COVERLEAD

Digital Technology Will Create a New World
After the Global Spread of Covid-19
By Naoyuki Haraoka

The explosive outbreak of the coronavirus infection in2020 has started to transform the economics of society
drastically. As what we call “social distancing” is the only
way to avoid the rapid global spread of the virus until
medicine for a cure and a vaccine are produced, people
now increasingly depend upon communication through theInternet rather than face-to-face communication. Mostpeople today are staying and working at home andcommunicating with their colleagues at their company bye-mail. As people get used to this, it could become a newworking style in the future even after Covid-19 has gone.
Even without the pandemic, 2020 was supposed to be theyear of 5G – the fifth generation of wireless communication
technologies – being promoted significantly around theworld after its commercial use began in 2019 in manynations. The pandemic has even caused nations to benefit
from 5G and will significantly accelerate development of thedigital economy. What will this digital economy look like,
and what are its merits and challenges? The answers tothese questions will need to be scrutinized. The rapid global
spread of the virus could shorten the time for reflection onthese issues given the urgent need to stop the infection byusing digital technology. I hope the articles of this issue’s
cover story will be useful in thinking about the digital
economy from a longer-term perspective.
Our cover story starts with an interview with Dr. Kei
Sakaguchi, professor at Tokyo Institute of Technology. He
introduces how 5G will realize a “Super Smart Society”
where remote control of machines or automated driving or
telemedicine will be seen. These technologies will be a kindof social overhead capital in society, and those without theknowledge and skills to handle them would be poor, while
those with such knowledge and skill would be rich. Such a“digital gap” would be a new challenge for policy makers.
We then introduce three business points of view on aworld dominated by 5G. The first is an interview with Taro
Shimada, corporate senior vice president and chief digital
2 Japan SPOTLIGHT • May / June 2020

officer of Toshiba Corporation, president and CEO ofToshiba Digital Solutions Corporation, CEO andrepresentative director of Toshiba Data Corporation, andboard chairman of ifLink Open Community. He emphasizes
the need to share the benefits of Big Data by using theCyber-Physical System (CPS) technology to enhance thewelfare of people living in a digital society. The second is anarticle by Dr. Takanao Uchida, former chief engineer at
Honda Corporation. He discusses how virtual engineering
could make a Japanese automobile company’s international
competitiveness much less significant, as digitaltechnology would terminate the competitive advantages
born of human skills, a key in the automobile
manufacturing process and a strength of the Japanese
automobile industry, as feasible virtual engineering willreplace human skills. The third is an interview with SeanDeng, CEO of OPPO Japan, a smartphone producer ofChinese origin that represents Asian digital business very
well. For his business, consumers’ needs and interests are
keys to success, and as for any digital product, the end
users will determine the producer’s business structure andstrategy.
We then move on to public policy perspectives.
Kazumasa Oguro, professor of the Faculty of Economics at
Hosei University and a member of Japan SPOTLIGHT’seditorial committee, talks about the possibility of new
public services born from applications of new technologies,
replacing the government’s functions and thus leading toalleviating the government’s fiscal deficit. How we canachieve a fair and relevant taxation policy for digital
services is now a big question, and Shigeki Morinobu,
research director of the Tokyo Foundation for Policy
Research, highlights in his article the debate on taxing
digital services, in particular the points where interests
clash.
Finally, we introduce the rule-making aspect of the digital
economy. Dr. Jota Ishikawa, professor of International
https://www.jef.or.jp/journal/

COVERLEAD

Economics in the Graduate School of Economics atHitotsubashi University, provides an update on current
progress in digital trade and the status of rule-making inthis domain.
(Brief Introductions)
COVER STORY 1
Interview with Dr. Kei Sakaguchi, Professor at Tokyo Institute of Technology

COVER STORY 4
Interview with Sean Deng, CEO of OPPO Japan

Consumers’ Needs Are the Engine of Business for Smartphone
Producer OPPO JapanBy Japan SPOTLIGHT

While the Chinese and Southeast Asian populations aremore adaptive and ready to accept new things, in Japanpeople still have a lot of things being done manually or onpaper.

5G – a Technology to Realize a “Super Smart Society”
By Japan SPOTLIGHT

A “Super Smart Society” to be achieved by 5G technology
will bring new digital services like automated driving bus
transportation, automated driving taxis or a “connectedcity” with the introduction of automated driving cars. In
such a society, different levels of knowledge about these
new technologies would create serious inequality. To
mitigate this gap, open education for all people regardlessof jobs and generations will be crucial.

COVER STORY 5
New Public Services Created by Diversity & Connections:
Possibilities for Applications of New Technologies
By Kazumasa Oguro

Private-sector-led donations and philanthropic activities areother forms of redistribution, in addition to those carriedout under government policies that collect taxes from somepeople and transfer them to others. These can be new
public services created by diversity and connections
throughout digital networks.

COVER STORY 2Interview with Taro Shimada, Corporate Senior Vice President & Chief Digital
Officer of Toshiba Corporation, President & CEO of Toshiba Digital Solutions
Corporation, CEO & Representative Director of Toshiba Data Corporation,
Board Chairman of ifLink Open Community

CPS Technology Creates a Society Sharing the Benefits of Big Data
By Japan SPOTLIGHT

Promoting the sharing of the benefits of Big Data in adigital economy will be a key to achieving enhanced socialwelfare. Respecting the privacy of individual data owners
and avoiding monopolies on data on the business side will
also be important in achieving it.
COVER STORY 3
Development of a Global Manufacturing Model in the Digital
Economy – a Revolution Brought About by Virtual Engineering
By Takanao Uchida

Virtual engineering is creating a revolution. The automobile
industry will not need specific human skills in themanufacturing process as virtual engineering makes it
possible to assemble a product perfectly in accordancewith the detailed design of the product. Japanese
automakers that have been dependent upon human skills
would lose their competitiveness.

COVER STORY 6
The Debate on Taxing Digital Services, Where Interests ClashBy Shigeki Morinobu

The development of the digital economy has provokeddebate on how to tax digital services. We need to achieveinternational rule-making in this domain to avoid a situation
where countries impose unilateral taxes. Coordinating theinterests of the respective countries would be the essenceof international taxation.
COVER STORY 7
Progress of Digital Trade & the Current Status of Rule-Making
By Jota Ishikawa

There is an urgent need for minimum multilateralrule-making for digital trade so that all the nations canbenefit from the digital economy with equal opportunities.
Japan, as the country having started the Osaka Track, is
expected to continue leadership in this rule-making.
Naoyuki Haraoka is editor-in-chief of Japan SPOTLIGHT & executive
managing director of the Japan Economic Foundation (JEF).
Japan SPOTLIGHT • May / June 20203