Digitalisation could boost Japan firms’ sales

THE JAPAN NEWS/ANN – A specialty hoto noodle soup restaurant located near Lake Kawaguchi in Yamanashi Prefecture is so popular that nearly 100 groups of customers would queue on weekends to get a table, but the line at Hoto Kura Funari has disappeared with the introduction of tech.

Diners enter their smartphone data on a tablet at the restaurant’s entrance and then can check their phones for seating information while sightseeing. When a table is almost ready, a message is sent to the customer’s smartphone that said, “Please come to the restaurant”.

In the past, customers had to wait their turn in a packed waiting room. “Customer experience started from dissatisfaction even before the food was served,” said Managing Director of the eatery Makoto Enokihara, 41. But congestion has now been alleviated thanks to the system.

The widespread adoption of sophisticated yet user-friendly devices like smartphones has quickly expanded the base of digitalised businesses, as small shops can implement systems similar to those utilised by major corporations at reasonable costs.

Japan’s industrial productivity has stagnated since around 2000 and lags behind many countries.

The delay in digitisation is said to have caused the stagnation. However, large corporations have begun to change.

A device allowing customers to pay their bill without touching it at a Kura Sushi restaurant in Osaka. PHOTO: THE JAPAN TIMES/KYODO

Last year, Asahi Group Holdings Ltd started production at its Rome plant, but engineers could not travel to Italy due to the coronavirus pandemic. So the Italian staff wore glasses equipped with a camera and microphone and communicated in real time with engineers in Tokyo, who gave the local team advice about operations.

The Internal Affairs and Communications Ministry estimated that if the digitisation of Japanese companies progresses to the level of United States (US) firms, sales will increase by about JPY68 trillion.

Senior economist at Daiwa Institute of Research Ltd Keiji Kanda hopes the launch of the Digital Agency on September 1 will be a catalyst. “If the administrative procedures necessary to do business are simplified, overseas investment, which has shied away (from Japan) because of the complexities, will expand,”

Kanda said. Fuji Chimera Research Institute Inc estimated that the amount of digital-related investment in fiscal 2030 will nearly quadruple from that of fiscal 2019.

Investment is expected to accelerate in a wide range of industries including transportation, finance and manufacturing.

However, one concern is a shortage of workers. According to the Economy, Trade and Industry Ministry, 1.58 million IT personnel will be needed in 2030 and there will be a shortage of 450,000 workers if the current situation continues.

Employment in fields such as sales and clerical work may decrease due to digitisation.

The key will be to increase the number of people who can work in fields with growth potential through measures such as implementing vocational training.