Big Data and Economic Growth

Author: Sadayasu Senju

The Abe administration under the banner of “Abenomics” is aiming for Japan to be the most advanced IT nation by 2020. The government announced its strategy in 2013, locating a set of IT reforms and policies under the third “arrow” of its economic strategy, which focuses on steps to promote economic growth. Japan has arguably the best Internet infrastructure in the world, the challenge is to use it in ways that spur growth and solve pending social issues.

The administration’s growth strategy has three major areas of focus. The first is to support the development of new and innovative business models and services; the second is to use ICT to guard against natural disasters and protect business continuity in the event of a disaster; and the third is to reform government offices so they offer “one-stop” services to citizens.

It is clear in a country like Japan which is prone to earthquakes and other natural disasters and is also grappling with the dilemmas of an ageing society that early attention and investment should go to the second objective. Measures include dealing with the shortage of health professionals in rural areas and using ICT to predict and mitigate disasters. Additionally through automating many public services, the local government workload can be reduced while improving services and reducing costs.

The question is what can be done to promote the first objective, which is to grow new businesses. The focus in the government report is on the area of big data and steps to facilitate and broaden its utilization for business purposes. The problem is how to manage and protect personal data.

So the big hurdle is how to revise the legal framework for the protection of personal data so that such information can be used easily by business. The Diet is just finishing debate on new legislation to accomplish this goal, but many of the key decisions will be left to the new Personal Information Protection Commission (PIPC). As the Commission does its work, it is very important that they pay close attention to the legal framework in other countries, so that Japan’s new law will be closely aligned with them.

With respect to steps to encourage new businesses, the revisions to the privacy law are a good start – but there are many others areas where the legal system needs to be changed if new businesses are to grow. Unfortunately, the government’s strategy does not take up these issues in any detail. The online content business is a good example. This area of the economy is very dynamic abroad, but in Japan the failure to reform the copyright law to make it easier to distribute and use content online is a big obstacle to the emergence of new businesses, like iTunes and Netflix in the United States. If the government is serious about its 2020 goal to make Japan the leading IT nation, these issues require attention.

Sadayasu Senju

Sadayasu Senju

Faculty of Law
Keio University
Sadayasu is a member of Faculty of Law at Keio University.
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