Japan’s economic stagnation, often referred to as the “Lost 30 Years,” has been partially a consequence of its lagging investment in digital technologies. As a result, since the late 2010s, Japan’s public administration has been increasingly focused on digital transformation, a critical factor missing from the nation’s economic trajectory in the Heisei era (1989-2019).
Although the Japanese government acknowledges the importance of digital advancement, including the establishment of the Digital Agency in 2021, Japan’s standing in the field of digital technology remains relatively low. National and local governments are criticized for not sufficiently digitizing their administrative processes and continue to operate inefficiently. However, some advanced initiatives have emerged in using digital technology.
Generative AI
Since the emergence of ChatGPT in 2022, interest in text generation AI has boomed. Yokosuka City began experimenting with ChatGPT in April 2023 and the Tokyo Metropolitan Government created guidelines for the use of sentence generation AI and a document summarizing how ChatGPT can be used in the government. The advancement of AI is expected to accelerate the automation of government operations, leading to increased efficiency. In Japan, where labor shortages are a common challenge for many local governments, the adoption of AI is seen as a viable means to reduce the workload.
Metaverse and Digital Twins
The Metaverse, which received a great deal of attention alongside a host of other XR technologies (Augmented Reality, Virtual Reality and Mixed Reality) in 2022, has also influenced local government activities. Local governments are utilizing virtual spaces to not only conduct public relations campaigns, but also provide social welfare (Hosting a VR event to promote understanding of dementia; providing a counseling service for hikikomori, or homebodies, in a VR space; and providing VR travel experiences for the elderly in assisted living facilities) and educational support (providing virtual learning opportunities for students who don’t attend school, and providing VR-based training to students at a special-needs school)
Additionally, Digital Twins technology – which replicates real spaces in virtual environments to enable simulation, have also been employed by Japan’s local governments. For example, Shizuoka Prefecture released 3D point cloud data, enabling anyone to simulate disasters and speed up the disaster response process.
Web 3
Web 3-related technologies such as NFTs (Non-Fungible Tokens) and DAOs (Decentralized Autonomous Organizations) are emerging as innovative tools in local governance. Local governments like Kamishihoro Town and Yoichi Town are selling their own NFT art as a reward for the hometown tax donation program. Municipalities like Nishikawa are issuing digital residency certificates, allowing people outside of the area to be treated as digital residents. In addition, DAOs have facilitated a new policy scheme where people who have purchased NFTs can participate in certain local government projects. Some local governments and areas are beginning to establish DAOs, and there are cases where several local governments have jointly established DAOs. This movement may herald a new era in digital governance.
Japan’s Local Governments as Pioneers in Digital Innovation
Japan has lagged behind in the digital industry, but local governments are uniquely positioned to use and innovate new digital technologies. Japan has strengths in content creation, such as animation, manga and games, which are highly compatible with digital technology. One example of local government content creation is “Yuru-chara” (local mascot), by many local governments since the late 2000s, aimed at promoting regional identities. In 2015, 1,727 characters participated in the Yuru-chara Grand Prix, where votes were cast to determine the number one character. Although the yuru-chara boom is said to be over, certain mascots, like Kumamoto Prefecture’s mascot, continue to achieve success, with merchandise sales extending to China and other Asian countries. Further, the Yuru-chara Grand Prix, which ended in 2020, was revived in 2023 under the name “Yuruverse”, showcasing character avatars in a virtual space. It is expected that many local governments will start using AI and XR to increase the attractiveness of their PR content.
Digital technology and local revitalization
In Japan, rural areas face significant challenges due to their aging and declining populations, compounded by the financial constraints of local governments. Digital technology will not solve all of the problems, but it can help alleviate some. The adoption of AI will reduce the administrative burden on governments, helping to control spending and reduce staffing. In addition, XR technologies could help local governments that rely on tourism to maintain and grow their local economies to create new tourist attractions and improved PR campaigns. Moreover, the future potential of digital products such as NFT art could be a catalyst for promoting regions and generating revenue. The current experimental efforts in digital technologies by many local governments are expected to yield good new practices and contribute to regional revitalization.
Despite lagging behind the U.S. in the development of digital technology, Japan’s local governments have uniquely embraced the latest innovations. Their progress deserves continued attention.
Toshiya Komatsu
Toshiya Komatsu (he/him) is an MPM student at the McCourt School of Public Policy and an Associate in the Research Department at the East Asian Policy Association. Toshiya has worked for the Tokyo Metropolitan Government and spent most of his career in the Office of the Governor for Policy Planning. He has also been seconded to the Japan Local Government Center Sydney Office (a.k.a. CLAIR, Sydney) and to the Development Bank of Japan. He studied urban engineering at a graduate school in Japan.