Why Japan’s Digital Transformation Is Inevitable

This chapter examines the digital transformation of Japanese business in terms of key technologies, the barriers to their expansion in Japan, and the drivers moving them forward. After clarifying definitions and discussing key technologies, the chapter discusses six sources of pressure toward digital business transformation in Japan. These pressures include overseas partners, fintech, the drop in Japanese population, generational change, and the preference for food grown in Japan. The sixth of these is a sense of innovation deeply baked into the upcoming generation that will likely impact all areas of life and business in Japan. The new generation is impatient with conventional services and feels the need for transformation as available labor decreases and aging increases demands of individuals on society. There is an additional, even though temporary, source of pressure as well – the 2020 Olympics. The sectors that are most likely to feel the impact of new digital technologies are finance, retail, manufacturing, services, agriculture, and elder care. The big question that looms in front of Japan, as with other countries, is how Japanese business and society will provide the human resources and investments needed to bring transformation to fruition.