Digital deficit

The Japanese government is urging businesses to replace outdated systems and train skilled personnel to enhance digital competitiveness, aiming to balance the digital trade balance.

Enhancing the training of skilled personnel is expected to help Japan improve its digital competitiveness. Photo: HMRASIA

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

The demand for digital services continues to grow with developments such as the widespread adoption of artificial intelligence (AI). Much of this demand in Japan is currently provided by American tech giants like Google, Amazon, and Microsoft, causing capital to flow out of Japan. Domestic providers find it difficult to compete with these companies, and reducing dependence on them is no easy task. Japan's Minister of Digital Transformation, Taro Kono, acknowledged that Japan's information technology and digital sector still has much work to do to become more competitive, with a top priority being increasing 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 the necessary skilled personnel for digital transformation.

Outdated systems are currently hindering many companies in their digitalization process. Japan faces difficulties by 2025, as many skilled personnel will be working with these legacy systems. The Japanese Ministry of Industry estimates this could cause economic losses of $75 billion per year due to factors such as increased system failure risks. This policy is prompting the establishment of an interdisciplinary group to identify challenges and solutions by June 2025. The government will promote the use of cloud technology, which is affordable and easily adaptable to changes in the business environment.

The plan also aims to train more cybersecurity professionals, a field that is becoming increasingly important as cyberattacks become more frequent. Japan aims to have 50,000 nationally certified information security professionals by fiscal year 2030, up from approximately 20,000 (as of April 2023). The government hopes to make it easier for regional vendors 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 growth potential of the economy. This includes promoting digitalization and automation, and investing in key areas such as green technology and semiconductor chips to ensure national security. This policy promises to support large-scale, multi-year investments to boost production as well as research and development in the fields of AI and chips.

MINH CHAU

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