Why Digital is so Important for the Future of Japan

It’s New Years in Japan, which means a new day and a fresh beginning to another year of insane work hours and conservative industry barriers that can make even the most sane person go completely nuts, but I digress.

Let’s face it people, progress is hard in Japan. New ideas, new thinking, entrepreneurial innovation…

Sure, these are all great buzz words, but is any of it really possible?

Have you ever tried to start a business in Japan as a foreigner? It’s literally almost physically impossible.

I even attended a meetup the other day and found out there are Japanese entrepreneurs who find creating a business here so difficult that they end up flying over to Taiwan to set up their entity and then back here for just a satellite office.

So, what are we doing, why are we here?

It starts by meeting the needs of the people

According to Harvard Business Review, in 2016 there was a 30% deviation rate between businesses using digital to reach their customers and the amount of customers using social media.

Customer social media usage since then has more than doubled and business adoption has stayed relatively the same.

This means there is possibly a 40%–60% deviation rate or hole between businesses in Japan and the attention of their customers.

Few countries as economically dominant as Japan have communication gaps as large as this. And while for years Japan was able to get away with it, times are changing.

When a country or its businesses fail to communicate accordingly with their consumers, those consumers either go elsewhere or another solution sweeps in to win their attention and dollars.

The economic result of this usually varies on the competence of a countries ability to bounce back and respond creatively, which Japan internally is horrible at.

Previously, this has happened in cycles throughout the US, where Japan was the dominant player re-entering the market and capitalizes on poor US innovation and product development.

But a new era in media and innovation has completely changed business in the US and also across the rest of the world and Japan’s late response is starting to have a negative ripple effect.

So, whether it’s a company frantically looking to expand overseas, an increase in foreign product adoption on the rise, or even consumer demand creating new market opportunities as a result of where their attention is focused…

The once small deviation statistic that has now created a larger whole in the market, can only be full filled by the missing digital innovation and communication gap that got it there in the first place.

Why?

It has the ability to create new solutions across multiple categories

Amazon was once just a book vendor and now it’s an everything for everything business finding ways to tap into just about every market niche there is.

Japan had this opportunity with Rakuten, but clearly missed the chance for broader global expansion, which is integral for the future of Japan as well.

However, while some of the bigger companies in Japan are failing to meet the need for innovation, not all hope is lost.

Whether it’s Soft Banks investment in foreign innovation firms coming to Japan or the recent news that Japan is offering foreign entrepreneurs a new visa opportunity, it’s clear that the investment on digital innovation is about to hit a gold rush here.

But could digital adoption really impact Japan the same way it did the US and even China?

Think about what Facebook has done to business in the US?

Or what Twitter has done to transparency across the world?

Or even how has Google changed what we know about education?

The truth is that digital adoption is important to the future of Japan because it answers the questions some in Japan are asking.

Such as, “How to stimulate education amongst Japanese youth?”

Or even “How to communicate the importance of having children in a culture that is seeing a rapid population decline?”

These are serious questions being asked across communities within Japan because they have such serious implications on Japanese society.

However, their ability to go from concept to fully accepted reality can only happen through larger digital adoption that proves a means for a new form of communication.

Which leads us to our next and final point.

Digital creates a new language for communication

What I love about social media the most is how it has changed how we communicate and share ideas as a society.

While this is open to debate in terms of its larger impact, you can’t deny that it has initiated and brought forth a lot of good.

Whether it’s supporting female workforce empowerment, finding ways to eliminate racism, or just forming a group of 100,000 people to march in New York for something you believe in, many of these things wouldn’t be possible without digital innovations.

In the same way, part of what holds Japan back is its own conservative nature and culture.

So, if digital can drive change in both the poorest and wealthiest communities by creating a new dialogue, it can do the same in Japan.

And if it can make even the smallest impact in opening the walls that are keeping progress in Japan from taking root, then it has the chance to reverse the negative ripple effect happening now into a new wave of opportunity for innovation in the future.