Will new cabinet provide a “Suga-rush” for Japan’s online procurement infrastructure?

The newly elected PM Suga Yoshihide has made administrative reform a top priority for his new government, as a sluggish government response with regard to support measures for Japanese business to deal with the impact of the corona-virus, revealed severe shortcomings in the IT-infrastructure supporting day-to-day government activities. With the appointment of Digital Minister and the appointment of one of the Abe-cabinet heavy-weights, Kono Taro as Administrative Reform Minister, the new government hopes to revive the momentum for administrative reform and digital transformation, ending practices where ministry officials were forced to communicate by fax, as intra-government IT systems were unable to do so.

This new momentum might also be good news for companies active in the Japanese government procurement market, where working with large volumes of paper documents is still standard practice at many procurements and contracting offices. The corona pandemic has already led to a slight movement towards less face-to-face interaction in bidding procedures by Japanese government organisations, with more making tender details available online or via email. However, the lack of a proper IT infrastructure still leads some organisations to come up with creative interim solutions, such as asking prospective bidders to send self-addressed envelopes in order to send tender details by regular post. Therefore, the danger is that government entities will move back to their time honed practices, once the corona-impact has subsided. Still, in recent months, new projects and legal proceedings have started to enable submission of digitally signed documents and bidding documents, which could make participation by overseas suppliers less cumbersome.
The Centre's Japan Tax and Public Procurement (JTPP) Helpdesk is currently conducting an investigation into the Japanese government entities added by the EPA to get a better insight into their practices with regard to paper-flows of procurement related information. Initial findings suggest that with many, there still seems to be the insistence that bidders must visit their offices to submit documents in person, often making participation by EU suppliers not present nearby difficult.

JTPP Helpdesk hopes that the PM Suga's drive will also help alleviate the administrative burden for overseas suppliers to Japanese government organisations and that the new enthusiasm to invest in government IT-infrastructure will create new business opportunities for EU businesses that have supported the development of e-government in their countries as well.

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Published: October 2020