Can the New Digital Agency Transform Japan into a Tech-Savvy Society?

Politics Economy

The pandemic has focused a spotlight on the sad state of Japan’s IT capabilities. In a bid to address shortcomings in the field, Prime Minister Suga Yoshihide launched the Digital Agency in September 2021 to oversee the digitization of public administrative procedures. An IT expert breaks down the organization of the new agency and looks at its digital strategy for improving the lives of citizens.

For a technologically advanced society, Japan has been woefully slow in digitizing the administrative functions of the government. To speed up the process, Prime Minister Suga Yoshihide (2020–21) launched the Digital Agency in September 2021, tasking it with the challenging job of breaking down bureaucratic silos that have impeded progress. Under direct control of the cabinet, the organization oversees tasks including the government’s IT-related spending and hiring, drawing heavily on talent from the private sector for the latter. Below I examine the new agency’s organization and strategy for unifying public procedures at the local and national levels.

Slow Out of the Blocks

The coronavirus pandemic cast Japan’s meager digital capacity in a stark light. As soaring COVID-19 case numbers forced countries to lock down at the start of the crisis, governments raced to offer cash payouts to citizens and businesses to stave off the worst of the impending economic impact. The rollout went smoothest in nations boasting robust digital infrastructures. Singapore, for instance, had disbursed money to 90% of residents within five days of adopting the policy. By comparison, Japan took months to get payments out the door, much to the detriment of pandemic-impacted residents.

Similarly, when the government’s COVID-19 contact-tracing smartphone app was found to have serious glitches, the issues were left unresolved as staff lacked the adequate knowledge and experience to address the problems. It came as little surprise, then, that the United Nations’ July 2020 E-Government Survey gauging countries’ efforts to provide effective, accountable, and inclusive digital services downgraded Japan—from tenth to fourteenth on the list.

Japan’s Digital Vision

The Digital Agency aims to create a human-centered digital society that “leaves no one behind” and “contributes to the happiness of every individual by allowing diverse citizens to choose digital services suited to their needs.” In simple terms, this means digitizing administrative services to enable citizens with just a smartphone or other device to easily complete procedures online, including those required when moving and for receiving government benefits.

The prime minister officially heads the Digital Agency, an arrangement intended to prevent sectionalism from further hindering cooperation among ministries when creating digital services. The minister of digital transformation, however, oversees the actual administrative functions with the help of the chief digital officer, effectively the second in charge at the agency, along with a vice minister, parliamentary secretary, and the deputy director-general.

Along with these bureaucratic appointments, specialists from outside the civil service will be tapped for such managerial roles as chief architect, chief design officer, chief information security officer, chief product officer, and chief technology officer. Furthermore, the agency is divided into four separate groups overseeing such aspects as implementing strategy and developing new services, with the overall aim of promoting public-private collaboration. To this end, a third of the agency’s starting staff of 600, around 200 people, come from the private sector.

The Digital Society Promotion Council was established in tandem with the agency and is charged with examining and evaluating the implementation of measures taken by individual departments. A separate advisory council that considers the overall strategy and direction of Japan’s digitization is debating the various elements of the digital strategy and will provide a report ahead of final policy decisions by the cabinet.

Implementing the Digital Vision

The Digital Agency sets out to achieve four basic missions: to digitize public administrative procedures, encourage digitalization across society, create the necessary infrastructure to support digitization across all industries, and realize a digital society where no one is left behind.

Central to realizing the first of these goals is the expanded use of Japan’s My Number social security and tax identification cards. The agency is promoting the cards, which carry the 12-digit individual number assigned to each resident in Japan, as a way to digitize access to emergency government services, including measures against the ongoing COVID-19 pandemic. It is also encouraging their use as a comprehensive tool for completing administrative procedures and for improving information sharing systems of ministries, agencies, and local governments. For instance, the cards are used with a recently launched government app that creates a digital vaccine passport for use at places like airports, restaurants, and event venues.

The cards also serve as identification for administrative procedures related to social security, taxes, and disaster countermeasures. An embedded IC chip containing an electronic certificate identifying the individual can be utilized to access services provided by private businesses as well.

However, the low rate of applications for My Number cards has hampered their wider use. According to the Ministry of Internal Affairs and Communications, from October 2015, when the system started, through the end of September 2021, some 48.7 million cards have been issued, representing just over 38% of residents. The government is looking to boost distribution, including plans to offer card holders reward points worth up to ¥20,000, with the aim of issuing cards to all residents by the end of fiscal 2022.

As of March 2021, My Number cards can be used in lieu of health insurance certificates at hospitals and other healthcare facilities. What is more, by applying through the dedicated “Myna” portal, residents can continue using their cards without needing to file burdensome bureaucratic paperwork typically required when their status changes, such as when finding employment, changing jobs, or moving residences. The cards also bring together medical information about exams, medications, and medical expenses, making it easy for the individual and the medical practitioners serving them to access and track their personal health-related data. In addition, cards are linked with the National Tax Agency’s e-Tax system, allowing card holders to easily enter medical costs when filing tax returns.

Rolling out the needed infrastructure, including card readers, has been an issue, though, and as of October 2021, less than 10% of medical facilities are able to accept My Number cards.

Plans are in the works to equip smartphones by early 2023 with functions that will allow My Number cards to be used for purposes like electronic verification and to enable card holders to apply online for childcare and other municipal services. Cards are also expected to be integrated with driver licenses and residence cards starting in early 2025.

Data Strategy

To encourage digitization in day-to-day life, the Digital Agency is leading the way in creating more advanced administrative service systems while also promoting data coordination across sectors like healthcare, education, disaster prevention, mobility, and contracts and settlements. In particular, the government plans to finalize measures promoting data collaboration in quasi-public areas like healthcare and education by the end of March 2022.

Japan sees the broad use of data as key to solving social issues and ensuring a competitive environment in a digital society. At the core of its comprehensive data strategy is the promotion of open data, information that anyone can access, use, or share. By widely disclosing public data, the government looks to improve the lives of residents and stimulate business activity, contributing to social and economic development.

Central to the strategy is the development of base registries containing basic social data, including populations, corporations, land, buildings, and accreditations made public by the government and organizations. The Digital Agency will need to guide the way in establishing platforms and base registries for data collaboration, but if it can succeed in creating a sustainable ecosystem in which data is readily available at minimal cost, the benefits to residents, companies, and society as a whole will be enormous.

An enormous challenge, though, will be building the necessary degree of public confidence in the safety of registries, including guarding against cyber-attacks and protecting personal information.

Improving Society

The Digital Agency represents a giant first step for Japan toward catching up with other advanced nations in the digital realm. However, it needs more than a hefty budget and broad authority to succeed in its goals. It must be the standard bearer for all ministries and agencies, not just in adopting digital technologies, but also in connecting with the leading figures in various IT fields, and in transforming how government functions in core ways.

Equally important is the need to offer the public safe and reliable digital services while keeping an ear open to public opinion to direct them going forward. To this end, the agency is developing a “digital idea box,“ a community platform for soliciting opinions and ideas from citizens that are openly shared and discussed. In October 2021, the agency launched an early version called PoliPoli Gov.

The Digital Agency will pave the way for citizens to deliver their opinions on policies and services that affect their lives. By engendering flexible and open cooperation across multiple ministries, it can achieve its primary goals of realizing a digital society and providing government services that are convenient for every resident.

(Originally published in Japanese. Banner photo © Pixta.)

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