Digital deficit

The Japanese government is calling on businesses to replace outdated systems and train skilled personnel to enhance digital competitiveness, aiming to balance the digital trade balance.

Strengthening the training of specialized personnel is a factor expected to help Japan improve its digital competitiveness. Photo: HMRASIA

The Japanese government has just announced the fiscal 2024 version of its Priority Policy Program for Realizing a Digital Society. This is the first version to mention Japan's "digital deficit," which is growing due to rising costs of software licensing, cloud storage, and online advertising. The deficit from digital-related services doubled last year to $33.7 billion from 2015 levels, according to the Bank of Japan's balance of payments data, a factor that has worsened Japan's overall balance of payments for services, even as overseas tourism recovers.

Demand for digital services continues to rise with developments such as the widespread adoption of artificial intelligence (AI). Much of this demand in Japan is now provided by US tech giants such as Google, Amazon and Microsoft, causing money to flow out of Japan. Domestic suppliers find it difficult to compete with these companies, and reducing dependence on them is no easy task. Japan’s digital transformation minister, Taro Kono, acknowledged that Japan’s information and digital technology industry still has a lot of work to do to become more competitive, with the top priority being to increase the number of systems and programs produced in Japan. To lay the foundation for building a digital industry, the plan calls for establishing a framework to promote data integration as well as training qualified personnel for digital transformation.

Legacy systems are holding many companies back from digitizing. Japan faces a challenge until 2025, with many skilled workers working with legacy systems. The Japanese Ministry of Industry estimates this could cause $75 billion in economic losses a year due to factors such as increased risk of system failures. The policy calls for the establishment of an interdisciplinary group by June 2025 to identify challenges and ways to address them. The government will promote the use of cloud technology, which is affordable and can easily adapt to changes in the business environment.

The plan also aims to train more cybersecurity experts, an increasingly important field as cyberattacks become more frequent. Japan aims to have 50,000 nationally certified information security experts by fiscal 2030, up from about 20,000 as of April 2023. The government wants to make it easier for regional suppliers and small and medium-sized enterprises to acquire basic cybersecurity knowledge and skills.

The Japanese government has also approved a new policy focused on expanding the economy's growth potential. This includes promoting digitalization and automation, investing in key areas such as green technology and semiconductors to ensure national security. The policy promises to support large-scale, multi-year investment to boost output as well as research and development in the fields of AI and chips.

PEARL

Source: https://www.sggp.org.vn/tham-hut-ky-thuat-so-post746118.html