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The Digital Agency kicked off operations Wednesday in the hope that it will become a powerful engine driving Japan’s digital transformation as part of Prime Minister Yoshihide Suga’s administrative reform agenda.

The move is expected to push the digitalization of a public sector notorious for its limited use of digital tools in administrative procedures.

Since a lack of tech specialists in the government is considered to be a major factor in Japan’s poor progress in digitalization, the agency has strengthened its personnel by adding about 130 people from the private sector. The agency is starting off with about 600 workers, about four times more than its predecessor, the IT Strategic Headquarters.

Takuya Hirai was appointed digital minister, while Yoko Ishikura, professor emeritus at Hitotsubashi University, will serve as chief officer of the agency — the top administrative post for someone appointed from the private sector.

Ishikura, a former manager at McKinsey & Co., has served as an outsider director at a number of firms, such as Shiseido Japan Co., Sekisui Chemical Co. and Fujitsu Ltd. She received a doctoral degree from Harvard Business School and an MBA from the University of Virginia.

Just before she was appointed to the agency’s top post, Ishikura worked as an independent consultant specializing in global strategy and talent.

The Digital Agency office in Tokyo on Tuesday | KYODO
The Digital Agency office in Tokyo on Tuesday | KYODO

Joi Ito, former director of the Media Lab at the Massachusetts Institute of Technology, had emerged as the leading candidate for the post in August, but the government apparently backed away over his links to Jeffery Epstein, a financier charged with sex trafficking. Ito resigned from the MIT post in 2019 over funds he received from foundations run by Epstein.

In order to break free of red tape arising from bureaucratic divisions, the Digital Agency will be in charge of compiling the information technology budget for all government ministries and agencies.

Previously, each ministry and agency drafted its own IT budget, which inflated the total amount due to overlaps in orders. In addition, these bodies lacked strong bargaining power because of a shortage of specialist tech workers and a consequent lack of knowledge, resulting in vendor lock-in.

On the agency’s to-do list is the digitalization of so-called vaccine passports for those traveling overseas.

The Digital Agency will also introduce a government-cloud platform to unify and standardize IT systems across local governments that are currently running different applications, which currently makes smooth cooperation between them harder.

Hirai also stressed that it is critical to change the mindset of government bureaucrats.

“What we have taken for granted as common sense should not be common sense anymore,” he said Tuesday during a news conference, adding that this sense of crisis must be shared by other government ministries and agencies.

The Digital Agency will be in charge of compiling the information technology budget for all government ministries and agencies. | KYODO
The Digital Agency will be in charge of compiling the information technology budget for all government ministries and agencies. | KYODO

In addition, the agency is also in charge of promoting the My Number system, which gives an identification number to all residents — something seen as key to improving public digital services.

“We are in an era where digitalization matters to every policy,” Hirai said.

He added that Japan needs to accept the fact that its IT policies failed in the past, noting that the nation was ranked 27th out of 64 countries in the 2020 Digital Competitiveness Ranking compiled by the Institute for Management Development, a Swiss academic institution.

“This means there’s a lot to catch up on. We hope to connect digitalization efforts with the growth strategy in various ways.”

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