Goals

In this episode of Asia Insight, NBR’s Doug Strub has conversations with two experts on Japan’s digital transformation (DX). First, Ulrike Schaede discusses digital transformation among Japanese industry. Following that conversation, Daisuke Kawai joins to talk about the Japanese government’s DX strategies and objectives.

 

Daisuke Kawai is a Research Fellow at the Japan Institute of International Affairs (JIIA) and the National Graduate Institute for Policy Studies (GRIPS). His areas of expertise are Japan’s foreign and security policy, Indo-Pacific security, technology policy, and arms control, with an overarching research interest in emerging technologies. He is also the serving secretariat of the Council of Security Cooperation in the Asia Pacific (CSCAP) Japan.

Ulrike Schaede is Professor of Japanese Studies and Director of the Japan Forum for Innovation and Technology at UC San Diego’s School of Global Policy and Strategy. She is a member of the Board of Advisors at the National Bureau of Asian Research. Dr. Schaede is an expert on Japanese business and management strategies, author of The Business Reinvention of Japan: How to Make Sense of the New Japan and Why It Matters (2020), and co-author of The Digital Transformation and Japan’s Political Economy (2022).

Doug Strub is Director of NBR’s Center for Innovation, Trade, and Strategy. He manages NBR’s work on trade, technology, and digital issues.

TIMESTAMPS

Ulrike Schaede

[1:30] How do you define “digital transformation?”

[3:50] What are the key technologies driving this transformation, and in which technologies is Japan finding the most success?

[6:40] You’ve written a lot about Japan’s “competitive repositioning.” Can you explain this idea and how Japanese industry and manufacturing have been evolving in recent decades?

[11:25] What drove these changes?

[17:15] How is Japan’s success in digital manufacturing translating to broader digital transformation across society?

[19:42] How successful have strategies and initiatives such as Society 5.0 been at enabling a broader societal digital transformation?

[23:14] Why is there such a contrast between the successful advancements in digital transformation among industry compared to the slower progress made by the government?

[27:00] How is Japan’s aggregate niche strategy and its emergence as a key producer of critical technological inputs impacting the rest of the world?

Daisuke Kawai

[30:12] How does the Japanese government define digital transformation, and what are its DX goals?

[30:58] How successful has Japan been so far in its pursuit of digital transformation?

[31:27] What are the main impediments that have prevented Japan’s DX from being carried out more quickly?

[32:26] Can you explain what the Hanko is?

[33:03] What are the current administration’s main DX goals, and what strategies and policies is it implementing to pursue these?

[33:50] What are the Digital Agency’s main responsibilities, and what steps has it taken so far to further Japan’s digital transformation?

[34:30] Have people embraced the introduction of the My Number Card system, and how has this impacted society?

[35:32] What services does this card provide, and what incentives do people have to sign up for it?

[36:24] The government has also launched the Digital Garden City Initiative. Can you talk about what that is and what it’s trying to achieve?

[38:57] Related to this, the government has also launched the Digital Garden City Initiative Promotion Grant. Can you explain what this is and the impact it’s having?

[40:20] What are the main remaining barriers the government will need to address to more effectively and comprehensively realize its DX goals?

[41:18] How effective are the current polices in addressing the challenges you’ve mentioned?

[41:58] Are there any particular areas you think these policies could be doing a better job in addressing?

[42:57] Do you have any recommendations for how the government could more effectively achieve its DX goals?