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Japan’s Digital Transformation Policy and Implications for Korea ICT economy, industrial policy

Author Gyupan Kim Series 22-01 Language Korean Date 2022.05.20

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   This study takes Japan's digital transformation policy as a research topic after the COVID-19 pandemic. The scope of digital transformation is relatively broad, such as digital government, digital transformation of industries, and building of digital industrial infrastructure.
   First, the Japanese government's digitalization in the administrative field, that is, the digital government policy, focuses on regulatory reform in the public domain, standardization of information systems between the government and local governments, and regulatory reform in the private sector.
   There is a general recognition that Japan is lagging behind Korea in terms of digital government, but in the field of private use of public data, Japan has already enacted the ‘Public-Private Data Basic Act’ in 2016 and many local governments have established public-private data utilization promotion plans. In Korea, among the so-called '3 Acts on Digital Transformation' submitted to the National Assembly in June 2021, the ‘Data Basic Act’ can be highly evaluated in that it lays the legal foundation to promote the use of public data by the private sector. However, it seems that the work of building a public information data base like Japan's 'Base Registry' should be accelerated.
   In relation to regulatory reform, the Korean government needs to closely review the Japanese government's permit for telemedicine in the course of responding to the COVID-19 pandemic. The Japanese government's regulatory reform in the medical field is ahead of Korea's as shown in the permission of online sales of over-the-counter drugs in 2014.
   Second, this study analyzed the Japanese government's digital transformation policies and corporate trends in manufacturing, agriculture, and infrastructure and logistics sectors. The Korean government’s ‘Digital New Deal’ policy also emphasizes digital transformation in industrial fields such as smart industrial complexes, smart cities, and smart logistics systems, but in terms of policy directions and technological capabilities to pursue in each area, it is necessary to closely examine the Japanese cases to promote domestic distribution and dissemination.
   In the manufacturing sector, it is necessary to refer to the ‘Common Data Connecting Project’ supported by the Japanese government through pilot projects. At the corporate level, it is worth noting that Japanese manufacturing companies are focusing on industrial digital platforms by attracting related companies that go beyond factory automation to the entire supply chain. Japanese construction companies are also using digital platforms for remote management of construction sites as well as building management.
   Regarding the smart agriculture policy of the Korean government, it is necessary to pay attention to the Japanese government’s ‘Smart Agriculture Demonstration Project’. The Japanese government is implementing various pilot projects in a way that applies the so-called 4th industrial revolution-based technologies such as robot tractors, drones, sensors, cloud services, and AI to local agricultural field by establishing an public-private cooperation system.
   On the other hand, in the field of infrastructure and logistics, the Korean government also needs to actively introduce digital transformation work for urban planning like the Japanese government’s Plateau project. As of November 2021, 56 cities in Japan have developed large-scale 3D city models through the Plateau project, and in the future, use cases involving private companies will be developed in terms of the use of 3D city models to promote smart city development.
   Third, the digital infrastructure field needs to be approached from the perspective of economic cooperation between Korea and Japan. The Japanese government is focusing on supporting technology development in the post 5G mobile networks, but the weak competitiveness of Japanese companies in the field of 5G communication equipment provides room for Korea-Japan cooperation in the future. And, although the Japanese government is making plans to relocate its domestic data centers, there seems to be no way to hedge Japan's geopolitical risks such as earthquakes. From this point of view, the Korean government needs to consider ways to attract Japanese companies' data centers, just as it did immediately after the Great East Japan Earthquake in March 2011. Lastly, the Japanese government is also very active in fostering the domestic cloud service industry. Especially, the Korean government and companies need to be interested in the hybrid cloud system and super-decentralized cloud architecture that the Japanese government has designated as key support areas, and prepare a plan for cooperation with Japanese companies.

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