Japan lagging behind on digital

Japan lagging behind on digital

From a pioneer of innovation, to a country floundering in pursuit of the increasingly elusive technological frontier. Japan's parable over the last 30 years is a warning to all countries and leading companies of cutting-edge technologies. In the first homeland of modern high-tech, where cell phones were first connected to the internet, today fax communications are still an everyday reality for many offices across the country.

In a sense, Japan's digitization hasn't really taken off yet  despite the efforts made in recent years. Paper files are still extremely widespread in the state bureaucracy and only until a few years ago in order to formalize documents it was necessary for each of them to be endorsed with an official stamp, the so-called hanko. Furthermore, according to an internal survey conducted by the government last year, approximately 1,900 public administration procedures still require the use of long-discontinued media, such as floppy disks that Sony stopped producing in 2011.

Japan's digital backwardness is a problem whose causes are not easy to identify and which bring both the government and the population into play for various reasons. One example above all, which faithfully demonstrates the obstacles that the country has yet to overcome, is that of the digital identity introduced in Japan in 2016 and known as My Number. It is a digital identification system made available by the authorities to every citizen and resident of the country whose purpose is to facilitate access to some public services. At the moment, the law restricts the use of the system to social assistance, disaster response and taxation, but the government plans to expand its use to other services as well.

The situation:

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A problem of inertia

As far as the Tokyo authorities are concerned, recent years have offered some sensational examples of the superficiality with which the issue of digitization has been treated. In fact, last spring, the Ministry of Health had arranged for the introduction of scanners that would allow  the use of My Number even in pharmacies and health care facilities that had not adopted the digital identification system until then. However , the plan was hastily revised when citizens discovered that the cost of installing the equipment would be charged to users . Until then, only 17% of these entities accepted the digital identification system.

Last October, the government therefore decided to take a different path, announcing its intention to decommission the old health identification system . It should be precisely the My Number card that absorbs its functions, which however still suffers from a very limited diffusion: last September only 49% of those entitled were in possession of their card, while just 20% had also enabled it as a means for identification within the national health system.

Such low numbers can be explained by the fact that issuing My Number is not mandatory but remains at the discretion of residents and citizens (often discouraged by a long and cumbersome bureaucratic process), a situation that could potentially also have consequences serious. In fact, the risk is that when the old health card will no longer be usable at the end of 2024, a large part of the population will have difficulty accessing health services. The same thing should happen for the old driving licenses, which will be phased out in 2025.

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A problem of distrust

The inertia of the government, unable to push the population to registering, however, is not the only cause of this stalemate since the distrust of the population plays an equally important role. Last October, just after the announcement that My Number would replace the old health cards, in a few days over 100,000 people signed a petition to request that the current system be maintained.

At the origin of this hostility towards digital identification there is a fear on the part of many citizens that this system puts their privacy at risk, allowing access to confidential personal information by administrative bodies that do not have the right to do so. In some ways this hostility is rooted in the political culture of post-war Japan, which is very sensitive to the limits imposed on government authorities when it comes to individual rights, but in others it is instead the fruit of decades of scandals over mismanagement and data leakage. .

At the beginning of March, the Supreme Court  issued a sentence that tries to dispel these fears, recognizing the constitutionality of My Number and stating that the digital identification system is used only for legitimate purposes that do not violate the right to privacy of citizens. But

The technological deficit

This delay in digitization is not without consequences on a technological and economic level. Without an adequate demand for services in the digital sphere, Japanese industry has not had the stimulus to develop and innovate a sector which is instead an important segment of the technological frontier.

The result is that today the industries of the Japan often rely on online services developed elsewhere, thus burdening Tokyo's balance of payments. According to data published by the Ministry of Finance, last year the country recorded a deficit in the trade of digital services of about 35.9 billion dollars. The imbalance was further exacerbated by the pandemic, given that compared to the deficit of five years ago, the one recorded in 2022 is 90% higher.

This phenomenon is then linked to the appearance of the  first deficit in the electronics, which probably represents an even more worrying trend for the Japanese economy which has built its fortune on the export of these products. Even if the increase in the import of electronics is a phenomenon with multiple causes that are not attributable to digital delay alone, the link between the two still remains strong. Without the development of a domestic digital ecosystem, Japan will struggle to restart its electronic hardware industry capable of supporting that ecosystem.

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