Japan Finance, Technology & Innovation Reading List
Over the last month, I had several opportunities to discuss the Finance, Technology & Innovation ecosystem in Japan with diverse audiences. The interest in the country remains strong, and we hope to see many of you in person again once travel becomes feasible. In the interim, for those who asked for recommendations on further reading, here are some suggestions, shared in this Medium post as they might be generally useful. If you feel strongly about anything I might have missed, please add your recommendation in the comments.
Japan Digital Agenda 2030 (February 2021)
Japan is currently the world’s third largest economy. Total productivity is now declining at -0.2%, and restoring it is paramount. Digital offers a path, but Japan ranks #27 in digital competitiveness, #22 in digital talent, #17 in startup ecosystems, and has single-digit penetration in areas such as e-commerce (9%), digital healthcare (8%), and eGovernment (7.5%).
Japan Digital Agenda 2030 is a bold transformation agenda developed in collaboration between McKinsey & Company Japan and the American Chamber of Commerce Japan. It outlines 11 Big Moves to restore growth and productivity through digital in education, government, and industry.
Ten Shifts for Japan (March 2021)
Japan remains a country of extremes with a unique business and cultural landscape, and launching the Tokyo Studio of a global design firm presented distinct challenges. Like creativity, extreme environments can be incredibly inspiring. They heighten our senses and force us to focus and pay attention, see and articulate things differently, and explore new opportunities with curiosity and optimism.
As IDEO celebrated its 10-year anniversary in Tokyo, they took a pause, reflected, and shared ten “shifts” they have observed taking place in Japan during their formative years, with a peek into the near future.
Digital Cliff 2025 (September 2018)
In September 2018, Japan’s Ministry of Economy, Trade and Industry (METI) published a report on digital transformation, commonly referred to as the “DX Report”. Its key message was that Japan may suffer an economic loss of up to 12 trillion yen per year after 2025 (“2025 Digital Cliff”) if it is unable to leverage new digital technologies to develop innovative business models or modify existing ones in order to drive revenue growth and enhance competitiveness.
Japan’s information technology landscape is unique. Many companies completely outsource their IT to service providers, only retaining IT strategy and governance functions in-house. The principle of job rotation leads to the IT function being led by generalists, not IT specialists. In addition, the service providers, which often are subsidiaries, are used as the last career step for managers who cannot progress any further in the mother company. In a world that has increasingly recognized the leadership quality of IT in the definition of new business models, in Japan IT staff are rarely seen as being equal to their business users — specifications are compiled as “orders” in a traditional waterfall method and thrown over the proverbial wall for IT to execute. All this does not bode well for digital transformation.
Womenomics (April 2019)
April 2019 marked the 20 year anniversary of the first “Womenomics” report on the link between Japan’s gender employment gap and GDP, published by Chief Japan Strategist Kathy Matsui and her team at Goldman Sachs Research. This edition checks in on how this thesis has played out.
Since 1999, Japan’s female labor force participation rate has risen to record levels that surpass both the US and Europe. And the economic benefits of continued improvement are potentially sizeable. Specifically, GS Research’s strategists estimate that closing the gender employment gap could lift Japan’s GDP by 10%, and in a “blue-sky scenario” where the ratio of female vs. male working hours rises to the OECD average, the GDP boost could expand further to 15%.
Global Financial City Tokyo (November 2017)
Tokyo was once a global financial center on a par with London and New York. For Tokyo to reassume its position as one of the world’s top global financial cities, it must tackle structural and intrinsic issues with a sense of urgency, and arrive at thoroughgoing solutions.
In November 2016, the Tokyo Metropolitan Government (TMG) set up the Advisory Panel for Global Financial City Tokyo, consisting of corporate executives and experts from Japan and abroad. Over a period of one year, the panel discussed a wide range of matters, including challenges that exist in revitalizing the financial sector and that present obstacles to overseas financial businesses trying to enter the Japanese market, and ways to overcome these problems, and compiled its “Advisory Panel for Global Financial City Tokyo Final Review” in October 2017. While giving consideration to the final review of the advisory panel, the measures that must be taken for Tokyo to shine as the world’s leading global financial city have been compiled in this “Global Financial City: Tokyo” Vision.
Japan as an International Financial Center (March 2021)
The Japanese Government is committed to expanding Japan’s role as an international finance hub. New policies will help foreign asset managers and other financial institutions enter the Japanese market so that they may contribute to improve Japan’s financial and capital markets in tandem with local players and eventually we may better serve as an international financial center in Asia and the world.
On December 8, 2020, the Government published New Comprehensive Economic Measures, including the policy package on initiative to expand Japan’s role as an international financial hub.
The Japanese Banking Crisis (February 2021)
Himino Ryozo was appointed as the current Commissioner of the Financial Services Agency, Japan’s integrated financial regulator, in July 2020. He is also the Chair of the Financial Stability Board’s Standing Committee on Supervisory and Regulatory Cooperation, a global forum of regulatory authorities, central banks, finance ministries, and standard-setting bodies.
His book provides a readable narrative of the bubbles and the banking crisis Japan experienced during the two decades between the late 1980s and the early 2000s. Japan, which was a leading competitor in the world’s manufacturing sector, tried to transform itself into an economy with domestic demand-led mature growth, but the ensuing bubbles and crisis instead made the country suffer from chronicle deflation and stagnation. The book analyses why the Japanese authorities could not avoid making choices that led to this outcome.
Beyond Limits. Unlock Our Potential (July 2020)
Based on “Beyond Limits. Unlock Our Potential.”, a strategy for forming a world-class startup ecosystem, published in June 2019, local governments, universities and private organizations were invited to join in the development of the “Startup Ecosystem Base City Formation Plan”.
Four cities were selected as “Global Startup Hubs” in July 2020, namely the Tokyo Consortium (along the Tokyo/Yokohama innovation corridor), the Central Japan Consortium (centered around Nagoya), the Osaka/Kyoto/Hyogo Consortium, and the Fukuoka Consortium. As a second tier, Sapporo, Sendai, Hiroshima, and Kitakyushu received recognition (Japanese Cabinet Office website in Japanese, please use Google Translate).
Statistical Handbook of Japan (September 2020)
“Without data, you are just another person with an opinion.” The Statistical Handbook of Japan 2020 is designed to provide a clear and coherent overview of present-day Japan through statistics. It provides statistical tables, figures, maps, and photographs to portray conditions in modern-day Japan from a variety of perspectives, including demographics, economic and social trends, and culture. Most of the comments and statistical data for this purpose have been drawn from principal statistical publications available from government and other leading sources. The handbook is published annually in September.
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