The Digital Transformation and Japan's Political Economy

The digital transformation and demographic change are usually seen as two separate but equally threatening events that foreshadow job replacement, industrial decline and social bifurcation. Because Japan is the world’s frontrunner in demographic change with an ageing and shrinking society, it is facing these two disruptions at the exact same time. This creates a “lucky moment”, as it presents an opportunity to employ one as a solution for the problems caused by the other. For example, Japan’s traditional sectors are replaced by digital systems that demand fewer people while offering new jobs. Emerging technologies are opening fresh opportunities for Japanese companies to compete globally. The twin disruptions are also upending Japan’s political economy. As companies reinvent business strategies and employees reskill to pursue individual careers, the state is reorganizing to find a new role in balancing the unfolding demands of the digital economy.

 

Kay Shimizu is a Research Professor in the Graduate School of International and Public Affairs at the University of Pittsburgh. Her research addresses institutional design and their effects on economic governance with a focus on East Asia.  She is the author of Betting on the Farm: Institutional Change in Japanese Agriculture (with Patricia Maclachlan), and The Digital Transformation and Japan’s Political Economy (with Ulrike Schaede).  Her current research is about the confluence of demographic change and the digital transformation in the East Asian context.