Digitalizing the government and public services is an urgent issue in Japan, which still lags behind other developed countries in this regard. On the other hand, Denmark tops the rankings in the United Nations Department of Economic and Social Affairs E-government Survey 2020. Eva Berneke, CEO of KMD, Denmark’s biggest IT company, speaks with Takako Matsumi, Senior Expert of the Digital Government Promotion Division, NEC, about Denmark’s digital journey. What is needed to digitalize and achieve well-being the way Denmark has?

Turning crisis into opportunity

TM: That is great. Conversely and unfortunately, of 11 markets surveyed, Japan was found to be the only one where trust in both government and business has fallen in the pandemic, according to the 2020 Edelman Trust Barometer Spring Update. We need to ensure more transparency in Japan, and “trust” will be increasingly important moving forward.

One factor in the declining trust in government is that the introduction of digital technology into public services has not progressed. Most procedures require many paper documents, Japanese-style physical seals and face-to-face interaction, and these practices are strongly embedded. However, at long last, the Japanese government has finally felt a sense of urgency in the face of the pandemic, because these processes have proven to be an obstacle to digitalization for business.

The importance of political courage

EB: I was visiting Japan last year and I had the opportunity to talk to several government officials. Japanese politicians and officials showed a lot of interest in digitalizing society, while recognizing that this is not a simple task. As you said, you can only digitalize society when people trust the government.

In Denmark, we have had a “citizen number” since the 1960s, which helps to create good data. The same is also true not only for citizens, but also, say, companies or real estate. Creating data is an important step in the digitalization journey. I think Japan has started to take some of those same steps with the identification number system, but it may still be facing difficulties in applying digital data to community services.

TM: In Japan, personal data usage is still a major issue. Interoperability is also a big problem. I believe there are three main points for advancing the digitalization of the government in Japan. The first one is eliminating vertical silos. Each ministry and agency makes its own policy decisions, so there are many systems that have no interoperability. We need a grand design for nation-building and total optimization, eliminating the silos of national and local governments. The government should establish a dedicated digitalization agency to do this.

The second point is citizen-centered thinking. The difficulty of using Japanese government systems is a major reason why digitalization has not been more rapidly adopted across the country. To achieve user-friendly and practical digitalization, design architecture must be considered at every step. I think the most effective way to introduce digitalization would be to start from local municipalities and enhance citizen convenience. It is municipalities that have the trust of their residents and are the ones providing them with public services.

The third point is we need a legal approach. There are many old and complicated laws in Japan that are obstacles for digitalization. These laws should be amended in a way that makes it mandatory to use digital communication between citizens and the government.

EB: It is true that inoperability between the systems of different ministries or municipalities has been a big issue. But in Denmark, one of the key elements was political courage to seek optimization. It made the political decision that local municipalities should share data to the central government, for example the tax or health authorities. As a result, the legal framework for transferring data in a seamless fashion is in place.

For more than 20 years now, KMD has been working on projects developing those systems. Still, we find it is not easy to securely transfer data from one system to another, but we are where we are today as a result of the decision by the government to build user-friendly systems for citizens.

Today, in Denmark, very few people have to send papers to the tax authorities. Data related to your income flows automatically from your employer or bank to the tax department. People’s trust in the public sector is a major factor in creating a free flow of data in Danish society. It has been a journey of many steps toward digitalization of public services for Danish people. As a result, this journey has actually built trust between citizens and the government.

Enhanced well-being

TM: The phrase you used, “political courage,” really resonated with me. Japan also needs to find the courage and commitment to build citizen-centered, user-friendly systems. I think we have a lot to learn from Denmark.

Let me ask you about KMD. It is Denmark’s largest IT company and has built up a lot of knowhow. What strengths does KMD bring to expanding into the Asian market with NEC?

EB: KMD does business in Denmark, Sweden, and Norway, and we are starting to collaborate with NEC Singapore. Each of those countries has its own laws and systems, but they are all looking to build systems that enhance the well-being of their citizens. We develop software that supports the public sector in a user-friendly manner.

TM: I think Japan and Asia in general have a lot to learn from Denmark’s design-driven DX. For example, KMD uses digital for telemedicine and in-home care for the elderly, which optimizes medical costs. That is a project that is extremely pertinent to the aging society of Japan. I am certain that, by combining KMD and NEC technologies, such as biometric authentication and AI, we can help governments provide better and more secure services. For example, NEC’s multimodal biometric authentication can enable touchless services and online processes with high-precision identity verification. Moreover, by integrating AI into a wide range of solutions, we can optimize services for each individual.

EB: KMD has the same goal as NEC of “Orchestrating a brighter world.” We believe that technology is a lever to change people’s lives for the better. With a growing elderly population, it is vital to make public services efficient and optimize health resources by utilizing digital technology. We believe that a sustainable society, where people can live with peace of mind, is good for everyone’s well-being.

TM: In Japan, COVID-19 accelerated people’s changing workstyles. Remote working has risen dramatically and people are rethinking aspects of their working life, such as the long hours or commuting in overcrowded trains. We need to realize a society where everyone can make their own choices, such as how we work, how we use our precious time, who we spend time with, and what kind of life we lead.

To support these changes, companies and governments must be able to communicate effectively, and for that, they need to understand each other’s worldview and values. In this, experience is essential. I started out working in local government and I believe that to maximize and broaden joint public-private efforts to address social issues, it is very helpful to have someone on the team who has hands-on experience. Therefore, the key to revitalizing society lies in mobility between the public and private sectors.

Strength in diversity

EB: I think it is very important for younger women to have different role models who can show them that they can have successful careers in many different ways, including balancing both work and family.

Technology has not necessarily been an area with a lot of women. In KMD, one-third of our staff are women. The same is true of our senior management. We are also doing a lot to include non-Danes in our work as we expand into Asia and other regions outside northern Europe. For instance, switching to English as our corporate language has been an important element for promoting inclusion and diversity.

In times of great change, it is noted that diversity is a great plus. If you take the COVID-19 crisis, for example, countries with female leaders fared better. They look at the situation in different ways, and when you meet something new, such as in a crisis, it is very important to look at all aspects in order to make the right decisions.

TM: Speaking of leaders, in Japan, no female Prime Minister has ever been appointed. In business as well, there are few female leaders compared to other countries. It is also true that there is a serious gender pay gap.

Amid the collapse of the Japanese-style employment system, including lifetime employment, I think it is necessary to create a society in which individuals can change careers flexibly. This will enable us to adjust our work styles in accordance with life events and take learning opportunities to improve our skills. I hope that such flexibility and digital tools will expand people’s potential and lead to greater well-being for all.

EB: Society has changed so much in the past 20 years. I have an engineering background, so I love technology anyway, but I think the real strength of technology is that it can be used for the greater good of tomorrow and to create a better society. It drives not just me, but a lot of my colleagues at NEC and KMD. Everyone has their own sense of well-being. Leveraging technology, I hope that we can build social systems with the flexibility to fit the needs and circumstances of each citizen and create value across borders.

(October 30, 2020)