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Participation in discussions on global issues essential

The Japan Times had the privilege of welcoming William Hiroyuki Saito, a special advisor to the Cabinet Office on cybersecurity to a lecture held at The Japan Times’ Nifco Hall on March 13.

Having entered the University of California, Riverside, at the age of 16, he later incorporated I/O Software with high school classmate Tas Dienes before graduating from the UCLA School of Medicine. He became a medical doctor to fulfill his parents’ expectations, but quit on the first day at work, firmly determined to continue 44-employee-strong venture software business. He jokes that he could always restart as a doctor if his business failed, but his company went on to become a leader in biometrics and information security, and his technologies are found in fingerprint recognition and contactless IC cards are used around the world today.

After selling his company to Microsoft at the age of 33, he had his first free time since he had launched his business as a teenager. He could have retired then and actually tried to do nothing but relax in Hawaii only to end up bored. That was when he decided to come to Japan, his parents’ home country, to start a venture capital firm. “It was the major Japanese companies that supported my startup with jobs when I was still a teenager. I felt I owed Japan and wanted to give something back, especially to the next generation here,” he said.

Saito founded InTecur in Japan as a venture capital and technology consultancy that has since expanded its activities to include sponsoring students to study abroad. He also chairs Impact Japan, an organization enhancing entrepreneurship. At the same time, Saito has looked at over 15,000 companies since arriving in Japan over a dozen years ago.

While being an entrepreneur, venture capitalist, public policy consultant and educator, he is also a Foundation Board Member at the World Economic Forum (WEF). He explained why it is important for Japan to be actively involved in the World Economic Forum Annual Meetings, the so-called Davos meetings, and other related international gatherings to address cybersecurity challenges and other current issues both society and the planet face.

The WEF is a Swiss nonprofit organization founded in 1971 by Klaus Schwab, then a professor of business policy at the University of Geneva. It is best known for its annual meeting held in January at Davos, a resort high in the Swiss Alps. According to Saito, the uniqueness and significance of the WEF annual meeting and other conferences that the WEF hosts is that it takes a multi-stakeholder approach to tackle pressing issues of the world.

At the Global Agenda Summit in the United Arab Emirates that is held prior to the WEF annual meeting every year, discussions on various topics that require global solutions take place. This is where the main theme of the subsequent Davos meeting is decided. Under the main theme, numerous subtopics carefully chosen by the Global Future Council comprised of specialists in diverse fields from around the world are discussed in sessions attended by not only the experts of the particular area directly associated with the topic, but also professors and engineers of other fields, leaders of both the public and private sectors, NPOs, artists, religious leaders, educators and others.

Everyone is listened to, regardless of their title or specialty, and free and lively discussions have often lead to exploring new possibilities, creating new business ideas, building partnerships and finding global solutions. “This is exactly what Japan needs most; a place where borderless discussions are held to find real and actionable solutions,” Saito said.

With an aim to encourage Japan to take the initiative in cybersecurity, Saito organized an event called the Cyber3 Conference in Okinawa in 2015 and in Tokyo last year in cooperation with the government and the WEF. He insisted that all discussions be conducted in English so participants from any countries would feel welcome to speak out in a Davos-like atmosphere. He said: “In one of the sessions, I managed to gather a representative from every ministry related to the topic to have them discuss cybersecurity issues in front of 500 experts who attended the session. This is usually totally against “the rules” in the over-compartmentalized administration in Japan, but absolutely necessary to keep things lively and deliberately increase the tension for a more frank discussion.”

He also said that the strategic use of information and communications technology (ICT) and the internet of things (IoT) is ever more important for any country to continue growing in a drastically changing world driven by three major forces, the market, Mother Nature and Moore’s law. “In the global market, data is the new oil, and IT firms have replaced oil companies as the most competitive in just the last 10 years. In order to survive in the situation predicted by Moore’s law where the price of computing keeps going down while quality and performance constantly improve. This requires significant and constant improvement by companies and thus making single products for single purposes is not enough,” said Saito.

Saito speaks at the Cyber3 Conference Tokyo 2016 in Roppongi, in Tokyo
Saito speaks at the Cyber3 Conference Tokyo 2016 in Roppongi, in Tokyo’s Minato Ward, in November. | INTECUR

“This is where the IoT comes in. One of the Technology Pioneers selected at this year’s WEF annual meeting was a company that used IoT devices to monitor cattle activities, collecting a vast amount of data automatically. Improvement to the environment and farming processes enabled a 20 percent increase in productivity.” Here, the IoT integrates multiple purposes, resulting in creating leveraged value.

In the history of industrial revolutions, the pre-machine age is represented by agriculture, which was taken over by the “machine age 1.0” when the steam engine was invented. Characterized by exponential growth in innovation and automation, we are now in an era often called “machine age 2.0.”

“Some predict that computers will outsmart humans collectively by 2045, leaving only 35 percent of occupations non-automated to today’s elementary school children. This is a global concern that should be discussed internationally and reflected in education,” Saito said.

However, Saito sees the positive side and suggests that as a rapidly aging society with decreasing numbers of young people and children, Japan can and should take the initiative in automation technology and artificial intelligence. “An aging society is nothing to be afraid of. We were lucky to be the first one to experience this ahead of everyone else. I’m sure that Japanese diligence will help our country become a successful model of an aging society. Innovations in this field can grow as Japan’s export industry,” he said.

Saito also points out that there is still room to do more in the areas of platform and networks in Japan. Japan’s output now relies heavily on parts and components which are highly vulnerable to commodification whereas technology leaders such as Apple and Microsoft for example, focus on platform instead of products. “Japan is the first and the most precise manufacturer in many fields, but while it sticks to making and selling parts, other countries that can provide platform have eventually taken the leadership,” says Saito.

Among the top companies of 22 industries in the world, Uber is the number one taxi company that does not own a single taxi, Airbnb marks the top in the hotel Industry without a room, Youtube is a film company that makes no movies. “There are no Japanese enterprises on the list. Unfortunately that is because Japanese companies have not truly grasped the significance of networks,” Saito said, asserting that the human network is the most important of all. Vibrant exchanges of knowledge and views held among the leaders and experts of all fields and countries at the WEF annual meetings often lead to innovations that could not have been achieved via internal, closed discussions within a specialized domain.

Cybersecurity is one of the most prioritized issues at Davos that requires a network of intelligence. “It is important to understand that cybersecurity is the fundamental enabling technology that makes the internet useful as a business tool,” Saito said.

The conventional atomic, biological and chemical (ABC) threats can be appropriately responded to even if the government ministries and expert groups are vertically divided because the required knowledge is specialized and limited. “After ABC comes D, the digital threat, which is far more difficult to cope with. The Cold War has been replaced by the ‘code war.'” We are dealing with non-state players that we cannot always see,” said Saito.

He continued, saying that cyberattacks have shifted from nuisances to professional operations. Also cyberattacks cannot be contained in the digital world. Today, they can now cause physical damage such as the electricity outage in Ukraine and the system errors on ticket vending machines in San Francisco last year.

Cyberattacks are asymmetric in a sense that very little resources are needed to affect a significant number of people. In addition, although the first cyberattack may require a certain amount of time, effort and money, it costs almost nothing to conduct the second attack and others. There is also the issue of how data is attacked. “Among the elements of cybersecurity, integrity of data is crucial. What if my blood type is not only disclosed, but also altered on the hospital’s database just before I go into surgery?”

However, we should not just be protective, but strategic. “Mistakes are made, machines break, accidents happen, there is no such thing as ‘perfect’. That is why resilience is important,” said Saito. In the wake of the World Trade Center attacks on September 11, 2001, the task force took out the Y2K manual almost instantly. They thought they could apply it to the emergency situation they were facing.

Political and business executives discuss global issues at the Annual Meeting 2017 of the World Economic Forum in Davos, on Jan. 20.
Political and business executives discuss global issues at the Annual Meeting 2017 of the World Economic Forum in Davos, on Jan. 20. | WORLD ECONOMIC FORUM / GREG BEADLE

Cybersecurity can enhance resilience if it is used strategically. “For the advancement of cybersecurity, ideas generated from active discussions among not only technical experts, but also psychologists, economists and other professionals are a must. The WEF annual meetings provide such opportunities,” he said.

The shinkansen was launched to coincide with the 1964 Tokyo Olympics. “The speed of the shinkansen was only achievable with high-performance brakes. Japanese cars have established a reputation for reliability and Japan is the first country that brought safety and security to the global market,” said Saito. Cybersecurity is yet another field that provides both challenges and opportunities in which Japan should take initiative.

Following Saito’s lecture, attendees were able to ask some questions.

Q&A

Q: What is the path that young people can pursue to take part in global summits?

A: The Global Shapers Community provides the opportunity to people in their 20s. Klaus Schwab, the founder and executive chairman of the WEF created it, based on my idea that more young people should participate in discussions on a global scale. At least 50 members globally, including a few from Japan are selected to join the WEF annual meeting every year. You can contact the nearest hub to apply for membership. Another way is to become a Young Global Leader (YGL) if you are in your 30s with a record of significant achievement and leadership experience. It is harder to become than a Global Shaper because you have to be nominated first and be approved through a selection process. Young Global Leaders can take part in the Annual Meeting of the New Champions informally known as “Summer Davos” and 150 out of 800 leaders can attend the WEF annual meeting.

Q: Can any countries, including autocratic or developing nations take part in the WEF annual meetings? Or is it just limited to advanced countries?

A: It is the Founder Klaus Schwab’s unique idea to get the leaders of the two incompatible nations such as Palestine and Israel to talk at the WEF annual meetings. African countries participate too, and even the invitation to North Korea has been considered. However, the two-thirds of the world’s population is not hooked up to the internet. This is yet another issue that should be addressed at something such as the WEF annual meeting.

Q: What should Japanese companies do to survive in the global market?

A: The biggest problem is that Japanese people are too worried about failing. “Fail fast,” is a common phrase used among successful companies around world, as failures are actually experiences that are necessary to achieve success. Japan’s population is shrinking, and we have to sell to the world. The internet is indeed a way to efficiently connect to the world, but most Japanese companies do not have strategic business models to follow after they are connected to the internet. To learn about diverse possibilities, leaders of Japanese companies need to participate in more global multistakeholder discussions.

This page has been produced with the support of the Ogasawara Foundation for the Promotion of Science and Engineering, which was founded by late Toshiaki Ogasawara, the former chairman and publisher of The Japan Times and the former chairman of Nifco Inc.

Saito’s biography

William Hiroyuki Saito
William Hiroyuki Saito | YOSHIAKI MIURA

William Hiroyuki Saito had already been an entrepreneur and business owner for several years when he obtained his medical license, and he chose to continue his career as an expert on cybersecurity.

After he sold his company to Microsoft, he founded InTecur in Tokyo with the aim of supporting entrepreneurs and promoting innovation. He played the role of CTO in the Fukushima Nuclear Accident Independent Investigation Commission in 2011.

In 2013, he was appointed as a Special Advisor to the Cabinet Office. He is a Foundation Board Member of the World Economic Forum. He has been selected as a Young Global Leader and Global Agenda Council member and strives to get more young people involved and bolster discussions at international meetings.

He is also an educator, a TV commentator and an author, and his most recent book focuses on the significance of the WEF annual meetings and how Japan should play a more important role on the global stage.