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Messages from Keidanren Executives December, 2020 Changing Our Mindset to Build the Future Through Digital Transformation

Jun OHTA Vice Chair, Keidanren
President and Group CEO, Sumitomo Mitsui Financial Group, Inc.

Already one year has passed since the pneumonia patients of unknown case were first found in China. This time last year, no one could have predicted the upcoming Olympic year would end like this.

Looking around the world, I believe that Japan has fought well with the unknown virus–COVID 19. However, it became increasingly evident that there are a ton of issues to be addressed; the most urgent one is the delay in digitalization. At the government, the result aggregation of PCR inspection was time-consuming, and the use of the medical data was insufficient. Moreover, heavy manual labor was deployed to provide the Special Cash Payment. In the private sector, the fact that the emergency introduction and expansion of telework reveals the fact that a lot of analogue workflows have been almost untouched.

Although Japan has been wrestling with the digitalization over long period of time since year 2000 when "IT basic Strategy" was first established, the goal of becoming one of the Information Technology advanced countries is still remote. In 2020, International Institute for Management Development (IMD) announced "Digital Competitiveness Ranking 2020", in which Japan is ranked in 27th out of 63 countries; far behind from the Asian counterparts, e.g. Singapore (2nd), Hong Kong (5th), South Korea (8th) and China (16th).

Singapore has advanced in digitalization since establishing the nation-wide IT program in 1980s. Furthermore, Singapore has launched Smart Nation initiative since 2014. This makes a difference with the conventional digitalization, strategizing to address various issues to leverage upon a combination of data and advanced digital technology. Their approach could be used as a valuable reference for Japan to make progress in realizing "Society 5.0". For example, the Government establishes the cross-ministerial body under the office of the Prime minister to address the regulation flexibly; the value co-creation approach which induces the public to contribute in solution developments.

Prime Minister Suga put the regulatory reform as the very top priority. The traditional regulations/systems/practices will prohibit us from progressing. Taking advantage of this situation, we should set up the cross-ministerial team and rethink the regulations prohibiting DX at zero-base. Furthermore, each and every individual is encouraged to change the mindset.

By freeing from stereotype and break the molds to address DX, catching up would be not a dream. Taking COVID-19 crisis as a chance to leap forward, we now would like to take a giant step to realize the installment of DX and realization of Society 5.0.

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