Key Takeaways for Organizations and Leaders from the DX and AI Keynote at the UNU
Disclaimer: This article is based on my personal participation and notes and does not represent any official partnership, endorsement, or position of the United Nations University (UNU).
The Real Meaning of DX and AI from the UNU Summit | TL;DR
- Japan’s slow DX progress was not caused by a lack of technical skill, but by cultural and structural habits. Paper processes, seals, and legacy approval flows were combined with digital tools, which increased cost without improving efficiency.
- Partial digitization is not transformation. Converting the same old workflow into digital form does not create meaningful change.
- AI should not be treated as a convenient tool, but as a starting point for redesigning how organizations and work are structured. Companies that add AI as a feature will fall behind. Companies that redesign around AI will move ahead.
- In the AI era, trust does not come from technology. It comes from clear human accountability for outcomes.
- Sometimes the most effective innovation is not high tech, but simple systems that produce real results. One example shared at the summit was the use of goats to prevent wildfires.
The core message of this report is simple. Do not place digital tools or AI on top of outdated workflows. Redesign the flow of work itself with AI as a foundational assumption.
Background: A Long-Awaited Return to the United Nations University
This event was held as the Japan–United States Leadership Summit (JUSSC), an international conference bringing together government officials, business leaders, researchers, and innovators from Japan and the United States. The summit focused primarily on AI and smart cities as its central themes.
(Official event website: https://summit.jussca.org/)
On October 9, 2025, I was invited to attend a two-day summit held at the United Nations University (UNU) in Shibuya, Tokyo.
It had been a long time since I last visited the United Nations University, and after many years, the occasion felt personally meaningful, accompanied by a sense of quiet nostalgia.
On my way to Tokyo, I initially assumed the program would take place in the usual a large conference lecture-style hall with simultaneous translation headsets. Instead, the session was held in a smaller room round-table style, which unexpectedly created a far more intimate and interactive atmosphere among participants. That closeness made the discussion and insights even more impactful.
What struck me as somewhat unexpected was that after entering the room, Minister Kono took a seat next to me that I could have reached out and shaken his hand. Given his minister-level stature, I had expected tight security and a clear physical distance, but in reality, he blended naturally into the group of participants.
While it may not have been impossible to ask for a photo, I felt that doing so in a policy-level setting like this would not have been appropriate from a professional standpoint.
While many speakers from the US were scheduled for presentations of around ten minutes, I waited for the session with keen interest in what Minister Kono would cover during his roughly hour-long address.
Through this session, I have to say that my respect for Minister Kono deepened even further.
Being able to directly experience a form of international, practice-oriented leadership that is rarely discussed domestically proved to be an extremely valuable experience.
International Significance: Opening Session by the California Delegation
Prior to Kono’s keynote, representatives from various cities across the California delegation presented the challenges facing their municipalities and the initiatives they are pursuing. While many focused on the use of AI, some presentations emphasized more practical, human-centered solutions over technology-driven approaches.
One particularly striking example involved wildfire prevention. Rather than relying on expensive AI-controlled machinery to clear vegetation, a simple old-fashion approach was introduced: grazing hundreds of goats to naturally consume the brush. The method was reported to be low-cost, fast to deploy, and highly effective.
The lesson illustrated here was clear.
AI is powerful, but in some cases traditional approaches are better.
Innovation is defined not by technology, but by results.
It was precisely this international context that made Minister Kono’s account of Japan’s DX failures resonate even more strongly.
Core Insight: A Candid Self-Assessment of Japan’s DX Failures by Former Minister Kono
Although he had been asked to speak about Japan’s digital reform, Minister Kono began by directly acknowledging Japan’s failures from the very outset of his remarks.
What made the keynote exceptional was not the topic, but the stance he took. For a top national-level politician, the remarks were unusually self-critical and concrete.
Personally, it is exceedingly rare to see a national-level politician (a former cabinet minister) publicly acknowledge the failures of their own country and speak about them almost as if they were personally responsible. Minister Kono outlined in concrete terms what Japan had gotten wrong, while openly explaining the policy-level conflicts and resistance he faced at the time.
What stood out even more was that, despite these being institutional and structural issues, Minister Kono spoke about them almost as if they were his own personal responsibility. Although such failures are, in reality, the result of organizational dynamics and the accumulation of policies over many years, his willingness to take them upon himself felt less like the posture of a politician and more like that of a business leader exercising executive leadership.
His remarks delved deeply into issues ranging from the bureaucratic system and cultural barriers to legacy systems and the behind-the-scenes realities of policy struggles.
What was also particularly amazing for me was that he delivered all of this in English, without relying on prepared notes.
Below is a summary of the key points from a business perspective.
Key Implications for Japanese Companies and Business Leaders from Taro Kono’s Keynote
Below are the key points reorganized from the perspective of management and organizational operations.
1. Success in the Analog Era Delayed the Sense of Urgency Around Digital Transformation
Kono explained that Japan’s global dominance in analog consumer electronics during the 1980s paradoxically led to delays in digital investment. The sense of security created by systems that appeared to be working well weakened awareness of the need to invest in new digital infrastructure.
Implication for businesses: Past success can become one of the most dangerous obstacles to innovation.
2. The Hanko Culture Pulled Digital Processes Back to Paper
Japan’s seal approval culture meant that even documents created digitally ultimately had to be printed, stamped, and submitted. As a result, workflows remained constrained by physical processes.
Implication for businesses: As long as analog approval steps remain, true digital transformation cannot be achieved.
3. Administrative Conventions Such as the Japanese Empirical Calendar Create Inefficiencies
He noted that the continued use of the Japanese imperical calendar leads to unnecessary calculations and errors in everyday operations. Although an attempt was made to standardize on the Gregorian calendar for greater efficiency, institutional resistance prevented the change from being implemented.
Implication for businesses: Even small conventions can result in significant productivity losses over the long term.
4. Government Core Systems Remain Dependent on COBOL
Critical systems in healthcare and public administration continue to operate on COBOL and mainframe platforms. As the number of engineers capable of maintaining these systems declines, long-term risk continues to rise.
COBOL stands for Common Business-Oriented Language and was first introduced in 1959.
Implication for businesses: Legacy technologies are a quiet time bom
This is not merely an issue of outdated technology, but a structural risk driven by the aging of the workforce responsible for maintaining national infrastructure. Even if systems remain stable, they cannot be sustained once the engineers who support them disappear.
5. Eliminating Floppy Disks
Because the submission of floppy disks still remained part of administrative procedures, Kono pushed forward a reform effort he himself referred to as the “floppy disk war.”
The practice was not fully abolished until 2024, making it a symbolic example of the delays in digitalization within Japan’s public administration.
Implication for businesses: True reform begins not by adding more, but by removing what no longer serves a purpose.
For reference, the last time I used a floppy disk was in 2004.
The fact that floppy disks were still in active use within Japanese government operations nearly twenty years later made the gap between eras impossible to ignore.
6. Implementing the My Number System Was a Battle of Psychology, Not Technology
In Japan, long-standing ideological opposition to national ID systems made implementation extremely difficult. Because the Supreme Court ruled that it could not be made mandatory, the system had to be introduced on a voluntary application basis.
Implication for businesses: DX cannot move forward unless it overcomes human emotions and political realities.
7. Paper Health Insurance Cards Have Become a Security Weakness
He pointed out that paper-based health insurance cards, which contain neither a photo nor an IC chip, can easily become a breeding ground for misuse. In hospitals, digital systems and paper-based processes continue to coexist, perpetuating inefficiency.
Implication for businesses: Half-measures in transition only amplify risk.
8. Japanese Companies Stopped at Partial DX
Even when companies introduced digital tools, they did not change their workforce structures, resulting only in higher costs. As a consequence, productivity failed to improve.
Implication for businesses: DX without structural change has no real impact.
9. AI Is Being Used Only as a Support Tool
Minister Kono noted that in Japan, AI is largely limited to tasks such as drafting speeches and assisting with email responses. Unless AI is used to replace the work itself, the return on investment remains limited.
Implication for businesses: AI should be used for substitution, not merely assistance.
10. Regulating before understanding real-world use risks stifling innovation.
He warned that governments around the world are advancing regulatory discussions without fully understanding the potential of AI. The Hiroshima AI Process was cited as a symbolic example.
Implication for businesses: Use first, learn through practice, and only then consider regulation.
About the Hiroshima AI Process
11. Japan Is Overly Dependent on Overseas Platforms (Japan has a Tech Deficit with the US)
As reliance on overseas services such as Google, Microsoft, and Apple has deepened, Japan has developed a structural digital trade deficit of significant scale with the US. From a national perspective, this represents an economic vulnerability.
Implication for businesses: Excessive dependence on external platforms can lead to a gradual loss of competitiveness and strategic control over the medium to long term.
For a more detailed examination of why Japan has fallen behind in designing incentives for the IT sector and technical talent, this article explores the issue in greater depth.https://kumidia.jp/why-japan-fell-behind-it/
In my view, by failing to design adequate incentives for technical talent and treating IT merely as a cost, Japan has gradually weakened its own domestic foundation for innovation. As a result, this structure has accumulated year after year, further accelerating dependence on overseas platforms and, in my view, contributing to the continued expansion of Japan’s digital trade deficit.
12. A Realistic Strategy Japan Should Pursue
He suggested that while continued use of overseas platforms is unavoidable, the core elements of identity, data, and institutional frameworks should be retained domestically. Strengthening Japanese-language data was identified as essential.
Implication for businesses: Control the foundation at home.
13. Structural Limitations in the Japanese Education System Are Constraining AI Talent
In Japan, students who follow non-science academic tracks do not study mathematics in depth, creating a structural barrier to entering AI-related fields. In the US, it doesn’t really matter what you major in. Furthermore, in the United States, enrolling in university during mid-career or later in life is common, whereas in Japan it remains extremely rare.
Implication for businesses: Societies and companies that embrace reskilling and reeducation will be the ones that succeed.
14. The AI Era Assumes Lifelong Reskilling
He pointed out that the knowledge acquired at university graduation is no longer sufficient to sustain a career in a long-lived society. Continuous reskilling is essential.
Implication for businesses: Education should be treated as an ongoing investment.
15. Trust in AI Requires Leadership Resolve
In response to my question, he stated that leaders must take ultimate responsibility for decisions made by AI. While human mistakes are often tolerated, errors made by technology are judged far more harshly, which makes leadership resolve essential.
Implication for businesses: Trust is built not on perfection, but on accountability.
Below is an excerpt from the audio recording of Kono’s response to a question I asked at the venue about how governments and organizations can earn public trust in AI.
In line with the overarching theme of the keynote, he emphasized that it is the willingness of leaders to take responsibility when problems arise from AI-driven decisions that ultimately earns public trust.
Final Message to Japan’s Leaders and Business Executives
Minister Kono’s keynote was not a political performance, but a warning about Japan’s structural failures.
Japan did not fall behind because of a lack of technology.
Japan fell behind because new technologies were simply layered on top of outdated systems.
The same thing is happening right now with AI.
Companies that merely add AI will become losers.
The next winners will be the companies that redesign their organizations around AI from the ground up.
AI is not merely a tool.
It represents a fundamental redesign of management structure.
I also felt that a major reason for stagnation is that Japan’s IT talent is not sufficiently valued or rewarded.
Link：https://kumidia.jp/why-japan-fell-behind-it/
Personal Reflections on the Leadership, Humility, and Communication Style of Minister Kono
What left the strongest impression on me during this session was the humility shown by Kono as a leader.
It is extremely rare to see a national-level politician publicly acknowledge a country’s failures and speak as if they were personally responsible for them. Yet in his keynote, Kono repeatedly and candidly addressed where Japan’s digital transformation had stalled, speaking openly about the institutional and policy-related issues behind it without reservation. He spoke not as a distant observer, but as someone willing to shoulder responsibility. I felt that this sincerity gave the keynote a strong sense of persuasion and credibility.
Another aspect that left a strong impression was his ability to communicate directly in English.
In a setting where interpreters would normally be used especially at the UN, he explained complex issues naturally in his own words, without relying on prepared notes, and drew the audience in with well-placed humor.
Among Japanese politicians, I feel there are very few who achieve such a high level of both transparency and international communication capability.
From his approach and the way he spoke, I came to understand why he is often described as a maverick in the world of politics.
More importantly, his approach as a minister highlighted a clear contrast with the leadership styles that still persist across many hierarchical societies and organizations today, as exemplified by Minister Kono.
While this tendency can be observed globally, it is particularly pronounced in environments with strong hierarchical structures, where “saving face” takes precedence over accountability, making candid self-correction the exception rather than the norm.
In Japanese society as well, there remains a deeply ingrained tendency for those in higher positions to avoid acknowledging their own mistakes. In both domestic households and workplaces, an unspoken mindset of “apologizing means losing” is not uncommon.
This mindset of never admitting fault undermines trust, hinders organizational growth, and creates unnecessary friction on the ground. In business in particular, it can easily give rise to a distorted power dynamic in which “the paying side is always right,” allowing position to take precedence over expertise and facts.
Such situations significantly damage team morale and quality end results. For that reason, from a long-term perspective, reassessing relationships and, when necessary, even terminating contracts can be an important management decision to protect both the organization and the health of any high performance team.
I felt that Minister Kono’s stance exemplified the kind of leadership that should exist, one in which greater authority demands stronger accountability and a higher capacity for taking ownership of failures.
FAQ
How did Kono explain why Japan’s digital reform failed?
He explained that the primary cause was not a lack of skill or technology, but the decision to layer digital systems on top of analog institutions and cultural practices. He pointed to stamp seals, paper-based processes, the continued use of the Japanese imperial calendar, and legacy systems as structural constraints that held progress back, as described by Taro Kono.
How did Kono explain why productivity did not improve in Japanese companies even after investing in DX?
He explained that costs increased because companies introduced tools without changing their organizational structures or workforce models. This served as a strong warning that DX without fundamental reform has little meaning.
What was the point that Kono warned most strongly about regarding AI?
He warned that companies that use AI merely as a support tool will become losers, while those that redesign their operations with AI as a foundational assumption will become the winners. He emphasized that AI is not simply a tool, but a transformation of management structure.
What were the structural reasons Japan fell behind in digital transformation?
The reasons discussed included past success that reduced urgency, rigid bureaucratic structures, treating IT as a cost rather than a strategic asset, undervaluing and undercompensating technical talent, and the accumulated consequences of dependence on overseas platforms. The point was that this was not a one-time failure, but a long-running structural problem.
What is the digital trade deficit, and why is it a problem?
It describes the ongoing transfer of capital to foreign digital platforms, creating not only economic losses but also strategic risks by placing control of critical data and infrastructure outside the country.
How does the Japanese education system hinder the development of AI talent?
In Japan, there is a structural barrier in which students who choose humanities tracks are effectively cut off from mathematics education, making it difficult for them to enter AI-related fields. In contrast, in the United States it is common even for middle-aged and older adults to return to university, highlighting a stark difference between the two systems.
What should companies truly be doing in the age of AI?
Rather than simply adding AI, companies need to redesign their business processes and organizational structures with AI as a foundational assumption. What is required is not partial adoption, but structural transformation.
What leadership stance is necessary for executives to foster trust in AI?
It was argued that leaders must be prepared to personally assume final responsibility for decisions made by AI. Trust does not arise from technology itself, but from accountability.
*This article reflects the author’s personal participation and record and does not imply any partnership, endorsement, or official relationship with the United Nations University.
Links of Interest
This article is informed by the author’s participation in an international conference at the United Nations University and the lectures delivered at the event. The following information is provided to help deepen understanding of the background of this article.
- United Nations University Official Site： https://unu.edu
- Japan–United States Leadership Summit（JUSLS）Official Site： https://summit.jussca.org/
- Taro Kono’s Official Profile： https://www.taro.org/profile
- Public information released by the United Nations (UN) regarding AI: https://www.un.org/en/global-issues/artificial-intelligence
- The Hiroshima AI Process ： https://www.mofa.go.jp/mofaj/ecm/ec/page5_000483.html
Kumidia Insight
Decoding digital transformation from the perspectives of practice, policy, and structure.
