Digital Agency

Partner, Senior Executive Manager
Social System Innovation Unit
Takeshi KAMISE

1. A Symbol of the New Cabinet

Suga Cabinet was launched on September 16th, 2020, and a variety of policies and strategies were announced at its early stage. Its direction toward the establishment of Digital Agency is one of its hottest agenda. Initially, there was announcement that it would be launched in April 2022, but the timing may become earlier.

This paper summarizes the background, organization, operational and policy considerations related to the establishment of Digital Agency.

2. Post Background : Back in the 1990s

As a precedent of the reorganization of the government ministries and agencies including IT, Hashimoto Cabinet (1996-1998) tried to reorganize its IT-related government structure. The interim policy report of “the Conference on Administrative Reform”, which served as a place for discussion and reform, proposed a drastic reorganization plan in September 19971. The plan was to establish Communications and Broadcasting Commission as an external office within the Ministry of Internal Affairs and Communications. After the Interim Report was released, there was a strong opposition from key stakeholders and the drastic plan was finally cancelled.
More than twenty years have passed since then and the situation has changed dramatically. Deregulation in ICT has proceeded dramatically and our current hot topic is DX (Digital Transformation).

1 Sep. 1997 Interim Report of the Conference on Administrative Reform
http://www.kantei.go.jp/jp/gyokaku/0905nakaho-01.html

3. Requirements for Digital Agency

Based on the analysis of Japanese digital strategy and environment, I would like to define the requirements of what Digital Agency should aim for. Then, respond to the institutional and personnel aspects that relate to the design of Digital Agency.

① Current Challenges

Various issues have already been pointed out regarding Japanese e-government and digital strategy. Recently they have become critical issues for Covid-19 related government policies because major governmental support for citizens are provided on-line, such as temporary government benefits and “GoTo Campaigns”.

Primary and secondary supplementary Japanese governmental budgets included a huge amount of budget spending. Therefore, IT spending by the government will be required to be cost-effective. Most ministries and agencies are more or less involved with digital strategies and services under Covid-19 policies. In those circumstances where speedy decision and execution are the top priorities, transformation from traditional consensus-based administration into digital agencies with strong coordination capabilities and leadership will be inevitable.

② Organizational Design

When designing the Digital Agency, the key issue may be its structure and mandate.
For example, Consumer Affairs Agency (CAA) was formerly an internal bureau of the Cabinet Office, but it became its external bureau in 2009 under the law. The head of CAA came mostly from government officials but some came from outside government.
At present, it seems that the official status of Digital Agency is not determined but it is certain that the position will be powerful and independent from other traditional government ministries.

③ Transferring Privileges from Existing Offices

Coordination with the existing government ministries is required but the transfer of authorities from those existing ministries might face difficulties. Current authorities of each ministry and agency is stipulated in the Act and Order. We need strong leadership and top-down approach to change them.

④ Personnel Assignment

After the head is hired from private sector, how to find its managers and staffs becomes essential issue. In terms of IT or IT-based service and marketing, private sectors will have more experts than public sector. On the other hand, government officials have deep and precise understanding of regulation, budget, and coordination skills within government.
We should identify the appropriate balance between private and public sectors. In addition, human resources mobility between both sectors should be more flexible in order to hire competent managers and staffs from private sectors.

4. Broad Picture of Digital Agency

The policy themes surrounding Digital Agency are very diverse.

Figure 1 Policy schemes surrounding Digital Agency
Figure 1 Policy schemes surrounding Digital Agency

In the following paragraph, expected three policy schemes are described; enhancing global competitiveness, contributing to the government work style reform, and social design of post COVID-19.

① Enhancing Global Competitiveness

Low global competitiveness of Japanese businesses, especially in ICT sector, should be improved. Digital Agency should be more active about planning and implementing such as DX and international standardization strategies.

② Contributing to the Government Work Style Reform

The state-of-the-art digital administration cannot be realized if public officials are exhausted by huge analog and non-productive works. In 2018, we supported work-style reform workshops by mid-level government employees. We found some obstacles against their working style reforms. Some of them can be solved simply by using digital technologies but other operational and institutional reforms should proceed simultaneously.

③ Social Design of post COVID-19

I hope that Digital Agency will design a future image of what IT can contribute socially by taking initiatives in the policies and strategies of each government ministry and agency. MaaS (Mobility as a Service) is typical example of the ICT-based social innovation.

5. Conclusion

For Digital Agency to function truly as an organization for the public, it will be necessary to set appropriate outcome-based goals and regularly evaluate and publish the results of its progresses.
Design of its structure and role, concrete policies, and coordination with relevant ministries and agencies are already on the track. I hope that Digital Agency will play a major role in solving various social issues through IT and digital transformation.

* This report is the translation of the report in Japanese as of September 30th, 2020 :
https://www.nttdata-strategy.com/knowledge/reports/2020/0930/

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