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  2. Policy Proposals
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  4. Establishing e-Government with the Aim of Realizing Society 5.0

Policy Proposals  Industrial Policy Establishing e-Government with the Aim of Realizing Society 5.0

February 14, 2017
KEIDANREN (Japan Business Federation)
Table of Contents
  1. 1. Introduction
  2. 2. The Progress of Digital Government
  3. 3. Key Factors for Developing New E-Government
    1. (1) Active Use of Individual Number System
    2. (2) Issues to Be Addressed
  4. 4. Targets for Developing E-Government That Will Be Embraced by Citizens
  5. 5. Measures Required for the Development of E-Government (10 Proposals)
    1. (1) Top-Down System Development Aimed at Establishing E-Government Embraced by Citizens
    2. (2) Active Use of Individual Number System
    3. (3) Integrated Reforms by National and Local Governments
    4. (4) Building World Leading E-Government
  6. 6. Conclusion
Appendix: Model Projects
Appendix: Results of 'Survey of Businesses on Streamlining of Regulatory and Government Administrative Procedures' (Preliminary Report)

1. Introduction

As a key measure aimed at reaccelerating the implementation of Abenomics and achieving a GDP of 600 trillion yen, Keidanren (Japan Business Federation) is working on giving shape to and implementing the "10 strategic public-private joint projects" mentioned in the growth strategy laid out in the 2016 Japan Revitalization Strategy. In particular, Keidanren is focusing on actions that will help to embody Society 5.0 (the Super-Smart Society), which will extensively transform the industrial structure and promote new ways of working and living by fully leveraging ICT, leading to enhanced industrial competitiveness.

In Society 5.0, it will be important to create new value and help improve the quality of people's lives and resolve social problems by collecting and analyzing large quantities of diverse data. Given that data is a source of added value, it is essential to move forward with the digitalization of society as a whole. However, in the government sector specifically, progress is not being made with efforts to cut down on costs due to the existence of paper-based procedures, corresponding document storage needs, etc.; this also impacts the private sector, which must align its processes with government requirements. Ultimately, this is impeding productivity improvement for Japan as a whole.

As a result, BPR (business process re-engineering) and digitalization within the government sector are key issues with regard to creating the new Japan, and it is therefore essential that the Individual Number system, which provides a foundation for realizing these transformations, be applied and expanded.

The Individual Number system was launched in January of last year in Japan. In addition, following an extraordinary session of the Diet at the end of the year, the Basic Act on the Advancement of Utilizing Public and Private Sector Data was promulgated and enforced, and Mynaportal (an information provision and record disclosure system) as well as an information provision network system are scheduled to begin operation in July this year. These are making it possible not just to make selected government administrative procedures available online but also to consider drastic revisions to existing systems, workflows, and practices through digitalization at the national and local levels. The conditions for establishing e-government in full swing are therefore being put in place.

Japan's growth strategy also includes the introduction of a new mechanism for regulation and system reform aimed at achieving a productivity revolution. This demonstrates Japan's intention to introduce new regulation and system reform methods that will promote regulation reforms, streamlining of administrative procedures and IT-ification in an integrated manner and work to reduce regulatory and administrative procedure-related costs from a business perspective, with the aim of making Japan "the most business-friendly country in the world." Based on this, the Regulatory Reform Promotion Council launched by the government in September last year has set up an Administrative Procedures Working Group, which is considering measures based on its understanding of the needs of businesses and methods for reducing government administrative costs in other countries; an investment working group has begun considering measures as well, with thorough regulatory reform for the purpose of promoting a digital society being positioned as a key issue.

In light of these circumstances, Keidanren, as a firm advocate of administrative reform, will make proposals below which are aimed at establishing an e-government that will be embraced by citizens.

2. The Progress of Digital Government

Based on previous Keidanren proposals regarding e-government made to date,#1 a government chief information officer (CIO) position was established in 2012 to oversee the medium- to long-term development of e-government, and in the four years since, Japan has reformed government information systems (e.g., reducing and integrating the number of administrative information systems through inventorying, lowering operating costs, promoting the use of cloud technology by national and local governments) and introduced the Individual Number system.#2

On the other hand, while the digitalization of procedures such as applications and notifications has progressed, very few people prefer online procedures in some fields#3, and joint surveys conducted by the Cabinet Office and Keidanren have indicated that the complication of administrative procedures has caused considerable strain. From a business perspective, issues such as cost increases and slowing down the pace of business development have not yet been resolved.

Table: Administrative Procedure Burdens
Relating to Maintaining/Expanding Business Activities
Procedures Considered BurdensomeBurdensome Aspects of Procedures
1) Participating in surveys/statistics collection ... 47.8%
  • Preparing documents for submission is a considerable hassle#4.
  • Difficult to understand how to fill out application form and what information to include.
  • For the same procedure, the application form differs for each organization/department (e.g., for each municipality or local office).
  • Some or all of the procedure has not been digitalized#5.
  • Procedure has been digitalized but is not user-friendly#6.
2) Social insurance-related procedures ... 46.7%
2) Employee tax payment-related tasks#7 ... 46.7%
4) Local tax#8 declaration and payment ... 45.7%
5) National tax#9 declaration and payment ... 44.6%
6) Business permit and approval-related procedures#10 ... 40.5%

Source: Regulatory Reform Promotion Council Administrative Procedure Working Group (December 20, 2016)
Created from "Results of 'Survey of Businesses on Streamlining of Regulatory and Government Administrative Procedures' (Preliminary Report)" submitted by Keidanren
For full list, see the appendix to this report

The purpose of promoting digitalization should not simply be to reduce internal government costs—it must also contribute to enhancing Japan's international competitiveness by aiming to improve the convenience of the lives of citizens and establishing reliable social security systems through increased efficiency and transparency and to revitalize Japan's economy, society, and people's everyday lives by creating new industries and businesses through the industrial use of public data.

Given this, with keeping in mind that active use of the Individual Number system is essential, it is necessary to develop measures for promoting the digitalization of government that will improve convenience and productivity from the perspective of both individual citizens and businesses by reducing the cost of regulatory/administrative procedures, establish an open government approach that will earn the trust of citizens, and focus on fostering collaboration between national and local governments to adapt to the super-aging of society and acceleration of globalization.

When it comes to integrated realization of the digitalization of administrative procedures, the government has identified the following fundamental principles: 1) "digital first,"#11 2) "connected/one-stop services,"#12 and 3) "once only."#13 Going forward, it is necessary to develop a user-oriented business environment#14 and establish e-government that will be embraced by citizens based on these principles.

3. Important Considerations for Developing New E-Government Services

(1) Active Use of Individual Number System

In addition to the introduction of Individual Numbers and Japan Corporate Numbers, which assign a unique identification code to each individual and company that is used across all government organizations, a new system for sharing information between national organizations and local governments is expected to begin operation in July of this year. In light of this, it is essential to focus on making active use of the Individual Number system, which provides a platform for developing e-government.#15

(2) Issues to Be Addressed

The reasons why efforts to date aimed at the digitalization of government may be considered insufficient include the following:

  1. A lack of fundamental BPR, which is a prerequisite for reaping the benefits of digitalization
    (Fundamental BPR = revamping workflows and rules without being constrained by existing processes and precedents)
  2. A lack of overall optimization due to initiatives being carried out independently by various ministries
  3. Insufficient co-operation between national and local governments
  4. A lack of specialized personnel within government to plan, prepare, and implement e-government in a unified manner
  5. Insufficient consideration of usability/accessibility (Ease of use for all citizens)
  6. A lack of experience in regulatory reform based on technological innovation

In recognition of its role as an entity providing services to citizens, the government should strive to further increase its reliability through initiatives aimed at resolving the above issues.

4. Targets for Developing E-Government Services That Will Be Embraced by Citizens

Keidanren has set three targets aligned with the progress of e-government. The initiatives that are required, services to be implemented, and outcomes for each target are summarized below.

(1) 2020 target: Strengthening of data infrastructure#16 by national and local governments

Required initiatives
  1. Promoting data sharing between government organizations
  2. Moving away from processes based on face-to-face interaction/written documents (from paper to digital)
    • Conducting a complete survey of all relevant legislation that requires amendment for the purpose of making further use of ICT that will help simplify the running of government and make it more efficient, based on the Basic Act on the Advancement of Utilizing Public and Private Sector Data. In particular, cross-governmental efforts should be made to identify comprehensively and revise laws that make it mandatory to create and store paper documents.
    • Considering the kanji characters that will be used by the system with a view to limiting their scope in order to facilitate information-sharing between the private sector and government.#17
    • Declaring and implementing system standardization and "cloud first" principles at the national and local government levels.
  3. Comprehensive BPR for procedures at government organizations, etc.
    • Analyzing the present state of various procedures relating to life events such as births, moves, job changes, retirements, and deaths (e.g., necessity of procedure, details of tasks and requirements relating to procedure, overall flow, time and cost involved) with stakeholders, including citizens, companies, and government organizations, and publishing the findings.
    • Proposing future visions and action plans based on the above—e.g., principles for digital procedures,#18 principles for verification by government organizations.#19
  4. Promoting the automation and visualization of administrative procedures and ensuring the transparency of government activities
  5. Enhancing security measures at the national and local levels
  6. Improving the capabilities of government IT personnel (training, recruitment, etc.)
  7. Promoting the use of Individual Number Cards
  8. Relaxing regulations for dealing with Individual Numbers
  9. Enhancing corporate information proving the reality/substantiality of companies
  10. Enhancing government communications relating to the use and spread of the Individual Number system
Services to Be Implemented
  • Streamlining government procedures, making them more efficient, and implementing one-stop services
  • Visualizing the status of processes such as permit and approval applications via a single contact point
  • Enabling updates for various qualifications, etc., to be completed online
  • Actively developing push-based government services
  • Replacing various official certificates with the Individual Number Card
  • Replacing seals, stamps, and signatures with Japanese Public Key Infrastructure (JPKI), digital certificates, and biometric authentication
  • Equipping smartphones with JPKI functions and using them
  • Providing one-stop services for moving, etc.
  • Reducing regulatory and administrative procedure-related costs to users
  • Enabling secure, reliable online transactions
  • Increasing citizens' level of trust in government (balancing information security management with the need to ensure transparency and predictability for citizens)

(2) 2023 target: Improving convenience and added value through sharing of data between public and private sectors

Required initiatives
  1. Expanding data sharing, including the private sector (publication of API#20, connection to Mynaportal, etc.)
  2. Strategic universal design (taking universal design initiatives, by considering accessibility measures, as required with a view to giving Japan an advantage as it enters the era of the super-aging society)
  3. Redesigning government services based on collaboration that transcends boundaries between the national government, local government, and the private sector
Services to Be Implemented
  • Creating new industries/business through development of government service-related applications by the private sector, etc.
  • Providing one-stop services in tandem with the private sector through sharing of private- and public-sector data relating to all major life events (deaths, etc.)#21
  • Improving usability/accessibility through the use of private-sector applications
  • Increasing the number of users by establishing e-government systems that are easy to use for all citizens
  • Alleviating the administrative procedure burden relating to major life events (deaths, etc.)
  • Enhancing competitiveness through improving the productivity of business activities

(3) 2026 target: Developing policies and providing government services based on forecasts and analysis using public data

Required initiatives
  • Comprehensive development and implementation of digital-driven policies through sharing and using public data collected and kept by government organizations, etc.
Services to Be Implemented
  • Developing detailed policies that address the needs of citizens at all levels of society
  • Government services that leverage data-based projections and policies
  • Initiatives and solutions for local issues (municipal government level) based on civic participation (interactive approach)
  • Addressing administrative issues in collaboration with citizens (improving quality and efficiency of administrative tasks based on identification of specific issues at the civic level)
  • Addressing social issues (e.g., increased social security expenses as society ages)

5. Measures Required for the Development of E-Government (10 Proposals)

Keidanren proposes the following measures aimed at establishing the new e-government described above.

(1) Top-Down System Development Aimed at Establishing E-Government Embraced by Citizens

Proposal 1: Top-down promotion based on strong leadership from the Prime Minister (Kantei)

Leading e-government countries have established systems for promoting e-government with cross-governmental authority and responsibilities#22 and set up dedicated organizations reporting to the head of state, which are involved in decision-making in the final stages of liaison between ministries and agencies.

In Japan, under the Strategic Headquarters for the Promotion of an Advanced Information and Telecommunications Network Society (IT Strategic Headquarters), a Ministerial Council on e-Government is held comprised of relevant ministers of state and the government CIO, chaired by the chief cabinet secretary. Since its establishment in June 2014, however, few meetings have been held, and based on the information available in public documents it is difficult to conclude that the Council is working in an agile and strongly committed manner to achieve digitalization and the concomitant integrated reform of operational processes.

Steps should therefore be taken to make the Ministerial Council on e-Government more active and reposition it as a key player possessing leadership and coordination capabilities that can promote cross-governmental co-operation at the national and local levels.

In addition, with a view to pursuing administrative reform through the establishment of e-government, it is important to hold joint meetings with the Administrative Reform Promotion Council and work closely with it when considering measures.

Proposal 2: Enhancing structure for developing and implementing e-government strategy and training/recruiting personnel
2-1. Enhancing structure for developing and implementing strategy

In order to establish e-government, it is vital to develop an implementation structure based on an appropriate strategy. At present, the Deputy Chief Cabinet Secretary for Information Technology Policy (i.e., the government's CIO), the National Strategy Office of Information and Communications Technology, the Ministry of Internal Affairs and Administration's Administrative Management Bureau, and others are working to refine administrative tasks and make them more efficient (e.g., through using the Individual Number system), overseen by the Prime Minister-led Strategic Headquarters for the Advanced Information and Telecommunications Network Society (IT Strategic Headquarters). However, rather than separate initiatives undertaken by various ministries, it is necessary to undertake integrated measures with a view to overall optimization.

For example, system budget-related requests from each ministry and agency should require the approval of the government's CIO, and the CIO should also be given a strong mandate with regard to promoting sharing of data between ministries and agencies

In developing and implementing e-government strategy, it is important to formulate a time schedule that includes local governments, manages progress by clearly defining the key performance indicators (KPIs) and the parties responsible for implementing actions, and pursue continuous improvement aimed at achieving the targets.

2-2. Training and recruiting personnel

In order to design and develop administrative information systems and enable the development and implementation of digital-driven policy based on sophisticated data use/analysis, the training and recruitment of qualified government and IT personnel is also a key issue.

In Japan, due to the nature of the civil service personnel system, it is currently difficult to develop specialists internally who have both practical knowledge and expertise in formulating e-government policy. Moreover, various problems have been identified with regard to recruiting personnel from the private sector, including: 1) the short-term nature of positions, which are based on a term-limited appointment system or part-time employment, 2) the limited authority of the CIO's aides, and 3) the restrictions on new employment after leaving the government (e.g., taking another job at a government supplier or participating in bids for government contracts at a new company).

With the aim of realizing Society 5.0, in addition to improving the civil service personnel system to increase mobility between the public and private sectors, consideration should be given to establishing a dedicated organization under the government's CIO that will bring together diverse highly specialized personnel to handle the planning, development, and implementation of e-government strategy.#23

Proposal 3: Consistent promotion and expansion of the Basic Act on the Advancement of Utilizing Public and Private Sector Data
3-1. Legislating the switch from paper to digital

In order to establish e-government, it is not enough to make procedures available online; it is also necessary to move away from rules requiring face-to-face interaction/written documents and overhaul existing business processes (i.e., BPR).

As one of its fundamental policies, the Basic Act on the Advancement of Utilizing Public and Private Sector Data, which was announced and enacted following an extraordinary session of the Diet last year, includes a provision stipulating the following as a fundamental policy: any "application, notification, notice of a disposition or any other procedure pertaining to an administrative organ, etc.... [will], in principle, [be] conducted by a means using an electronic data processing system" (Article 10). The Basic Act may therefore be viewed as enabling the switch from paper to digital that Keidanren has requested. Going forward, all relevant legislation should be reviewed and amended as required in accordance with the principles of the Basic Act; furthermore, changes concerning specific procedures that are not specified in the law should be stipulated separately by means of governmental and ministerial ordinances and the like. At the same time, the utmost care should be given to ensuring the consistency of policy at the national and local levels, with consideration being given to prohibiting government organizations from independently tightening their regulations through changes to their rules and ordinances, except when there is adequate cause to do so.

In addition, in order to enable one-stop services integrating multiple administrative procedures and push-based services that help make government more transparent, the sharing of information between government organizations (including local governments), digitalization of tasks, and automation of processes should be adopted as principles.

Along with formulation of the Basic Plan for the Advancement of Utilizing Public and Private Sector Data that is mentioned in the Basic Act by national, prefectural, and municipal governments, it is important to visualize the implementation time schedule (including the targets to be achieved), assess progress, and develop an improvement process.

3-2. Making operational reforms and digitalization mandatory based on the Basic Act

Business process reengineering (BPR) requires that the government take consistent measures based on cross-departmental regulations. It will be difficult to reduce the burden felt by citizens through an approach that is based on individual ministries and agencies identifying specific procedures and revising them independently.

In the survey mentioned above that was conducted jointly by the Cabinet Office and Keidanren, many respondents requested digitalization of certain procedures that represent a considerable burden to businesses. In light of this, it is essential that promotion of digitalization and BPR be supported by legislation—e.g., regulations which make it mandatory for government institutions to digitalize administrative procedures (automation of processes from submission of applications through notification of decisions, etc.) whenever possible.#24

Specifically, the following should be legally stipulated in order to effect changes in the principles governing all administrative operations:

  • Digitalization of administrative documents
  • Offering procedures that make it possible to submit applications to government organizations without going there in person
  • Identity verification based on the use of e-signatures
  • Shared use of administrative information (not requiring applicants to provide information that government organizations already have)
  • Enabling push-type provision of G2C and G2B information (shift from request-based to information provision-based government services)
  • Prohibiting redundant investment in digitalization and promoting standardization (enhancing government IT investment management)
  • Carrying out BPR that will leverage the benefits of digitalization (streamlining existing procedures through digitalization)
  • Conducting and publishing administrative evaluations by business unit (not limiting initiatives to specific fiscal years but pursuing continuous improvement)
  • Improving the ICT skills of government personnel (operational reforms that apply ICT based on suggestions from government personnel)

(2) Active Use of Individual Number System

Proposal 4: Revising Individual Number system in order to improve quality of citizens' lives, etc.
4-1. Expanding scope of Individual Number usage

At present, Individual Number usage is restricted to tasks stipulated by law in three fields: tax, social security, and disaster prevention. Moreover, within those fields where it is used, information that may be linked via Individual Number is also restricted, so its effect is limited.#25

When revision of the Individual Number Act, which is scheduled to take place three years after its enactment, is undertaken, in addition to expanding its scope of use#26, efforts should be made to revise the information that is handled in administrative tasks that are already designated as being covered by the system and further streamline and improve the efficiency of operations through back-office co-operation between government organizations.

4-2. Revising regulations for handling specific personal information

When handling specific personal information (i.e., personal information whose details include Individual Number), businesses are obliged to implement strict security measures. The financial costs and psychological burden associated with complying with these measures is considerable. Under such circumstances, it is likely that the use of Individual Number Cards will not become more widespread#27, so with the aim of balancing privacy protection with promotion of Individual Number usage, steps should be taken to ensure that the mandatory safety measures are appropriate but not excessively stringent.

4-3. Expanding the scope of information covered by information-sharing platform

Starting July this year, government organizations will be able to send and receive information required for administrative procedures via an information-provision network system. However, the scope of this information is limited, based on the provisions of the Individual Number Act and municipal ordinances, Personal Information Protection Commission regulations, etc. Consideration should be given to carrying out the system reforms needed to further expand information-sharing between government organizations.

At the same time, consideration should also be given to what kind of information possessed by the government can be shared with the private sector.

4-4. Promoting use of Individual Number Card (including JPKI#28 functions)

It is possible for private-sector businesses to install applications for providing services in unused space on the IC chips embedded in Individual Number Cards. It is necessary to make effective use of this function to increase the number of locations where people may use the cards in their day-to-day life.

The 2015 Japan Revitalization Strategy stipulated that technological development and system design would be undertaken in order to realize an environment that enables the use of Individual Number Cards (JPKI functions) directly from smartphones by 2019. Ongoing consideration should be given to measures aimed at improving convenience for citizens, such as making it possible to carry out secure, reliable online procedures and transactions via smartphones, which people bring with them everywhere they go.#29

With a view to increasing the number of locations where the cards can be used, along with the addition of a health insurance policy verification function expected in 2018, functionality should be expanded so that, for example, it is possible to make ATM bank transfers to government organizations using an Individual Number Card. Furthermore, it is desirable to promote the card as a means of conducting error-free identification procedures at major events (e.g., for admission to venues, ticket purchases, etc., at the Tokyo Olympic and Paralympic Games in 2020).

4-5. Improving the convenience of Mynaportal

Starting July this year, the Mynaportal site will begin operation. With the launch of this site, which will serve as a direct government-to-citizen (G2C) contact point, it is anticipated that new services will be developed.

Provision of a series of services is already being planned, including verification of specific personal information possessed by government organizations, etc. (i.e., viewing information about oneself), verification of specific notices from government organizations, etc., aimed at individuals, online searches and applications for childcare-related services offered by local governments (i.e., one-stop provision of childcare services), and public fund-related settlement services, but in the future, it will be necessary to further develop the site in order to improve its convenience for citizens, such as one-stop provision of name change procedures (after getting married, etc.) and death-related procedures, providing notifications about private-sector services relating to personal safety and security (health, disaster prevention, etc.), linking the site with social media, and collaborating on the latest technologies and services (AI, FinTech, etc.).

Furthermore, it will also be important to expand Mynaportal's functionality. For instance, if handling of benefit payments and deposits could be completed online, it would improve the site's convenience for applicants and save money by reducing the costs associated with verification of the payee's bank account by local governments and automating administrative tasks. It should be made possible for individuals to register their banking information on Mynaportal in advance, thereby eliminating the need for them to enter their bank account number during benefit application procedures.

At the same time, consideration should be given to expanding the scope of the information that can be disclosed on Mynaportal so that individuals may view the usage history of specific personal information via their Individual Number.#30

4-6. Use of Japan Corporate Numbers

In January of this year, the Hojin Information site began operation. This collects information on corporate activities possessed by the government in a single site, where it can be searched, viewed, and obtained by users. However, in order to improve its convenience for users, the government should aim to gather and use more information.

In addition, in order for corporate numbers to serve as a reliable information source about businesses, some means of verifying the reliability/substantiality of corporations should be provided.#31

Accordingly, consideration should be given, for example, to incorporating information indicating whether or not a corporation has filed a tax return or paid taxes on Hojin Information.

(3) Integrated Reforms by National and Local Governments

Proposal 5: Comprehensive BPR at the national and local levels

In order to maximize the effects of digitalization, it is essential to revise administrative processes that are based on face-to-face interaction or written documents and to pursue cross-organizational BPR.

When doing so, the aim should be to reform procedures and standardize tasks at both the national and local levels, and reduction of regulatory and administrative procedure-related costs should be achieved through agile, comprehensive initiatives.

At the local government level in particular, there are various differences between municipalities in terms of application document formats and system operation. This is a factor that increases the regulatory and administrative procedure-related costs for businesses seeking to expand across a broad area.

From the perspective of citizens and businesses, there is a need to review the current situation, which requires different administrative procedures depending on the regulations of each municipality. Accordingly, under the leadership of the national government, efforts should be made to commonalize and standardize at the national and local levels, a standard national system should be developed for tasks common to different municipalities, and consideration should be given to measures such as providing services via cloud technology.

In the future, the aim should be to consolidate and integrate municipal clouds across Japan#32 and promote seamless data-sharing nationwide.

Proposal 6: Further revision and integration of government information systems and enhanced security measures
6-1: Promoting system reforms

It is desirable that the government continue to push forward with additional reforms, based on the outcomes of the system reforms undertaken to date.#33 For example, based on a basic policy promoting a cloud-first approach, clear standards should be developed for using public clouds and private clouds, according to the nature of the stored data.#34

6-2: Enhancing security measures

It is essential to ensure security by preventing leaking of confidential information, improper access, etc. With threats of targeted attacks on government organizations on the rise, the government has been strengthening its structure in order to promote cyber security; for example, it formulated the Policy for General Enhancement of Cybersecurity-Related Human Resources in March last year and has also increased the budget and staff of the National Center of Incident Readiness and Strategy for Cybersecurity (NISC).

Going forward, in addition to training and recruiting personnel to handle security, enhanced efforts should be made to raise the level of security measures as a whole (including local governments), led by the NISC and Ministry of Internal Affairs and Communications.

Furthermore, steps should be taken to increase citizens' confidence in the government's data management—e.g., tougher punishments for conduct such as unauthorized viewing of private information or cyber spying.

Proposal 7: Enhancing support for promotion of digitalization in regions

Local governments are facing tough financial and personnel constraints, and some municipalities are forced to restrict their services to residents (e.g., limited number of personnel assigned to dealing with the public). In regions where aging of the population and depopulation are advancing, going to government offices for the purpose of carrying out procedures is becoming a greater burden for citizens.

In light of these circumstances, digitalization may be expected to have a positive effect, but individual municipal governments developing and upgrading systems independently is inefficient. From the standpoint of supporting the promotion of digitalization by the government, BPR model cases should be established in order to realize seamless service delivery at the national and local levels.

Furthermore, while providing financial support (e.g., subsidies), the government should aim to establish criteria for achieving digitalization and thoroughly implement it in municipalities, while also promoting the development and provision of application software through private- and public-sector collaboration.

(4) Realizing World Leading E-Government

Proposal 8: Providing business opportunities

The U.K. placed first in the United Nations' 2016 World e-Government Rankings, establishing a Government Digital Service (GDS) in 2013 and promoting the digitalization of government services based on a user-oriented design approach. Since 2014, it has operated a public digital service procurement site, Digital Marketplace, which enables open procurement of services from both domestic and international ICT vendors, including SMEs.

Japan too should introduce a framework for enabling the active adoption of the private-sector technology and applications required to promote the digitalization of government at the national and local levels.

Proposal 9: International collaboration initiatives

Since 2014, five leading e-government countries, the U.K., Estonia, New Zealand, Israel, and South Korea, have been holding the Digital 5 summit of the world's leading digital governments (D5 summit).

Last year, the third summit was held, with South Korea acting as the chair. Based on the theme of "Leading Digital Innovation," participants discussed the future of e-government and methods of rectifying the digital gap between nations, and formulated the Busan Declaration, which calls for measures such as sharing of innovative digital government policies and outstanding practices and searching for collaborative approaches to improving digital services and implementing joint projects among member nations.

There are also initiatives involving multiple countries aimed at promoting open government through collaboration between government and civil society, such as the eight-nation Open Government Partnership led by the U.K. (which also includes Brazil, Indonesia, Mexico, Norway, the Philippines, South Africa, and the U.S.) launched in 2011.

Japan too should actively participate in this kind of international collaboration and, drawing on the experiences of other countries, aim to establish more effective, world-class e-government.

Proposal 10: Promoting better understanding of e-government among citizens

In order to establish the Individual Number system as a new form of social infrastructure and develop e-government, understanding among citizens is essential. Moreover, citizens' support and involvement are also needed to develop new data-driven approaches to government. From this standpoint, the government should be actively and continuously engaged in communications activities that facilitate understanding of BPR at the national and local levels based on sophisticated use of ICT and the improvements in convenience, efficiency, safety, and security that citizens will experience in their daily lives thanks to advances in government services.

6. Conclusion

In order to realize the productivity revolution included in Japan's growth strategy, it is vital to transform government by leveraging the use of ICT and to drastically revamp existing systems, workflows, and practices. To implement fundamental BPR of administrative tasks, it is not enough to simply digitalize procedures—it is also essential to work on data-sharing among government organizations and emphasize the exchanging of information between the public and private sectors. Towards realizing Society 5.0, it is expected that the collection and use of high-quality big data are ensured, which propels Japan's economy toward a GDP of 600 trillion yen.

Furthermore, since various laws and regulations need to be amended in order to promote fundamental BPR, it is necessary to design a framework that takes into account all legislation, with a view to fully optimizing state institutions. The integrated promotion of digitalization via the government, the judiciary, and legislation should enhance governance functions for Japan as a whole and contribute to achieving the productivity revolution.

In addition, with the aim of reducing regulatory and administrative procedure-related costs to businesses, it is important to implement regulatory reforms, streamline administrative procedures, and enable integrated promotion of IT-ification. To achieve this, it is necessary to undertake projects to revise specific procedures (i.e., to reduce the administrative burden and improve convenience), which should produce benefits that are readily apparent to businesses.

It is therefore hoped that the launch of the Individual Number system and the announcement and enactment of the Basic Act on the Advancement of Utilizing Public and Private Sector Data will serve as a springboard for achieving a new approach to government in the Society 5.0 era that will be embraced by citizens. The government—under the strong leadership of the Prime Minister (Kantei)—should consider the establishment of e-government as a national project contributing to the creation of a new Japan and pursue sustained cross-governmental efforts at the national and local levels, paying attention to the opinions of citizens, businesses, and private-sector experts.

Appendix: Model Projects

Addressing the matters discussed in the proposals should make it possible to reduce the burden to users for various administrative procedures. Accordingly, Keidanren presents the following model projects as examples of how this can be achieved.

Project 1: Mandating the digitalization of government-business procedures

In May each year, many local governments mail municipal tax notices for employees to companies, which then have to be opened, verified, input into the system, distributed to employees, and stored.

Revisions to the Local Tax Act in 2016 have made it possible for governments to send special collection tax notices electronically (on the private-sector side, if the number of documents such as salary payment reports submitted exceeds a certain amount, it is now mandatory to submit them via electronic means). However, at present, few municipalities plan to send these statements to companies electronically.

In order to handle deductions at source appropriately, companies have to carry out onerous administrative tasks: they receive a huge number of special collection tax notices in various formats and styles mailed from multiple municipalities, which they must then verify and sort visually before re-inputting the information. Furthermore, since government organizations require this process to be completed within a limited number of days, it is extremely burdensome (including the need to assign personnel to carry out the tasks). Even though both paper and digital documents are now recognized as original copies, as long as some municipalities continue mailing documents, companies will have to carry out the tasks inherent in dealing with paper documents, and there will be no alleviation of their administrative burden.

It should therefore be made mandatory for all municipal governments to send special collection tax notices electronically.

Project 2: Streamlining social insurance procedures for companies

The various applications that companies have to make as part of social insurance procedures for their employees require similar procedures to be performed multiple times (e.g., for Hello Work, the Japan Pension Service, medical insurers), and in many cases, supporting documents must be included with the application. This imposes a significant administrative burden on both companies and employees.

As stated in the Individual Number Act, in order to eliminate the need for applicants to submit identical information multiple times, governments should be able to share information possessed by different municipalities (Basic Resident Register, amount of income earned in previous year, tax-related dependent information, amount of income earned by dependents in previous year, family register information, etc.) between them. Specifically, whenever notification about an address, name, marriage, etc., is submitted to the municipality where a citizen resides, it should trigger the provision of that information to social insurance-related organizations via Individual Number system infrastructure, which would reduce the application procedures required of companies. As well, applications to various social insurance-related organizations should be consolidated together in a single location for the purpose of providing one-stop services to companies.

Furthermore, consideration should be given to allowing individuals to directly submit personal declarations such as dependent applications themselves and eliminating the need for multiple subsequent applications, with their registration status being verified as necessary.

Project 3: Implementing a system for providing pre-filled declaration forms

Leading e-government countries are pushing forward with sharing of data between the public and private sectors and adopting the "once only" principle. For example, declaration forms in which necessary items such as deductions for medical expenses, social insurance premiums, and life insurance premiums that have already been filled out are being provided to citizens via a push-based approach, which minimizes the administrative burden for citizens who can then prepare their tax declarations simply by verifying and correcting the included details.

With the launch of the Individual Number system, consideration should be given to revising procedures by, for example, creating a system for providing pre-filled declaration forms that include tax withheld at source and year-end tax adjustments, obtained via the individual's employer (i.e., the withholding agent).

Project 4: Accelerating procedures by providing notices regarding tax payment amount corrections directly to the individual

Dependent exemption correction notices are sent to companies (withholding agents) from the tax office around one year or more after a dependent exemption application is made. The company which receives the notice is obliged to check several years' worth of records and report information within a short period of time. The only information provided in the notice is the individual's name, and since they are issued during the busy year-end adjustment period, the process of identifying individuals and checking records involves a considerable administrative burden.

Therefore, by means of back-office co-operation based on the Individual Number system and information-provision network, information on members of the same household possessed by municipalities should be shared with tax offices, and a system should be developed for providing dependent exemption correction notices directly to the relevant individual on Mynaportal (virtual mailbox).

Based on the above, it will be possible to rapidly and reliably identify the individual to whom the tax correction applies, which will encourage early payment. Furthermore, it will reduce the administrative burden on companies and municipalities.

Project 5: Improving efficiency of procedures such as medical expense assistance through the use of Individual Number system infrastructure

  1. Establishing a system that enables healthcare facilities, insurers, etc., to verify the status of relevant information pertaining to patients, insured persons, dependents, etc., such as intractable disease certification, share of expenses covered by the government, and welfare benefits

    The medical expense assistance programs stipulated by municipal ordinances vary from one municipality to the next in terms of whether they are offered, their name, who is covered, the up-front costs, and so forth. Furthermore, based on the outsourcing of medical expense assistance tasks to health insurance claims review and reimbursement services, there are differences in terms of whether explanations of medical expense statements are provided (amount of up-front costs, assistance information, etc.), and dealing with these differences is a considerable burden in terms of medical-related paperwork (for healthcare facilities and insurers). In addition, from the perspective of healthcare facilities and insurers, the process of obtaining information about patients' and insured persons' eligibility for benefits (intractable disease certification, medical expense assistance, welfare benefits, etc.) is complicated. For insurers specifically, the amount actually paid up front by an insured person or dependent at a healthcare facility is not definite and it is necessary for them to verify information relating to the share of the costs they will cover, which is a significant burden in terms of administrative work.

    Therefore, Individual Number system infrastructure could be used to develop a system that enables healthcare facilities and insurers to verify eligibility information, which should ensure more efficient procedures and accurate medical expense payments.

  2. Streamlining procedures relating to medical expense assistance program and intractable disease certification applications made by patients

    The application procedures for medical expense assistance program and intractable disease certification applications require patients to obtain information during a consultation at a healthcare facility and to make multiple visits to the facility and municipal office in order to obtain the municipal documents required for making an application (certificate of residence, taxation certificate, etc.), obtain a medical certificate issued by a designated healthcare facility, and submit the application to the municipality. Moreover, paperwork is required each year, since the application must be updated annually.

    Accordingly, Individual Number system infrastructure such as Japanese Public Key Infrastructure could be used to develop a system that enables one-stop application from healthcare facilities, which would simplify the application and annual update procedures and reduce the administrative burden on patients.

Project 6: Acquisition of customer relocation information by businesses via J-LIS

In January last year, the JKPI Act (Act on Certification Business of Local Governments in Relation to Electronic Signatures) was amended and it became possible for businesses approved by the Minister of Internal Affairs and Communications to use signature verification.#35 With the customers' prior consent, this enables businesses to verify whether or not their name, address, etc., has changed by checking the validity of their digital certificate via the Japan Agency for Local Authority Information Systems (J-LIS).

However, since it is only possible to verify whether or not a change has occurred, obtaining the new name or address requires the customer to report the information. Consideration should therefore be given to making it possible for businesses to acquire customers' relocation information (assuming they provide advance consent), in order to improve convenience for customers and operational efficiency for businesses.

Project 7: Digitalization of information relating to laws and regulations such as the Waste Disposal Act

As part of its efforts to vigorously promote e-government, the government should push forward with the digitalization of information relating to laws and regulations such as the Waste Disposal Act, with the aim of ensuring compliance with the Act as well as supporting the efficient use of resources. Specifically, it should proceed with publishing and integrating management of waste management-related permit and approval information via digitalization, digitalize procedures for permit and approval applications and various types of reports, manage waste disposal information (including sharing of electronic manifest information), and so forth.

The digitalization of waste disposal-related information will enable the streamlining of procedures for municipalities and waste disposal customers and suppliers. Furthermore, digitalizing and publishing permit and approval information will allow customer businesses to select appropriate waste disposal suppliers, making it easier for them to fulfill their responsibilities. Moreover, by making it easier to implement policies aimed at eliminating improper waste disposal, the Ministry of the Environment and municipal governments should be able to develop healthy recycling-oriented communities.

There are many issues that must be addressed in order to achieve these goals. The Ministry of the Environment should first take the lead by setting up a committee to examine these issues, formulate a vision of how digitalization can help achieve the development of a recycling-oriented society, and then consider policies for resolving issues and promoting digitalization.

Appendix: Results of 'Survey of Businesses on Streamlining of Regulatory and Government Administrative Procedures' (Preliminary Report)

(Submitted by Keidanren to the Regulatory Reform Promotion Council Administrative Procedure Working Group on December 20, 2016)

  1. Procedures Perceived as Burdensome by Respondent Companies
    (When Maintaining/Expanding Business)
  2. Aspects Considered Burdensome (by Procedure)
    (When Maintaining/Expanding Business)

  1. See "Keidanren's View on Establishing a Government CIO" (August 6, 2012) and "Pursuing Economic Revitalization through the Use of ICT" (January 22, 2013).
  2. In the World e-Government Rankings published every two years by the United Nations, Japan surged up to 6th place in 2014 (compared to 18th in 2012 and 11th in 2016). The top-ranked country was South Korea in 2012 and 2014 and the U.K. in 2016.
  3. With regard to fields defined as priority areas for implementation in the "Policy for Improving the Convenience of Online Procedures" (April 2014), the online usage rate in FY2015 was over 60% (66.3%) in the registration field, but in many other fields, such as social insurance (8.7%), employment insurance (11.9%), and labor insurance (3.1%), it is necessary to further promote use.
  4. E.g., internal clerical work (including document collection), payment of external professionals, etc.
  5. E.g., need to submit supporting documents separately (paper documents, CDs, etc.).
  6. E.g., people who submit documents in paper format finish the process more quickly.
  7. Income tax (deductions at source, year-end adjustments), residential tax (special collection).
  8. E.g., business tax, prefectural tax, business office tax.
  9. E.g., corporate tax, income tax, consumption tax.
  10. E.g., change applications, business reports, notifications.
  11. As a rule, individual procedures and services will be consistently completed digitally.
  12. It will be made possible to get complete services at any single contact point (including private-sector services).
  13. Processes will be designed so that when a document has been submitted once, it will not be necessary to submit it a second time.
  14. The Japan Revitalization Strategy states that by 2020, Japan aims to become one of the top three advanced nations (OECD member countries) in the Ease of Doing Business ranking published by the World Bank each year (October 2015 ranking: 24th).
  15. See Keidanren, "Policy Proposal for Promotion of Digital Society Based on the Individual Number System" (November 17, 2015).
  16. It is assumed that data stored by national and local governments will be shared seamlessly via the information provision network system (Data Exchange Layer).
  17. For example, consideration could be given to complying with the Information-Technology Promotion Agency (IPA)'s Character Information Infrastructure and using substitute characters as needed when sharing information.
  18. Here, it is assumed that all key government organization tasks must be digitalized and that all tasks which are able to be handled via digital processes must be digitalized, except where there are specific reasons not to do so.
  19. Here, it is assumed that government organizations are not allowed to request the applicant to verify items which are capable of being verified digitally between government organizations before submitting them, except in cases where there are specific reasons to do so.
  20. API (Application Programming Interface) refers to a set of protocols that define programming procedures which enable application developers to use functions provided by other software and hardware. It makes it possible for individual developers to create applications that use those functions simply by invoking them based on the protocols rather than programming them themselves.
  21. For example, if life insurance companies were to use Individual Number, it may be possible to: 1) omit submission of supporting documents confirming that the policyholder is alive, which is required as part of the payment process for life annuity insurance, 2) implement ongoing follow-up services that depend on having valid address information, 3) provide timely information from insurance companies via Mynaportal, etc.
  22. In South Korea, which placed in the top three in the United Nations' World e-Government Rankings, the Ministry of the Interior, under the guidance of the President, plays a leading role in the promotion of e-government (e.g., coordinating the actions of relevant ministries and local governments).
  23. For example, South Korea's National Information Society Agency (NIA), a dedicated organization employing several hundred specialists with masters or doctoral degrees, is playing a major role in establishing e-government in that country. It advises the Ministry of the Interior (the equivalent of Japan's Ministry of Internal Affairs and Communications) regarding the development of e-government strategy, manages cross-ministerial systems, conducts IT procurement-related technical assessments, provides training for employees of various ministries and agencies, and so forth. Going forward, its aim is to develop sophisticated e-government that incorporates new technology such as the Internet of Things (IoT), cloud computing, big data, and mobile technology.
  24. In addition to the Basic Act on the Advancement of Utilizing Public and Private Sector Data, which stipulates that ICT be used in principle for administrative procedures (Article 10), the Act on the Use of Numbers to Identify a Specific Individual in Administrative Procedures mentions the once-only principle in Article 3. It is necessary to provide legislative support for the establishment of e-government that includes these principles.
  25. The East Asia Business Support Center (EABuS)'s "Urgent Proposal Concerning Individual Number Usage from the Perspective of Welfare Administration" (November 18, 2016) notes that of the 47 items stipulated as necessary in a survey based on Article 29 of the Public Assistance Act, only 17 are able to be referenced/provided based on the provisions of the Individual Number Act.
  26. For example, using Individual Number for property registrations with the aim of addressing the vacant home issue and using it for family register-related tasks, which is expected to be legislated in 2019.
  27. According to Ministry of Internal Affairs and Communications documents, as of November 9, 2016, the number of Individual Number Card application requests received was only 11.82 million and the number of cards issued 9.09 million.
  28. Japanese Public Key Infrastructure = a public personal authentication service.
  29. Estonia, which is recognized as a leading e-government government, has combined official documents such as driver's licenses, national health insurance cards, and passports onto a single ID card which citizens are obliged to acquire; it can also be used for purposes such as online voting, net banking, and retail store loyalty cards.
  30. The East Asia Business Support Center (EABuS)'s "Urgent Proposal Concerning My Number Usage from the Perspective of Welfare Administration" (November 18, 2016) notes, with regard to disclosing information on Mynaportal to an individual about the use of their personal information, that the rules (e.g., what records should be saved and disclosed) only cover the sharing of information between organizations (i.e., information provision) and no rules exist with regard to information shared within the same government organization (i.e., information usage).
  31. In particular, corporate numbers, which are assigned based on a copy of the company's corporate registration, may be viewed on the National Tax Agency's corporate number site, but the only information that may be obtained there is the fact that a corporation has been registered; it is not possible to determine whether or not it is actually engaged in business activities.
  32. As of January 2016, there were 56 municipal cloud groups across Japan.
  33. South Korea is moving forward with government information system reforms, and rather than having separate information systems for each ministry, the information resources of various ministries and agencies nationwide have been consolidated at integrated computer centers in two locations, which are operated and managed in a consistent manner. This has resulted in benefits such as cost savings, increased energy efficiency, and enhanced response to cyberattacks.
  34. At the present time, in Japan, "clouds" signify private clouds (shared government platforms) and there are no standards for using public clouds, which are less expensive and more user-friendly. In order to promote the use of public clouds, reduce administrative costs, and develop agile systems, it is necessary to have standards for separating both private and public use.
  35. I.e., Verifying the validity of digital certificates.

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