Why is a developed country like Japan so attached to fax machines, floppy disks and ink stamps?

When mentioning Tokyo, many people often immediately think of brightly lit skyscrapers, the famous high-speed train system or the settings of classic movies like Akira and Ghost in the Shell, where a futuristic Japan appears with intelligent robots and holograms.

Yet, beyond this glitzy technological vision, Japan maintains another, slower-paced, down-to-earth side. It is the persistence of fax machines, floppy disks, and personal ink stamps, tools that seemed long gone in most developed countries.

For the people, this “digital disconnect” is not only annoying but sometimes makes them frustrated by the cumbersome bureaucratic system. One member of the foreign community in Japan even compared: “Japanese banks are like the gates of hell”, while another sarcastically said: “Maybe sending a fax will help”.

The problem was most evident during the Covid-19 pandemic, when the Japanese government fumbled to deal with the nationwide crisis with clumsy digital tools, thereby exposing a huge gap between economic potential and technological capacity.

In recent years, the government has made efforts to close this gap, including establishing the Digital Agency and launching a series of modernization initiatives. However, Japan has missed many opportunities, 36 years since the birth of the internet and more than half a century after the first email was sent, Asia's leading technology nation is still struggling in the digital race.

Now, as the country races to catch up with the world, the question is not only why it has fallen so slowly, but also whether Japan can turn things around in time.

How did Japan get into this situation?

Japan has not always been associated with the image of being late to the digital transformation. On the contrary, in the 1970s and 1980s, this country was a technology icon that the whole world admired. Corporations such as Sony, Toyota, Panasonic and Nintendo became global household names, bringing iconic products such as the Walkman music player or the legendary games Donkey Kong and Mario Bros.

However, the turning point came at the beginning of the 21st century, when personal computers and the Internet gradually shaped a new economy based on software and digital services. While the world shifted strongly, Japan - which had superior strength in hardware - proved slow to adapt to the software game.

“Japan is falling behind because it is too focused on hardware, but lacks a strategy for software and services,” said Daisuke Kawai, director of the Program for Policy Innovation and Economic Security at the University of Tokyo.

The reasons for this lag lie not only in industrial thinking, but also in deeper factors. Japan did not invest enough in information and communication technology infrastructure during the crucial period. As the electronics industry gradually declined, many talented engineers left the country to join foreign companies, making the domestic technology workforce increasingly thin.

The government, which has limited IT capabilities, has struggled to modernize. Ministries and agencies have implemented fragmented IT strategies that lack overall coordination. As a result, many public services remain heavily dependent on traditional paperwork and personal “hanko” seals – once symbols of the past, but now barriers in the digital age.

Besides technology, culture is also a barrier.

In addition to technological and policy factors, Japan also faces a socio-cultural obstacle. According to Daisuke Kawai, many Japanese companies are still dominated by a “risk-averse” culture, seniority-based hierarchies and slow decision-making processes that rely on collective consensus. These characteristics make innovation difficult and stagnant.

In addition, Japan is rapidly aging. The elderly outnumber the younger generation, which not only puts pressure on the welfare system, but also shapes attitudes toward technology. Seniors are often wary of digital solutions, worried about online fraud, and still prefer traditional methods such as hanko, personal seals. “Therefore, the demand and pressure to promote digital services in Japan is relatively low,” Kawai said.

This apathy extends beyond the general public to businesses. Jonathan Coopersmith, professor emeritus of history at Texas A&M University, points out that many small businesses and individuals see no reason to abandon fax machines, which are deeply ingrained in Japanese office culture. “Why buy an expensive new computer and go through the trouble of learning how to use it when fax machines work just fine and everyone uses them?” he asks.

Even large corporations, banks and hospitals are reluctant to change for fear of service disruption. The larger the organization, the harder it is to change, especially in the software sector. Furthermore, digitalization also brings legal challenges, with each new technology requiring a new legal framework, from electric cars to artificial intelligence.

Coopersmith estimates that to fully digitize, Japan would have to adjust thousands of regulations, a task lawmakers are reluctant to undertake, because “digitalization rarely gives an advantage in elections.”

Professor Coopersmith concludes with a poignant question: “Why should I enter the digital world, if I really don't need to?”

Digitalization boosted by the Covid-19 pandemic

For decades, Japan has been caught between two opposing worlds. On the one hand, the country is known for its groundbreaking advances in robotics, aerospace, and everyday life that international visitors admire, from its extensive bullet train network and punctual public transportation to its ubiquitous convenience stores and vending machines. On the other hand, Japan is deeply attached to old technology, creating a paradox that is difficult to explain in the digital age.

That backwardness sometimes manifests itself in controversial ways. In 2018, Japan’s cybersecurity minister sparked outrage when he admitted he had never used a personal computer, before having to retract his statement. Just a year later, the decades-old messaging service was officially discontinued in Japan.

The consequences of maintaining old technology are not only an image problem, but also contribute to the perpetuation of bureaucracy. Even basic procedures such as opening a bank account or registering a home still require manual hanko seals, along with various types of paperwork that force people to go directly to local authorities.

The Covid-19 pandemic has exposed these gaps in stark relief. As the need to process information skyrocketed, central and local governments quickly became overwhelmed by a lack of digital tools. It wasn’t until May 2020, months into the global outbreak, that the Japanese Health Ministry launched an online portal for hospitals to report cases, replacing handwritten faxes, phone calls, and emails.

Even so, glitches continued, with contact tracing apps failing for months, leaving thousands of people without alerts. Remote work and learning became a challenge, with many office workers having never used Zoom or file-sharing tools.

A rare incident in 2022 became a typical example of technological lag. A town accidentally transferred all 46.3 million yen in Covid relief money to personal accounts due to a mistake in processing data using floppy disks and manual paperwork. By the time the error was discovered, the money had been gambled away by the recipients. For the younger generation, floppy disks are just “antiques” that store 1.44 MB of data, less than a photo on an iPhone.

These failures forced Japan to act. In 2021, the government established the Digital Agency, a new agency with the mission of leading the country into the digital age. The minister in charge at the time, Takuya Hirai, bluntly called the pandemic response a “digital failure,” seeing it as a necessary wake-up call.

Since its inception, the Digital Agency has implemented a number of initiatives, including issuing smart social security cards, promoting cloud computing in government agencies, and launching a campaign to completely eliminate floppy disks. In July 2023, the agency declared it had “won the war on floppy disks” after eliminating more than 1,000 regulations that required the use of this obsolete storage medium in government systems.

The road to modernization, however, has not been easy. At one point, the government even made the public laugh by asking for public input on its hyperspace strategy via an Excel spreadsheet downloaded and emailed back. The incident caused a stir on social media, prompting Digital Minister Taro Kono to respond on Twitter, promising that from now on all feedback would be taken via a proper online form.

The pandemic has become a trigger for Japan to realize its digital divide - a gap that can no longer be ignored. And with Digital Agency, the land of the rising sun is trying to rewrite the technology story, from the image of a country stuck in the past to a digital vision for the future.

Digitalization as a “means of survival”

According to Daisuke Kawai, the government’s aggressive intervention has provided a crucial push for Japanese companies to accelerate their digitalization journey. As pressure to reform has grown, many companies have turned to outside contractors and consultants to redesign their outdated operating systems.

One of them is Masahiro Goto, a member of the digital transformation team at Nomura Research Institute (NRI). He has been accompanying large Japanese corporations for many years in the transformation process, from building new business models to restructuring the entire internal system.

According to Goto, most of his clients have one thing in common: they are eager to transform but don't know where to start. "Many companies are still relying on outdated systems that are expensive to maintain or are nearing their end of life. When they realize this risk, they come to us for support," he told CNN.

This demand has made consultants like Goto scarce. He said the number of companies seeking NRIs has “definitely increased year by year,” especially in the past five years. The reason lies in the fact that for decades, most Japanese companies outsourced their entire IT infrastructure, leading to a shortage of internal skills as they entered the phase of full digitalization.

“They want to improve productivity, reduce costs, and more importantly, they see digitalization as a means of survival in a shrinking population. As the workforce shrinks, improving operational efficiency is no longer an option but a must,” Goto asserted.

Of course, the road has not been smooth. Efforts to eliminate fax machines in government have been met with more than 400 official protests from ministries in 2021, according to local media. Or the hanko seal – a traditional symbol associated with culture and family life – that is unlikely to be completely eliminated due to its deep spiritual value.

The digitalization process also depends heavily on the Digital Japan Agency's determination to push for legal reform, as well as lawmakers' priorities in budget allocation.

Meanwhile, global technology is constantly changing, putting pressure on Japan to accelerate or it will fall behind. “This will be a continuous process, because technology in 2025 will be very different from that in 2030 or 2035,” said Jonathan Coopersmith, professor emeritus at Texas A&M University.

Experts remain optimistic, however. Kawai predicts that at the current pace, Japan could catch up with some Western countries within the next five to 10 years. More importantly, the public – especially the younger generation – is increasingly embracing online services, from cashless payments to digital administrative platforms.

“People are definitely eager for digitalization. I believe that the majority of Japanese society wants this to happen as quickly as possible,” Mr. Kawai emphasized./.