Two decades on, Japan government’s digital ambitions still stuck in piles of paper

Asakusa, Taito, Japan. Photo: Claudio Guglieri/unsplash

Two decades after Japan rolled out an ambitious plan to go digital, the COVID-19 crisis has exposed the government’s deeply rooted technological shortcomings as ministries remain stuck in a paper-driven culture that experts say is hurting productivity.

While Tokyo has made “digital transformation” its main policy plank this year, the switch may not prove so easy as bureaucrats from different ministries still aren’t able to hold teleconferences together and little of their administrative work can be done online.

Analysts say the lack of government digitalisation could reduce the incentive for the private sector to go digital in a blow to Japan‘s efforts to boost productivity.

“Lack of digital investment by the government has hampered productivity and efficiency at the private sector,” said Takuya Hoshino, senior economist at Dai-ichi Life Research Institute.

In its mid-year policy strategy, the government vowed to accelerate digitalisation of its outdated administration, which has delayed delivery of cash payouts to help citizens weather the pandemic.

Much of the problem stems from Japan‘s preference for paper documents and seal for approval at government offices.

Paper documents and seal are still prevalent. Politicians whom I deal with also prefer face-to-face meetings,” a government official told Reuters on condition of anonymity.

Adding to its digital woes is Japan‘s vertically structured bureaucracy: each ministry as well as local governments, for instance, have developed their own computer systems that aren’t compatible with each other.

Currently, each ministry has developed its own LAN network with various vendors, making it difficult to hold teleconference with each other because of differences in their on-line security policy, a Cabinet Office official in charge of IT strategy, who declined to be named, told Reuters.

In Japan, less than 12% of administrative work is transacted online, according to Japan Research Institute.

Overall, it could cost the government 323 million working hours per year if it doesn’t go digital, translating into personnel costs of nearly $8 billion, a government regulatory reform panel estimated in a report released in July last year.

The digital drawbacks give the lie to Japan‘s image as one of the world’s leading high-tech nations – in fact, the world’s third-biggest economy ranked 23rd among 63 countries, lagging behind some Asian nations like Singapore, South Korea and China in a survey by Swiss think tank IMD on digital competitiveness.

The last OECD Digital Economy Outlook put Japan at the lowest rank among 31 countries in on-line procedures, with just 5.4% of citizens utilising digital applications at public offices, way below Denmark, Estonia and Iceland at around 70%.

Seiji Kihara, a former Ministry of Finance official who now serves as ruling party’s deputy policy chief, said young bureaucrats were running around with a pile of documents seeking bosses’ seal for approval when he was there twenty years ago.

“They are doing pretty much the same now.”

Reuters

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.