“I believe the Digital Agency is going to be the showcase for other agencies and ministries,” says Karen Makishima. “So much about it is new and unique.” Indeed, as it approaches its second year, Japan’s Minister for Digital argues that the work of the Digital Agency will not only transform her country’s notoriously bureaucratic government, but also make Japanese society more innovative and inclusive, increasing both its sustainability and well-being.

That is high octane talk in a country where change, particularly in how government works, tends to be tectonically slow. Predictably, within months of its launch, some media reported claims by sceptics that the digitalisation effort was already stalling — criticisms Makishima emphatically dismisses, adding that, unlike the country’s previous digitalisation efforts, this one simply cannot afford to fail. That is why it has the full backing of the Prime Minister, Fumio Kishida, and his Cabinet, as well as leaders from the private sector.

There is a shared “sense of emergency,” she says, a recognition that “Japan could lag ever further behind global trends of digitalisation and lose international competitiveness if it continues to take ad hoc and patchwork measures instead of embracing the growing development of digital technology.”

Caught Flat-Footed by the Pandemic

The COVID-19 crisis provided the wake-up call. As it responded to the pandemic, the Government was embarrassed by a series of failures that, directly or indirectly, were a result of its digital backwardness, including launching a glitch-laden track-and-trace application and long administrative delays in getting essential support payments to individuals and businesses.

Yet even before the pandemic, it was increasingly clear that Japan’s digitalisation process, first announced in 2001, was faring poorly, especially compared with efforts of a similar vintage in countries ranging from the U.S. and U.K. to Singapore, Estonia, and Denmark. A 2020 report by the Organisation for Economic Cooperation and Development (OECD) ranked Japan 33 out of 34 countries for citizens engaging digitally with their government. Fewer than one in 10 Japanese people interacted with government services via the internet, compared with more than two-thirds in several Scandinavian countries.

The pandemic response demonstrated conclusively that nearly two decades of the supposed digitalisation of government in Japan had “been almost ineffective,” says Makishima. Moreover, it showed why a unified, whole-of-government approach was needed. She lists three specific failures that stood out as government struggled to combat the deadly disease. First, there was a lack of connection and integration between national and local government systems. Second, too many government agencies had responsibilities for aspects of the emergency response, from the viewpoint of their own administrative area. Third, government ministries did not collaborate effectively together, particularly in the sharing and use of key data.

The Digital Agency was created to be the “command tower” of a joined-up reform effort spanning all national government ministries and agencies, and more than 1,700 local governments, as well as the private sector (reflecting an enthusiastically multi-stakeholder approach).

Although the Digital Agency had opened a month earlier under his predecessor, when Kishida became Prime Minister in October 2021, he embraced the agency and threw his political weight behind the digitalisation effort.

Japan could lag ever further behind global trends of digitalisation and lose international competitiveness if it continues to take ad hoc and patchwork measures instead of embracing the growing development of digital technology. – Karen Makishima

Japan’s Digital Revolutionary

Appointing Makishima, who has a doctorate in political communication and who describes seeing government as a start-up, was a symbol of that commitment. Then 44, the youngest member of his Cabinet and a rising star of Japanese politics, she had just a year earlier become the first female director of the Youth Division of the ruling Liberal Democratic Party (a post whose previous holders include several men who went on to be Prime Minister, among them the late Shinzo Abe). She had played a leading role during the previous premiership, of Yoshihide Suga, in developing the digitalisation strategy she is now in charge of implementing.

As well as giving the Digital Agency its command tower role, Makishima points to several other governance innovations designed to set this effort up for success. Arguably the most important is that, as well as her role as Digital Minister, she is also the minister in charge of structural reform. The goal of combining these two roles is to ensure that digitalisation is not seen as a narrow effort to modernise information systems but rather as a broad mission of regulatory reform and work-style reform, touching every aspect of government.

“The policy-making process in Japan must be digitalised as well,” says Makishima, who oversees the development of government policies around emerging technologies such as artificial intelligence, the metaverse, and a reboot of the internet or “Web 3.0”, working with relevant individual ministries to develop consistent policies within their areas of responsibility, always with an emphasis on evidence-based policy-making.

Acting on its mandate to modernise Japan’s more than 40,000 existing laws and regulations, the Digital Agency has already identified “approximately 5,000 provisions that should be reviewed as part of the plan for a mass overhaul of regulations in line with digital principles,” says Makishima.

From Analogue to Digital: Putting Policies in Place

She hopes to shift a governmental system built on in-person and on-paper communication to one that is unapologetically digital first. In December, she oversaw the publication of a set of digital principles stating, among other things, that “procedures and tasks that require written, visual, residency, or field audits, should be completed by digital procedure and automated by machines.” The list of 5,000 is intended only as a start, says Makishima, who hopes to find further ways to “clear out analogue regulations in the next three years.”

To illustrate the potential of this nascent digital revolution, Makishima lists examples ranging from using drones instead of people to carry out basic infrastructure inspections of bridges and tunnels, to removing restrictions on the types of diseases that can be treated, determining patient distance from hospitals, and the number of examinations that can be given online in order to facilitate the widespread use of telemedicine. Fittingly, given the triggering role that COVID-19 played in the launch of this digitalisation strategy, one of the first changes overseen by Makishima was to make official vaccination certificates available via smart phones.

Removing regulatory impediments to innovative businesses is a particular priority. The Government must, she says, “remove any obstacles which may hamper industry’s efforts to take advantage of opportunities to be the next game changer.” The digitalisation strategy is meant to align with Prime Minister Kishida’s “New Capitalism” philosophy.

Shared Experiences

Another innovation is a strategy of reaching out to other governments that have pioneered digitalisation, to study their experience of a “wide variety of issues, including operational, innovation, education, procurement” concerns, she said. Some of this outreach has led to the signing of several inter-governmental Memoranda of Cooperation (MOC), including with Singapore, Denmark, and Estonia.

The last of these might be expected to yield valuable insights into, among other things, Estonia’s X-Road strategy to facilitate secure data exchange between public authorities and the private sector — something that is likely to be a high priority for Japanese digitalisation, especially the new unified “default government cloud” that Makishima hopes will replace the individual data systems currently used by ministries, agencies, and local governments, now exceeding 1,700 in aggregate.

Another key governance innovation, designed to reinforce the joined-up approach being led by Makishima, is the formation of the high-level Special Commission on Digital Administrative Reform. This brings together experts, government ministers, and private sector leaders on a regular basis to focus on the next steps of digitalisation. Meetings are held with the Prime Minister at his official residence, which reinforces the priority assigned by the highest office in government.

Engaging Private Sector Involvement

Private sector leaders are taking seriously the invitation to engage. In April, the Keidanren federation of Japanese businesses published a list of 87 regulatory reforms that it recommended the government prioritise to accelerate digitalisation. Ending the widespread requirement to obtain seals and signatures from government officials, for example, would clearly be very popular with businesses.

Arguably the most ambitious innovation of all is Makishima’s goal of making the Digital Agency a flat, agile organisation that brings together top talent from national and local governments and the private sector. This could kickstart the transformation of a government workforce that is currently decidedly analogue and paper-based, with many officials the opposite of digitally native.

Of the Digital Agency staff of around 700, about 250 joined from private companies, with the first batch of 50 expert positions attracting 20 times as many applicants as there were posts available. That remarkable response, given the usual difficulties that governments in Japan and many other countries have in recruiting from the technology sector, seemed to justify the controversial decision to allow private-sector recruits to continue working part-time with their existing company alongside doing two or three days a week with the agency. (Tough conflict-of-interest rules, not the norm in Japan, were also introduced, to ensure that no favours are done by staff for companies connected to them.) By allowing staff to be paid simultaneously by both the private and public sector, “we can now recruit so many highly-talented engineers and programmers from the private sector,” says Makishima.

Bridging Cultures is Key to Effective Transformation

Still, she acknowledges that combining staff from different sectors into a coherent culture has presented some significant challenges. “Sometimes we do not share the same technical words,” she says. There have been all-hands discussions and one-to-one meetings to help get everyone onto the same page. Yet Makishima pushes back on commentary in the media claiming that high levels of job dissatisfaction throughout the agency had led to several private-sector recruits quitting before the end of their contracts, describing the reports as “inaccurate”, “based on misunderstandings”, and possibly premature. In a survey three months after the Digital Agency was launched, “the engagement of workers was relatively worse, but we have improved the situation,” she says.

Makishima also dismisses media claims that the unexpected resignation in April of the head of the Digital Agency, Yoko Ishikura, officially on health grounds, was a sign that things have gone awry. The veteran McKinsey alumna had been recruited only eight months earlier to lead the first institution-building phase of the agency, which was primarily completed, Makishima explained, so it was time to “pass the baton to the younger generation”.

The successor, Takashi Asanuma, a former fintech executive and expert in communications and online user experience who was already working at the agency, was chosen to lead the crucial second phase now under way, which will focus on human-centred design. This phase of providing “services which put user experience at the centre”, especially by “making administrative services simple and intuitive for everyone”, is important for transforming human behaviour, says Makishima.

A particular focus will be engaging more proactively with everyday Japanese citizens, especially the elderly and those who are unfamiliar with digital technology and “who are confused by new developments around their daily lives, which are mostly related to digital technologies”. With that in mind, Makishima has ambitious plans to create a nationwide volunteer army of “Digital Supporters” to provide education and training to digital neophytes and technophobes. “We are creating an environment throughout the country where people can learn how to use digital devices, technologies and services from people close to them in familiar places,” she explains.

Digital Everywhere, Everyday

This emphasis on local delivery is part of what may become Makishima’s signature programme, the creation of a Digital Garden City Nation, in which technology is used to provide citizens wherever they are with seamlessly delivered public services touching on every aspect of daily life, from work to education to healthcare. As well as improving well-being for those already living in these Garden Cities, perhaps they might also cause people to “move from Tokyo to these local areas,” she says.

Vision for a Digital Garden City Nation

In the spirit of her boss’s New Capitalism, she sees a big opportunity to “build an eco-system in which industries that address local problems can grow and expand their business into the world”. The Digital Agency also launched recently a beta-version of a new digital tool that measures the degree of citizen “well-being” in each local area.

There can be no doubting the ambition of Japan’s new digitalisation strategy. Yet all over the world, there are many disappointed erstwhile reformers in public and private sectors alike who once talked confidently about turning their bureaucratic analogue organisations into agile digital ones.

Makishima remains confident that she can prove the sceptics wrong. “We still face challenges,” she readily acknowledges. “But we know how to tackle these challenges.” If she succeeds, Japan will be transformed. The next step would further test the limits of policy — to ensure change is endemic, and trust in digitalisation is embedded for even greater and more meaningful change ahead.