In a bit to improve business efficiency and develop new services, companies are striving to foster personnel with expertise in digital fields.
Tokyo Electric Power Company Holdings Inc. (TEPCO) plans to increase the number of digital specialists in its group firms to about 6,000 by the end of fiscal 2023.
With Japanese companies lagging behind U.S. counterparts in digitization, the government also plans to support efforts toward human resource development.
-- Cost reduction
TEPCO has set a goal of training 20% of its employees as digital experts at its five major group firms. Employees with experience in data analysis will hold lectures for other workers and when participants have gained experience themselves, they will serve as instructors for future participants.
TEPCO aims to develop techniques that can be used in different situations by holding employee contests to determine the accuracy of forecasts for such things as changes in the volume of water in dams and the supply and demand of electricity.
Significant cost reductions can be made by streamlining operations at power companies, which use large-scale equipment and facilities. In hydro-power generation, costs can be cut by predicting changes in the volume of water in dams based on precipitation and other factors, and by releasing water at appropriate times.
Liberalization of the electricity market intensified competition in the industry, creating a tough business environment for power companies. "If we increase the number of personnel who can solve problems that differ from site to site, we can improve the efficiency of the entire company at once," said a TEPCO official who is in charge of digitization at the company.
-- Targeting all employees
In the manufacturing sector, Asahi Kasei Corp. wants all of its 40,000 employees to be trained as digital experts by 2023.
The company brought in Kazushi Kuse, a former chief technology officer at IBM Japan Ltd., as a senior executive officer, and created bespoke teaching materials to train employees with different levels of digital skills.
JFE Steel Corp believes employees who are familiar with production processes are best suited to drive digitization at production sites. The company has reinforced its in-house training, aiming to increase the number of digital specialists in its workforce to 600 by the end of fiscal 2024.
MUFG Bank Ltd. and Sumitomo Mitsui Banking Corp. have courses on digital fields that are available to all their employees. An SMBC public relations official said the bank aims to "promote the digitization of not only our own business but also that of our business partners."
IT firms are also eager to acquire cutting-edge digital technologies.
Yahoo Japan Corp. wants all of its 8,000 employees, including salespeople, to be capable of using artificial intelligence tools in their work by fiscal 2023.
"AI is a means, not an end. In addition to experts, all employees need to use AI," said Yahoo Japan Chief Data Officer Hiroki Taniguchi.
-- Mind the gap
According to a 2021 white paper by the Internal Affairs and Communications Ministry, 13% of Japanese companies are working on digitization in such areas as product development and operational reforms, compared to about 60% of U.S. companies.
If digitization in Japan reaches the same level as in the U.S., it is estimated that sales in the manufacturing industry would increase by 6%, or 23 trillion yen yen, and in the non-manufacturing industry by 4%, or 45 trillion yen yen.
A ministry survey found that 53% of firms cited the lack of digital specialists as a challenge to achieve digitization. As companies are competing for such personnel, there is an urgent need to develop talent among their employees. The government has also stepped up support by establishing a system to subsidize the cost of training digital personnel.
"The lack of digital talent could cause companies to miss out on commercial opportunities," said Hideaki Yokota, managing director of market research firm MM Research Institute Ltd. "Firms that are seen to be proactively utilizing advanced digital technologies, will have a better chance of attracting talented candidates."
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