Commentary / Japan | The Great Reset

It's time to reset Japan's digital infrastructure

by Jonathan Soble

Special to The Japan Times

This is the second installment of a series in collaboration with the World Economic Forum’s Centre for the Fourth Industrial Revolution (C4IR) Japan, which will explore how the coronavirus pandemic has revealed the need for a reset of the world’s economic and social systems.

Japan is renowned for its advanced technology, yet many parts of society remain decidedly analog — its government in particular.

Countries from Estonia to India are speeding ahead with digital-government initiatives designed to reduce paperwork and eliminate long waits at government offices, but Japan seems permanently attached to paper and hanko stamps. According to the Japan Research Institute, the national government has more than 55,000 administrative procedures, only 7.5 percent of which can be done entirely online.

Meanwhile, Japanese internet access, especially the mobile kind, can be surprisingly patchy and expensive.

These weaknesses have become harder to ignore in the remote-everything world of COVID-19. Chizuru Suga, head of the World Economic Forum’s Center for the Fourth Industrial Revolution Japan, tells Jonathan Soble how Japan needs a reset of its digital infrastructure.

How well-prepared for the digital age is Japan?

Japan has always been proud of its digital infrastructure. Fiber-optic cables are everywhere, and transmission speeds are generally high.

But times are changing. The future of the internet is wireless, and on that we’re falling behind. Coverage is uneven and inefficient, and it costs a lot — mobile phone bills are higher in Japan than in many other countries. And although people can easily shop online, the same can’t be said for dealing with the government. Japanese bureaucracy is still very analog. If we want to remain an advanced nation in the digital age, we have to rethink both the infrastructure and services sides of the internet.

What would a “Great Reset” of internet services look like to the average resident?

I think Japan should aim to lower the cost of home internet and cellphone bills to a total of ¥5,000 a month. That would be about half the current average.

We could do it by making infrastructure investment more efficient and by expanding public wireless access. When people are paying more than ¥10,000 a month for what is, in effect, a public utility, it’s unacceptable. It’s a burden on household finances, especially for lower-income families.

One survey, by the NGO Chance for Children, found that a quarter of low-income households do not have sufficient internet access for online schooling. In an era when more people have to work or study from home, it’s an issue of basic fairness.

So what exactly is wrong with Japan’s digital infrastructure?

For one thing, it’s inefficiently built. With wireless coverage, each phone provider builds its own base stations. It finds a spot, negotiates with the landowner and installs its antenna on top of the building. Often there are multiple base stations on the same building.

So we have to ask, does that make sense? Is it an endeavor that really benefits from open competition? Or would it be better and cheaper to have shared, publicly managed towers that any provider could use? With a new generation of wireless technology on the way with 5G, we don’t want to repeat past mistakes.

Secondly, providers have little incentive to invest in underpopulated areas. The premise has been to build transmission infrastructure where people live and work — which makes economic sense, of course, but it goes against the principle of digital access as a public good. With other utilities and quasi-utilities — electricity, transportation, postal services — there are requirements for universal coverage. There’s no reason internet access shouldn’t be treated the same way.

Today, with the workforce becoming more flexible and remote-based, tying infrastructure to current population distribution makes even less sense. That’s why Kobe, for instance, installed free public Wi-Fi at the top of Mount Rokko. Nobody lives there, but the city wanted to maximize people’s ability to go anywhere and to work from anywhere.

We need to expand that kind of thinking nationwide. It’s one thing to have private companies compete freely on the services side, but the public sector could be much more involved in basic infrastructure, whether it’s by mandating universal mobile coverage or installing more free public Wi-Fi.

Won’t expanding government control over the parts of the telecommunications industry raise objections?

I think providers understand that the current system, under which each company installs its own base stations, is very burdensome. Private industry would still be involved in setting specifications and so forth, and there would need to be measures in place to ensure fair access to the shared infrastructure.

But it should be possible to find areas where businesses themselves want the government to coordinate — to draw a line between competitive and noncompetitive spheres that makes sense to everyone.

Shouldn’t Japan be consolidating its infrastructure, rather than expanding it?

Depopulation is exactly why we need to rethink digital public goods. Economically, it might make sense to consolidate Japan into densely populated cities. But it would also be dangerous, as the pandemic has shown. If we want more personal space, we need to make it possible for people to live comfortably in the countryside. That should be a national goal. And these places will need services that, if left entirely to private enterprise, simply wouldn’t be available. A certain degree of public support for basic infrastructure is necessary.

It’s a question of balance. Japan probably doesn’t have the resources to cater to every single situation — a person living all alone in the middle of nowhere, say. We have to do what we can with the resources available.

It’s one thing to have internet access, but if every administrative procedure requires forms and hanko, what does it matter?

You can’t just build an expressway, you need cars that are capable of driving on it. Digitizing government services is a big challenge for Japan. I think the pandemic has shown that digitization goes hand-in-hand with sustainability. It means data moves instead of people, which is better for the environment, among other things.

Obviously we need to get rid of the hanko culture. That’s not even debatable at this point — COVID-19 has shown that. It has also highlighted Japan’s failure to adopt personal ID numbers as a normal part of our digital infrastructure.

Everyone wants the government to digitize, but then they worry that the central My Number system is going to turn Japan into a surveillance society. It’s a contradiction. Digital government means being able to do your all your business with the government online, which means keeping digital records — which households have received which benefits, who’s entitled to welfare support, how much child allowance a family is eligible for, and so on. And that means we need reliable digital identification, to match the records with the right people.

And just as small countries like Estonia are forging ahead in digital government, much larger nations like India are doing it, too.

As for Japan, this is a problem we need to address, for the sake of country’s future. We need a government that’s committed to the goal, including the unpopular parts like personal IDs.

This might finally be starting to happen. The government launched a multiagency working group in June to look at ways to improve and extend the My Number system and to help local governments digitize.

Doesn’t the resistance to ID numbers suggest a fundamental lack of trust in the government?

I think there are two kinds of trust when it comes to government.

One is about honesty — is the government doing what it says it’s doing, or is it lying? The other is about competence. Does it know what it’s doing?

At the very least, we can start building the second kind of trust. We can take the slapdash approach to digital government that we have and turn it into a clear, sensible blueprint for the future.

As for the first kind of trust, that’s beyond the scope of digital infrastructure policy. But there are things that can be done with technology to make the system more trustworthy. Decentralizing databases, for example.

That’s the principle behind blockchain. People have different ideas about what blockchain is, but the fundamental insight is that it’s unhealthy to put one person or organization in charge of a pool of data. Instead, you let lots of people see who’s been accessing and updating a database, which makes it impossible for any single person to secretly misuse it.

In Estonia, all kinds of records are linked to people’s personal IDs and are available for government officials to access — health records, driving records, you name it. But each time your information is accessed, you receive a notice — who looked, when, and for what purpose.

In the digital age, we can’t simply keep people’s information locked up in paper files. But we can secure our information in a different way, through transparency. It would be a big shift in thinking, but it would be worth it.

Chizuru Suga is head of the World Economic Forum’s Centre for the Fourth Industrial Revolution Japan, and leads projects related to health care data policy, next-generation mobility, smart cities and other fields. Previously, Suga was an official at the Ministry of Economy, Trade and Industry. Jonathan Soble is the center’s editorial and communications lead.

Your news needs your support

Since the early stages of the COVID-19 crisis, The Japan Times has been providing free access to crucial news on the impact of the novel coronavirus as well as practical information about how to cope with the pandemic. Please consider subscribing today so we can continue offering you up-to-date, in-depth news about Japan.

Coronavirus banner