Is coronavirus a game changer for businesses in Japan?
What would you think? Did everything get changed by a coronavirus?
Do you think coronavirus is a game changer for businesses in Japan?
The simple answer is no, while it certainly has forced change in some areas, it has not been able to drive changes in Japanese business culture.
Fear of contracting the coronavirus has forced Japanese companies to introduce technology into the workplace and further their digital transformation.
The introduction of new technology is aimed at improving the working environment and to enable people to work from home to avoid spreading the virus.
After the spread of the coronavirus in Japan, there was an increase in purchases of digital technology such as computers, Wi-Fi routers, and headsets with microphones.
Under the emergency declaration, working remotely has helped slow the spread of the virus and prevent new cases. It also allows workers more time in the morning and at night since they no longer have to commute to the office. Working remotely helps workers save their energy and have more time to recharge.
In 2016 the Ministry of General Affairs, called the Soumu-sho, surveyed people in Tokyo and the surrounding areas about their work lives. The survey showed that people spend around an hour and a half a day commuting to and from work. Some workers often have to take over crowded trains known as “Man-in Densha”. These rough commutes add on to workers’ already stressful lives.
How are people able to endure taking overcrowded trains every morning and evening?
In a way coronavirus saved people from the daily hellish commute which usually added physical stress and mental stress onto them. By working from home and protecting themselves from the virus, people were also able to reduce stress from work because they no longer had to commute.
According to the survey conducted by Nikkei xtech, sales of goods needed for teleworking increased sharply.
Sales of cameras for computers increased by 426.5% in the last week of March, up from the 100% increase seen in the last week of January. The sold rate of PC comparing to the sold amount of last year. Sales of computers increased by 165%, compared to last year, after the state of emergency declaration was announced on April 16th. The increase was due to companies buying computers for employees to allow them to work from home.
Additionally, many workers did not own Wi-Fi routers or have internet access at their homes because they usually spent more time in their office than at home so they didn't need it.
To create a working environment at home, it is first necessary to purchase the equipment.
Acquiring the equipment needed to work remotely might be the first step in pushing Japanese companies to adopt a telework culture. Digital Transformation, shortened as DX, is the use of new digital technologies to solve problems. Examples of this include implanting cloud storage and digitizing documents to go paperless.
After buying the necessary equipment needed to work remotely, the next thing that companies need to do is update and create new workflows and systems.
In April of 2020, just after the first state of emergency declaration, the persol company took a survey asking workers about their teleworking experiences. The survey showed that only 27.9% of workers in the Kanto area could telework and that outside of the Kanto area the average was under 20%. However another survey was conducted by an association of large Japanese corporations known as the Japan Business Federation or “Keidanren. Their survey concluded that 97.8% of their member companies, 397 out of 406 companies, had started implementing teleworking after the state of emergency declaration on April 16th.
Looking at a company shows that the amount of people working remotely varies from department to department. While not everyone is able to work remotely, at least large companies have finally started allowing teleworking to some degree.
Even after the state of emergency ended in early May, many companies such as GMO Group Japan, Hitachi, and Suntory are still allowing workers to work from home. These companies announced that in order to let staff continue to work from home they would allow the use of signatures or digital seals (inkan) to approve paperwork. (In the Japanese business world, people use seals instead of signatures to sign and approve things.)
Many Japanese companies have started adjusting their workflows to allow for more things to be done online. For example, the GMO group announced that they would stop using physical seals (inkan) and instead start using e-seal systems (denshi-inkan) and e-contracts (denshi-keiyaku).
The Suntory group also announced that they are working to improve their workflows and will start testing the use of new systems online that allow for remote work such as e-seal systems. These new workflows would also lower costs by reducing the use of paper and creating a paperless environment. Suntory and Suntory International is aiming to implement their new workflows by 2020 allowing 10,000 employees to use online systems. By introducing these new systems Suntory would no longer need to buy as much paper and revenue stamps (Shunyu-inshi) which would reduce their annual costs by 30 million Japanese yen.
It seems there is a new big trend called “new normal” or “with corona” in Japan.
Will these changes be permanent or are they only short term measures brought about because of the pandemic?
Suntory announced that they were planning the new paper-less workflows two years ago.
Why weren’t paperless environments and e-seal systems widespread before the pandemic?
Shachihata, one of biggest seal (inkan) companies in Japan launched their e-seal system for businesses in 1995.
While the system was in place for a long time, the business culture had not changed.
Seals are still used by banks, schools, courts, city halls, and labor offices.
Japanese companies have been striving to improve their way of doing things. Many of them are under pressure to create new digital systems which employees may not have seen before.
Efforts to create safe and cost saving work environments have been going on for a long time, even before the trend of digital transformation.. However, these changes take time and many companies grew tired of effort needed update their systems or create new workflows.
According to a survey by IDC Japan in 2019, 20% of people contacted at companies felt exhausted from testing proof of concepts (PoC) needed to test proceed with digital transformation.
Nikkan Kogyo Shimbun
Managers at companies are often inexperienced with digital systems making it difficult to teach them about it and to get approval to implement it. If a company is doing well and profiting, they will not invest to change their current way of doing things. The thinking being that the changes would damage their current business model.
Coronavirus forced companies to change their way of doing things or risk the safety of their employees and their company as a whole.
With the virus spreading, it became widely accepted that staying home to reduce exposure was the responsible thing to do. This change in the general way of thinking created the need for companies to change their working environment and culture, making it possible to no longer require people to come into the office every day or have face to face meetings.
Because of the pandemic companies have realized they need to change their way of doing things; this creates a big opportunity for people who have been trying to introduce changes since before the pandemic. The current general understanding by companies make it a good time to test and implement changes to the workplace.
On the other hand, some companies swiftly announced to their employees that they must return to their workplaces after the end of the state of emergency.
Complaints by the workers of these companies can be seen on twitter and other social media. They don’t want to take the train and risk infection but they also cannot afford to ignore their company’s orders.
The risk of contracting the coronavirus varies from company to company.
Is coronavirus a game changer for businesses in Japan? No, I don’t think so.
The coronavirus pandemic changed our day to day lives for a few months and caused many to spend money on things they wouldn't normally buy.
For some, the pandemic could be an opportunity to push for permanent changes that have been in the works since long ago. For others, it is nothing more than a temporary phenomenon to be waited out and then go back to the old way of doing things. The coronavirus hasn’t changed society that much, however, it has raised many questions about the current state of affairs which may lead to new customs and ideas bringing about a “new normal”.