Monday, April 19, 2021
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Digitising Japan: Coronavirus forces firms to use tech solutions

The coronavirus pandemic may be a drag on economies across the globe, but in Japan it's bringing long-overdue change in work habits and tools.

About 90% of Japanese refiner Idemitsu Kosan Co.'s non-manufacturing employees have worked from home. Department-store chain Isetan Mitsukoshi Holdings Ltd. is using video chats to offer shopping suggestions online, while smaller enterprises are emracing digital tools. Digital signatures are finally taking hold, replacing official stamps and seals.

Despite being at the forefront of technologies ranging from imaging chips to electric-vehicle batteries, Japan ranked 23rd out of 63 nations in digital competitiveness last year, according to the International Institute for Management Development. While a chronic labor shortage caused by a declining population was already spurring businesses to automate, the Covid-19 outbreak is pushing the transition to the digital workplace into higher gear.

"Many companies small and large have talked about digitization as being important, but put it off," said Miku Hirano, chief executive officer of Cinnamon Inc., a provider of AI-based business-solution services. "Now, the pandemic is making them take up the mission."

Although Prime Minister Shinzo Abe lifted Japan's state of emergency in late May, companies such as Hitachi Ltd. and Nippon Telegraph and Telephone Corp. plan to keep work-from-home measures in place for better operational efficiency. Earlier this month, Fujitsu Ltd. said it would halve its office space over the next three years, encouraging the electronics maker's 80,000 staffers to work primarily from home.

Small- and mid-sized companies, which make up more than 90% of the nation's enterprises, are also embracing change. While it closed its doors during April and May, the Szechwan Restaurant chain used the time to ditch manual schedules and set up spreadsheets instead, and hold meetings via video chats. "A quick shift to digital tools wasn't possible without the pause, because we were too busy with regular restaurant operations," said deputy director of marketing Ayami Kotani.


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