Japan's Lack of Digitalization

Life in Tokyo has almost returned to normal after the government lifted the emergency status. Although concerns over a second wave of COVID-19 remain, we are nonetheless carefully stepping forward into a new way of life.

As a result of the COVID-19 pandemic, we realize that Japan lags behind other countries in digitalization. The government decided to provide a cash handout of JPY100,000 to all residents to soften the economic fallout from the COVID-19 pandemic.

The government’s plan was that every Japanese citizen could apply online and the money would be deposited into their bank accounts two weeks later. However, the local government was not used to handling such procedures online, which caused them to take a long time in processing applications. As a result, as of June 10, 2020, those who received their cash handouts in two weeks accounted for only 61% of all recipients.

The government allocated two supplementary budgets this fiscal year that total JPY319 trillion to cope with the emergency situation. Nonetheless, the required aid is not reaching its intended recipients quickly. The Japanese municipal office’s inefficiency and lack of digitalization has therefore become quite apparent. Japanese citizens are supposed to apply online or send applications via the mail. All of these applications came flooding into the municipal governments and their staff are busy correcting mistakes. Can you believe that they print out every application and manually check it against resident registers? This is a really outdated practice.

In many other countries, individual identification numbers are linked to bank accounts, thus making it possible to quickly deposit money. We have the “My Number System,” but not a consolidated system that links all personal data including bank accounts, annual income, and family members, and it is not fully utilized.

Overall, the government has tried to develop more efficient systems, but there is strong opposition to making changes, especially among those who have a vested interest. In particular, doctors do not like introducing online consultations because of fear that they will lose their jobs. Teachers do not want to change educational programs due to a possibly increased work burden and opposition from parents. The government also plans to offer a smartphone application to prevent the spread of the disease. It is based on a contact-tracing application, raising concerns about user privacy. We need a system to check the operation of tracing apps to make sure personal data is protected.

If we cannot build more efficient systems, we will fall behind in terms of digitalization and the Japanese people will not be able to receive satisfactory benefits.

Posted on June 16, 2020