Economic security in the post-pandemic era: Japan could play a pivotal role in the creation of a new international order

Izumi Harada, Chairman, Crisis & Risk Management Society of Japan / Executive Fellow, Institute for International Socio-Economic Studies

   The new coronavirus pandemic has changed society significantly. One side effect has been an acceleration of the rate at which DX (digital transformation) measures have been introduced at companies and organizations. In particular, with the widespread adoption of teleworking and remote working, there has been a revolutionary wave of irreversible changes, including the transformation of work practices and working styles, office spaces, and public transportation organizations. There is also expected to be a continued relocation of head offices and staff to regional locations in the future, resulting in human resources returning to provincial areas, and changes in the relationship between cities and the rest of the country. These trends have created favorable conditions for the realization of Japan’s unique decentralized edge AI nation, and of a democratic society based on distributed cloud-edge AI-type community network, which I discussed last time (April 16). The key requirements for supporting these trends are technologies and services that allow communities to network with one another and with the state, and security measures and personal information protection systems and systems to keep these networks safe. 

   In international affairs, the new Cold War between the US and China is intensifying in the run-up to the US presidential election in November. This could have a major impact on Japan, making it increasingly urgent for the Japanese government to make diplomatic efforts to ease tensions and prevent blocking, while strengthening the country’s economic security.

   Economic security encompasses fields where economy and security are closely related, such as preventing the leakage or export of technologies that could be used for military purposes such as AI, 5G, drones, semiconductors, and global positioning systems. Since last year, the government decided that communication equipment that carries security risks must not be procured by any government ministries and agencies, and in April this year, Japan’s National Security Secretariat set up an economic group specializing in economic security. With the addition of the coronavirus pandemic, it became necessary for private businesses to review their supply chains and overseas production bases from this viewpoint in order to take the possibility of information leakage into consideration.

   Under these circumstances, the prevention of foreign espionage against Japanese companies and universities has become a matter of great importance. According to press reports, the government has decided to create a qualification system to provide civilians with guarantees regarding the trustworthiness of advanced technology. In addition, the Liberal Democratic Party is expected to petition the government by the end of this year to adopt stronger measures for curbing espionage by employees and researchers at companies and universities. In the future, not only government agencies but also organizations including related companies and universities will be involved in the creation of network environments that are resistant to cyberattack, the prevention of information leaks from trading companies, and the improvement of security measures at contractors. There is consequently an urgent need to popularize the US information management guidelines (NIST SP800-171), which describe methods for access management, sharing and handling of important advanced technology.

   To begin with, Japan’s cyber security lacks self-sufficiency, being heavily reliant on Western products and information sourced from Europe and the US, and we are lagging behind other countries in terms of our domestic technology and our ability to collect and analyze information. It is important to make improvements in this regard, lay the foundations for open R&D and human resource development, and promote collaboration between industry, academia and government to enhance our ability to respond autonomously to cyberattacks. At the same time, we should actively participate in and exchange information with the Cybersecurity Tech Accord (an international business-to-business initiative that promotes cybersecurity), and the Charter of Trust (an international reliability charter on cybersecurity).

   In the future, Japan must gradually reduce its economic and diplomatic dependence on China while building up its own confidence, and in terms of economic security, it must strengthen its technological capabilities and cooperate more closely with countries that share the same values. Also, while adhering to the principles of freedom, democracy, the rule of law, respect for human rights, and non-aggressive defense, we should take the lead in playing a key “connecting” role not only in logistics but also in exchanges of personnel for the new international order. This is how Japan should seek to resist and coexist peacefully with authoritarian nations while supporting the decentralized community network society described above.