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News Release

Realizing a Growth Strategy Through Administrative Reform Led by Information Technology
- Approaches Taken in Other Countries -

August 2, 2007

Overview

Japan has recently seen a series of major scandals, including the loss of pension records and the crisis in local government finance. Japan's public sector may be facing a serious breakdown. The reason that the situation has been neglected for so long and has deteriorated to the point that no improvement can be expected without large-scale rescue measures is that systemic defects make it difficult for interested parties and third parties to implement effective checks and controls. In other developed countries, problems of this kind have generally been eliminated at early stages. As few countries have experienced such problems in the first place, moves are afoot for the creation of new schemes using IT. This article outlines initiatives aimed at the realization of electronic government in other major developed nations, which differ from Japan and examines the major issues for the future.

A comparison of electronic government services on the basis of the United Nations Global E-government Readiness Report 2005 suggests that Japan has reached a fairly satisfactory level in the basic areas. However, in terms of the provision of convenient services to users and of the exchange of information between citizens, enterprises and government and within government, Japan is lagging.
The 2005 UN Report also reveals that Japan is near the bottom of the top 25 countries in terms of public participation via electronic routes. The Report focuses on three areas: (i) the provision of adequate access to information on key matters such as government policies and plans (ii) the establishment of processes for public participation in policy decision-making and (iii) feedback on the expression of opinion, and in each of these, Japan appears to be lagging far behind the top runners, namely the United States and the United Kingdom.

The reason that, in recent years, disclosure and public participation have become increasingly widespread is that the use of information technology has penetrated deep into the economy and society, and its use is now well established. Added impetus has been provided by the fact that the expanding role of government means that interest in government activities among citizens and in the corporate sector, and the likelihood that they will be directly affected by government activities have grown.
In the past, public participation was a fantasy. However, technological advances have made it possible to realize a "virtual direct democracy", in which checks, discussions and investigations can be conducted and the process of government pursued over the Internet.

It is already nearly two years since the publication of the 2005 UN Report. What kind of initiatives are currently being pursued and what are their future aims? The latest developments in the leading countries — the United States and the United Kingdom — can be outlined as follows.

i) United States

1.In addition to the amalgamation of public services, specialist websites have been set up for each area and the range of government agencies participating has been expanded to include State governments and local governments as well as federal departments and agencies. By pursuing standardization and the elimination of duplication, convenience to users has been enhanced and costs have been reduced. The program is expected to be virtually complete within the next 1-2 years. Considerable progress has been made towards the provision of a "one-stop service", not only for transactions between citizens or enterprises and government, but also for transactions within government such as applications for and the granting of subsidies.

2.Initiatives geared to the reform of the public sector through the strategic use of information technology, something that, as yet, has not even been discussed in Japan, are already under way. In other words, a program aimed at optimizing organizations and business schemes has been under way since the early stages of the e-government project launched in the mid-1990s. This is the FEA (Federal Enterprise Architecture) program. In September 1999, the "FEA Framework Version 1.1", setting out the overall framework, was published.
Moving on to the second phase, designated for the actual implementation of the e-government project, February 2001 saw the publication of a practical guide to the implementation process, "A Practical Guide to FEA" and, in December 2002, the "E-Government Act of 2002" was passed. Meanwhile, experimental projects aimed at the optimization of organizations and business schemes were pursued, problems were identified and corrective measures were drawn up.
Moving on to the third phase, positioned by the US government as the period of change, in March 2005, an action plan proposing the reform of government business and encompassing local governments was drawn up. Following a two-year period of foundation-laying (2005-2006), the plan is to implement a full-scale reform of public services.

ii) The United Kingdom

1.In some respects, the ambitions of the British government — a reform of the public sector, beginning with a review of public services through the use of information technology, and extending to working styles and organizations — and the results achieved, outstrip those of the US government.
In November 2005, a report setting out the government's plans for reform of the public sector through the use of information technology was published under the title "Transformational Government — Enabled by Technology". The plans designate 2005-2006 as a period of preparation and 2007-2011 as the period for the implementation of reform. There are three main objectives:

  • the provision of citizen and business centered services
  • a shift towards shared services, and
  • the pursuit of professionalism.

2.In January 2007, the government published an annual report. Although the project is still technically in its preparatory phase, results have been achieved in the area of shared services.

  • Transport for London has achieved a 30% reduction in personnel management costs.
  • The NHS has reduced its fund management costs by 34% and expects to achieve savings of more than 220 million pounds over the next decade.
  • The Ministry of Defence has also reported results, and expects to achieve total cost reductions of more than 300 million pounds over the next decade.

3.Meanwhile, the numbers of government employees, which had been rising, peaked in 2005 and have started to fall. Numbers have fallen from 5.86 million in 2005 to 5.83 million in 2006 and 5.79 million in the first quarter of 2007.

4.The government has also set out three directions to be pursued after the reforms are completed in 2011.

  • Transformation of government: escape from rigid organizations and the pursuit of flexible sharing of business with internal and external entities
  • Transformation of user evaluations: confidence in the ability of the government to transform itself and expectations of the pursuit of reform
  • Transformation of player roles: a blurring of the distinction between central and local governments and between public and private sectors

5.This may even lead to a fundamental review of the framework of government, including the division of government into central and local governments, and of the division of labor between public and private sectors based on the distinction between public and private sectors.

In summary, Japan has been slow to act. The basic policy objectives are limited to (i) achieving the world's most advanced level of e-government within the next five years, (ii) improving user convenience, and the element of government reform is lacking. In the area of local government reform, there is no evidence of desire to introduce new schemes. The only objectives remain within the existing framework, e.g. to present a "New Comprehensive Decentralization Act (provisional name)" to the Diet within the next 3 years. The realization of e-government should not simply involve the computerization of existing government procedures but should be the foundation of a strategy for growth. In addition to political leadership, Japan needs to take an approach based on collaboration between government and the private sector.

For more information on the content of this report, please contact Hidehiko Fujii, the Japan Research Institute, Limited.

Tel: 03-3288-4615
E-mail:fujii.hidehiko@jri.co.jp

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