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New Tokyo research center aims to boost Japan’s ‘Fourth Industrial Revolution’

by Shusuke Murai

Staff Writer

Technology today is advancing — often so fast that society fails to take full advantage of some great innovations due to outdated regulations, says the head of a new research center in Tokyo.

The newly established Center for the Fourth Industrial Revolution in the capital aims to update old regulations that hinder effective usage of cutting-edge technologies and accelerate social change by developing appropriate policy frameworks for a rapidly changing society, said Chizuru Suga, who heads the institution.

“In short, what we are trying to do is like determining the size of a soccer goal before playing the game. We are trying to set up common policy frameworks that help people play a fair game,” she said during a recent interview with The Japan Times.

“Today’s technology has been advancing so fast that no one could have been able to catch up with the most up-to-date movement and set the rules … to benefit as many people as possible,” said Suga, formerly of the Ministry of Economy, Trade and Industry.

The Tokyo facility, which opened Monday, is the first sister institution of the Center for the Fourth Industrial Revolution in San Francisco. The so-called revolution refers to the fourth major industrial era since the initial Industrial Revolution of the 18th century and is characterized by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres.

Established in March 2017 by the World Economic Forum — the host of the annual Davos meetings in Switzerland — the U.S.-based center has worked to bring together leaders in both the public and private sectors and leverage the benefits of emerging technologies such as artificial intelligence, big data, the “internet of things” and blockchain.

For example, the U.S. center worked together with the Rwandan government to develop a regulatory framework for drone operations, helping the African country build an aerial network of drones that deliver medical supplies to remote villages.

The Tokyo-based center aims to work with specialists to co-design policy frameworks that will be adopted by policymakers, legislators and regulators by focusing particularly on three areas — autonomous driving, big data and precision medicine.

Setting a framework “will help the government create technology policies more easily” because it helps them to determine the direction of policymaking, Suga said.

The government sees the fourth industrial revolution, which could drastically improve the efficiency of business and organizations through advanced information technology, as one of the key elements for its growth strategy.

The government believes implementing cutting-edge technologies will improve its notoriously low productivity at work. Japan’s labor productivity in 2016, calculated by output per hour, was 20th out of 35 Organization for Economic Co-operation and Development nations, according to data from the Japan Productivity Center published in December.

Despite its high-tech prowess, the country’s digital transformation is still lagging behind other rivals such as the U.S. and Germany in areas such as the internet of things, the sharing economy and financial technology, according to a Cabinet Office report in 2017.

The slow transition is partly due to old regulations that were established before the emergence of such technologies, Suga said. She added that some technology companies are forced to alter their services due to the regulations, making their businesses less efficient in the domestic market.

For example, Uber Technologies Inc.’s ride-hailing business has been facing a tough battle here due to the country’s regulations on unregistered taxis. And online lodging service Airbnb Inc. had to drop nearly 80 percent of private homes from its listing as it adjusted to a new private lodging law that came into effect on June 15.

“In Uber’s case, the regulation was originally made to prevent unreasonably high fares. … Technologies have already solved these problems. There are many cases like that,” Suga said. “What is happening in Japan now is that these old laws still remain even after innovations have brought drastic changes to our social structure.”

Asked how the Japan center can serve as a model for other countries, Suga said she would aim to offer a solution to Japan’s aging and declining population as many other countries are expected to face the same problem over next decades.

“Many people think Japan has very little investment value because of the dwindling market. I want to show that the country’s weakness can also be a strength,” she said. “I want to prove in a few years that Japan was actually at the frontline of innovation.”

WEF opened the Tokyo center in partnership with METI and the Asia Pacific Initiative, a think tank based in the Japanese capital. The institution is sponsored by such companies as Suntory Holdings Limited, Salesforce.com Inc., Sompo Holdings Inc., Hitachi Ltd., precision instrument manufacturer Horiba Ltd. and Mitsubishi Chemical Holdings Corp.

WEF aims to open further sister organizations of the San Francisco-based center in countries including India, China and the U.K.