The Hunt for DX Champions

Japan faces an uphill climb when it comes to digital transformation.

---

Presented in partnership with Robert Half

---

From left: Marcus Aakerholm and Lyndsey Hughes (Photo: Shelley Mae Photography)

---

Despite being a nation renowned for assimilating advanced machinery and technology into everyday life, the reality of Japan’s IT workforce paints a very different picture.

According to a survey of companies conducted by the Ministry of Internal Affairs and Communication, Japan’s information and communication technology (ICT) sector is falling short when it comes to digital transformation (DX). This is largely due to a lack of qualified technology talent. In 2018, there was a shortage of about 220,000 ICT workers, and the shortfall is expected to reach 450,000 by 2030.

At the same time, Japan’s economic landscape is experiencing a generational shift, influenced by new government policies and changing regulations designed to elevate the country to the global DX standard.

Slow Road to DX

Robert Half Japan supports clients undergoing digital transformation and is seeing promising progress.

“In many Japan-headquartered global companies, the pace of change has tended to be slow and incremental,” said Managing Director Lyndsey Hughes. “But this has started to shift over the past few years and momentum is building.”

“Even prior to Covid-19, we had started to see signs of large Japanese corporations incorporating their DX agenda into their corporate vision and hiring ‘disruptive’ senior executives from outside the organization—even from outside Japan—to expedite transformation,” he said. “It seems now there really is an appetite and a glimmer of commitment from corporate Japan to transform their global businesses.”

The 2022 IMD World Digital Competitiveness Ranking ranks Japan 29th out of 64 countries examined in terms of know-how, development of digital technologies, and preparedness to exploit digital transformation. Asian countries finishing ahead of Japan include South Korea (8th), Taiwan (11th), and China (17th).

Hughes noted that many companies have been stalling in their DX initiatives, often because they lack real commitment from the top, face resistance from middle management, or are short of know-how on how to manage global functions. They may also struggle to attract, and appropriately compensate, ‘new’ skill sets to implement the change.

DX touches every area of an organization, he explained, and while every company faces its own unique set of challenges, there are consistent themes that Robert Half is hearing from its customers. These include overhauls to human resources policies to adopt pay-for-performance compensation to attract specialized talent.

Robert Half is seeing companies start to take diversity, equity, and inclusion initiatives seriously, and many are ready to pay higher agency fees to prioritize the scouting of female talent as well as hiring, and even importing, more foreign talent. And while there is still a long way to go to embrace all types of diversity, at least the conversations have started, Hughes said.

In addition, large Japanese companies are beginning to move away from in-market IT to globally distributed IT functions that allow them to benefit from scale, respond more quickly to market changes, and mitigate cybersecurity risks.

There has also been a surge in the hiring of chief data officers to centralize data and analytics expertise, as well as breaking down data silos and harnessing the power of data across an organization.

Too many companies are entering uncharted DX territory, Hughes pointed out, and often lack the skills and expertise to deliver on such projects. This is where Robert Half and its business consultancy subsidiary, Protiviti, come in.

Helping Hand

“At Robert Half Japan, we have a strong focus on placing bilingual technology talent with foreign affiliates in Japan to bridge with their HQ, or to global Japanese firms looking to bridge their overseas subsidiaries,” explained Marcus Aakerholm, division director of business transformation. “As an enterprise, we have a unique capability to support DX initiatives in different ways, whether by placing permanent employees across various functions, specialist contractors to jump into different projects, or through Protiviti.

“In many cases, we offer a tailored and blended solution of outsourced consulting assignments combined with project contractors and permanent resources,” he added. “This allows us to respond flexibly to the fluid and diverse needs of our customers, across their global operations.”

Aakerholm has witnessed firsthand the unique market conditions affecting DX in Japan.

“A typical scenario for our team is assisting foreign-affiliated organizations that need to undergo a corporate-wide system update,” he said. “In these cases, the US office will send an internal team to implement the changes but, due to the unique market requirements here, their efforts are rarely implemented or understood by domestic teams. Our bilingual project managers and functional experts bridge that gap.”

Robert Half supports many Japan-headquartered clients that require bilingual talent with subject matter or technology expertise to interact with overseas subsidiaries.

In one example, Aakerholm’s team helped a global media company by bringing in a specialist consultant with the required language abilities, project management skills, and knowledge of system implementation to complete the introduction of finance modules of the Workday system.

Look Within

“When a company needs to evolve, it’s not just about bringing in new people,” said Hughes. “Organizations also need to create a culture of internal evolution so they can continue to adapt to changes in the market, customer needs, and so on.

“Generally, organizations think in functional silos, and those silos are often lacking a specific skill set,” he said. “But those skill sets may exist elsewhere in the organization. There are all sorts of capabilities floating around in every company, perhaps in a different function or a different market, so there isn’t necessarily a need to rush out and hire quickly.”

Smart leaders are adept at unearthing the hidden potential in an organization, he added, and creating an environment of empowerment to enable the enablers.

One Robert Half client innovated by introducing a “chief future officer” role and invited a relatively new hire to join the company’s transformation steering committee, alongside senior leaders from across the business, to bring a fresh perspective and add a new voice.

“People new to the organization often have the clearest minds to and come up with innovative solutions,” Hughes said. “Younger generations want their voices to be heard, to feel they are contributing, so tapping into their passion and capabilities is very important and can be a key catalyst for successful DX.

“Often, a manager thinks the candidate they need is a reflection of who they are and their own skills,” he said. “But they need to identify where they and their organization are coming up short and then find the person to fill that gap.”

The deficiency might be a hard skill set, such as expertise in a new technology stack or building global enterprise architecture standards, but it might also be the ability to champion new ways of doing things, exposure to different industries, or diversity in hiring to bring in better creative problem-solvers.

“I believe leaders need to be deliberate in understanding the current skill, personality, and knowledge gaps,” Hughes said. “And then ask themselves what their team members can do to help drive the transformation, what unique talents can they bring to the table.”

---

Register now to learn, connect, and get inspired by Robert Half Japan networking events: roberthalf.jp

---

Healthy Makeover

How are digital transformation tools changing healthcare in Japan?

---

ChatGPT, that large language model that is stealing the headlines these days, may be all the buzz, but it’s just one example of how technology is rapidly changing the way we work and do business. And while the artificial intelligence (AI) bot may represent a leap forward, the deployment of digital technology across an organization’s operations has been on the rise in all industries since the advent of the World Wide Web in 1989.

Today, we call it digital transformation (DX), and it is bringing computation, Big Data, AI, other digital applications, as well as connected devices, to bear on how products and services are made and/or delivered, in industries as diverse as education, finance, and logistics.

Healthcare could also greatly benefit from these incredible advances, and the industry is undergoing its own DX revolution—including in Japan. Here, healthcare DX is gaining traction in part due to the advocacy efforts of the American Chamber of Commerce in Japan (ACCJ).

However, speaking to The ACCJ Journal, industry insiders—including members of the chamber’s Healthcare Committee—note that adoption of healthcare DX in Japan lags that of other countries, especially those in North America and Europe.

“I think the current situation is that [Japan is far behind] compared with countries such as Denmark or the United States,” said Makoto Kawai, director of government affairs at Zimmer Biomet G.K., a global medical technology company. Kawai is also co-chair of the ACCJ Healthcare Committee.

Maya Mamiya and Diogo Rau share similar sentiments. Mamiya is an associate director of global public policy for Asia at Eli Lilly Japan K.K. and a Healthcare Committee vice-chair, while Rau serves as Eli Lilly’s chief information and digital officer.

Also sympathetic to Kawai’s view are healthcare industry expert and committee Vice-Chair Eiji Sasahara, and Go Ikeda, a senior manager in the Healthcare Economics and Government Affairs Division of medical devices maker Medtronic Japan Co., Ltd.

Data Utilization

Dr. Sasahara noted that healthcare DX in Japan—especially optimal utilization of Big Data—is still low. Why? It is in large part because “operations heavily depend on manual and paper-based processes,” he explained. “It’s not easy to utilize [the] merits of digital technologies, such as accessibility, scaling, and automation.”

However, optimizing Big Data use in healthcare is important for a variety of reasons. One area where its effective deployment is critical is in determining the health outcomes of patients, the experts pointed out.

Rau identified even more areas where optimal use of DX tools can make a difference. In the case of Eli Lilly, Big Data, AI, and machine learning can be used to:

• Develop digital connectivity for clinical trials and therapeutics
• Deploy solutions to manage patient-specific digital information
• Speed up the discovery of new life-changing medicines
• Design and implement clinical trials
• Increase accessibility to and diversity of medicines
• Obtain more accurate efficacy/safety data
• Improve patient experience
• Improve the safety and effectiveness of medicines
• Manage and interpret patient data from connected therapeutic devices

Medtronic’s Ikeda agrees. “In order to link personal health records [(PHRs)] and medical information, it is necessary to build a platform and take measures to shift data ownership and management to individuals,” he explained.

“By connecting and sharing data such as PHRs and medical information, the value of medical care will be improved, allowing for early diagnosis and prevention of disease progression.”

“By connecting and sharing data such as PHRs and medical information, the value of medical care will be improved, allowing for early diagnosis and prevention of disease progression.”

To provide better healthcare while maintaining universal access, the current fee-for-service health insurance system should be shifted to value-based healthcare (VBHC), Ikeda suggested. “DX of healthcare is an important precondition for VBHC.”

Sasahara refers to this new paradigm as “citizen-centered care”—a form of healthcare that not only makes use of digital tools such as Big Data, but also puts patient outcomes at the core of the industry.

Healthy Prices

The upside of deploying healthcare DX can be enjoyed not only by patients and the private sector, but the public sector, too, the experts noted.

Government ministries and agencies—as well as the hospitals and other healthcare institutions and research and development (R&D) centers they fund—will be able to reduce costs through the effective deployment of DX strategies.

Ikeda noted: “DX will promote R&D and enable outcome-based reimbursement evaluation, supporting a reduction of medical and nursing care costs. It can also support the healthcare workforce shortage [to] benefit patients overall.”

Data Security

Improving data security is another benefit the DX revolution will confer on the healthcare industry, according to the experts. This is especially the case when securing the privacy of patient records, an area of concern many of them highlighted.

Healthcare DX, they said, should adhere to international standards of security. These standards are based on interoperability of systems and use of platforms such as cloud computing. In Japan, however, patient data is usually stored on premises and in stand-alone systems, which are not necessarily secure.

“With regard to data storage, the current mainstream on-premises, stand-alone system has increased security risks, and it should be considered that an open mechanism using the public cloud paradoxically improves security,” explained Ikeda.

Lilly’s Rau added: “Some of the key concerns include ensuring the confidentiality of this data when tied to a patient and the integrity of the data when billing and making care decisions.”

Sasahara agrees. He also noted that, in Japan, there is a lack of in-house security expertise. “It is usual that there is no [chief information security officer] at Japanese hospitals.” Kawai held a similar view.

However, this opens up an opportunity not only to acquire the necessary human resources but also to “develop and utilize emerging privacy-enhancing technologies,” Sasahara and Kawai agreed.

Securely digitizing patient records will be key to realizing the potential of healthcare DX.

---

Prevent and Cure

The reach of healthcare is broad. It includes the prevention, diagnosis, and treatment of diseases, injuries, and ailments, and encompasses a wide area of professions and fields—from doctors to nurses to medical researchers—as well as facilities such as hospitals, clinics, and research institutions.

In the healthcare technology space, a few themes are emerging at the forefront. For Ikeda, three areas of particular note are:

• Grand design
• Value assessment
• Private–public partnership (PPP)

Regarding the path to implementation, Ikeda shared: “We believe that it is necessary to first illustrate a grand design for the overall picture of what the platform should be in order to realize medical DX, and then the process for building that overall picture should be presented.” It is the remit of the government, working with stakeholders across society, to provide that grand design or vision, he added.

“DX will promote R&D and enable outcome-based reimbursement evaluation, supporting a reduction of medical and nursing care costs. It can also support the healthcare workforce shortage [to] benefit patients overall.”

As for value assessment of digital health technology, Ikeda noted that this is difficult to properly assess under existing medical service reimbursement systems.

“To reduce the burden on medical professionals, as a new evaluation perspective unique to digital health technology [emerges], to equalize and improve the efficiency of technology, and to evaluate products that match the speed of product development and improvement, it is necessary to build a new evaluation system by referring to overseas cases and the utilization of non-insurance combined medical care systems,” he explained. Here, stakeholders in Japan and abroad can learn from each other.

And what of private–public partnerships? To enhance PPP, Ikeda added, it is also necessary to set up new forums for information sharing and discussion among the public and cross-cutting private sectors. “I am expecting that the ACCJ could be the hub of PPP.”

Sasahara mentioned three more trends to keep an eye on as paradigms change in the healthcare industry:

• Citizen engagement
• A shift from reactive treatment to data-driven prevention
• Utilization of gamification tech for patient care

The ACCJ Healthcare x Digital program focused on empowering elderly patients through digital health in 2022.

---

Advocating for Change

To keep abreast of fast-changing developments in the industry, the ACCJ Healthcare Committee was invited in March to an event hosted by the American Medical Devices and Diagnostics Manufacturers’ Association (AMDD).

Led by Ikeda, who is chair of the AMDD’s Digital Health Committee, the event featured Dr. Kengo Miyo of the National Center for Global Health and Medicine, a hospital and international medical research and healthcare training facility located across Tokyo. Miyo is the director of the institute’s Department of Planning Information and Management.

Ikeda explained that the event was organized to realize medical DX in a situation where the environment is changing, and technology is progressing rapidly. “Cooperation among stakeholders toward a shared goal, and understanding of medical DX as a whole, are indispensable,” he stated.

---

Future Ready

What must Japan do to ensure that its workforce can compete in a digital world?

---

We’ve been living in a digital world for quite some time. More than three decades have passed since the World Wide Web began connecting us through zeros and ones. For most of that time, it’s been possible to straddle the line between digital and analog. But if the first quarter of 2023 has made anything clear, it’s that we’re at an inflection point when it comes to technology.

If Japan is to remain globally competitive and secure its future economy, it must embrace digital transformation (DX).

Despite increased efforts to push DX, Japan dropped to 29th place in the 2022 IMD World Digital Competitiveness Ranking, an annual report published by the Switzerland-based International Institute for Management Development that assesses and compares the digital competitiveness of countries based on their ability to adopt and explore digital technologies.

More concerning is that Japan ranked 41st in the talent subcategory and 54th in future readiness.

Overcoming this digital talent gap is a must. For companies, the required skill sets are shifting, impacting not only talent acquisition and retention, but also the country’s education system and overall workplace culture.

To find out where Japan is on the road to readiness, The ACCJ Journal spoke with corporate leaders making DX possible, as well as those helping companies and talent come together for success in today’s digital-driven world.

Widening Gap

Talent acquisition has become a pressing issue for companies across Japan. In a 2022 survey conducted by the Ministry of Internal Affairs and Communications (MIC), 67 percent of Japanese respondents cited a shortage of information and communications technology (ICT) personnel as a roadblock to their DX efforts.

Surveys conducted by recruitment site Doda show a sharp rise in the monthly number of job openings per candidate for engineers and other tech professionals—from 3.44 in March 2019 to 9.54 in March 2022. The Ministry of Economy, Trade and Industry (METI) projects a shortage of 450,000 ICT workers by 2030.

“We have a big problem. It’s a serious talent crisis that is going to get much worse,” said Daniel Bamford, associate director of technology for Asia–Pacific at specialized recruitment agency Robert Half Japan.

Changing Workplace

Faced with a dwindling talent pool and fierce competition, the Japanese labor system must change within a few years if Japanese companies are to acquire good talent, Megumi Tsukamoto, senior adviser at global consultancy J.S. Held Japan LLC, told The ACCJ Journal. The country’s traditional human resources model, according to which compensation is based on age and seniority, has exacerbated the digital talent shortage.

A 2016 comparative survey by METI found that the average annual salary of ICT personnel in Japan was roughly half that of their US counterparts. Workers in their twenties in the United States earned an average of $77,990 per year, while their Japanese counterparts took home just $31,300.

“Workers in their twenties in the United States earned an average of $77,990 per year, while their Japanese counterparts took home just $31,300.”

Tsukamoto noted that, in a bid to obtain and retain talent, some Japanese companies are beginning to offer salaries two to three times higher than previous packages. Some are offering much more than that. This is the result of ICT professionals either moving abroad, or choosing to work for such foreign companies in Japan as Google.

However, higher salaries are just one piece of the puzzle, said Victoria Ryo, associate director at Robert Half. In-demand ICT tech workers expect more.

“A company that provides workplace flexibility, along with benefits, interesting projects, and an international environment, is going to be more attractive,” she explained.

Ryo pointed to innovative initiatives that catch the attention of potential ICT workers. As an example, she mentioned the financial services organization Money Forward’s Culture Hero campaign, which awards employees who epitomize the company’s inclusive culture. But Bamford warns that a good diversity, equity, and inclusion (DEI) policy is not enough to attract these in-demand talents.

“For them, it’s a base expectation, not something that will win them over,” he said. “But if you’re not providing a diverse and inclusive environment, you will lose people.”

Looking Abroad

To address the domestic talent shortage, companies such as Fujitsu Japan Limited have accelerated plans to hire non-Japanese engineering researchers in the wake of recent mass layoffs in the US tech sector.

While skepticism remains that ICT workers from abroad can thrive in Japanese workplaces, where language—and sometimes insufficient DEI culture—remains a barrier, Tsukamoto cites Mercari, Inc. as a domestic player that has found success hiring international talent.

The thriving e-commerce company began its full-scale efforts to recruit overseas talent in 2018. Today, more than 50 foreign nationals are working at Mercari’s Tokyo office, according to their FY2022 sustainability report.

Last year, the company opened a subsidiary in Bengaluru, a hub for IT companies in southern India, with the goal of recruiting IT workers. As of last July, it had attracted 45 new graduates from the Indian Institute of Technology.

The school has been a popular source of tech talent for Japanese companies such as Rakuten Group, Inc., whose Bengaluru base grew from six engineers in 2014 to more than 1,000 in 2020.

The Japanese government has responded to this trend by launching two new visa schemes in April that target highly skilled foreign workers, such as researchers and engineers, as well as graduates of highly ranked universities.

The Japan System for Special Highly Skilled Professionals, or J-Skip, visa allows researchers, engineers, and business managers to bypass the points-based system used to award visas to skilled professionals.

Meanwhile, the Japan System for Future Creation Individual, or J-Find, visa allows graduates from highly ranked universities to live in the country for up to two years while they find employment.

Evolving Workforce

The Japanese government also pledged last October to spend ¥1 trillion over the next five years on reskilling workers to address the shrinking pool of tech talent.

In January, Japanese Prime Minister Fumio Kishida said that guidelines will be drawn up in June to increase labor market flexibility to encourage workers to move to high-growth sectors.

Major companies are also contributing. Amazon Web Services Japan G.K. (AWS) has invested more than ¥1.3 trillion to help its Japanese customers modernize their IT systems and to overcome their digital skills gap through education programs, training, and certification.

“Cloud and cybersecurity skills will be the two most sought-after digital skills by Japanese employers by 2025,” said James Miller, the company’s head of public policy. “AWS has trained over 400,000 individuals in Japan with cloud skills since 2017, providing them with in-demand skills and best practices to help learners and organizations innovate in the cloud.”

Miller—an American Chamber of Commerce in Japan (ACCJ) governor who also serves as co-chair of the chamber’s Digital Transformation Committee and vice-chair of the Secure Digital Infrastructure Committee—shared an example of how AWS extended a 21st-century hand to a 19th-century company.

In 2021, the company helped Toppan Printing Co., Ltd., the 122-year-old Japanese global juggernaut, embark on a full-scale digital transformation. More than 1,600 of its employees received AWS training over three months and 1,050 pursued AWS certifications in a single year.

Room for Movement

As businesses make DX a point of emphasis, having a range of skill sets has become more important. In terms of hard skills, such as cloud and DevOps, Bamford noted that recruitment has gone from a T-shaped model, where someone has broad awareness and one deep specialization, to a V-shaped one, where the candidate’s deep specialization is complemented by medium-depth knowledge in other areas.

“The other side is that the soft skills aspect is really focused on being able to bridge global and local, while also bringing technical and people skills,” he added.

While senior managers who can lead a company’s DX efforts are in demand, companies should look inward for potential employees who they can elevate, according to Bamford. He pointed to a client that was looking for a certified ScrumMaster and, rather than hiring someone already at that level, found success in ambitious young candidates who the company could train to be certified.

“Since there will be that much more demand, and that much more shortage, the secret is to unlock the skill sets of the people you currently have. Experience is nice, but learning mindsets are even better.”

“Since there will be that much more demand, and that much more shortage, the secret is to unlock the skill sets of the people you currently have. Experience is nice, but learning mindsets are even better,” he added.

Ryo noted that this can help companies retain their technical talent. “I think the number one reason people leave an organization is because they don’t feel they have the opportunity to grow.”

Preparing Future Generations

While reskilling offers companies a path to overcoming current DX issues, Japan’s new ¥10 trillion national endowment fund to boost research at universities in strategic priorities such as artificial intelligence (AI), biotech, and quantum technology is expected to help train the next generation.

However, Matthew Wilson, dean and president of Temple University, Japan Campus, believes that changing student mindsets is arguably more important to reversing the tech talent drain.

He contrasted students in the United States, who define their future goals by jobs they want to pursue, with Japanese students, who aspire to work for specific companies.

“If your goal is to work at a company, your pathway is going to be a lot different,” he said, noting that the practice of job rotations at Japanese companies, in which employees are transferred from department to department every few years, provides fewer incentives to focus on specific fields.

Wilson also noted that Japan’s public education system is “very conservative, which is difficult to change,” but is optimistic that the government’s push for DX and the advent of new AI technologies, such as ChatGPT, the conversational large language model developed by OpenAI, will accelerate change.

“It’s going to force people to educate differently and to assess differently,” Wilson said. “The point isn’t catching somebody who just did their essay with ChatGPT. Rather, it’s how to educate somebody so they have the skills and the knowledge they’re going to need for a job five years down the road.”

Unified Response

Steps have been taken to reshape the country’s education system with last year’s release of the Roadmap on the Utilization of Data in Education. A joint statement issued by the Digital Agency, MIC, METI, and the Ministry of Education, Culture, Sports, Science and Technology states that, by 2030, the government aims to create “a society where anyone can learn in their own way, anytime, anywhere, with anyone.”

While Wilson recalls similar government ambitions, such as former Japanese Prime Minister Yoshiro Mori’s “one student, one computer” initiative more than two decades ago, which had little success, he is optimistic about the Digital Agency and Minister Taro Kono, whom he praises for being “energetic and constantly finding ways to challenge processes and procedures.”

But he also noted that, while things are starting to move, “it’s going to take a while to get Japan to the digital utopia that they’ve been talking about for 25 years.”

---

Surf the DX Wave

Five big lessons for Japan from Hawaii

---

As Japan’s fledgling Digital Agency finds its way through its second year of existence, and the Tokyo Metropolitan Government’s new start-up strategy takes hold, a digital transformation (DX) wave is sweeping across the country. Learning to surf that wave takes experience, however, and another group of islands that know a bit about surfing, and have ridden DX to their advantage, could be a guide for Japan.

How the Hawaiian tourism industry found renewed life through digital transformation was the subject of a February 28 event held at Tokyo American Club and online, and entitled How to Surf the DX Wave: Five Big Lessons for Japan from Hawaii. The American Chamber of Commerce in Japan Tourism and Hospitality Committee luncheon—co-hosted by the Digital Transformation and the Information, Communications, and Technology Committees—welcomed Mayumi Nakamura and Mike Birt of Ascent Partners, LLC to discuss the restructuring of Hawaii’s tourism management system.

When the Covid-19 pandemic forced a total shutdown of travel, tourism hot spots such as Honolulu, which had welcomed a record 10.4 million visitors in 2019, went from overtourism to dead empty in just a few days. The islands fell quiet. And when tourism returned in 2021, it was not the same.

Recovering from Wipeout

“As people started coming back, the domestic travel industry was just a madhouse,” Birt explained. It was clear that the pandemic had left Hawaii’s tourism industry scarred and unprepared for the influx. Change was needed.

The seeds for change were planted even earlier. When heavy storms hit Haena State Park, on the island of Kauai, in April 2018, major access roads were shut down and neither tourists nor locals could enter.

It was a needed pause, however. Before the disaster, some 3,000 tourists had visited daily, leaving little room for Hawaiians. “There was some conflict there, and many people couldn’t enjoy their own homeland,” Nakamura explained.

While the storm was a multi-million-dollar disaster for many, others saw it as divine intervention, an opportunity to reappraise the management of state parks and give greater consideration to the balance of tourists and locals.

When the decision was made to transform the system, the Hawaiian government approached Ascent Partners for help. Nakamura led a team that designed a timed-entry reservation system. Entry was restricted to those with reservations, and daily tourist admission was capped. This allowed locals more opportunities to enjoy their own land. Greater emphasis was also placed on hiking the trails and evoking the experience of the natural land as the Native Hawaiians saw it.

Due to the pandemic, all the work had to be done remotely. The Hawaii project was run from Seattle, while the software development team was in India and various support staff were scattered across the US mainland.

The project was a great success. Not only were there societal benefits, but economic ones as well. The state brought in 250 percent of its projected tourism revenue in the first year.

The island of Kauai, home to Haena State Park

---

Model for DX

Birt believes the fact that this project could be carried out remotely with such great success shows the potential for adapting the approach to other countries, with each following their own philosophy of reimagining post-pandemic tourism.

“It became a model for how to scale and develop very effective software digital transformation projects that can literally span the world,” he explained. “Destination management is a key element—and this isn’t just Hawaii. Venice, Iceland, Amsterdam … there are a number of [places] that have really had to work on how to manage their destination so that it doesn’t become overrun, and the community can still enjoy where they live.”

“It became a model for how to scale and develop very effective software digital transformation projects that can literally span the world.”

Birt and Nakamura said they learned a lot during their three years working with the Hawaiian state government. They shared five lessons which they believe Japan could put into action to transform its own post-pandemic tourism.

Lesson 1: DX requires leadership and vision
“Without a vision, none of the people around [you] can support the project. In the case of Hawaii, it was a return of aloha spirit,” Nakamura said. What made the project possible, she added, was that both the state government and private individuals were on board and committed to using the pandemic to take a bold step.

Lesson 2: DX has customers—and adversaries
“The state parks are literally part of [Hawaii’s] soul; Hawaiians think of their parks as almost a living thing,” Birt explained. Undertaking such a large-scale project, therefore, brought together many parties with a vested interest, whether emotional or financial.

Naturally, with this came those who strongly opposed the transformation. But nobody, Birt and Nakamura acknowledged, knowingly played the role of adversary; they resisted change simply for self-preservation. What saved the project from failure was that powerful friends in the Hawaiian state government shared the vision and supported it from the start.

Lesson 3: Technology is powerful
DX is not a simple one-and-done operation. It is an everyday effort that must be constantly analyzed and adjusted to fit the needs of the project. The DX wave does not stop or slow down. Everyone must be skilled and educated to properly participate in the journey. Questions must be constantly asked. In the case of the Hawaii project: Where are the tourists going? How are they going? How could communication be improved? What could smooth entrance into the parks?

Lesson 4: Expectations change
While the aloha spirit is the genuine treasure of Hawaii, it must always be met in balance with malama, the respect for the state and environment, as well as the customs and culture that come with it. You receive the generosity of Hawaii, but you are obliged to pay it back in appreciation. The same balance is sought in DX, where it has the potential to bring revenue and benefits, but we must be careful to not kill the goose that lays the golden eggs.

Lesson 5: DX waves won’t stop, learn to surf them
Lastly, there must be an emphasis on change, and an understanding that there is no final resting point in DX. Nakamura referred to the decline of Facebook and the rise of the artificial intelligence tool ChatGPT as examples of the unpredictable nature of technology. “You have to be ready to ride the waves as they comes,” she said. “Be adaptable, be adjustable. Don’t think of it as a destination, but as a journey.”

---

Big Moves Moving

Two years into the JDA 2030, ACCJ leaders take stock of progress.

---

Transformations take time. Reaping rewards can take longer. For Japan, shedding analog processes is critical for future prosperity, and the American Chamber of Commerce in Japan (ACCJ) is bringing together the broad expertise and experience of its membership to assist with the push for digital transformation (DX).

In early 2021, the ACCJ unveiled a comprehensive white paper entitled Japan Digital Agenda 2030 (JDA 2030) that outlined 11 big moves which could position the country as a global leader as we dive deeper into the 21st century. Produced together with McKinsey & Company, the JDA 2030 presents technology use cases and describes how Japan could realize a transformation that would put the world’s third-largest economy on equal footing with leading digital nations.

These measures to bolster DX in Japan call for concerted steps by major industries and stakeholders in areas such as digital talent, industry transformation, digital government, and economic renewal. And in the two years since the paper was published, the need for cross-industry collaboration to make many of the JDA 2030’s big moves a reality has become increasingly clear.

An Evolving Proposition

What has also become clear is that the pace at which digital everything is infiltrating all aspects of business and society calls for a reassessment of the JDA 2030. The ACCJ’s new Digital Forum, confirmed by the Board of Governors in April and led by Chair Mitsuhiko Ida, along with Vice-Chairs Kristopher Tate and Scott Warren, will be leading this task, working with the various digital-related committees to coordinate the chamber’s voice and position on DX.

And with DX impacting all organizations, not just those in technology fields, everyone has a role to play.

“The question is swiftly becoming, Is there such a thing as a non-tech field?” Warren told The ACCJ Journal. “We are seeing technology being applied in almost every business. I think the application of technology is almost too alluring—and necessary to keeping a competitive edge—to be ignored.”

ACCJ Digital Transformation Committee Co-Chair Jim Weisser agrees. “All businesses are digital or have a DX component. Trying to figure out which piece to transform—and how to do it—is a problem for all companies.”

“All businesses are digital or have a DX component. Trying to figure out which piece to transform—and how to do it—is a problem for all companies.”

Fellow co-chair and ACCJ Governor James Miller added: “The most important thing for members to keep in mind is the cross-sectional view versus the deep dives. There are sets of concerns that are technology specific, but we are continuing to focus on sharing what sets of issues business leaders should prioritize that are cross-sectional.”

Already, the chamber is looking at a variety of mechanisms to bring together the insights from the JDA 2030—and those continually being developed by the ACCJ’s committees—to refine its position and recommendations to provide the best guidance in a rapidly changing environment. This effort, supported by the work of the digital committees on technology-specific issues, is focused on teasing out the common positions across the broad range of committees to bring the whole chamber to bear on DX.

A question about the big moves outlined in the JDA 2030 is whether they might require a longer timeline to be realized than the seven years that remain until the original target date. This has spurred an effort to learn from the chamber’s landmark 2009 white paper Achieving the Full Potential of the Internet Economy in Japan, how progress was achieved, or efforts stalled, and how the digital agenda itself can evolve.

While a lack of dialogue or substantive business input may have slowed progress, the Great East Japan Earthquake and Tsunami of March 11, 2011, reignited interest in resilience. Similarly, former Japanese Prime Minister Shinzo Abe’s focus on the role of data at the 2019 World Economic Forum Annual Meeting in Davos has since proved to be a major lift for the JDA 2030.

Data, Trust, and Talent

At the center of Abe’s Davos proposal was Data-Free Flow with Trust (DFFT), something which Japan and its allies have struggled to define in the years since, said Warren, who is also co-chair of the ACCJ Legal Services and IP Committee as well as vice-chair of the Information, Communications, and Technology Committee.

“How we achieve [DFFT] will be one of the main topics discussed during the G7 conference. The real challenge, I think, is that the definition cannot be static, as it is very dependent on the type of data—critical infrastructure data versus other data—and the question of how much you trust the receiving entity and country. I think the true answer has to take those factors into account.”

Ida, an ACCJ governor, noted that the establishment of a new organization to promote DFFT was agreed at the G7 Digital Ministerial Meeting held in Gunma Prefecture in April. “For this, governments want private sectors to share our experiences, needs, and suggestions for policymaking. This is just one case in which the ACCJ can contribute,” he said.

Another area of great importance to successful DX is the acquisition and training of digital talent. But for a company to build a deep bench of world-class talent, with the digital know-how that is increasingly critical to success, takes time, Weisser said.

Megumi Tsukamoto, a vice-chair of the ACCJ Task Force on Economic Security, said that it is likely to take five years or so for Japanese companies to establish their digital bench once they recognize the need and begin fostering this talent. First, they must overcome major challenges in their operating cultures to provide levels of compensation expected by these professionals.

She also notes that opportunities are emerging that might enable Japanese companies and IT vendors to build their digital talent sooner. One is the sudden availability of personnel following the recent restructuring in the IT sector, both in Japan and in key markets overseas. “They’ll do it because, without IT talent, it is very difficult to compete with other global companies. It is an urgent issue,” Tsukamoto emphasized.

Companies are also increasingly aware of the business opportunities digital can drive, and are developing their people to realize them. Tsukamoto points to one Japanese service provider that is working to create tools, some powered by artificial intelligence, to help staff who lack digital skills. By pooling specialists in planning, user interface design, and the core product—and combining these with dedicated IT support—they are able to develop in-house software that can enable service staff to focus on the highest value tasks while leaving the software to automate others. She also mentioned a Japanese manufacturer that is already pairing robots with its production line workers to realize mutual benefits.

Now Is the Time

New tools such as these show that technology concerns are not the biggest obstacle. “Oftentimes, it is the business thinking that we should be focused on,” said Miller. “A lot of tools can be used to reduce risk and mitigate concerns in a way that was not conceivable a decade ago.”

Japan also brings to the table a high level of competency in science, technology, engineering, and mathematics, or STEM disciplines, that enables it to leverage a strong legacy of engineering capabilities. “Combined with being the world’s third-largest economy, the level of scale and scope of opportunities seen in Japan are really unrivaled,” added Miller.

“Combined with being the world’s third-largest economy, the level of scale and scope of opportunities seen in Japan are really unrivaled.”

These insights are the basis for plans to coordinate DX leaders across the ACCJ’s various digital committees. The goal is to
understand the high-level points and the depth of topics, ranging from talent acquisition to cybersecurity.

“Now is the time to work together,” Miller concluded. “We’re seeing dramatic changes in Japanese policy and company environment that we haven’t seen for 30 years. We are seeing a lot more combined interest in [the US–Japan] partnership.”

The ACCJ, with its diverse and multinational membership, is one of the few organizations that can pull such voices together and bring industry views to both the US and Japanese governments, noted Ida. “We can partner with both governments to support their policymaking by providing our experiences, needs, and technical assistance.”

Warren invites all ACCJ members to get involved in shaping the chamber’s digital advocacy.

“The ACCJ has consistently espoused, for years, that whatever new policies are created in Japan must be fairly implemented across both domestic and international companies,” he said. “As for specific policies to implement related to digital transformation, the ACCJ is in the process of gathering those. If you have ones you think important, please submit them to one of the many digital policy committees or to your committee leadership.”

---

Have an idea? Get involved!

The ACCJ has a range of committees working on leadership and advocacy for Japan’s DX journey:

Digital Transformation • Digital Economy Task Force on Economic Security • Secure Digital Infrastructure • Information, Communications, and Technology • Healthcare • and many more

Visit accj.or.jp/committees to learn more.

---

Cracking the Code

Recruiter Robert Half shares how to find the best cybersecurity talent.

---

Presented in partnership with Robert Half

---

From left: Robert Half cybersecurity team members Fabrizio Fumagalli, Steven Li, Kani Taeng, and Naoto Hamada

---

As digital transformation (DX) touches every aspect of how we work and communicate, businesses face ever more complex challenges when it comes to protecting data—whether it is their own or that of customers. The evolution of cybersecurity means that companies must rethink how they hire for this critical task.

Steven Li, senior division director for cybersecurity at recruitment company Robert Half, told The ACCJ Journal that they see a lot of companies going through digital or IT transformations to shared service models, including for security.

“One of the challenges with security is that it’s all about data, and it’s all about being able to see your entire ecosystem or environment using a single source of truth or a single tool,” he said. “And a problem you may face is how to bring different business units that you’ve acquired onto a common platform for security operations and vulnerability management, so that when someone asks, ‘Are we impacted by this incident?’ you can answer with a degree of confidence.”

Robert Half advises clients on how to do just that and helps them find the right people to lead that transformation.

Expertise Matters

From a people perspective, previously siloed teams are being consolidated on a group level to create a centralized point of contact for cybersecurity that then provides support to each business unit, Li explained. Instead of outsourcing technical tasks to consultants, companies are now looking to hire specialists for their internal teams. But with much of this talent coming from outside Japan, domestic salaries are an obstacle.

“Employees here in Japan are typically rewarded based on tenure and age instead of merit and skill,” he noted. “To get around this, some companies have started to offer contracting solutions. They’ll say, let’s do a fixed-term contract. And with this fixed-term contract, we can step outside the bounds of our salary structure and give the specialist what the [global] market is paying, and a little bit more.”

This is important as there is an estimated shortfall of 190,000 cybersecurity professionals in Japan.

“Our clients are sharing that they need people who are application security engineers and can dynamically test the code.”

“Japanese companies are not used to hiring mid-career security professionals. They are used to hiring graduates, so to bring in someone mid-career, they don’t know how to do it, where to find them,” Li explained.

“Good cybersecurity engineers don’t typically fit the traditional model of an IT person. They may not have finished university, but they are adept at problem-solving and seeing patterns that other people might miss. We’ve placed people like this, and our clients have been absolutely happy with them,” he added.

Recruiting Manager for Cybersecurity Naoto Hamada shared an example of how Robert Half successfully placed a candidate who made a big difference for their client. But to do so, they had to overcome a challenge common in Japan: hesitation to change jobs.

“It was for a key project, and closing the role was a high priority. However, it’s challenging to find this talent in Japan,” Hamada explained. “We were able to find a match, and he received a competitive offer. But just one day before the deadline, on a weekend, he messaged me and said, ‘I can’t take this.’”

The problem wasn’t the offer but that he felt sympathetic towards his current manager should he leave.

“After receiving the message, he asked me to come meet at his station in person. I outlined the benefits of joining this international company and how it would provide him the career growth opportunities in line with his goals,” Hamada explained. “In the end, the key element was that we helped him visualize his priorities, then compare them to his current company. Based on this exchange, he decided to sign the offer and is now a key member in the newly created incident response team at his new company.”

Working hands-on in this way is at the core of Robert Half’s approach to recruitment. An important part of that are cyber risk meetups, which they host to bring together security professionals to share information and experiences which can help bridge the gap in cyber skills. A recent senior leaders’ meetup at Deloitte focused on ransomware resilience, and a public security meetup at Microsoft focused on software supply chain security.

“If we all share best ideas, best practices, and experiences, and implement those, perhaps we can improve cybersecurity maturity in Japan,” Li said.

Changing Regulations

Another thing to consider is the impact of changing regulations. Fabrizio Fumagalli, Robert Half’s recruiting associate director for cybersecurity, pointed out changes to ISO 27001, an international standard for information security management systems.

“This was updated in 2022, and companies have three years to comply,” Fumagalli said. “There are a few notable requirements on code security and the code supply chain. Companies need to be extremely careful about what’s in their code and conduct appropriate audits to assess where vulnerabilities may be.”

On average, about 80 percent of the code in a typical application is open source, Fumagalli noted, so it can be difficult to know what vulnerabilities may be hiding there. As a result, companies will need people in security who are proficient in software development.

“Instead of relying on documents from an external vendor, companies need a specialist who can check the code to ensure it is secure. Teaching security is easier than teaching the development side, so that is where companies’ priorities should be,” he added.

Specific to Japan, he said, is the need for mid-career cybersecurity talent. “You cannot randomly reassign, or do rotations, as most Japanese companies do. Due to the specific set of skills needed for the role, there is an urgent need for individuals who are experts in cybersecurity.”

Li added: “Our clients are sharing that they need people who are application security engineers and can dynamically test the code, play around with it, see if they can break it. Or do static analysis by reading the code itself and figuring out where the logic problems are. These skills are in extremely high demand.”

Partner for Success and Security

In closing, Li said that Robert Half is working to change the perception of recruitment in Japan and to help clients look beyond the numbers and the next quarter. If you are reassessing your cybersecurity, Li, Fumagalli, Hamada, Taeng, and the Robert Half team are ready to expand upon this approach and partner with you to build the best teams for today and the future.

---

Register now to learn, connect, and get inspired by Robert Half Japan networking events: roberthalf.jp

---

Japan to Foster Global Cooperation at the G7

METI focuses on three key policy areas: trade, climate and energy, and digitalization

---

Presented in partnership with the Ministry of Economy, Trade and Industry

---

In May 2023, the G7 Summit will be hosted in Hiroshima against the backdrop of a severe global energy crisis and supply chain disruptions that are stoking the fires of inflation, shaking consumer confidence, and threatening the most economically vulnerable in our society.

Climate change, Covid-19, and Russia’s aggression against Ukraine are fueling global concern. In a speech given at the Center for Strategic and International Studies in January, Yasutoshi Nishimura, Japan’s Minister of Economy, Trade, and Industry, expressed his alarm, saying “the global shocks that have occurred, one after the other in the span of only a little more than two years, have truly been a wake-up call.”

All three challenges are likely to be high on the agenda at the G7 Summit and relevant ministerial-level meetings to be held throughout the year. The Ministry of Economy, Trade and Industry (METI) will take the lead at the ministerial meetings, along with relevant ministries, and aims to drive discussion and policy action in three key areas—trade, climate change and energy, and digitalization.

Revitalizing Global Trade and Investment

Trade is a key policy issue, especially given the rise of serious supply chain disruptions due to Russia’s devastating war in Ukraine.

“Russia’s aggression against Ukraine has shaken the international order, and there are concerns about a global economic slowdown,” said Takuya Kimura, principal director of METI’s Multilateral Trade System Department. “At the G7 meetings, we would like to emphasize the importance of upholding the free and fair economic order.”

Topics will include:

• Promotion of trade and investment
• World Trade Organization reform
• How the G7 will deal with unfair trade practices that distort markets
• Proposals for strengthening economic security

Even if these key issues are addressed, the global economy faces insurmountable hurdles without the existence of healthy trade and investment relationships between nations. METI’s work at the upcoming G7 Summit will include laying the foundation for future progress.

Around the world, shortsighted trade practices could lead to unfair trade. Such practices include forced technology transfer, whereby foreign companies operating in a host nation are required to carry out all processes—from design and development to the manufacturing of advanced technology products—in that nation, possibly forcing companies to share their sensitive technologies with the host nation’s companies.

Nishimura said that we must build a world where “countries will come together based on trust and strengthen their cooperation under the banner of free trade, without slipping into protectionism.”

Climate Change and Energy in Focus

Japan is looking to promote green transformation, or GX, which can rewrite the rules of the prevailing socioeconomic system by inducing transformational changes, without shoehorning emission reductions and economic growth into an either-or relationship.

“Green transformation is a major keyword in Japan,” explained Shinichi Kihara, deputy director general for technology and environment at METI. “The idea is that emissions reduction and economic growth are not in a trade-off relationship. Instead, they can coexist.”

GX will not stop at Japan’s borders, and the government will make efforts to approach countries responsible for major emission outputs while also providing appropriate support to developing nations that are in the process of transitioning to a green regime. Ultimately, Japan seeks to promote GX in all sectors, including energy and industry.

At the same time, the energy crisis has put the spotlight on global energy security. Nishimura believes it is necessary to undertake decarbonization in a way that is fully compatible with ensuring a stable supply of energy, and that it will be important to undertake various and practical pathways that fit the needs and expectations of individual nations.

Japan will make the utmost efforts to promote its clean energy transition, including installing the greatest possible amount of renewable energy facilities and using nuclear plants as much as possible.

Minister Yasutoshi Nishimura

---

Boosting Digitalization

Another major transformation underway is digital transformation, or DX, which has been defined as the creation of new value through innovation made possible by the adoption of digital technology that aims for the creation of a more prosperous society. The role of digitalization as a bulwark against unpredictable events has been highlighted in recent years by global challenges such as the Covid-19 pandemic and Russia’s aggression against Ukraine.

The free flow of data in the face of arbitrary restrictions and ensuring data integrity are essential if the digitalized world is to operate as intended.

In a move that has garnered positive international feedback, Japan proposed a guiding principle, Data Free Flow with Trust (DFFT), which seeks to enable cross-border free flow of data while addressing privacy, data protection, intellectual property rights, and security concerns. The principle was first suggested by then-Prime Minister Shinzo Abe at Davos 2019, and later endorsed at the G20 Osaka Summit in June 2019. Since then, the DFFT has been widely accepted as a primary principle for international digital policy coordination in various international forums.

Reaching a global consensus or convergence on the rules that involve privacy and security will take time. The G7, currently under Japanese presidency, is expected to formulate the priorities in operationalizing the DFFT so that countries can work together despite their varied approaches to data governance. Vigorously moving the DFFT into its operational phase, the Japanese government has announced that it will establish an institutional arrangement to promote interoperability across data regimes, implement the priorities that have been identified by the international forum, and advance solutions for cross-border data transfer through public–private cooperation.

It is also important to redesign governance for a digitalized society. DX technologies, such as artificial intelligence, the Internet of Things, and the metaverse, now have the ability to fundamentally reshape the way companies operate and how individuals relate to society.

It is vital to explore new governance options, including involving multiple stakeholders in discussions on how to flexibly update governance systems in response to changes in the operating environment.

International Cooperation Is the Only Way Forward

At the end of the day, the G7 is not just about the interests of advanced industrialized nations, but about building a way forward together with the entire international community.

“In 2023, Japan will host the G7 Summit, and the United States, India, and Indonesia will chair APEC, the G20 Summit and ASEAN, respectively,” Nishimura said. “While working in cooperation to deal with global-level issues, we will lay out for the international community a path forward for building a new economic order.” It will be also essential for Japan to work in coordination with the Global South to tackle various global challenges. “Japan, working within that partnership, is fully determined to fulfill its significant responsibilities.”

---

---

Digitizing Women’s Health

Startups and entrepreneurs leverage tech to improve care and equality for women in Japan

Listen to this story:

---

In recent years, Japan has seen a boost in femtech. The portmanteau of female and technology refers to services using tech and products that help improve women’s health. Government support and media coverage have enabled femtech business offerings to move from niche to mainstream. But how soon might the fledgling industry take off as it has in the United States and Europe? The ACCJ Journal spoke with experts to explore prospects for femtech in Japan.

In 2021, the word femtech was nominated for publisher Jiyu Kokumin Sha Co., Ltd.’s Word of the Year, an annual award for language best representing life in Japan over the previous 12 months. The word eventually lost out to phrases related to US-based baseball superstar Shohei Ohtani, who made a splash in 2021. Yet the nomination alone is significant.

Awareness of femtech has remained low in Japan since the term was first coined in 2016 by Danish entrepreneur Ida Tin, founder of period- and fertility-tracking app Clue. But 2022 might see that change.

A February 2021 survey by Sompo Himawari Life Insurance Inc. shows that only 1.9 percent of its 1,000 working female respondents recognized the term. Once it was explained to them, however, more than half said they were “interested in” or “hopeful” about the concept.

Fast-forward to year-end, and 47.5 percent of respondents said they were aware of the word femtech. Though this is positive for the market, a Statista survey of 3,068 girls and women carried out in December 2021 and January 2022 also shows a long way to go, as just 15.3 percent of those polled report knowing the meaning.

Raising Awareness

Still, the increase is welcome for industry players. They say the market can grow only with an uptick in public awareness of, and willingness to talk about, women’s health—a topic that remains taboo in Japan. Progress over the past 12 months has been attributed to the launch of new products and services, exposure in media and social media, events, and other activities that support conversations about women’s health.

In March 2022, awareness-raising events Femtech Japan and Femcare Japan were held in Tokyo, while Japan Sports Week 2022, an industry event held in May, saw an area dedicated to femtech products and services supporting women in sports.

Promotion has already begun for Femtech Tokyo, an inaugural event to be held October 20–22 at Tokyo Big Sight, Japan’s largest international exhibition center. It will usher in what are expected to be annual trade fairs, designed to welcome the general public and businesses interested in “solving various problems in women’s life stages,” according to organizers.

“The term femtech is getting more recognition among women in Japan than ever before,” said Yoko Fukata, investment director at Sony Innovation Fund, which supports femtech startups in Japan. “Women want to know how their body works, such as its rhythms and hormones, and [want] to live better lives … exposure of the word and its different solutions will catch women’s attention.”

Indeed, consumers have been quick to notice femtech offerings entering the market. Almost 80 percent of some 10,000 working-age women in Japan said they knew of at least one femtech product or service, according to a 2021 Statista poll. Most familiar were sanitary shorts (48 percent), cloth sanitary pads (47.9 percent), ovulation test kits (40.9 percent), period tracker apps (40 percent), and sleep bras (38.3 percent).

These products are the result of several early stage femtech startups that emerged in 2019 and went on to release products and services in 2020 and 2021 in what can be considered “the first movement of the femtech industry,” according to Tomoko Minagawa, founder of industry association Femtech Community Japan and a leading investor in the femtech domain.

Improving Gender Equality

Now many players in Japan, including enterprise companies, are starting to launch new femtech businesses, Minagawa explained. Their motivation has been boosted by policies from a national government that sees the femtech industry as one method of addressing the country’s poor record in gender equality.

Japan ranks 120th among 156 nations in the World Economic Forum’s 2021 Global Gender Gap Report, far behind its G7 counterparts (which place between 11th and 63rd) as well as many of its Asian neighbors. The study, which tracks gender equality in four areas, evaluated Japan highly in health and education, but very low in economic participation and opportunity, as well as political empowerment.

Minagawa said the main reasons for Japan’s ranking are the lack of:

• Support for women in balancing their professional and private lives
• Consciousness of the very deep chasm between the experiences of men and women

She added that femtech can empower women by exposing the gap between the need for, and availability of, femtech products and services, and by leading discussions on femtech’s necessity and advantages for society.

Indeed, Minister of State for Gender Equality Seiko Noda, in her message on International Women’s Day 2022, listed “promoting femtech” as a government measure to improve Japan’s gender equality performance. Boosting women’s health by supporting the femtech industry is part of its efforts for “the realization of a society in which women live with dignity and pride,” one of the Japanese government’s four pillars in its Fifth Basic Plan for Gender Equality.

Government support includes the Subsidy Project for Demonstration Projects for Femtech and Similar Support Services that distributed a combined subsidy of ¥150 million to 20 femtech companies in 2021. According to the Ministry of Economy, Trade and Industry, which runs the program, the goal is to prevent events, such as the unwanted turnover of working women (triggered by life turning points, including pregnancy, childbirth, and menopause); to improve the well-being of individuals; and to increase the diversity of human resources at companies.

A healthy femtech industry, therefore, supports not only a societal need, but an economic one.

Business Cost

Loss of productivity, resulting from improperly treated health issues experienced by women working in Japan, is estimated at ¥2.7 trillion ($20 billion). According to Minagawa, the figure includes ¥323 billion ($2.4 billion) from menstruation, ¥672 billion ($5 billion) from fertility, and ¥1.75 trillion ($13 billion) from menopause.

With employees’ physical and mental health front of mind due to the acceleration of new work styles stemming from the pandemic, many companies are looking to the femtech industry for solutions to some of Japan’s long-running problems.

Kathy Matsui, general partner of MPower Partners, Japan’s first global venture capital fund focused on environmental, social, and corporate governance, told The ACCJ Journal that health and well-being has “become the priority” for more companies, particularly during the pandemic.

Startups have responded well. For example, lots of them have emerged that measure employee stress—now a legal requirement for companies in Japan. In the area of mental health support, companies are offering services, such as the outsourcing of care for children and elderly parents, she added.

Yuko Kidoguchi, operating officer and head of communications at life science company Bayer Holding Ltd. (Japan), which is active in women’s health policy advocacy, is also seeing more companies supporting the health and well-being of staff. Some are providing education on women’s health topics, including infertility treatment for women and men. Others are connecting female employees with gynecological care or providing financial support for women’s health treatments.

It’s all part of improving productivity and carrying out healthy management, Kidoguchi said.

Gradual Growth

With the needs and demand for femtech in Japan firmly established, what does the future hold? Japan’s femcare and femtech market grew from ¥57.5 billion ($428 million) in 2019 to almost ¥60 billion ($448 million) in 2020, and further development of the market is projected to generate an economic impact of about ¥2 trillion ($14.9 billion) in 2025, according to Statista.

In global terms, though, Japan’s market is tiny, with Asia accounting for only eight percent of the world’s femtech companies. Compare that with North America, which is home to 55 percent.

Sony Innovation Fund’s Fukata predicts that Japan’s femtech market will “grow gradually, not exponentially,” in part due to there being fewer female founders and investors than in the United States and some other countries.

Still, the industry consensus is that women femtech founders can make a big impact in both this industry and the wider healthtech domain.

“Women are often key decision-makers when it comes to household spending, and this is especially true in Japan,” according to Nuala Connolly, co-chair of the American Chamber of Commerce in Japan (ACCJ) Women in Business Committee and an ACCJ governor, as well as being head of talent, and the regional diversity, equity, and inclusion lead at AIG Japan Holdings. “Having women in leadership positions in startups and in femtech—and in every other sphere of business—means having leadership who represent this important consumer base and can innovate directly to optimally meet the needs of women. This, in turn, leads to the development of new products and markets, and boosts and elevates the overall economy.”

Fukata also cites the general population’s lack of deep understanding and the early stage of the industry as dampers on femtech growth, alluding to the fact that most femtech companies are focused on femcare, such as period underwear, rather than the technology aspect. She suggests this may be due to data that shows women are most concerned about period-related issues when it comes to women’s health. Alternatively, it might be due to the ease with which consumers can see, touch, and use such products.

“I think [femcare is] the starting point. Once they get accustomed to using those products and get to know more about the industry and the solutions there are in the world, there will be more people who want to focus on using femtech in different stages of their life,” she said.

Femtech Community Japan’s Minagawa agrees that most companies are providing non-tech products and services, but she is seeing some movement in the tech space, such as apps to track period cycles or to chat remotely with medical experts, as well as expansion into fertility treatments and early detection and support of menopause symptoms.

E-MCH

One area of women’s healthcare in Japan that is getting digital attention is the maternal and child-health (MCH) handbook, a printed booklet that can be obtained from a ward office or city hall which is used by doctors to track the results of pregnancy and post-birth health checks.

Lanex Co., Ltd. has developed an electronic version of the process—the E-MCH—an innovation for which the company won the From Japan and Beyond Award at last year’s ACCJ Healthcare x Digital competition.

“We analyzed the actual trend of existing digital healthcare solutions and found that most were not directly applicable to maternal and child healthcare, so we came up with the idea to digitalize the Japanese MCH,” explained software developer and project manager Boubacar Sow. “The E-MCH can play a significant role in tackling public health issues in both urban and rural areas of Japan. Our digital maternal and child healthcare system can collect and manage data from checkups during pregnancy, track the baby’s development, and enable women to communicate efficiently with their doctors and monitor their pregnancies.”

Sow said that femtech and supporting female entrepreneurship contributes to women’s empowerment and helps to achieve gender equality. “Specifically in Japan, femtech will boost the role of women in bettering healthcare and related activities. Femtech can be seen as one of the pillars of achieving gender equality in healthcare and bringing equal opportunities to women.”

The Road Ahead

There remains a long way to go, however. A full-fledged femtech market includes all kinds of hardware and software, including:

• Medical devices
• Wearables
• Telehealth and digital platforms
• Therapeutic drugs
• Vitamins and supplements

These items support everything from menstrual and reproductive health to pelvic, uterine, and sexual health to wellness and longevity.

Reaching that stage might not be smooth sailing, though, according to Dr. Amina Sugimoto, CEO of Fermata Inc., a platform and ecosystem designed to help domestic and overseas femtech companies enter the Japanese market.

Pointing to a lack of understanding, she explained: “People think there is nothing in the market and try to come up with their own services. But the problem is the market is not there.” She added that it is unlikely the 90 percent of women in Japan who choose sanitary pads during their period would be interested in a device to predict fertility if it requires insertion.

Consumers are also largely unaware of, or uncomfortable discussing, what their personal health issues might be, Sugimoto added. But she aims to change that with Fermata’s mission “to turn taboos into triumphs” by facilitating more openness on women’s health.

“If people could talk about [women’s issues] more freely, the market would slowly start to grow—companies and startups would get ideas to come up with new products,” she believes.

The public would also benefit from understanding women’s bodies better, said Kidoguchi, a vice-chair of the ACCJ Healthcare Committee and the brainchild behind Bayer’s gynecological health education program in Japan. Inspired by the country’s limited female health literacy and access to gynecological care compared with what is available in other nations, the program has been delivered to more than 50,000 students in 200 high schools, from Hokkaido to Okinawa, over the past seven years. Such schemes that educate both men and women can act as seeds for the future growth of Japan’s femtech market by creating more individuals who are open about, and understand, women’s health issues.

Minagawa said the current lack of understanding and cultural non-acceptance by investors, mainly dominated by men, is the structural impediment for investment in the femtech domain in Japan.

This was one driver for her to establish Femtech Community Japan, which connects investors, startups, enterprises, research institutions, government, and media for networking and discussion.

With the growth of such forums that support the development of an open conversation around femtech in Japan, it surely won’t be long before the term graduates from its current status as a year-end listing on language trends to being a topic of everyday conversation.

Beyond the Pandemic

Digital health can guide the way for Japan’s post-virus evolution

Listen to this story:

---

As the ACCJ is dedicated to ensuring a vibrant environment for global business in Japan, advocacy for improved health policy and initiatives is an important part of the chamber’s mission. One reason that foreign companies choose to invest in Japan is the nation’s high-quality manufacturing and services sectors, as well as its technological prowess and innovative workforce. Maintaining the health of the population—beyond the immediate challenges of Covid-19—is, therefore, critical to the future prosperity of the country and the viability of its business environment.

Recognizing this, the ACCJ has worked with the Institute for New Era Strategy (INES) to bring together key leaders in business, government, and academia to discuss the future shape of social security in Japan. The results can be found in the Healthcare Committee white paper Post Covid-19 Recommendations to Realize a Social Security System for All Generations.

Stronger Foundation

Our evolution as a data-based society has allowed us to grasp the impact of Covid-19 in real time, and digital tools have enabled the active cooperation of civil society as the government works to mitigate the threat and limit its damage. While this is an encouraging sign that bodes well for the future of Japanese society, the state of Japan’s infrastructure has been inadequate compared with other countries.

The ACCJ and INES provide ideas on how to build a stronger infrastructure through post-Covid-19 recommendations on how to realize a social security system for all generations, and to promote continued innovation and application of technology that can help Japan provide for the needs of its people in a way that is effective and fiscally sustainable.

The white paper discusses utilizing data technology, shifting financial resources to healthcare and retirement, and raising the health and financial literacy of society.

In terms of digital health and utilizing data technology, areas of focus include:

• Information usage rights
• Data collection
• Database integration
• Public–private collaboration
• Telehealth and virtual care

In the case of the last item, the Covid-19 pandemic has thrust this need to the forefront. As most people have been forced to stay home for extended periods, quarantine, or limit visits to clinics and hospitals, healthcare services at a distance has been the only way for many patients and doctors to interact. Particularly those in high-risk categories due to preexisting conditions, and those living in rural areas, have relied on telehealth services to minimize the risk of infection during the pandemic.

Stay the Course

One concern is that, once the coronavirus vaccine rollout is complete and a majority of the population has been inoculated, some digital initiatives that have been embraced might fall by the wayside as Japan fully returns to normal routines.

One recommendation from the joint ACCJ–INES team states: “It is essential to couple the support for telehealth with support for digital prescriptions, and to enable pharmacies to offer home delivery of important medications, all while expanding the overall role of digital technologies in delivering care. These measures will help support the aging population long after Covid-19, and enable new approaches to triaging, screening, and following up, customizing the patient experience, and improving the ability of doctors to monitor and communicate with their patients.”

Doing this will require a change in mindset and policy. While many forms of digital data exist in Japan, the individual’s consent is often not obtained at the time of collection, making it impossible to utilize the information. Even if the data is in the government’s possession, it is still difficult for it to be leveraged due to privacy considerations.

But with Japan’s fiscal strains exacerbated by the coronavirus, now is the time for the government to tackle these challenges. Strong political will and leadership are required to face reality, make the right choices, and share with the public a vision for a better future. And today’s digital tools and the power of data are making this possible and opening a door to a healthier, sustainable tomorrow.

---

Digital Transformation of Committees

Removing barriers and ensuring continuity through centralized tech

Listen to this story:

---

When the American Chamber of Commerce in Japan (ACCJ) kicked off the transformation of its website platform early last year, the process sparked a conversation among members of the Chubu chapter about what digital tools our committee leaders need to succeed in bringing value to members and addressing pain points.

Following ACCJ President Jenifer Rogers’s directive to improve succession planning, the Chubu chapter reviewed the impediments that committees were facing. The takeaway was that the committee chair usually has all the documents, templates, and contact lists on their computer, and no one else has access.

As Chubu Programs Committee Chair Ray Proper explained, “I have years’ worth of information about my committee activities on my own shared drive—for my current and past committees—that I think would be much more useful were it accessible to others as part of a formal arrangement.”

Sudden Shift

Often in the past, without warning a committee member may have had to move out of Japan for work. This made it difficult for the remaining members to continue with the committee’s activities. Similarly, if the chair had a sudden medical event or accident, the committee would tread water until they could get back on track. This meant that the bus factor—the minimum number of people who can be hit by a bus before a project comes to a stop—effectively has been one.

Lastly, for committee leaders, an ongoing issue has been new member retention. Sometimes, a person joins a committee, attends a meeting, then never attends another. The feedback we have received from such members to date is that it’s hard to get up to speed, because they don’t know what has been discussed in previous meetings, are unsure how they can contribute, and don’t know what tasks need to be carried out.

Centralizing

To address these issues, the Chubu chapter began piloting the use of cloud storage for the Chubu Walkathon. This was then rolled out to the other committees.

Chubu Community Service Committee Chair Erin Sakakibara shared how the move made a difference this year: “Thanks to cloud storage, we were able to organize all our content and collaborate. It was particularly valuable in providing a base and continuity to build on in subsequent years of the Walkathon,” she said.

“But to be honest,” she added, “though technology is the tool, it also takes human management. You need someone who is organizing files and providing guidance for the team to get the full benefit of the technology. We couldn’t have pulled off the Walkathon without the cloud capability or our captain, who kept us organized and honest in our tasks.”

Having a cloud drive reduced the amount of management required on the part of the chair, as individual members could update and share documents on which they were working. This also eliminated the question of whether a document was the latest version—a crucial timesaver for an event with 220 files, scattered among more than 45 folders, being worked on by 20 people over the course of six months.

Onboarding

Getting new committee members up to speed becomes easier when you can point them to a cloud drive and they can review all the materials and meeting minutes. This helps them quickly get an idea of the committee’s activities, as well as how the group is organized and managed.

The Chubu chapter has also created LINE groups for each committee, allowing speedier communication while also making things more accessible to new members, increasing engagement by adding more touch points.

For successor planning, cloud storage moves the breadth of knowledge from the chair into a repository that all can reference. This can remove the barrier to entry for members and allow current chairs to step down with minimum disruption.

The Chubu chapter will continue to look into other technologies to address issues as well as assist leaders and members, so that the chamber can provide more value to everyone involved.

---