NIRA RESEARCH REPORTEXECUTIVE SUMMARY
April 2022

The Lessons Learned from Telework andPandemic Countermeasures:
The Impact and Challenges of COVID-19 in Japan and the Country’s
post-COVID Prospects
Toshihiro Okubo

Professor, Faculty of Economics, Keio University /Senior Adjunct Fellow, NIRA

Atsushi Inoue

Research Coordinator & Research Fellow, NIRA

Kozue Sekijima

Research Coordinator & Research Fellow, NIRA

Since COVID-19 first emerged in the public consciousness in early 2020, thescope and pace of digitalization has rapidly expanded around the world. The key toJapan’s economic future lies in whether or not the country can ride this wave ofdigitalization to a new era of prosperity. However, the expansion of digitalization, andin particular, telework, also brings about new challenges in the realm of international
economy, bringing a new dimension to globalization that will further expose whitecollar workers to the ravages of international competition.
Recognizing both the critical nature of meeting this moment for Japan, as
well as the difficulties it will entail, the Nippon Institute for Research Advancement(NIRA) and Keio University’s Toshihiro Okubo, after having analyzed the trends
across six rounds of the “Questionnaire Surveys on the Effects of the Spread ofCOVID-19 on Telework- based Work Styles, Lifestyle, and Awareness on Telework”,
and now present the results for this paper. Our research has shown that to succeed inincreasing productivity via telework it is insufficient to simply provide an online
environment that connects workers and the workplace. Employers must craft clear
criteria for evaluating employee performance, ensure that there exists a clear divisionof labor and responsibilities, and assist employees in securing a remote work
environment in which they can be productive. Furthermore, even after controlling foroccupation and the specific responsibilities and duties of a given job, large divides
remain in telework opportunities between regions and companies of differing sizes.
Equalizing the situation so that the benefits of telework can be distributed more
widely will require a combination of the following: improving the ICT competency ofworkers, accelerating the digitalization of regional areas and corporate structures,and the reworking the employment system to better suite telework.

1
Copyright Ⓒ 2022 by Nippon Institute for Research Advancement
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation
presented here. Translated by Jonathan Webb.

NIRA RESEARCH REPORTEXECUTIVE SUMMARY
April 2022

Telework as a Pandemic Countermeasure:An analysis of the relationship between the use of telework, and the flow of people
in the Greater Tokyo Metropolitan Area shows that the First Declaration of a State ofEmergency was followed by a large decrease in the number of people staying in the Tokyo
city center during the daytime on weekdays, with a consequent increase in the number ofpeople staying in other areas of Tokyo. In other words, the use of telework alleviated, tosome extent, the flow of people in business areas that are normally crowded withcommuters. Although more research should be conducted to clarify this relationship,
telework will undoubtedly continue to be one of the most effective public health measuresavailable to fight the spread of COVID-19.

Japan Must Reform the Way It Works to Unlock the Increased Productivity
Telework Enables:
Research into the impact of telework on productivity in Japan during the pandemic
has shown that there have been many cases of decreased work efficiency. An analysis of
the pluses and minuses of telework as indicated by the data collected for this report showsthat decreases in productivity typically stem from inefficiencies that arise in the chain ofcommand due to the lack of physical proximity as well as difficulties experienced by
employees in accessing the work environment remotely. In cases where telework
increased worker productivity, it was tied to the crafting of clear criteria for evaluating
employee performance, the establishment of a clear division of labor and responsibilities
and the availability of quiet environment in which the employee could focus on work.
Taking the above examples into account, it is clear that it is not reasonable to expect
productivity to improve simply by setting up a remote office via ICT. Fully capturing thebenefits of telework will require institutions to retool their existing jobs and work styles,
while ensuring that employees have access to appropriate workspaces.

ICT Skill Improvement and Digital Environment Development Necessary toEqualize Telework Opportunities:
Amidst the backdrop of the pandemic, large differences in the use of telework byindustry, income, place of work and other factors have emerged, raising urgent questions
about teleworks impact on equality of opportunity. A pertinent example can be seen bylooking exclusively at gender, which reveals that the telework rate of women issignificantly lower than that of men. However, this is in part a reflection of the fact that2
Copyright Ⓒ 2022 by Nippon Institute for Research Advancement
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation
presented here. Translated by Jonathan Webb.

NIRA RESEARCH REPORTEXECUTIVE SUMMARYApril 2022
in many industries, the jobs and tasks that men and women perform at work differ
significantly; by controlling for factors other than gender, the rate at which womentelework increases significantly. This suggests that telework is an important tool for
women's labor participation. Also, at the time of the First Declaration of a State ofEmergency, non-regular workers were less likely to use telework than regular workers,
but later, as of September 2021, there was no longer a significant difference between thetwo groups. On the other hand, even after controlling for occupation, job duties andresponsibilities, and the position’s inherent compatibility with telework, significant
observable differences in the telework rate persist between individuals of differing ICT
skill levels, companies of differing sizes, and metropolitan and rural areas. This strongly
suggests that improving equality of opportunity in telework will require increasing
workers ICT competency, accelerating the digitalization both corporate structures andmore rural areas, and the reworking the employment system to better suite telework.

Figure: Difference in Telework Use by Gender

Five Challenges for the Japanese Economy in the era of Telework:
In order to make effective use of telework, the government must address the issues
facing the Japanese economy. The first order of business is to improve the digital skillsetof individuals, who collectively, make up the work force. The goal should ideally be for
digital skills to be accumulated at the individual level, not the corporate or organizational
level. Through support for individuals, the government should aim to raise ICT literacy
level of society as a whole. The second major issue to be addressed should be that ofretraining and labor adjustment. In order to keep pace with the rapid advancement of3
Copyright Ⓒ 2022 by Nippon Institute for Research Advancement
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation
presented here. Translated by Jonathan Webb.

NIRA RESEARCH REPORTEXECUTIVE SUMMARY
April 2022
science and technology, it is necessary to provide adequate incentives to encourage theretraining and reskilling of the labor force as necessary. The third issue is theimprovement of the employment environment. It is necessary to create a flexibleemployment environment that enables the integration of workers, both Japanese andnon-Japanese, within and outside Japan, into the workforce in the appropriate capacity,either in person or remotely. Fourth, infrastructure must be developed to connect
workplaces and residences, and cities and rural areas. It is important to promote digital
infrastructure throughout Japan to alleviate the concentration of people in Tokyo and topromote the development of other regions. The government must work to prevent theemergence of digital disparities that would impoverish rural areas and trap people in thelow-income bracket. Fifth and finally, Japan’s capacity for advanced research should beenhanced to further promote the advancement of digital technology. In the coming years,
it will be increasingly necessary to conduct research that transcends the boundaries ofindustry, government, or academia. Interestingly, Mr. Wakabayashi noted that theDanish and Australian state governments felt very “human,” despite the fact that thedigital transformation implies a focus on technology. He believes that the core of a
successful digital transformation is in changing bureaucratic systems into more flexible
and humanized systems, a suggestion that warrants greater attention.

NIRA Project Staff:
Volume Author & Editor: Toshihiro Okubo
Professor, Faculty of Economics, Keio University / Senior Adjunct Fellow, NIRA
Volume Author (1): Atsushi Inoue
Research Coordinator & Research Fellow, NIRA
Volume Author (2): Kozue Sekijima
Research Coordinator & Research Fellow, NIRA
Technical Advisor & Reviewer: Kiwamu Kato
Senior Architect for Future Corporation / Senior Adjunct Fellow, NIRA
Moderator: Toshihiro Okubo
Professor, Faculty of Economics, Keio University / Senior Adjunct Fellow, NIRA
Copy Editor: Sosuke Suzuki
Research Coordinator & Research Fellow, NIRA
Research Support: Kohei Ando
Graduate Student, Graduate School of Economics, Keio University (as of publication)

4Copyright Ⓒ 2022 by Nippon Institute for Research Advancement
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation
presented here. Translated by Jonathan Webb.

NIRA RESEARCH REPORTEXECUTIVE SUMMARY
April 2022

Project Support & Assistance:
Daisuke Aihara
Executive Vice President, Toray Carbon Magic Co., Ltd.
Mitsuko Zama
Department Head, Japan Institute for Women’s Empowerment & Diversity Management,Business Promotion Department
Kazuo Tamiya
Exclusive Director, Japan Telework AssociationMegumi Tsukamoto
Representative Executive Officer at a major multinational manufacturing firm with priorexperience working in the IT industry

5Copyright Ⓒ 2022 by Nippon Institute for Research Advancement
This is a translation of a paper originally published in Japanese. NIRA bears full responsibility for the translation
presented here. Translated by Jonathan Webb.