Coronavirus pandemic

Paper-driven culture stymies Japan's digital goal from 20 years ago

TOKYO • 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 are still unable 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 senior economist Takuya Hoshino 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In its mid-year policy strategy, the government vowed to accelerate digitalisation of its outdated administration, which has delayed delivery of cash payouts to help citizens weather the pandemic.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.

Mr Seiji Kihara, a former Ministry of Finance official who now serves as ruling Liberal Democratic 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 20 years ago.

"They are doing pretty much the same now."

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 are not 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 per cent 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 does not go digital, translating into personnel costs of nearly US$8 billion (S$11 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 such as Singapore, South Korea and China in a survey by Swiss think-tank IMD on digital competitiveness.

REUTERS

A version of this article appeared in the print edition of The Straits Times on July 28, 2020, with the headline 'Paper-driven culture stymies Japan's digital goal from 20 years ago'. Print Edition | Subscribe