I Want Japanese Companies to Create Something Exciting" — Kono Taro, Minister for Digital Transformation, Reflects on Two Years
Following the first part, 'Taro Kono, the Minister for Digital Transformation, Leading Japan's DX: Reflecting on Two Years of Progress,' which looks back on his efforts over the past two years as Minister for Digital Transformation, the second part delves deeper into Taro Kono's focus on the latest digital technologies."
The Reason for Promoting "Remote Work" That Has Begun to Take Root in Kasumigaseki, Based on His Own Experience in the 1990s
After graduating from Georgetown University in the United States, Minister Taro Kono returned to Japan and joined Fuji Xerox in February 1986. Assigned to the Research and Statistics Department at the headquarters, he was responsible for writing speeches for then-President Yotaro Kobayashi and supporting his activities in the business world. At one point, Kono was tasked with translating a substantial amount of English documents into Japanese, which led him to work from home for a while—what we now call remote work.
"Later, Fuji Xerox became involved in the first satellite office experiment in Japan. Due to my experience with remote work, I was appointed as the field manager for this project. To support the satellite office environment for employees living in Shiki New Town, Saitama Prefecture, I commuted more than two hours one way from my home in Hiratsuka."
"Of course, back then, there were no remote meeting tools like Zoom, so we used a large system for video conferencing. The network communication environment was also immature, so the video would often lag. Despite that, I was able to handle remote work without any issues, which gave me the confidence that a lot of work could be done without going to the office."
As we all know, remote work only became widespread in Japan after the COVID-19 pandemic, and it has since become an option for work styles. However, recently, more companies are encouraging employees to return to the office. Minister Kono finds this puzzling, saying, "I think it's strange."
"I believe that choosing a work style that aligns with one's desires and using remote work to achieve the kind of life one wants is a very positive decision. During the pandemic, as the Minister for Administrative Reform, I took on various challenges to establish remote work in Kasumigaseki. Many people working in government agencies are also involved in childcare or caregiving while working. It’s also said that recent graduates are less interested in working in Kasumigaseki. I believe that making Kasumigaseki a place where one can choose a flexible work style without having to go to the office is crucial for attracting talented individuals."
The Environment Where Engineers’ Skills Are Properly Valued and Utilized Is Not Yet Established
"As the Minister of State for Special Missions in the Cabinet Office in 2015, I promoted the policy of partially relocating the Consumer Affairs Agency to Tokushima Prefecture. At that time, the idea of relocating entire government ministries to a single location was a topic of discussion. Now, with various digital tools available for remote work, it might be more suitable to create an environment where each person can work from wherever they prefer," said Minister Taro Kono, continuing his explanation on the effectiveness of remote work by citing the example of the Japan Health Insurance Association, a special private corporation responsible for reviewing and paying medical fees under employee health insurance.
"Traditionally, the Japan Health Insurance Association collected large volumes of paper-based medical fee statements, known as 'receipts,' and had specialized personnel in each prefecture review them. With the advancement of electronic receipts, it’s no longer necessary to gather people in one place, and prefectural offices are also unnecessary. Additionally, we can have AI initially review electronic receipts, and then have humans take over the parts that AI couldn’t complete. This has significantly improved the quality of the work. When reviews were done solely by humans, there was noticeable variability in the standards across prefectures, but by using AI and other digital tools, the review standards have become almost entirely uniform."
The Environment Where Engineers’ Skills Are Properly Valued and Utilized Is Not Yet Established
Minister Kono has expressed his support and expectations for the success of Japanese startups in various settings. The Digital Agency is currently focused on fostering the growth of startups in Japan.
"I am encouraged by the success of Japanese startups. However, it is also said that Japanese startups tend to prioritize capturing the domestic market, and as a result, the mindset of targeting the global market from the outset does not develop," Minister Kono remarked. "I have felt this way for some time, and I often receive similar comments from overseas venture capitalists who point out that Japanese startups may need to adopt a global perspective."
The Digital Agency Welcomes the Participation of Startups
"This situation can also be compared to the difference in success between Japan's J-POP and Korea's K-POP. Both countries have talented artists who work tirelessly to achieve success. However, Japan's J-POP, with a large domestic market of 120 million people, and Korea's K-POP, which aimed at the global market from the start due to its smaller domestic market, have reached different levels of global recognition. I hope Japanese startups will also adopt the ambition to solve global challenges and capture the global market."
After becoming the Minister for Digital Transformation, Minister Taro Kono also identified areas for improvement in the unique multi-layered structure of Japan's digital and IT industries. His focus is on building a strong foundation for digital engineering in Japan.
"I feel that the current environment in Japan does not yet fully appreciate and utilize the skills of engineers. For example, when someone with strong programming skills joins an IT vendor, the main part of their job often becomes creating specifications and outsourcing the actual coding to subcontractors, leaving them with little opportunity to write code themselves. I've often seen situations where, based on these specifications, the actual coding is done by programmers who graduated from liberal arts schools and received some training. Ideally, those with excellent programming skills should be the ones writing code, and it's a waste that their experience isn't fully utilized."
The Digital Agency Welcomes the Participation of Startups
The Digital Agency is also focusing on enhancing fairness and transparency in the procurement process. They are creating a system that makes it easier for a wide variety of businesses, including small and medium-sized enterprises (SMEs) and startups, to participate in bids. After a decision is made, the information on not only the vendors awarded contracts but also their subcontractors and sub-subcontractors will be fully disclosed. According to Minister Kono, the aim is to allow SMEs and startups to publicly highlight their role in developing products for the Digital Agency.
Furthermore, when startups compete with large companies in bids, a "startup bonus" has been introduced to make it easier for startups that propose high-quality plans to win. "The definition of what constitutes a startup can be somewhat unclear, but the business of Japanese startups, including SMEs, is growing rapidly. External procurement by the Digital Agency accounts for about one-third of the total. However, in terms of monetary value, the proportion of startups and SMEs remains small, and they have yet to engage in large-scale procurement projects."
Looking Forward to the Day When I Can Be Excited About a "Cutting-Edge Japan"
"For various reasons, smaller companies sometimes can't allocate personnel for long procurement periods, or conversely, when the procurement period is short, they may not have enough time to prepare the necessary documents for bidding. There are also challenges like cash flow issues when payments are made only after delivery. Moving forward, we at the Digital Agency plan to enhance our support measures, addressing various needs to encourage startups to actively participate in large-scale business procurements."
Looking Forward to the Day When I Can Be Excited About a "Cutting-Edge Japan"
Minister Kono Taro frequently posts about the latest digital gadgets he experiences on his social media accounts, such as X (formerly Twitter) and Instagram. When asked about the current trends in the digital industry that catch his attention, his answer was somewhat surprising.
"I studied abroad in the U.S. in the 1980s. After graduation, I returned to Japan and joined a Japanese company. Many of my classmates, who were from overseas, came to work in Tokyo. The first place they would visit upon arriving in Japan was always Sony Plaza in Ginza, Tokyo. At that time, the portable audio player 'Walkman' was all the rage, and it seemed that visiting Sony to see the latest cool gadgets from this iconic Japanese electronics company was a big thrill for them. Later, things like the i-mode mobile internet service came out, and there was a period when Japan's digital technology shone the brightest in the eyes of people overseas."
"However, nowadays, all we hear about are overseas companies like Apple, Google, and OpenAI, while Japanese companies seem to have lost some of their momentum. I find this very disappointing. Even though I encounter new digital technologies, products, and services daily, I have a strong desire for Japanese companies to create something innovative and exciting—anything that can make us feel that spark again! I want Japanese companies to regain their drive."
As the Minister for Digital Transformation, Minister Kono has been the face of Japan's DX (Digital Transformation) for the past two years, identifying and addressing the many challenges that Japan currently faces. The seeds he has sown in such a short time are now beginning to sprout. We should continue to pay attention to the efforts of the Digital Agency as Japan's DX flourishes and grows into a mighty tree under the bright light of progress.
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