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Article Article February 5th, 2016

Maximising Japan's demographic dividends

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Japan’s vision is that a great number of citizens will be active and capable in their 80s.

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Japan will be altered by the fast pace of digitisation and new digital equipment.

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An ageing population means the most important areas in Japan are wellbeing and healthcare

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In 2013, the over 65s comprised roughly a quarter of Japan's total population. In 2040, that figure is expected to increase to a third. Japan will then be forced to design and apply innovative means to preserve and enhance its future public impact.

The aim is to put the needs of people first, by using sophisticated wellbeing services to extend their careers and roles as active citizens capable of taking responsibility for their own lives. Japan's vision is that a great number of citizens will be active and capable in their 80s.

An ambitious target of three per cent growth has been set for Japan's economy. Meeting this target would mean that, in the next 10 years, the GDP of Japan would increase by 20 to 30 per cent from the current trends. Productivity growth is the only way to maintain a sustainable economy when the working-age population will fall by almost four per cent by 2025, the population is decreasing, and the economy is shrinking. This, in turn, requires building highly innovative new business models, as well as new social and societal innovations.

The idea is to dismantle the top-heavy administrative structure and licensing system, as well as speeding up bureaucracy and reducing regulation. In practice, this means a revolution for Japan's traditional operating models, which will be significantly accelerated by Japan joining the US-led TPP trade agreement. At the core of this change is adopting the operational processes of Western nations and their expertise in management practice, among other factors.

A digital and urban leader

Japan - like any other modern developed country - will be altered by the fast pace of digitisation and the effective introduction and utilisation of new digital equipment. The way digital services and processes are built in Japan is interesting: it is done holistically, based on an ‘end-to-end' philosophy. The exploitation of services made possible by the internet will be maximised in various service and production processes, for example in trade and trade-related logistics.

Japan is putting money on the exploitation of big data applied to various forms of analysis: the pricing of services and goods, and marketing and R&D activities. Big data - and the analytical data it provides - play a key role in the development of managerial processes.

As one of the world's most urbanised and highly educated countries, Japan can act as a global leader in development needs, infrastructure, and green technologies as they related to urbanisation - and simultaneously create new, competitive know-how and technologies for Japan. Self-driving cars are big in Japan: when it comes to future energy solutions, Japan is investing in hydrogen energy.

Automation, the Internet of Things, and robotics are embedded almost everywhere they can be, bringing them closer to people's everyday lives. Intelligent programming and sophisticated programs enable the use of robots in industrial and service functions, not to mention fixing the ever-growing shortage of manpower.

The focus of the Japanese government's R&D and other investments is now on new wellbeing and healthcare solutions and technologies, ‘cleantech', renewable energy solutions, intelligent construction and housing, intelligent devices, and of course, intelligent robotics.

A healthy improvement

Given the ageing population, the most important areas in Japan for the future are wellbeing and healthcare. Healthcare spending is growing at a rate of almost four per cent a year and is projected to amount to nearly US$515 billion in 2025. The key targets of Japan's investment include stem-cell techniques, 3D-printed bone implants, robotic surgery, various biosensors and nanotechnology equipment, and gene therapy.

The search for solutions in Japan has also included paying special attention to reforming the healthcare administration by means of digitisation. Functions that were separate before are now being integrated: diagnostic practices, the production of standardised information and data, and government cash- and cost-flow management.

A future goal is to maximise the introduction of telecare and monitoring solutions and the related service technologies into wellbeing and health services, with improvements to in-home care, specialised hospitals, and reform of the clinics and medical services that operate close to people's homes. New generic drugs will be introduced, and genome data will be used for diagnostic purposes.

Of course, only time will tell whether Japan's approach will make the desired impact. But by putting the needs of citizens first, Japan's policymakers are maximising the opportunity to safeguard and strengthen its impact into the future.



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