Later this month, the government will set up a new framework to back up cooperation between midsize companies in rural areas and foreign start-ups, mainly from Asia, aiming to promote private-sector digital operations. The framework is designed to encourage Japanese companies to reform their businesses through the joint development of goods and services related to digital transformation with foreign partners.
The government plans to provide intensive support in five fields, including decarbonisation, a key policy of the administration of Prime Minister, and health care, the importance of which has been growing amid the novel coronavirus pandemic. The other three are next-generation mobility; retail business, for which digitalization is progressing amid the pandemic, and agritech, which combines agriculture and digital technology.
Moves for digital transformation have been accelerating in Asia. Under the new framework, the industry ministry will take the lead in matching midsize Japanese firms with foreign start-ups that have unique services and technologies mainly by setting up business meetings and conducting market research based on advice from experts.
On top of the joint development of products and services, the ministry will help Japanese firms invest in and acquire overseas companies through the framework. The initiative is expected to mainly target companies from Singapore, India, Indonesia, Vietnam, Australia and Israel as possible partners for Japanese companies.
The government aims to achieve net-zero emissions of greenhouse gases by 2050, as well as spread offshore wind power generation by helping improve technologies related to large windmills. Tokyo wants the new framework to promote digital transformation at Japanese makers of related parts and materials, and their overseas operations.
Japan ranked 27th in the 2020 digital competitiveness survey conducted by Switzerland’s International Institute for Management Development, far behind Singapore, Hong Kong and South Korea, which came in second, fifth and eighth, respectively. It was noted that if Japanese companies tie-up with foreign firms with excellent data analysis skills, a momentum to reform will spread in Japan.
According to another article, Japan’s economy will likely recover to levels before the coronavirus pandemic as early as March next year, according to the Governor of the Bank of Japan who offered an upbeat view on its recovery prospect despite headwinds from COVID-19.
He noted that a combination of expansionary fiscal and monetary policies have successfully stabilised Japan’s economy, signalling that the BOJ has offered sufficient stimulus, for now, to cushion the economic blow from the health crisis.
The key challenge for policymakers would be to prevent the pandemic from leaving a lasting scar on the economy, and to provide impetus to growth such as by promoting digitalisation and a “green” economy, the Governor said. “Greening the economy…was important before the pandemic. But now it’s more important. It would make our economy more sustainable. At the same time, it would provide some growth impetus.”
Recently, major tech companies and firms urged the Japanese government to make its 2030 renewable energy target twice as ambitious. The Prime Minister, last year, set a 2050 deadline for Japan to become carbon-neutral, but the country’s shorter-term renewables goal has long been seen as lagging.
Japan currently aims to source between 22 and 24 percent of its power from solar, wind and other renewables by 2030, a target set three years ago and soon to be reassessed as the government revises its energy strategy. A group of 92 corporations known as the Japan Climate Initiative on Monday urged ministers to double this goal to 40-50 percent. Many of Japan’s biggest firms as well as household names in insurance, electricity and food and drink, signed the petition.
