Japan and Y2K Revisited

Panel Discussion
Center for Global Communications
March 17, 1999

Panelists:

Andrew QUINN, American Embassy
Kiyoshi WADA, Ministry of Foreign Affairs
Johnanne WINCHESTER, Digits Corp
Kazue KIMURA, Telebody
Matthew ROSIN, Telebody
Takehiro TAKOSHIMA
Shumpei KUMON, GLOCOM
Takahiro MIYAO, GLOCOM

Moderator:

Daniel DOLAN, GLOCOM

Description:

The following information documents the fifth in a series of GLOCOM's English language debates and discussions on topics related to Japan. The title of the panel discussion was "Japan and Y2K Revisited." There were two central questions discussed:

Question: How are Japan's Y2K preparations and readiness status viewed overseas?

Question: What is the perception within Japan regarding Japan's Y2K activities?

WINCHESTER:  Many of the patterns that hold in other countries probably hold in Japan as well. I have been informed that Japan does not tend to litigate as much as we do in American, for instance. I hope that Japan can take the lead in diplomatic efforts too, as I believe that Y2K will be used as a political bargaining chip in the same way that food is.

DOLAN:  In the US media and more generally, is Japan discussed as being at particular risk to Y2K?

WINCHESTER:  I am not aware of such talk in the press in the United States, but I think that given its economic status and technological capabilities, Japan could take a leadership role.

WADA:  Gartner Group has modified their global Y2K readiness report I think that there is a gap in understanding between Japan and the rest of the world. This is a source of difficulty in Japan. Japan has accelerated greatly its Y2K activities, but because most news from Japan is in Japanese it is slow to reach the wider English-speaking audience. The US therefore has an advantage regarding publication of its Y2K activities.

WINCHESTER:  I think that it would be very helpful to put such information in pictures, because the mind remembers pictures.

Martyn WILLIAMS, Newsbytes:  Japan could require full disclosure from companies, because otherwise it leads many to believe that there is something to hide.

KUMON:  International comparison is not easy. For example, what are the specific criteria used by Gartner Group in its global Y2K readiness report? We simply don't know. However, Japan clearly is behind in the most visible sense. The United States has more government leadership in the form of documents, laws, and other activities. But on a less visible level I have some doubts about the actual readiness of the United States, for example in terms of embedded chips.

ROSIN:  In the most recent Gartner Group report, even though Japan has been elevated to the second level from the third it is still on the same level as South Korea, which is not very indicative of having in place a reliable Y2K program.

QUINN:  With respect to US government perceptions of Y2K activities in Japan, the US government has a good dialogue underway with both the Japanese government and the private sector. We see a greater level of engagement, a greater level of information disclosure, and the kind of data that is coming out seems credible. This represents a big change in posture from a year ago. Also, the kinds of concerns being voiced here in Japan are not so different than the concerns being voiced in other developed countries. We believe that there will not be perfect Y2K compliance anywhere. Rather, it will be a question of how severe the problems are. Although there are some detailed issues in Japan where more exchange of information would be useful, there is a greater degree of confidence in Japanese Y2K activities now among US experts in government than there was six months ago. I think that what these experts are seeing tracks fairly closely with efforts in the United States, perhaps more so than some press reports would lead us to believe.

MIYAO:  We often hear a sector-by-sector approach to Y2K. However, this usually only taps information about large organizations, which often claim that they are doing very well with Y2K. Missing is concern with the community level, which is very important. For Y2K we need community outreach volunteers, information centers, and crisis management plans. Comparisons between Japan and the United States can be made more meaningfully with attention to the community level.

Yasuhide YAMANOUCHI, GLOCOM:  Both the US Congress and the Japanese Diet face similar problems regarding what government responsibility should be for promoting Y2K compliance.

MIYAO:  There are many difficulties particular to Japan regarding community level Y2K activities. There are more than 3000 municipalities in Japan, and all of them are waiting for some form of guidance from the government. At the prefectural level there is greater awareness than at the municipality level, where there is little initiative taken on Y2K. For this reason, it probably is better to focus efforts on community groups rather than on municipal leaders.

WINCHESTER:  The Cassandra Project in the United States argues that the best way to prepare for Y2K is for citizens to get to know their neighbors and to make sure that everybody in the neighborhood is prepared. I think that it is going to very important to develop media from around the world showing communities, militaries, governments, and all sectors preparing for Y2K. We need to prepare as we would for natural disasters. The media needs to take more responsibility for generating awareness of Y2K. There also could be a game mentality so that communities could challenge each other for readiness.

KUMON:  This may sound pessimistic, but it seems to me that many rural communities in Japan have long been losing the traditional sense of community in which cooperation figured prominently. For example, when I first learned of the potential impact of Y2K I talked with my brother, who lives in my home town, about the possibility of returning to that town to build a solar-heated house and to be a model of Y2K preparation for other community members. He rejected my offer, however, saying that my family would not be accepted by the other community members if it turns out that Y2K is difficult and we are the only family in the town properly prepared. My hope is that Y2K activities at the local level can force this trend in deteriorating communities to reverse, but it may not be possible.

Takehiko AOYAGI, GLOCOM:  There are both good and bad points about Japan's Y2K situation. On the positive side, Japan's financial sector still uses mainframe computers in a centralized system, so that Y2K probably will not impact it negatively. On the negative side, there is too much complacency about Y2K in Japan. Also, I would like to see the Japanese government establish an information sharing non-liability law similar to the law in the United States.

QUINN:  To clarify the liability law in the United States, it only covers shared information and not the liability of installed computers. It also was not necessarily a response to pressure by computer vendors as much as it was a response to a situation whereby people were afraid to share information precisely because they were afraid of being sued for the impact that information might have. It seems to me that in Japan Y2K is being associated with shame and inadequate efforts, which prevents people from trying to make constructive efforts to deal with it. Actually, we are all in this together, so this is not just an opportunity to be embarrassed or fail, but also to rise to the challenge and confront this crisis. My fear is that in Japan there may not be enough candid discussion of Y2K because people are too busy trying to hide things or to assign blame.

WADA:  It is important to note when discussing Y2K activities that countries differ in the distance between governments and industry. For example, in South Korea the government can demand that business take specific steps, whereas in the United States the government has no influence on the business sector. Japan is somewhere between these two examples. Deregulation is helping, and cooperation is increasing. Also, as Mr. Quinn has stated, there is no perfect solution for Y2K. This is why the Japanese government has established priorities for remediation, the basic lifeline services. What is essential is for the government to give good and correct information.

Michio KATSUMATA, Nikkei Newspaper:  The government controls almost everything and has close relations with industry, so the case is not so different from that of South Korea. But in a crisis, there is always confusion about who will take initiative. All the ministries try not to share information and there is constant competition among them. Media has a responsibility to make public good information, but also should not scare the public.

Toshihiko SHIMIZU, Tokyo Electric:  I think that there is a misunderstanding about the preparedness of electric utilities in Japan. Although some outside reports show Japan's electric utilities as being in danger of Y2K, my company has been working on this issue since 1996 and we have found no problems with our control systems. We do use calendar dates for logging systems and accounting, however, so we need to focus on this. But it makes us wonder why many US electric utilities have reported problems with their control systems. Are we missing something? We don't think so. Also, we are sharing information with our vendors. Finally, power demand during the New Year is only half that of other months.

QUINN:  It is very encouraging to hear that TEPCO is doing so well with Y2K preparations, and I hope that it can be a shining beacon for other Japanese companies to disclose information.

WADA:  Regarding Y2K contingency planning at the government level, there is a deadline of June 1999 for remediation efforts to be complete, including testing, but it would be good for the government to establish some contingency plans to deal with events after June.

DOLAN:  To conclude the discussion I would like to suggest that to prepare at the community level Japan might well make use of its existing neighborhood information networks such as the police box system and the practice of neighbors exchanging information periodically via rotating volunteers. Using existing networks for Y2K would save time and avoid the difficulty of establishing new networks. I want to thank everybody here for taking part in the discussion, and we invite you to future events here at GLOCOM.

Related Information:

Japanese Ministry of Foreign Affairs: Japan's Recent Situation of Y2K Conversion (March 1999)

Gartner Group: US Senate Testimony, March 5, 1999 (4th Quarter 1998, Year 2000 International State of Readiness summary)

Nihon Keizai Shimbun (Nikkei), Japan's Y2K Agenda daily news and archive. (Subscription service, registration required.)