My Vision No.56
2021.10COVID-19: Highlighting the Japanese Affliction of Indecision
The spread of COVID-19 has highlighted the challenges faced by Japan’s system of medical carein a crisis. We must look back on the policy responses put in place to date and learn the lessons
that will enable us to prepare for the next crisis.

About This Issue
How Should We Apply the Lessons Learned From Japan’s Responses to COVID-19?
- Digitalization Allowing the Acquisition of Data in Real Time Will Be the Key -Yasufumi Kanemaru
Chairperson, Nippon Institute for Research Advancement (NIRA) / Chairman and President / Group CEO,
Future Corporation, Inc.
Pressure on Japan’s system of medical care has represented a problem since the initial stages of the COVID19 pandemic, and it is a problem that has not yet been fully resolved. Amendments have been made to the
Infectious Disease Control Act and the Act on Special Measures for Pandemic Influenza and New Infectious
Diseases Preparedness and Response, but these have not been as effective as desired. In order to prepare forthe next pandemic, we must examine the policy responses put into place thus far and learn from them. What
are the lessons to be learned from Japan's measures in response to COVID-19? What must we do in order toreform the nation’s system of medical care? In this issue of My Vision, we put these questions to frontline
personnel responsible for steering the course of medical care in Japan, in addition to an overseas expert in
the field of innovation and public value.
Keywords…Judgments in emergency situations, digitalization, redesigning the state

Expert Opinions
COVID-19: Highlighting the Japanese Affliction of Indecision
What are the lessons to be learned from Japan's measures in response to COVID-19? What must we
do in order to reform the nation’s system of medical care?

Exert Political Leadership to Establish an
Emergency “Control Tower”

It Was Essential to Switch to “Emergency
Mode”

Yasuhisa Shiozaki

Yasuhiro Suzuki

Former member of the House of Representatives

Vice-President, International University of Healthand Welfare / Former Vice-Minister for Health／Chief Medical & Global Health Officer, Ministry of
Health, Labor and Welfare

Keywords…Control tower, division of roles between
national and regional governments in emergencies,
integration of public health and clinical care

Build a System of Medical Care Able to“Change Modes” in an Emergency
Yoshitake Yokokura

Keywords…Temporary centralization, switching
concepts, understanding potential resources

Strengthen Japan’s Capability for Researchand Development of Vaccines andTherapeutic Drugs as Part of National
Security

Honorary President, Japan Medical Association /President, Yokokura Hospital

Sunao Manabe

Keywords…Family doctor, online medical care,putting ordinary hospital beds to other uses

Keywords…Development of R&D infrastructure,strengthening of industrial competitiveness, control
tower, drug research ecosystem

COVID-19 and Public Sector Capacity
Mariana Mazzucato
Professor of Economics of Innovation and Public
Value, University College London
Keywords…Public sector capacity for crisis
management, investment in ability to govern, 21st
century needs

Representative Director, President and CEO,
Daiichi Sankyo Co., Ltd.

Interview period：July-September, 2021
Interviewer :Mari Kawamoto（NIRA Research Coordinator &Research Fellow）
Kozue Sekijima（NIRA Research Coordinator &Research Fellow）

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
About This Issue

How Should We Apply the Lessons Learned FromJapan’s Responses to COVID-19?
– Digitalization Allowing the Acquisition of Data in Real Time Will Be the Key
The COVID-19 pandemic has caused severe damage andeconomic harm throughout the world. At the same time, it has alsobrought to light problems that Japan's social and political systems
have faced for many years. With this in mind, what has been
mistaken in Japan’s response, and how should the nation approachsuch situations in the future? In this issue of My Vision, we explore
the direction to be taken in our response to future pandemics withfive experts in diverse fields.

Yasufumi Kanemaru

Essential Emergency Decisions and Digitalization

Japan first experienced the shock of COVID-19 in
February 2020, when the cruise ship “Diamond Princess” berthedat Yokohama. As the situation in Wuhan and the world moregenerally was being communicated via the Internet and SNS, we
saw personnel from Japan’s Ministry of Health, Labour andWelfare board the ship in suits, while members of the nation’s Self-Defense Forces went aboard inprotective clothing. The contrast in approaches displayed here highlighted the difference in awarenessof the crisis being faced in Japan’s initial responses to COVID-19. The important thing in this case was
the decision on the existence of an emergency. Dr. Yasuhiro Suzuki, Vice-President of the International
University of Health and Welfare, indicates below the necessity for authorities to make the transition
to an “emergency mode” in the event of a pandemic, and I also endorse this view.
In addition to this, we must also consider a delay in digitalization. The Diamond Princess had
approximately 3,700 passengers and crew, including foreign nationals, and thus represented a treasure
trove of valuable data on, among other things, the status of health and the status of the spread of theinfection of those on board. However, the Ministry of Health, Labour and Welfare officials who
conducted the onboard investigation collected this data on paper and compiled it in Excel. When thesurvey personnel received inquiries from the Prime Minister’s Office and the news media, they wereforced to print out Excel sheets in order to respond. In addition, public health centers continued to
employ faxes in sending reports, creating a bottleneck in the imparting of information. Because no
digital system allowing rapid response to an emergency had been prepared in advance, Japan’s
response was entirely analogue, relying, inefficiently, on input from large numbers of people. A delayin the payment of the government’s lump-sum COVID-19 benefit was due to the same factor. It wasalso not possible to utilize Japan’s “Individual Number Card” and its associated system, for which“points” had been offered to promote uptake. Seeing the difference between their own nation’s response
and responses in the rest of the world, Japanese citizens were profoundly disappointed.
Chairperson, Nippon Institute for
Research Advancement (NIRA) /Chairman and President / Group
CEO, Future Corporation, Inc.

Effective Utilization of Online Medical Care and Development of Vaccines andTherapeutic Drugs as an Aspect of National Security
While it is a temporary measure, a Cabinet decision taken on April 7, 2020 makes it possible
to provide online medical care following a patient’s initial visit. Yoshitake Yokokura, President of theJapan Medical Association at the time this decision was taken, was understanding of the need foronline medical care. However, there has been strong opposition from local medical associations, andeven today, when a trajectory towards making this system permanent has been established, it is madelittle use of. There are still numerous issues that remain to be resolved before online medical care canbecome a hybrid tool and is able to be used as a service that is taken for granted in the standard medicalarmamentarium, and not merely a measure to be adopted during the COVID-19 crisis.
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
This resistance is not limited to online medical care. For example, in the UK, it was madepossible for vaccinations to be performed even by members of the general public after a certain amountof training. In Japan, however, under the existing law, only doctors, or nurses under the direction of
doctors, are responsible for vaccinations; not only are members of the public not permitted to offer
vaccinations, but even pharmacists are barred from providing them. It will be necessary to address therebuilding of Japan’s medical system, including making amendments to the Infectious Diseases Control
Act and the Medical Practitioners’ Act, to ensure that valuable medical personnel and facilities such as
public hospitals, private practitioners, and pharmacists can be utilized in order to take effective
measures against infectious diseases.
Yasuhisa Shiozaki, a former member of Japan’s House of Representatives, emphasizes thenecessity for the exertion of political leadership in order to create a “control tower” to function in a crisis.
The only way to realize this will be for the government to appropriately explain the situation to the
public and win over public opinion.
Up to the present, Japan has procured vaccines, medical devices such as respirators, andmasks from overseas as required. The COVID-19 crisis, however, has caused the foundations of thisfocus on “value for money,” on the purchase of the requisite items at a low price, to crumble. As Sunao
Manabe, Representative Director and CEO of Daiichi Sankyo Co., Ltd., indicates below, securing theseresources is strongly tied to national security. In addition to the spontaneous occurrence of a pandemic
resulting from an infectious disease, we must also consider the possibility of bioterrorism using a viral
agent. Responses to viruses, including the development of vaccines, therapeutic drugs, and relevant
medical devices, represent a significant business risk and are difficult for individual companies to makecommercially viable. In recent years, funding for fundamental research at Japan’s universities has also
been cut, meaning that the nation’s research capacity has undergone a noticeable decline.
In addition to adopting budgetary measures based on a long-term perspective, the government
should review its procedures for granting permissions in states of emergency in order to allow
researchers and companies to engage in research and development with a sense of security.

The Government Must Invest in Order to Improve GovernanceMariana Mazzucato, Professor of Economics of Innovation and Public Value at University College
London, points out below that “state capacity to manage a crisis is dependent on the cumulative
investments that a state has made in its ability to govern,” a view that I wholeheartedly agree with.
When the Japanese government has promoted regulatory reform, it has been a significant aspect of policy
to rely on the private sector to take responsibility for a number of services. However, response to a pandemic
is a crisis response that is far from the capacity of the economic rationality that characterizes commercial
enterprises to deal with.
Even in the case of public hospitals, the reduction of medical expenses should not be the main
focus; what is necessary is not only reform of governance as it relates specifically to public hospitals, butalso a systemic redesign that includes consideration of crisis response and a level of investment that iscommensurate with this. For example, hospitals that are part of national universities should be regarded
as core hospitals in their regional areas. If another pandemic was to occur, resources such as specialists andother medical staff and medical equipment could be concentrated in these hospitals. Strategies that would
involve, again for example, having normal in-patients transferred to private hospitals, should be formulated
in each of Japan’s regional areas. The only way to ensure that we respond as agilely as necessary to thecrisis represented by a pandemic will be to conduct investments and to make preparations from the very
first.
I would also wish to emphasize once more the importance of digitalization. No matter how much
we revise laws or change the structure of organizations, if real-time data is not readily available, it will not
be possible to take appropriate actions in response to a crisis. Whether a virus or a missile attack,appropriate decisions cannot be made in the absence of data, and in such a case, no matter where theresponsibility for taking action was placed, it would not be possible for the necessary actions to be taken.
We must assume that Japan will come under threat, and redesign the approach of the state based on thatassumption.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
Expert Opinions

Exert Political Leadership to Establish an Emergency“Control Tower”
In the event of a large-scale epidemic of an infectious disease,
it is essential for us to switch over from “normal thinking” to “emergency
mode.” The problem with Japan is that despite the fact that the
government recognizes the current situation as a disaster-levelemergency, it has not been able to establish an emergency system inwhich it functions as a “control tower.” In an emergency, a new divisionof roles between the national and regional governments is required, one
which differs from the system in place in normal times, and laws mustbe amended and institutions changed for that purpose. A control tower
Yasuhisa Shiozaki
system was finally mentioned in the government’s Basic Policy in June
Former member of theHouse of Representatives
this year, but it is too late for the concept to be deliberated in the ordinary
session of the Diet next year. If officials do not take responsibility, it will
be necessary for politicians to display leadership and make changes precisely because we face anemergency situation.
It has been indicated that the reason we cannot secure hospital beds is that we have an
insufficient number of doctors and nurses. This is mistaken, however. The issue is the fact that thenational and prefectural governments can only make request-based demands on medical institutions;they do not have the authority to give orders. The law should be amended to enable the national andprefectural governments to give instructions and orders in the event of an emergency. Even national
hospitals, “advanced treatment hospitals,” and hospitals affiliated with the Japan Community HealthCare Organization (JCHO) offer an extremely limited number of beds. It is the role of politicalleadership to correct this situation.
That said, the threatening approach of publishing the names of hospitals if requests are notresponded to is simply misguided bullying, in particular in the area of community health care, which
is built on relationships of trust. When the government requests hospitals to accept infected patients,
the focus should be on public hospitals that have capacity to spare. In addition, if a regional governmentis unable to set up temporary medical facilities, i.e., “field hospitals,” (which is now a responsibility ofregional governments), the national government should have the ability to establish them directly.
The fact that response to infectious diseases in Japan is focused on health centers, a situationthat has continued since the Meiji era, also represents a problem. Even if a GP wants a patient
displaying symptoms to have a PCR test, it is first necessary to seek the judgment of a health center.
The necessity for examinations and hospitalization is judged by health center staff who do not possess
appropriate medical qualifications, and there is also an insufficient number of staff. If “public health”
services concentrated in health centers continue to be situated as a higher priority than clinical medicalcare provided by regional medical institutions and doctors, lives that could be saved will be lost. It isnecessary for regional health centers and medical personnel to work together, and to do so in an organic
fashion.
Mr. Shiozaki has served as Chief Cabinet Secretary, Minister of State for the Abduction Issue, and Minister of Health,Labour and Welfare. He is a graduate of The University of Tokyo’s College of Arts and Sciences, and holds a Master in
Public Administration degree from the Harvard Kennedy School. He was elected to the Diet for the first time in 1993
following a period working for the Bank of Japan. Mr. Shiozaki was a member of the House of Representatives for eightterms and a member of the House of Councilors for one term. He is known as one of the leading policy experts in Japanesepolitics, and has emphasized that the Prime Minister's Office should take the lead in policy decisions. During his time as
Minister of Health, Labour and Welfare, he worked on the enactment of a bill to revise the Health Promotion Act,
including measures to prevent exposure to second-hand smoke. Since Mr. Shiozaki’s retirement, considerable regret has
been expressed concerning the withdrawal of such a significant presence from the political arena.
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
Expert Opinions

It Was Essential to Switch to “Emergency Mode”
If the spread of an infectious disease is of only a certain
limited scale, it can be responded to by extending the measuresthat characterize “normal times.” The current pandemic, however,should have been responded to by switching to “emergency mode”.
However, there was no mechanism available to enable this switch
in modes. It will be necessary to make clear to the public objective
standards for an “emergency mode,” in addition to specifying the
responsibilities of the relevant actors, to do away with arbitrary
judgments, and to switch from our “normal mode” in a timely
manner. Furthermore, responses should be evaluated after the
Yasuhiro Suzuki
fact, and the conclusions utilized in the next emergency.
In the “emergency mode,” it will be necessary toVice-President, International
temporarily centralize authority because it will be essential to
University of Health and Welfare /judge the ever-changing status of infections in each region of theFormer Vice-Minister for Healthcountry and adopt comprehensive measures. However, under the/Chief Medical & Global Healthcurrent Infectious Diseases Control Act, the role played by the
Officer, Ministry of Health, Laborand Welfare
Ministry of Health, Labour and Welfare, the central government
agency in such cases, is limited to the provision of technical advice
and support; it is not possible for the Ministry to offer legally-binding instructions to regional and local
governments. This is perfectly acceptable in normal times, but is not sufficient to allow an emergency
to be overcome. For example, if a region has its own definition of “critically ill” patients, and its own
criteria for reporting on the existence of such critically ill patients, it will not be possible to makeaccurate decisions in relation to the loan of medical resources or the provision of support from areas inwhich an epidemic has not spread to areas in which the infection is widespread.
In addition, an emergency such as the one we are now facing demanded that we should breakaway from the focus on perfectionism that characterizes normal times, but this could not be put into
practice. For example, vaccines could have been approved based solely on data from overseas clinical
trials, but in December 2020, a supplementary resolution of the Diet decided to review vaccines basedon both domestic and foreign clinical trials. As a result of also conducting clinical trials in Japan, thecommencement of vaccination was delayed by almost three months. This placed pressure on thenation’s system of medical care, and a considerable number of people died of COVID-19 during thisperiod. Of course we seek to avoid negative effects from vaccines, but in an emergency, we must stop
holding onto the idea of 100% certainty as we do in normal times.
And even when an infectious disease has subsided, we must not rest on our laurels, but rather
formulate and implement essential measures in preparation for the next wave. It will be necessary toslightly reduce the nation’s number of hospital beds, which is five times that of the United States per
capita, and to increase the number of medical staff per bed. In addition, it should be made mandatory
for nurses and clinical laboratory technicians to notify the authorities of their current status on aregular basis, as is the case for doctors, dentists, and pharmacists, and a nationwide registration systemshould be established. Of Japan’s 2.2 million qualified nurses, 700,000 are not currently working in
nursing, and we do not even know where they are. Even if they have left their jobs due to marriage orchildbirth, some will still be able to come back to work shorter hours. It will be essential to understandthe resources that are potentially available in normal times in order to prepare to respond to an
emergency.
Following his graduation from the Keio University School of Medicine, Dr. Suzuki joined the Ministry of Health andWelfare (now the Ministry of Health, Labour and Welfare). Among other roles, he has served as an official on dispatch to
the World Health Organization (WHO), Deputy Executive Director of the Shingata Infuruenza Taisaku Suishin Honbu,
an entity tasked with responding to the H1N1 virus, a Health Supervisor for the Ministry of Defense, and Director of the
Health Insurance Bureau of the Ministry of Health, Labour and Welfare. In July 2017, Dr. Suzuki was appointed to a
newly-created vice-ministerial post by the Ministry of Health, Labour and Welfare, becoming Chief Medical and Global
Health Officer. As a leading medical officer possessing medical qualifications, he has been involved in the creation ofJapan’s health care system, and he also offered guidance in the nation’s initial response to the COVID-19 pandemic. Dr.
Suzuki retired in August 2020, and took his current position in March 2021.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
Expert Opinions

Build a System of Medical Care Able to “Change
Modes” in an Emergency
We did not understand the actual nature of COVID-19
during the first wave that occurred from the end of March 2020;
however, before the start of the second wave in July of that year, wewere aware that there were numerous asymptomatic patients andpatients with mild symptoms, but that symptoms could easily
become severe in those with underlying conditions and the elderly.
From a clinician’s point of view, at that stage, we should have madethe change to the most desirable response: early detection andisolation of infected persons based on medical examinations. In the
fourth wave, which came in spring 2021, the number of patients inYoshitake Yokokura
hotel and home care increased under instructions from the
Honorary President, Japan
government, but the management of medical care was not
Medical Association / President,
sufficiently thorough. Fukuoka Prefecture has assigned doctors andYokokura Hospitalnurses to all its hotels in collaboration with local medical
associations. I feel that it would be a good thing if such measures
were put into effect nationwide. In addition, considering that the number of infected patients increased
rapidly in the fifth wave that followed, a mechanism that would allow patients to consult with medical
professionals regarding their condition by means of a variety of modes of communication, including
online medical care, should have been established.
From this perspective, I think that it will be important to entrench the idea of the “family
doctor.” Since my time as the President of the Japan Medical Association, I have been working to
improve the functions of the family doctor based on the concept of the necessity to re-allocate roles incommunity medicine. Opposition has been deep-rooted, in part due to issues related to remuneration
for medical treatment, and the system has not yet been institutionalized, but I think that this is an
issue that should be further discussed in the future.
Medical care in Japan has mainly focused on lifestyle-related diseases in the past several
decades. Because of this, there were very few beds available for the treatment of an infectious disease,and the response to COVID-19 was delayed from the initial stages. This was an issue that had become
apparent at the time of the spread of the H1N1 virus. Reflecting on that time, proposals were made bya government council in 2010, but the current pandemic arrived without these having been fully
implemented. Based on the lessons learned from this pandemic, it will be necessary to reform the
medical care system to create one able to rapidly switch to emergency mode in the event of such an
emergency. There is a limit to the number of hospital beds that can be added for patients suffering from
infectious diseases, and it is clear that there will necessarily be a shortage of beds in the event of apandemic. We will need to determine in advance the rate of potential conversion from normal beds tobeds allowing response to infectious disease in the nation’s regions. Training will also be required for
healthcare professionals to enable them to change their approach and their thinking to an emergency
footing in the event of a pandemic. The Japan Medical Association and prefectural governments
organize medical teams to respond to disasters, and provide them with regular training. It would be agood idea to make it mandatory for these medical professionals to take classes and receive training inpractical skills that not only enable them to deal with disasters, but also to respond to infectious
diseases. Everyone involved in medical care has a determination to work together in an emergency. It
will be important, in normal times, to consider how to establish an effective system of cooperation forthese emergency situations.
Following his graduation from Kurume University School of Medicine, Dr. Yokokura worked as a surgeon at the same
university. After a period of study at Detmold Hospital in Germany, he succeeded his father (the founder of the hospital)
as the President of Yokokura Hospital. While pursuing his medical duties, he became involved in the activities of thelocal medical association and in 1990 was appointed a Director of the Fukuoka Prefecture Medical Association. Having
later become the President of that Association, he served as Vice-President of the Japan Medical Association from 2010,
and its President from April 2012 to June 2020. During his tenure, Dr. Yokokura engaged with a variety of issues, forexample creating the “JMA Kakaritsuke PhysiciansTraining Program,” which seeks to train and improve the quality offamily doctors. He also served as the 68th President of the World Medical Association.
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
Expert Opinions

Strengthen Japan’s Capability for Research and Developmentof Vaccines and Therapeutic Drugs as Part of National Security
I would like to discuss three factors that delayed the developmentof domestic COVID-19 vaccines in Japan.
The first factor is the weakening of Japan's vaccine industry and its
R&D capability. Japan was once one of the world’s most advanced nations interms of vaccine development, but repeated vaccination accidents and losses
in cases of government litigation in response to vaccine side effects haveengendered reluctance to take up the challenge of new technologies, andvaccine hesitancy among the public has hampered the creation of newmarkets and businesses development. Second, there was a lack of crisis
awareness with regard to infectious diseases before this pandemic. SARS
Sunao Manabe
and MERS did not affect Japan directly. During the H1N1 virus pandemic,
issues were identified, but after the virus was contained, awareness of a
Representative Director,
President and CEO,crisis also diminished. The European and American vaccines that were
Daiichi Sankyo Co., Ltd.
rapidly created following the outbreak of the COVID-19 pandemic have beenin research and development for almost 10 years as a national security
measure. Third, Japan has been slow to introduce new technologies in this field. Most Japanesepharmaceutical companies that have achieved success in the area of small-molecule drugs have been slow
to shift to biotechnology, the current mainstream in the global industry. Behind this is the fact that a “drugresearch ecosystem” that could promote introduction of new technologies has not been sufficiently
established in Japan. In addition, government financial support for basic research in universities has also
been limited.
In order for Japan to create vaccines and therapeutic drugs quickly for future pandemics, I would
like to emphasize that it will be necessary to respond to each of the factors mentioned above. First, the“Strategy for Strengthening Vaccine Development and Production Systems,” approved and announced by
Japan’s Cabinet in June 2021, should be rapidly and comprehensively realized, allowing the development of
R&D infrastructure in Japan and increasing the business viability of vaccines, thus strengthening thecompetitiveness of the industry. In addition, in order to enhance public awareness of vaccines, it will also be
important to disseminate scientifically correct information, including information regarding the risks ofvaccines, in an easy-to-understand manner.
In addition, Japan should position measures to respond to infectious diseases as part of national
security and establish a “control tower” function to provide leadership in normal times, looking towards a
future pandemic. This control tower would formulate a national strategy for measures to respond toinfectious diseases from a comprehensive and long-term perspective. In normal times, it would support
technological innovation and the development of human resources through industry-academia-government
collaboration in the area of vaccines and therapeutic drugs and promote the development of production
facilities and the infrastructure to ensure stable supply. In the event of a pandemic, it would coordinate therelevant ministries and agencies and play a role in promptly delivering vaccines and other essential
materials to local governments and medical institutions based on a clear policy.
Further, like the United States, which has been the most successful nation in terms ofpharmaceutical development, Japan should create a drug research ecosystem in which every organizationand individual necessary to the creation of new drugs, including pharmaceutical companies, venturecompanies, universities, regulators, and investors, is able to actively interact with each other, increasing thecapacity for innovation. It will also be necessary to appropriately evaluate the ability of researchers and theoutcomes of innovation. If we cannot, it will not be possible to attract human resources, expand the base of
research, and make Japan a true “science and technology nation.”
Since joining Sankyo Co., Ltd. (currently Daiichi Sankyo Co., Ltd.) more than 30 years ago, Dr. Manabe has been engaged
in research in a variety of fields. Previously Director of Sankyo’s Safety Research Institute, following the integration of
the company with Daiichi Pharmaceutical Co., Ltd. in 2007, he served as General Manager of the R&D Division’s’ Project
Implementation Department, Group Personnel and CSR Manager, and General Manager of the Corporate Strategy
Department. Following his appointment as a member of the Board of Directors, he oversaw domestic and overseas sales
and marketing. He was appointed Vice President and Representative Director in 2016, and President and Representative
Director in 2017. Dr. Manabe has been the President of the Federation of Pharmaceutical Manufacturers’ Associationsof Japan since May 2021. He holds a Doctorate in Agriculture from The University of Tokyo, a Master of Medical Science
degree from the University of Tsukuba, and has been a Visiting Researcher at Ohio State University. Daiichi Sankyo isdeveloping a COVID-19 vaccine for commercialization in 2022.
Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese.
NIRA bears full responsibility for the translation presented here. Translated by Michael Faul.
Copyright Ⓒ 2021 by Nippon Institute for Research Advancement

My Vision No.56
2021.10
Expert Opinions

COVID-19 and Public Sector Capacity
The COVID-19 pandemic has presented a massive
challenge for governments, from the provision of income support
to citizens and aid to struggling companies to the strengthening ofhealth services. In this issue, I discuss the conclusions of thecomparative research I conducted with Prof. Rainer Kattel into
government responses to the COVID-19 Pandemic across multiple
countries (published in the full-length paper “COVID-19 andpubic-sector capacity”) and the implications for public sector
capacity in the “post-COVID” world.
Mariana Mazzucato
COVID-19 has tested governments’ capacity to lead
Professor of Economics ofInnovation and Public Value,societies through crisis, affecting countries disproportionally due
University College London
to differing degrees of preparedness and public sector capacity.
Countries like the US and the UK have realized how vulnerable
their production, public health, and supply chains are, while others, such as Germany and South Korea,
showed greater resilience due to their capacity to coordinate private-sector activity and ownership ofcritical health system elements.
One of the biggest lessons is that state capacity to manage a crisis is dependent on the
cumulative investments that a state has made in its ability to govern. Prioritizing deregulation,
shareholder value, arm’s length regulation, and outsourcing have not worked as well as some predicted.
Outsourcing can remain viable only if governments practice foresight and ensure the underlying
partnerships are truly in the public interest.
The pandemic has shown the areas which will be critical for governments in the rebuilding of
economies and societies, namely the capacity to adapt and learn; align public services and citizen needs;
oversee resilient production systems; and govern data and digital platforms. Governments must
counteract the hollowing out of public organizations’ ability to oversee these functions.
Creating a symbiotic relationship between states and businesses in the public interest requires
a new understanding of the role of the state: that it is responsible not only for fixing markets, but also
for co-shaping and co-creating them. The state has been acting as an investor of first resort, catalyzing
new types of growth, and crowding in private-sector investment and innovation around future growthareas. The state should therefore ensure societal return from these activities.
One such example would be redirecting the data generated via users of Google Maps and otherplatforms that rely on taxpayer-funded technologies, to improve public services such as transportation,
instead of simply allowing it to be monetized for profit. There is vast potential for governments to steer
digitalization away from targeted advertisement and monetizing personal information.
The pandemic and its aftermath offer an opportunity to rethink our policy foundations andalign them with the needs of the twenty-first century. Lessons from successful responses to COVID-19
show that building back better and preparing for future crises necessitates substantial investment indynamic public sector capabilities. We must not let this crisis go to waste.
Mariana Mazzucato is Professor in the Economics of Innovation and Public Value at University College London andFounding Director of the UCL Institute for Innovation and Public Purpose. She is the author of three highly-acclaimed
books, The Entrepreneurial State, The Value of Everything, and the and the newly released Mission Economy: amoonshot guide to changing capitalism. She advises policymakers around the world on innovation-led, inclusive andsustainable growth.

Editor: Reiko Kanda, Maiko Sakaki and Tatsuya Yamaji. This is a translation of a paper originally published in Japanese. NIRA
bears full responsibility for the translation presented here. Translated by Michael Faul.
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