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The new IT strategy launched by Prime Minister Yoshihide Suga is garnering much attention as of late.

The strategy’s main feature is the establishment of a government entity in charge of all things digital — a digital agency. Suga has appointed Takuya Hirai, the Liberal Democratic Party’s top IT expert, as minister of digital reform, and plans to launch the new agency next year. The Suga administration will aim to erase the government’s lag in digitization. This deficit was recently highlighted during the COVID-19 crisis with troubles such as those relating to the electronic application for special fixed benefits.

“We need to take responsibility for all digital-related policies in one agency. The agency’s institutional design is forthcoming, but I want to give it top priority,” Suga said concerning the creation of a so-called “control tower” to guide the new IT policy. “We are also considering necessary revisions to the IT related law. We want to consolidate all fields, including My Number system.”

Suga has also made the establishing of a new IT strategy a top priority for his administration in part because he was the minister for internal affairs and communications (MIC) in the first Shinzo Abe Cabinet in 2006 and is proud that he is “familiar with the information and communication fields.” Since he was chief Cabinet secretary, Suga has publicly stated that Japanese mobile phone charges should be cut by 40%. Under the Abe administration, the government had been focusing on a policy of promoting competition in the telecommunications market, such as granting e-commerce company Rakuten a license to become the fourth mobile telecommunications carrier in the country.

This policy follows the example of France where mobile phone charges have dropped dramatically thanks to the entry into the market of the new mobile carrier Free Mobile, which offered at the time cheaper services compared to the dominant providers. It was an easy-to-understand message for general consumers who are less likely than big corporations to enjoy the benefits of Abenomics. With Suga as prime minister, the pressure to reduce mobile phone charges will increase again, which has the major telecommunications companies concerned.

In fact, the idea of ​​unifying the government’s IT strategy into one unit isn’t new. Ryutaro Hashimoto promoted the idea of​​ creating a “Ministry of Information and Communication,” back in 2001 when a reorganization of central ministries was taking place. The plan was to combine the information policy department of the then-Ministry of International Trade and Industry (MITI) with the communication policy department of the then-Ministry of Posts and Telecommunications (MPT), with the aim of unifying governmental organizations involved with IT strategy.

At the time, MPT did not like the idea of MITI taking charge of the project, and thus it never went anywhere. Eventually, the Ministry of Posts and Telecommunications merged with the Ministry of Home Affairs, which is responsible for local autonomy, and the current Ministry of Internal Affairs and Communications was born.

As a result, Japan’s IT strategy is split between the Ministry of Economy, Trade and Industry (METI) and the Ministry of Internal Affairs and Communications. The Ministry of Education, Culture, Sports, Science and Technology is also in charge of technical policies in the IT field such as supercomputers.

As Suga noted, Japan’s IT strategy is different in each ministry. For example, information and communication technology is called “IT” by the Ministry of Economy, Trade and Industry and “ICT” by the Ministry of Internal Affairs and Communications, with neither side willing to yield on their terminology. Yet in the era of cloud computing, where computers (information) and networks (communication) are fused, such feuds are counterproductive.

Elsewhere, Taiwan, South Korea, Singapore and other high tech countries have made good use of digital technology to combat the novel coronavirus. In Taiwan, Audrey Tan, the minister in charge of digital affairs who is known as an IT genius, launched a mobile site to prevent the hoarding of masks, receiving high praise at home and abroad for the use of digital technology.

In South Korea, cell phone location data was used to track the travel history of virus-infected people, showcasing its digital savvy to the world. It can be said that all of these initiatives resulted from the government unifying its IT strategy and giving top priority to the digitization of administrative work, education, and medical care. In Japan, however, the vertically divided structure of government offices has hindered even the digitization of Tokyo’s central government district of Kasumigaseki.

The central ministries and agencies were first connected to each other via the Kasumigaseki WAN network in 1997. At its launch though, the sharing of documents between agencies was very inefficient. The problem stemmed from the fact that each agency ordered computing systems from separate domestic vendors, with the specifications differing from one manufacturer to another.

In the United States, the General Services Administration (GSA) took a different approach. It established specifications for information systems across agencies, and has improved the efficiency of system development by procuring equipment in a unified manner. In the U.K. in 2000, government procurement organizations at the time were unified under the Office of Government Commerce (OGC) which is now known as the Crown Commercial Service (CCS), with the nationwide system eventually being standardized. Furthermore, the OGC is not only responsible for procuring systems but also for streamlining the administrative structure itself.

At this stage, it’s unclear whether Suga’s digital agency will be an organization that controls Japan’s national IT strategy or just an entity that promotes the digitization of the government itself. That’s because the government already has an IT general strategy office in the Cabinet Secretariat, with the authority of the government’s chief information officer having already been strengthened. For Suga, though, the low penetration rate (of under 20%) of the national ID “My Number Card” promoted by the IT General Strategy Office cannot be tolerated.

Suga’s interest also extends to financial and local economic policies. During the LDP presidential election, Suga pointed to the problem of too many local banks. The consolidation and digitization of local banks must be seen as inevitable.

At a ministerial meeting held under the new prime minister in late September, guidelines were confirmed for the establishment of a digital agency by the end of the year. Minister of Digital Reform Hirai said he’s aiming for the launch of the agency next year. Both Suga and Hirai emphasize a need for speed.

Suga wants his own stamp on a policy similar to that achieved by former Prime Minister Abe, who made great strides in making changes to the nation’s defense policies. Thus, he wants to cook up his own policy flavor through the implementation of a digital strategy. So telecommunications and broadcasting companies, IT vendors, regional banks and other entities can expect to feel pressure from his efforts. Suga aims to break down vested interests standing in the way of a new digital strategy, and the digital agency will be an effective step toward realizing that vision.

Waichi Sekiguchi is president of MMRI, a Japanese research and consulting firm on information technology. He was formerly an editorial writer and a Washington correspondent for the Nikkei financial newspaper.

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