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Japan’s smart city initiatives will play key role in its digitisation and economic revival

Shinjuku, Japan. Image: Takashi Watanabe / Unsplash

Yuta Hirayama
CEO, Ideapost
Rushi Rama
Project Lead, IoT & Urban Transformation, World Economic Forum, C4IR Japan
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Davos Agenda

This article is part of: Global Technology Governance Summit
  • Japan’s new digital agency and other initiatives are designed to pave the way for the country’s long-overdue digital transformation.
  • The Super City Law aims to improve the collaboration between the public and private sectors for the digital transformation of cities.
  • Japan was an early and enthusiastic supporter of the G20 Global Smart Cities Alliance, whose knowledge-sharing promises to bring convergence on key issues like privacy, interoperability and business models.

This article previously appeared on Forbes.

For a country that has traditionally been attached to paper bureaucracy, Japan is finding COVID-19 is highlighting the importance of digitisation to radically transform and modernise public services, from education to health, in order to adapt to the changed circumstances the pandemic has wrought.

Despite a global reputation for impressive technological progress, Japan’s public sector – and a good portion of its private sector – has been slow to embrace the digital era, even as the country’s citizens become keenly aware of the need for the rollout of extensive digital policies.

That is why it is the Japanese government’s announcement last year of the creation of a new digital agency to pave the way for the country’s digital transformation was greeted with such enthusiasm and high expectations. New digital initiatives are being organized around a vision known as Society 5.0, which will aim to integrate the possibilities of digital technologies with human needs. It is a vision that aligns neatly with the promise of smart cities, which hold out the promise of an unprecedented window of opportunity to improve the lives of millions of urban residents while kickstarting economic growth.

It is no surprise, then, that smart city strategies are finally taking off across Japan.

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The innovators’ dilemma

It wasn’t always thus. Japan might be the most urbanised country in the G20, with its cities inspiring visions of our urban future for decades, yet its status as the world’s third largest economy is often not matched by its cities’ digital competitiveness. In a recent ranking by the influential IMD World Competitiveness Center, Japan ranks just 27th in the world in digital competitiveness.

In some respects, Japan has been caught by the innovator’s dilemma. Apps that tell you how far away the bus is, are not as useful when the bus always arrives on time, every day. Paper forms are not as bad when error rates are low. Paradoxically, Japan’s ability to run its legacy analogue systems efficiently – using personal ink stamps (hanko) and even fax machines – may have left it behind the curve when it comes to the kind of digital transformation that other countries pioneered in order to deal with social challenges.

But this is set to change with the government’s digital agency and other initiatives, which the new Digital Transformation Minister, Takuya Hirai, has promised will have the authority to make meaningful change to enable the government to mirror the private sector’s perpetual digital transformation.

Change from top down and ground up

In May 2020, the Super City Law was enacted in Japan. This new law aims to improve the collaboration between the public and private sectors for the digital transformation of cities. Cities selected as Super Cities will deploy AI and big data in medical care, education, energy, crime prevention and transportation, including the development and use of autonomous vehicles.

The Super City authorities will appoint ‘smart city architects’ with powers to coordinate services and technology in their regions. This should address two longstanding problems: getting siloed agencies to cooperate and ensuring that systems are interoperable across different jurisdictions.

While the national government is setting the tone, cities are also themselves driving change. Fukuoka, for instance, is doing away with the traditional hanko stamp required on official Japanese documents, so that forms can go digital. Kakogawa City is introducing Decidim, a platform for participatory democracy that originated in Europe. Many of these changes are being driven by a younger generation of municipal and public sector leaders who are committed to overcoming institutional resilience to radically overhaul public services through innovation and embracing new technologies.

In post-pandemic Japan, economic recovery will be a priority and such digital initiatives are seen as a way to encourage long-term sustainable growth, while meeting the needs of its citizens. Examples include:

  • In Hiroshima Prefecture, a data exchange platform has been implemented under a government initiative, whereby data from more than 10 private companies are linked and analysed for regional optimisation.
  • Some member cities of the G20 Global Smart Cities Alliance, such as Hamamatsu, Kaga and Kakogawa, have begun implementing local 5G and regional broadband wireless access via cable, with investment in such infrastructure accelerating.
  • Tsukuba City is accelerating online medical services in collaboration with various startups.
  • In Maebashi City, 155 private companies have applied to join the Super City project’s public offering, indicating big interest by the private sector in smart city projects.

Challenges ahead

In spite of these efforts, Japan’s cities still face enormous challenges to become “smarter”. In the past, our cities have competed for investment and recognition; working in isolation, they have struggled to formulate long-term strategies, adopt sensible technology policies and negotiate with global technology vendors. Coupled with unwieldy procurement processes, fragmented systems and dependency on legacy systems, the result in too many cases has been failure. These barriers, felt by cities all over the world, still hold back Japan’s ambitious cities from the kind of transformation envisaged by Society 5.0.


What is the World Economic Forum doing to ensure smart cities?

With its multi-stakeholder approach, the World Economic Forum is striving to provide a solution. The Forum’s Centre for the Fourth Industrial Revolution brings together global expertise in the G20 Global Smart Cities Alliance, to crystallize and share global norms that cities, both large and small, can learn from. Japan was an early and enthusiastic supporter of the Alliance, which was announced at the G20 Summit in Osaka in 2019.

This kind of knowledge-sharing promises to bring convergence on key issues like privacy, interoperability and business models. That convergence towards global norms is especially important for Japan. The largest markets like the United States and China can set their own standards, and the market will follow. The same cannot be said of other economies, including Japan. Failure to follow global norms could leave Japan stranded in closed-product ecosystems.

Now the Forum is seeking to bring together Japan’s smart city communities to plot a more open, global future together, asking questions such as: How can we implement digital services that empower people in a global open market rather than aiming for individual optimisation? How will we promote the creation of the global rules needed to achieve this?

We welcome the opportunity that having the Global Technology Governance Summit opportunity in Japan will afford to deepen the discussion on this issue.

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