Priority Plan 2024 for the Realization of a Digital Society: The Future of Business Competitiveness and Digital Transformation

The "Priority Plan for the Realization of a Digital Society," approved by the Cabinet in 2024, signifies a transformative policy initiative poised to reshape Japan's business landscape. This plan aims to harness digital technology to foster sustainable growth and bolster international competitiveness. It lays out a strategic framework for companies to maximize economic opportunities through digitalization, enhancing both their competitiveness and capacity for sustainable development. This article delves into the implications of the Priority Plan on the Japanese business environment and outlines strategies that companies can adopt to leverage digital transformation effectively.

Relationship between the vision of a digital society and economic growth

The Priority Plan 2024 for a Digital Society serves as a pivotal policy framework designed to accelerate Japan's digitalization and stimulate economic growth and business innovation. It articulates specific initiatives aimed at effectively deploying digital technologies to cultivate a more efficient and convenient society for citizens and businesses alike. The government's objective is to achieve sustainable growth through digitalization while simultaneously fortifying international competitiveness.

Compared to the previous year

In comparison to the prior Priority Plan approved by the Cabinet in June 2023, the 2024 iteration places a heightened emphasis on international collaboration and data utilization. While the earlier version primarily concentrated on expanding the My Number system and digitizing administrative services, this year's plan distinctly focuses on strengthening the digital industrial foundation and enhancing competitiveness through data collaboration. Furthermore, the promotion of DFFT (data free flow with trust) is highlighted as a vital measure to boost competitiveness in the global business arena.

The relationship between digitization and economic growth

Digitization has a multifaceted impact on economic growth. Particularly, digital transformation (DX) is an essential strategy for companies aiming to elevate their competitiveness. The integration of cloud computing, artificial intelligence (AI), and big data can drive down costs and enhance operational efficiency, leading to new business opportunities. Moreover, digital technologies can facilitate regional revitalization and enhance public services in critical areas such as healthcare, education, and disaster prevention. These initiatives are pivotal for achieving sustainable growth.

The government is also leveraging digitalization to address regional disparities and create new job opportunities in response to pressing domestic challenges, including a declining birthrate, an aging population, and a shrinking workforce. Notably, industrial innovation through AI and data analysis will play a significant role in maintaining competitiveness in the global marketplace while fostering sustainable business models.

Policy summary as stated in the "Priority Plan 2024 for the Realization of a Digital Society."

Digital infrastructure development and innovation in project management

As previously mentioned, the "Priority Plan 2024 for the Realization of a Digital Society" emphasizes the enhancement of digital infrastructure development to improve corporate competitiveness. Specifically, the comprehensive reform of "systems, operations, and frameworks" aims not only to implement digital technology but also to reassess institutional reforms and overall workflows in pursuit of greater efficiency, which is expected to significantly influence corporate business activities.

Impact of the Trinity Reform of "Systems, Operations, and Frameworks" on companies.

The Trinity Reform will empower companies to swiftly adopt new digital tools and cloud technologies while enhancing the transparency and efficiency of their overall operations. For instance, efforts are underway to transition local governments' mission-critical business systems to the government cloud by 2025. This shift is anticipated to expedite the online migration of administrative procedures and enable seamless project management and data sharing for businesses.

Moreover, the implementation of this government cloud, spearheaded by the Digital Agency, will facilitate shared digital infrastructure among local and national governments, reducing costs and accelerating business operations. This unified infrastructure will enable rapid data collaboration between local governments and businesses, positively influencing business decision-making.

Expanding business opportunities brought about by a common digital infrastructure.

The establishment of a common digital infrastructure, facilitated through collaboration between national and local governments, presents substantial business opportunities for companies. The standardization of systems via the Government Cloud will foster cooperation with local governments and is expected to drive new business development. For example, the introduction of a "one-stop window without writing" utilizing the "Window DX SaaS" provided by the Digital Agency is projected not only to enhance service efficiency for residents but also to create new business models through partnerships with private entities.

The establishment of this infrastructure will accelerate digitalization in local regions and invigorate local economies. Companies can capitalize on business opportunities by collaborating with local governments to address regional challenges. Additionally, local governments are also reinforcing their digital infrastructure through the Digital Rural City State Initiative, which is anticipated to reveal new markets and strengthen competitiveness.

Strengthen business competitiveness through digital technology and data strategies

The current business landscape is undergoing dramatic changes driven by rapidly evolving digital technologies and data applications. In particular, AI, cloud technologies, and data strategies are crucial elements that will enhance corporate competitiveness and unlock new growth opportunities. The Japanese government is also formulating policies to promote enterprise digitization as part of its 2024 Priority Plan for the Realization of a Digital Society.

Improve corporate competitiveness through digitization. The "Priority Plan for the Realization of a Digital Society 2024" is set to catalyze a significant transformation in Japan's business environment. Corporate digitization is expected not only to optimize operational efficiency but also to markedly enhance corporate competitiveness, serving as a strategic component for supporting sustainable growth. In particular, the application of AI and data can enhance corporate decision-making and customer service while enabling real-time market trend analysis. Automation through AI also boosts business agility by streamlining repetitive tasks, allowing human resources to focus on more creative endeavors, thereby improving responsiveness.

Cloud technology reduces costs and increases productivity. Embracing cloud technology is a vital strategy for companies to manage resources efficiently and curtail costs. By utilizing cloud solutions, businesses can decrease the expenses associated with maintaining large IT infrastructures while simultaneously enhancing productivity through, for example, remote work capabilities. The cloud is particularly advantageous for small and medium-sized enterprises lacking sufficient resources, as it offers access to cutting-edge technology with minimal initial investment.

Data Strategy and Global Competitiveness. Developing a robust data strategy is another essential pillar of competitiveness, with DFFT serving as a framework to facilitate international data transfer, forming the foundation for enhancing global competitiveness. For instance, visualizing and streamlining supply chains across nations, coupled with utilizing data for precise market analysis, creates new growth avenues for businesses. The construction of a government data ecosystem is also in progress, with collaborative data usage by public and private sectors poised to accelerate business innovation for companies.

Importance of Security and Cyber Risk Management

As the digital society advances, security risks and the threat of cyber-attacks are escalating. Particularly with ongoing digitization, companies and government entities are increasingly targeted by attacks, making robust security measures essential for business continuity. The Priority Plan 2024 for the Realization of a Digital Society underscores security strategies based on the principle of "security by design," advocating for the establishment of an integrated security system from planning through to operation.

Security risks associated with the advancement of digitalization and the need to manage them.

The rapid evolution of digital technology is transforming both business operations and daily life, yet it simultaneously amplifies the risk of cyber threats. Notably, ransomware attacks and those targeting supply chains are surging, compelling companies to adapt to these emerging risks. Governments have integrated security risk management into their national strategy, prompting businesses and local authorities to bolster their cybersecurity protocols.

Security measures must be viewed as integral to business growth and competitiveness, rather than mere defensive tactics. For instance, an information breach or system failure could severely damage a company's reputation and have far-reaching consequences. Consequently, risk management and security initiatives have emerged as top priorities within corporate strategy.

Role of Security in Responding to Cyber Attacks and Strengthening Digital Infrastructure.

Cyber attacks are becoming increasingly sophisticated, particularly those that threaten national security and target critical infrastructure. To combat these threats, the government is enhancing its security framework through public-private sector collaboration on security training. The GSOC, under the auspices of the Digital Agency and NISC, has been fortified to facilitate real-time threat analysis and information sharing, with information collection through Attack Surface Management and Protective DNS set to commence in FY2024. By implementing these measures, government agencies and businesses are expected to minimize the risk of cyber attacks and safeguard their digital infrastructure. Companies need to enhance their reliability and establish a solid foundation to support sustainable growth by rigorously applying security-by-design principles.

Summary

The "Priority Plan 2024 for Achieving a Digital Society" serves as a crucial guideline for bolstering Japan's economic growth. For companies to attain sustainable development, it is imperative to align with the government's digitization strategy and embark on business innovation. Specifically, the utilization of AI and data will facilitate swifter, more efficient business processes and decision-making, ultimately generating new value. Moving forward, companies will need to make strategic digital investments to enhance their international competitiveness while capitalizing on prevailing digitalization trends.

References

• デジタル社会の実現に向けた重点計画
• デジタル社会の実現に向けた重点計画（2024年6月21日閣議決定)
• デジタル庁:デジタルの活用で一人ひとりの幸せを実現するために「デジタル社会の実現に向けた重点計画」紹介資料
• デジタル社会の実現に向けた重点計画（2023年6月9日閣議決定）

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