In September 2021, Japan set the ball rolling with its digital policy as the new Digital Agency took office in Tokyo. While the country steps up to transform itself digitally, let us try to understand why it continues to be identified as digitally backward despite being distinctly technologically more advanced than the rest of the world. The Organisation for Economic Co-operation and Development’s (OECD)
Digital Economy Outlook 2020 put Japan at the lowest rank amongst 31 countries in online procedures. As opposed to European countries like Estonia, Denmark, and Iceland where nearly 70 percent of the population utilises digital applications at public offices,
Japan is barely at 5.4 percent. In 2001, Japan launched the e-government strategy in an attempt to carry out information technology reforms. However, two decades later, paper-based administrative services and usage of FAX continue to be widespread.
The Japanese government not only failed to provide relief from the pandemic by delaying the delivery of one-off cash-handouts worth 100,000 yen per individual last year, but also received criticism for major glitches in its COVID-19 contact tracking app—Contact Confirming Application (COCOA). For better or for worse, the COVID-19 pandemic exposed Japan’s digital backwardness. A Tokyo based think-tank, Asia-Pacific Initiative (API), in a convention of experts called Japan's response to COVID-19 a
“Digital Defeat”. Owing to that, earlier in May this year, the Japan Diet passed the Digital Agency Law to establish a new government agency called Digital Agency to ramp up its digitalisation ambitions. The agency that kicked off its operation this September consists of
600 officials, including one-third from the private sector. This is about
four times more than its predecessor, the IT Strategic Headquarters. If compared, Singapore’s Government Technology Agency had nearly three times more, i.e.,
1,800 officials, at its inception in 2016.
The Agency was the pet project of Prime Minister Yoshihide Suga. However, with the sudden announcement of
PM Suga’s resignation well before the Agency delivered any notable results, the government leadership for this massive project is under scrutiny. Under newly appointed Prime Minister, Fumio Kishida’s leadership, Karen Makishima is currently steering the Digital Agency. Interestingly, Kishida, who led the LDP to an early General Election on the 31
st of October, has an average approval rating of just above 50 percent—much lower than his predecessors. Having lost
one of two by-elections for the upper house, the honeymoon period of Kishida’s leadership might have come to an early end. However, as he continues to head the nation, there had been little conversation in pre-poll debates and party manifesto about his visions of the Digital Agency. While Fumio’s ambitions of a “new capitalism” model shift from ‘Abenomics’, and better handling of the coronavirus have taken precedence in media coverage, the discussion on means to achieve these goals via active digitalisation has been scarce. As none of the leading parties have created conversations around the Agency, it is easier then to assume that digitalisation might take a backseat amongst other policy decisions.
It is now imperative to understand the tasks of this Agency and why, for years, the Japanese government has put digital reforms on hold. Along with numerous other tasks, the Agency is set to digitalise vaccine passports for those travelling overseas, and also introduce a
government-cloud platform to unify and standardise IT systems across local governments that are currently running different applications. To advance an electronic contract system, the government has introduced digital signatures, hoping to do away with the age-old practice of using Hanko seals. The new entity is also tasked to further the usage of the “My Number” personal identification card. To its dismay, even though the card was introduced in January 2016, according to the Ministry of Internal Affairs and Communication, the card has only been adopted by
26.3 percent of the population (as of March 1, 2021). It is now under the mandate of the Agency to address the lack of awareness regarding the card and concerns regarding privacy.
Red tapism?
The delay in bringing out these reforms in Japan was due to numerous frictions in society. “It’s not about technology lagging behind. It’s about
structural problems,” says Masaaki Taira, former State Minister at the Cabinet Office in charge of information technology policy and a Lower House lawmaker from the ruling Liberal Democratic Party (LDP). Japan’s traditional-minded and unadventurous bureaucracy has, for years, resisted digital changes within the system. Hideaki Tanaka, Professor at Meiji University and expert in public policy, says that Japanese bureaucrats tend to
avoid risks that could affect their careers. Playing safe has become a tradition and has resulted in structural rigidity.
Moreover, the system of rotating posts every two years has created hurdles in attaining specialisation. Many bureaucrats that are able to acquire digital knowledge are transferred to other sections. Having to start from scratch renders them as typical generalists. Not to mention, the vertical structure of the bureaucracy has rendered various ministries incompatible with each other. The Digital Agency now faces the challenge to engage with private sector stakeholders and break away from the traditional bureaucratic culture. While the Agency has pushed various other ministries and agencies to hire employees from the private sector, the influential higher positions continue to be populated by career-track civil servants of the long-standing
bureaucratic system.
Apart from bureaucracy, many interest groups and unions have historically resisted digitalisation policies in Japan. The pandemic exposed major setbacks in Japan’s healthcare sector. The Japan Medical Association (JMA)—a strong ally of the LDP and a powerful interest group—has actively opposed a permanent transition to telemedicine. It believes that the government’s push for telemedicine will favour the generalist drug stores. Owing to their pressure, the Ministry of Health, Labour and Welfare (MHLW) has been
reluctant in promoting medical services online. The COVID-19 pandemic eased some regulations, however, major political barriers continue to exist. Not only is there a fear of competition, it can also be argued that this resistance from JMA is generational. An aging generation inept with modern-day technology has pushed back against telemedicine as nearly half of Japan’s doctors are over 50 years of age. In the post-pandemic era, it is all-the-more urgent for the Digital Agency to challenge conservative unions and promote reforms within the health sector.
Naturally, the agency will have numerous hurdles in the coming years. Lack of initiative from the government due to pressure from unions and conservative factions might impact its smooth working. As was seen in the case of regional neighbours, South Korea and Singapore, direct involvement of top decisive leadership in rolling out effective policies is very vital. This, in return, calls for political stability. The need for a strong leader will act as a prerequisite for progress. The success of the Agency also highly depends on the collaboration of the public and private sectors. Greater horizons of opportunities for businesses will give further impetus to the private sector to assist the government in its initiatives. The Agency is bound to face dilemmas of privacy and debates over civil liberties and information exchange. Hence, it is essential to call upon civil liberty advocates and cyber security experts on the round table.
The Digital Agency needs to show, above all, willingness to change its course of action, undergo trial and error, and work through dialectics to successfully implement its policy decisions. There is also a need for collaboration with international partners to make sure that Japan’s path towards digitalisation is interoperable with other countries. Partnerships with countries like Estonia and India, who have invested heavily in national authentication systems, should be pursued.
Digital reforms in Japan would not only aid the country in dealing with its labour shortage but also help it be successful in amplifying productivity, while also catering to its aging population and demographic changes. It would also provide impetus to innovations and encourage women's labour participation. The next step and the biggest challenge in front of the Agency is to not only overcome old technologies but also to alter the obstinate mindset of the government officers in favour of this change. If the example of Estonia—the most digital country—is to be followed, it is vital for people to trust the system and the government’s intentions. As the traditional system is replaced, there is a need for the establishment of a virtuous cycle for the new system to work. One can hope that the systemic loopholes and backwardness exposed by the pandemic would create room for the Digital Agency to actively promote a digital environment within the country. As the situation stands, domestic politics will be principal in proclaiming Japan’s Digital Agency a success or a pie in the sky.
Chitrali Parashar is a research intern, ORF.
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