Part 1 Understanding the current state of DX in Japan

January 30th, 2023 [No. 106 – 2022]

Fujikazu Suzuki
Research Center for Solidarity-based Society, Japan


The Impact of DX and Work Style Changes in the Era of Living with COVID in Japan
Part 1 Understanding the current state of DX in Japan

One of the most important pillars of change in economic society during the second half of the 20th century was the advancement of informatization, and its central characteristic was increasingly rapid development. This speed of change was not seen in any of the past technological innovations. Advancement of informatization frequently and repetitively created significant qualitative leaps instead of gradual and sustainable changes.

The core of the new phase of advancement of informatization in the early 21st century is digital transformation (DX). Its major characteristic is that it is moving forward as a whole societal change covering not only industrial and company operation but also culture and people’s lifestyle.

Erik Stolterman (currently a professor at Indiana University), who is believed to be the first person to propose the concept of DX, defined digital transformation as “the changes that digital technology caused or influences in all aspects of human life” in his paper published in 2004.

This has led to discussions of DX from multiple aspects and viewpoints. For example, the Digital Governance Code 2.0 (revised in September, 2022) by the Ministry of Economy, Trade and Industry defines DX as a process for a company to transform not only its products, services, and business model but also the business itself, organization, business process, and corporate culture to establish a competitive advantage by responding to drastic changes in the business environment and utilizing data and digital technologies based on customer and societal needs. Prof. Stolterman in his recent blog article proposes that DX in Japan needs to be redefined in terms of DX for society, the public sector, and private sector while taking into consideration Japanese organizations, culture, and DX progress.

One of the characteristics of the Digital Governance Code 2.0 by the Ministry of Economy, Trade and Industry is that, while it takes into consideration the issue proposed by Prof. Stolterman, it focuses on DX of corporate activities. This is unsurprising considering that the Ministry is in charge of administration related to economic and industrial development as well as supplying of mineral and energy resources. The fact that the government definition of DX is widely used as the typical definition of DX in Japan, however, may be seen as a reflection of the predominant influence of corporate activities in Japanese economic and social life, which is often described as a company-centric society.

There are two routes by which DX of corporate activities influence all aspects of our social life. The first is that DX of companies changes the way of the goods and services market and influences all economic and social life. The second is that changes in human resource management by companies influence how people manage their work and life styles and their ways of living. In this article, we keep our attention on the latter path to present an overview of the impact of DX and work style changes in the era of living with COVID in Japan.