Commentary / Japan

Now is the time for Japan to make a digital shift

As the whole world struggles in its endeavor to combat the COVID-19 pandemic, two things are becoming clear about Japan.

First is the nation’s hygienic environment, which is generally believed to be excellent. What’s ultimately important at this time is to prevent people from becoming seriously ill and to prevent deaths from the new coronavirus as much as possible.

The media tend to focus on the number of infections, in particular the emergence of newly infected cases, while not paying much attention to how many of the infected have recovered from the illness. But a close look at the number of COVID-19 deaths and its proportion to the population reveals big differences among countries. The number of deaths per 100 million people (as of March 16) is 230 in China, where the virus is deemed to have originated, and 150 in South Korea, but the figure is much smaller at 19 in Japan. That is one of the lowest rates among major countries, along with Germany, and is below many European nations.

Of course, we must endeavor to keep that as close as possible to zero. But anyway, it should be noted that the mortality rate for the new coronavirus is quite low in Japan. And that fact indicates Japan’s hygienic environment is generally good, the nutrition level is high and people have quite a strong awareness of public hygiene.

On the other hand, the pandemic has also made it clear that Japan lags far behind other countries in putting new digital technologies to actual use: the so-called digital shift. Remote medical services and remote education — measures deemed effective as the movement of people is restricted due to the COVID-19 outbreak — are still uncommon. What must be pursued in the current situation is the digital, or remote, shift.

Although China continues to find itself in a highly difficult situation, a major structural change toward the future is taking place there.

The information technology giant Alibaba has distributed a system called Ding Talk, which enables remote conferences and decision-making, to 10 million domestic companies free of charge. That is an enormous figure, given that there are an estimated 22 million businesses in China. That should help promote remote work at these firms and change the work style of their employees. It will also lead to a reduction in the massive cost of commuting and business trips across the vast country, thereby significantly pushing up productivity.

Over the past several months, major universities such as Beijing University have reportedly built systems to distribute all their lectures online. The streets may be deserted and shops and restaurants may be losing sales due to the COVID-19 outbreak, but online shopping and home delivery services are surging. The digital shift is indeed progressing at a ferocious speed, leading to a major transformation of the economic structure and system.

In Japan, remote medical service is the area where a digital shift is most clearly needed. If that is realized, patients in remote places can easily access medical services. And above all, remote medicine will significantly reduce the risk of doctors themselves becoming infected with the new coronavirus.

Similarly important is to promote remote education. Prime Minister Shinzo Abe’s call for shutting down all schools nationwide stirred up a controversy, but no uniform closure of schools would be necessary if an efficient remote education system was in place.

Cashless payments must also be promoted. Since last year, the government has been pushing for cashless payments, and some progress has been observed. But compared with northern European countries, China and the United States, the share of cashless payments remains far too small. Concern over viral infections through the handling of cash makes yet another case for promoting cashless payments. The COVID-19 pandemic gives us all the more reason to encourage people to work from home.

Behind the slow progress of the digital shift in Japan are the presence of rigid regulations and strong opposition from vested interest groups. In this regard, the Japan Medical Association and the Japan Teachers’ Union are known to wield strong political influence. One of the reasons that remote work has not become widespread in Japan is the nation’s labor practices that reward work mostly for the hours spent on the job instead of the outcome — and the strong objections raised from some labor unions and opposition parties to performance-based pay.

Historically speaking, pandemics have left many lessons. An important point is that a society that has experienced a pandemic will be different from what it was before.

As a result of the Black Death, which struck 14th century Europe, per capita wages went up due to the population decline and the authority of the church was eroded. These changes led to the Renaissance immediately afterward. The current pandemic will likely give rise to a massive digital shift, and an enormous gap will emerge between countries that have achieved it and those that did not, and between businesses that carried it out and those that did not.

Japan needs a grand design to push reform toward building a post-pandemic society, while at the same time making efforts to minimize the immediate damage from COVID-19. It is hoped that Japan will pursue a policy that, years later, will enable people to look back on the coronavirus crisis and think that although they faced tough times during the pandemic, their life and society took a turn for the better in some ways.

Heizo Takenaka, a professor emeritus at Keio University, served as economic and fiscal policy minister in the Cabinet of Prime Minister Junichiro Koizumi from 2001 to 2005. He is a member of the government’s Industrial Competitiveness Council.

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