April 2019 to March 2020

Masayuki Azemi (Senior Fellow, Institute for International Socio-Economic Studies)

The Smart City concept extends to the various fields of the elements that it comprises. These include transportation, logistics, medical care, administration and security, and these elements and their respective devices and services integrate in layers to form a Smart City. Enterprises carry out research and development to implement these various devices and services in society, but in doing so, they are confronted by various legal obstacles. In the coming smart society, referred to as Society 5.0, large amounts of data will be utilized among a variety of devices and services, and to promote development of such elements, government will not only relax some regulations, but also impose various other rules and regulations to protect the legal rights of their citizens, and enterprises will need to accommodate them accurately and with flexibility.

In this research, we reviewed smart city requirements and related policies in terms of municipal and financial issues, and then investigated current regulations and potential future legislation regarding issues with security and privacy and potential deficiencies in existing laws, and any adverse effects that could occur due to implementation of smart city building related technologies.

We also carried out a study with examples of technical service provider enterprises, of the "regulatory sandbox system," RegTech, and SupTech.  The regulatory sandbox system is a system that enables enterprises to verify technologies under conditions where the current rules and regulations are temporarily suspended, to determine whether they can be implemented in accordance with regulations, whether enactment or revision of regulations can be applied quickly, and whether costs can be controlled in dealing with regulations.  RegTech utilizes rapidly advancing technologies such as AI, robotics and authentication technologies in handling rules and regulations, and SupTech utilizes AI and other technologies to monitor/supervise with respect to the regulations from the administrative perspective. These were examined with respect to the background, approach and types of these technologies, concrete examples of applications in Japan, Europe and America, and market expansion trends for businesses offering services to handle such rules and regulations.