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Japan digital transformation can boost GDP by $735bn: ACCJ

  • February 25, 2021
  • , Nikkei Asia , 3:42 p.m.
  • English Press

WATARU SUZUKI, Nikkei staff writer

 

TOKYO — Japan can add up to 78 trillion yen ($735 billion) to its economy by 2030 through a series of bold moves to accelerate digital transformation, according to a U.S. industry body in Japan.

 

The recommendations were outlined on Thursday in a white paper jointly produced by the American Chamber of Commerce in Japan and McKinsey and Company Japan, and sponsored by Amazon, Apple, Microsoft and Facebook, among others.

 

The suggestions are an indicator of how U.S. companies are eager to bolster their business in Japan, where the administration led by Prime Minister Yoshihide Suga has outlined digital transformation as a key economic agenda.

 

The paper highlighted how Japan is the world’s third-largest economy but ranks only 27th in digital competitiveness, 22nd in digital talent and 17th in startup ecosystems.

 

Among the 11 recommendations were tripling Japan’s digital talent pool, transforming core industries using artificial intelligence and other technologies, investing in digital government, and building next-generation startups.

 

“Systems integrators” like Fujitsu and NTT Data that have built legacy IT systems for companies and governments should modify their business models to remain competitive amid a shift to cloud computing and cloud-based software, the report said.

 

The measures could boost productivity in core sectors of the economy, such as industrial manufacturing, retail, health care and financial services. In total, they can add up to 78 trillion yen to Japan’s gross domestic product until 2030, according to an analysis by McKinsey Global Institute. The figure represents about 15% of Japan’s gross domestic product in 2018.

 

The report succeeds a white paper published in 2009, which outlined areas for U.S.-Japan cooperation in taking advantage of the internet. “Significant advances have been made in some areas” such as safeguarding internet privacy, ACCJ President Jenifer Rogers said in an online event on Thursday. “But frankly, progress has been mixed, and this has slowed the pace of economic growth and technological innovation in Japan.”

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