Japan once led global technological innovation. How did you fall so far?

When I first moved to Japan in the late 1990s, Japan’s technological achievements were the envy. In 2001, at a book launch party in New York, I recorded a video of fellow revelers on my Japanese mobile phone. The model just launched: a square-shaped shell in glossy maroon plastic, with a gorgeous color display and emoji-like graphics. I immediately emailed the video to my publisher friends in Tokyo, which at the time was home to the world’s second-fastest internet speeds. They responded a few minutes later, giving off victory signals. My New York friends sneered as if we had just seen a new moon landing.

But after almost exactly twenty years, vast swathes of Japan’s digital universe are stuck in the very beginnings of the early days. Online banking, airline bookings, major newspapers, you name it: Services that have been simplified by the digital revolution in much of the world, in Japan, still suffer from complex drop-down menus that lead to dead ends, and detailed forms to print. Fill it out with a pen and even return it by fax. In a country that justifiably prides itself on excellent customer service, something happens when it comes to conveying information through a user interface displayed on a flat screen.

Japan’s high-quality public infrastructure has long hidden its sclerotic digital systems. The contrast between the country’s sterile digital facades and its unparalleled engineering prowess—the trains leaving every minute, the escalators and elevators that rarely break down, the heated toilets that mask your voices, clean your lower parts and sometimes talk and even sing to you. Why the separation?

Forty years ago, the Asian scholar Chalmers Johnson coined the term “developmental state” to describe the practical role of the Japanese government in the postwar economic growth spurt. The so-called “Iron Triangle” linked the Liberal Democratic Party – still in power today – with big business and the bureaucracy, creating a well-designed infrastructure and public jobs for massive economic success. In Western media, the phrase has sometimes been called “Company Japan,” a pejorative term referring to a public-private partnership rooted more in government-led collusion and coercion than competition. But it has also given birth to systems like the Tokyo Metro and its accompanying FeliCa-pass technology, made by technology giant Sony and integrated throughout the transportation network.

The state-supported innovation was very effective because it reduced uncertainty. But when a new breed of software entrepreneurs began to drive innovation elsewhere in the world, Japan’s private sector found it hard to follow. The iron triangle was petrified, locked into something like a firm jiu-jitsu fist. If a player moves their elbow an inch in one direction, they are all at risk of tripping; If a company representative tries something new and moves his elbow, the politician may break. In general, it was better to stay in one place: even if the match was boring and no one was making progress, at least you were in a position.

By all accounts today, digital Japan’s performance is dismal. Among the OECD countries, Japan is now ranked 27th in digital competitiveness and 22nd in digital talent by the International Institute for Management Development – embarrassingly low for the world’s third largest economy. A recent McKinsey & Company study revealed that two decades after the government launched its first digital initiative, “e-government,” only 7.5% of its actions can be completed online. Information technology and software engineering degrees are less popular than those in economics or management, and pools of developer talent are recruited from abroad.

In 2022, these numbers will have serious repercussions. Initial vaccine rollout in Japan last spring slowed in part due to ineffective analog systems, poor communication between governments and clinics, and a mail-based paper-voucher campaign. When Covid-19 hit two years ago, most Japanese companies had no contingency plans to work remotely, and few had experience with platforms like Zoom.

Yes, you have to work from home, some have said, but you have to come to the office to get your personal seal stamped (pitchfork) to prove that you worked. It was Covid-19-Meet-Kafka: Some employees are traveling by train, risking infection just to seal their seals and go home. Last summer’s Tokyo Games saw international athletes and media dominate Twitter over packets of Japanese-language documents they were asked to sign and a host of apps to download – many of which were buggy and dysfunctional. (A year later, progress has occurred: the recently launched Express Entry app has caught several pleasant surprises.)

In what seemed like a shocking move, the Japanese government launched its first “digital agency” in September 2021, shortly after the Tokyo Games ended and before national elections. But a few advertisements followed, and the agency’s current English-language website looks more like a hastily written government memo, pinned to the Internet. The lack of cohesion on various levels also led to a lack of momentum. As of December 2021, the world’s third-largest economy has produced six tech unicorns—although there are various incubator programs, including the ambitious government-backed J-Startup. Total venture capital funding last year, at about $9 billion in number, remained a small portion of the amount invested in the U.S.

The barrier to change, at least for me, is that the discomfort passes. The founder of a startup can rightly be frustrated by the still-nascent ecosystem. But as an ordinary consumer, there are solutions; Using Amazon on a visually challenging Rakuten, or build the habit of paying in-store bills over automated direct debit. And even when you travel to a shinkansen A station with digital PASMO – a prepaid transfer card – and prevents you from using the ticket machine, forcing you to park in populated kiosks, still sliding down the escalator, as the express train speeds you to your destination, on time per minute.

When the product finally works infallible, the old ways of communicating and consuming are kind of weird: comforting signs that one of the world’s most aging nations, home to most of the world’s oldest companies, is behaving with its own personalities.

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