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In 2020, a thriving education system, strong industrial foundation, and top-notch infrastructure saw the Japanese economy rank third in the world, outperforming the IMF’s projection. Despite pandemic-related challenges, Japan is still positioned to achieve stronger growth in 2022 and beyond. A key element in Japan’s remarkable growth is its booming hardware industry, which has also boosted productivity across major economies worldwide. Today, it is paramount importance for Japan to identify and implement the right technology tools and remain competitive at the global stage.


Technological gaps in Japan’s pursuit of prosperity and their solutions

While the country’s economic performance is exemplary, its digital sector needs to be modernized. Today, Japan ranks 27th in terms of digital competitiveness and 22nd in terms of digital talent. There are a few self-imposed obstacles in Japan’s digitization journey that emerge as prominent factors.

A great solution in this regard can be large-scale deployment of technology-powered digital infrastructure. Technology has proven to be an ally in the pursuit of economic growth throughout the world. Likewise, Japan can benefit from technology’s role as a growth engine. Mobile and cloud technologies combined with modern security software, for example, can provide secure, reliable access to business applications anywhere, anytime. Integrating automation can expedite processes and reduce errors. Additionally, it can create a better workplace environment by shifting workers’ attention from mundane tasks to higher-value actions that machines can’t do.

Artificial intelligence can analyze data sets to pinpoint problems such as fraudulent behavior and provide insights to identify new opportunities that can increase revenue. Introducing such promising technologies can really bring a much-needed boost to Japan’s economy. By the end of the decade, this could also provide Japan with the opportunity to further digitize its industries. The bottom line of such a shift is quite obvious- unprecedented acceleration in Japan’s current growth rates and productivity.

Strategic imperatives for improving Japan’s digital competitiveness

With the industries and economies across the globe trying to constantly expedite their digital transformation journey, the slow and steady can no longer win the race. Therefore, to eliminate its current productivity gap, Japan must make dedicated efforts to modernize and embrace the previously mentioned new technologies that incorporate digital innovation across every aspect of organizational, industrial, and economic evolution. And four themes, in particular, underpin these endeavors:

Digital talent: Growing the digital talent pool, with a focus on software developers and data management experts, is one of the most crucial steps. But successfully achieving this will require an understanding that software expertise has the same value as traditionally prized hardware or other non-software engineering areas. In conjunction with these changes, the workforce will need to be upskilled with the increased digitization of the education sector.

Industry transformation: Rapid digital growth is imperative in the four industries that account for nearly half of Japan’s GDP: industrial and automotive manufacturing, wholesale and retail, healthcare, and financial services. Each of these sectors has the potential to scale up, reduce costs and increase revenues by leveraging new-gen digital tech such as cloud-based applications, machine learning, the internet of things (IoT), and 5G. In fact, by 2030, Japan is expected to see the rise of AI-powered industrial sectors, value-based digital healthcare for senior citizens, integrated retail e-business, and mobile banking capabilities supported by frictionless global payment systems.

Digital government: Dedicated efforts from the government that foster connectivity, ensure cybersecurity, and enable cloud resources to support innovation integration will play a decisive role in Japan’s productivity recovery. It is also essential that the government sets an example by developing digital applications to offer services to citizens and businesses to eliminate physical visits, paperwork, and other outdated processes.

Economic renewal: While Japan is home to half of all companies that find their roots a century back,  the country must also focus on its start-up ecosystem which is perfectly positioned to revive the dwindling profitability. This can be done by introducing reforms to encourage entrepreneurs, attract talent, and support start-ups to foster growth. Systems integrators play an important role in economic revival as well since they account for the majority of Japanese technology-related talent.

For Japan’s digital transformation to succeed, technology and talent need to be brought back into key business operations, and systems integrators need to find new business models for helping clients make the transition. Like all other digital transformation implementations, leadership that is strong in execution and broad in its ability to adapt is required to combat this. Japan’s digital transformation can be the most inspirational one of the decade. With its intelligent citizens and high-quality assets, Japan has the right endowment. All that now remains is to adopt technology.


About the Author:

Yash Bhatnagar, VP & Business Head – Japan & Far East, Motherson Technology Services

With more than 22 years of IT experience in various leadership roles across the globe in multi-cultured environments in managing Global IT Sales, Delivery Management, Client Relationship Management, GIC (Global In-house centres) Advisory and Sales, Establishing a business in new geographies, Large deals Program Management and Solution Designing, HR (Talent Acquisition and workforce operations), Transition and Bid Management.

In his previous stint, Yash worked as the head of Sales and Associate Vice President at HCL Technologies based out of Tokyo. Yash has been instrumental in revenue expansion and increasing the footprint of HCL’s IT business in Japan, Establishing HCL’s GIC (Global In-house Centers) business involving advising customers to establish their GIC’s offshore and developing business of existing GIC’s in India.

Yash also functioned as the Delivery Head of HCL Japan and managed the IT deliveries, creating a local partner ecosystem for effective resource mobilization, leveraging Global deliveries at various offshore locations, Managing the account and key client relationships, establishing and running nearshore development centres in Japan.

Yash Is JLPT level-2 certified and is fluent in reading and writing Japanese language as well.


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