“API Geoeconomic Briefing” is a weekly analysis of significant geopolitical and geoeconomic developments in the post-pandemic world. The briefing is written by experts at Asia Pacific Initiative (API) and includes an assessment of burgeoning trends in international politics and economics and the possible impact on Japan’s national interests and strategic response. (Editor-in-chief: Dr. HOSOYA Yuichi, Research Director, API & Professor, Faculty of Law, Keio University)

This article was posted to the Japan Times on January 7, 2021:

https://www.japantimes.co.jp/opinion/2021/01/07/commentary/japan-commentary/api-digital-agency-2/

API Geoeconomic Briefing

January 7, 2021

How Japan can become a data powerhouse

MUKOYAMA Jun, Fellow, Asia Pacific Initiative (API)

 

 

 

 

With the COVID-19 pandemic, the world has realized the need to utilize big data — from medical data on infections, to mobile data and traffic data to track the movement of people — to counter the virus.

But it has also been faced with the hard realization that there are no international regulations to restrict the use of personal data or reign in major data platforms. The same could be said for Japan, which lacks a comprehensive system that will enable data to be shared among central and local governments and the private sector.

Could the nation’s digital agency, which is slated to be launched this year, be a leader in shaping domestic regulations as well as drafting strategies to spearhead international rule-making on data governance?

According to the World Digital Competitiveness Ranking released by Switzerland-based IMD, Japan ranked 27th among the 63 nations listed. Looking at subfactor rankings in the survey, Japan came at the top for technological framework, including the number of mobile broadband subscribers and Wi-Fi broadband coverage. However, Japan was at the bottom for the use of big data, agility of companies and international experience of digital engineers.

It was also critical that Japan was assessed as a country not able to use and analyze data. While the level of cybersecurity indicates a country’s defense capability in cyberpower, there is no doubt that data is what makes a country competitive, with added value to bolster its presence in the global community in the coming years.

But the question is whether the digital agency will be able to turn around the current situation.

Amid COVID-19, the world has moved to a phase in which data is actively used to respond to the pandemic, with more people deepening their understanding of how data can be utilized. China’s surveillance state has raised the alarm over privacy issues, but we have also seen the potential of data usage.

China, the epicenter of the coronavirus outbreak, wasted no time in making full use of its available data. In January last year, the Industry and Information Technology Ministry had already built a system for other ministries to share their data to help pinpoint those who had close contact with virus carriers by analyzing people’s movements. They also monitored quarantined individuals through electricity consumption data and ran simulations of how the virus would spread by getting traffic data from subways and other public transport. In the medical field, hospitals in China were quick to use artificial intelligence analyses for scanned CT images.

Meanwhile, Google has published “COVID-19: Community Mobility Report,” a data analysis of people’s geographic movements over time, such as in parks, public transportation, workplaces and homes, aiming to help governments around the world to counter the pandemic.

Although the use of data is effective in achieving policy goals, democratic nations are struggling to draft balanced rules. Many are hoping to avoid becoming surveillance states, but putting overly strict rules on personal approval rights, as exemplified by the EU’s General Data Protection Regulation, may hamper innovation as well.

In many democratic states, private platforms are the ones who have an overwhelming amount of users’ data. Therefore, the question is how authorities should regulate them and make compromises.

We are no longer discussing ideals on utilizing data, saying that “data is the new oil.” The world is now actually leveraging data and the value it adds in real life, and data governance has become one of the most difficult global issues.

 

Japan’s leadership

So what is Japan’s game plan?

Former Prime Minister Shinzo Abe said at the World Economic Forum in 2019, “The engine for growth, if you think about it, is fueled no longer by gasoline, but more and more by digital data.”

At the forum, Abe proposed “Data Free Flow with Trust (DFFT),” a concept by which countries put in place data protection regulations but also allow the free flow of data. He later followed it up at the Group of 20 summit in Osaka a few months later with a process called the “Osaka Track,” which aims to get related nations, regions and international institutions to work together to draw up international rules on data flow and electronic commerce under the World Trade Organization.

Its basic ideal is: “Striving to form an international framework that will facilitate free flow of data while appropriately protecting personal and critical industry data and securing public trust in privacy and security.”

Japan attempted to show a different approach to the U.S., where private platforms, such as Google, Apple, Facebook and Amazon (GAFA), are the dominant data holders; China, where the nation controls data for both public and private sectors; and the EU, which is focusing on individual rights with GDPR.

Japan hoped to take diplomatic initiative with the proposed DFFT, but how is the country actually using data at home?

In 2016, the Basic Act on the Advancement of Public and Private Sector Data Utilization took effect, bumping up Tokyo’s ranking on promoting open data to 4th in the OECD in 2019.

To secure transparency, Japan has made progress in disclosing government data. However, the COVID-19 pandemic has revealed that the government has been unable to effectively use its data and cooperate with local municipalities in its battle against the virus.

The government’s COVID-19 cluster response team, which has played a significant role in its efforts to contain the virus, had to manually type in data coming from various municipalities and organize it before being able to analyze it.

Moreover, daily reports from medical institutions on infection cases to be put in a system called HER-SYS, which was launched in around June to manage data on infected individuals, were sent to the central government via fax.

 

A data-driven society

So what roles should the government and the digital agency play?

First, it is crucial to draft rules that will be the foundation for data utilization and prepare underpinning systems that will enable the private and public sectors as well as the central and local governments to utilize data that they have with each other.

For instance, Hiroaki Miyata, a professor at Keio University, has proposed “data sharing rights,” which allow authorities to use personal data without the permission of individuals if the usage is for the purpose of the greater good. This kind of thinking has been reinforced as utilizing medical data became increasingly important in the COVID-19 era.

It is best to build a system that will allow the government to leverage data from the public and private sector if it is deemed to contribute to the public good in times of emergency, including natural disasters and medical crises.

It is also essential to enable prefectural governments and local municipalities to exchange more data, including from local health centers, with the central government. Personal data ordinances in prefectures and municipalities need to be revised.

The digital agency needs to spearhead the move to get rid of sectionalism among ministries and prefectures, and between bureaucrats and the private sector.

Secondly, Japan needs to take the initiative for global data rule-making by working with other like-minded nations. Data is not something closed within a border. People are relying more on platforms provided by overseas firms, mostly the U.S., as they stay and work remotely from home.

There are still various issues to consider, including making sure those platformers that possess an enormous amount of data are not taking advantage of their dominant position and monopolizing data.

We have also learned the fearful truth that a government can manipulate people’s behavior if it imposes a surveillance system like China’s. While respecting individuals’ privacy, a free flow of data must be secured, which citizens of democratic countries must strongly feel.

Rather than allowing superpowers to unilaterally decide regulations, Japan should play a significant role in shaping rule-based order through cooperation with other like-minded countries that share basic values.

 

Enhancing convenience

Thirdly, the government should closely work with private firms to provide services that people can truly benefit from.

As a part of its efforts to counter the coronavirus, the government has launched experiments, such as analyzing people’s movement based on data from mobile network carriers and obtaining health condition data through the message app Line.

The proposed direction for Japan’s digital society included in a draft of the revised basic law on information technology currently under debate states that “the government, cooperating with the private sector, will create an environment to provide services that will respond to diverse needs among its people while launching new services that will better incorporate users’ perspective.”

The digital agency will need to have not only wider, strategic viewpoints, such as forming Japan’s data infrastructure and global data rule-making, but must also compile policies that will benefit the country’s people.

 

Disclaimer: The views expressed in this API Geoeconomic Briefing do not necessarily reflect those of the API, the API Institute of Geoeconomic Studies or any other organizations to which the author belongs.