Link: Japan’s digital deficit might be a good thing

The strength of Japanese firms has traditionally been in importing raw materials and turning them into made-in-Japan products to sell overseas, so the country should aim for the same with digital technologies, he adds. Just using the cloud is not enough. They have to innovate on it. Even if the digital deficit were to expand, it wouldn’t be an issue as long as Japanese companies boost profits to offset the increased costs, Wataya says. Yuichi Kodama, chief economist at Meiji Yasuda Research Institute, echoes the point. Foreign tech giants are just providing platforms, and “the main issue is whether Japanese firms can effectively use them to create new value. Japanese firms should be able to do more,” Kodama wrote in a report. Japan’s digital deficit recently set off alarms in some quarters in the country, especially as the number has become so big and forms such a noticeable item on the country’s international accounts. If Japanese firms are unable to fully take advantage of digital technologies, the swelling of the digital deficit could become a problem as it increases capital outflows. Some analysts argue that the yen has weakened in part due to a flood of money going to international tech service providers. #

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Yoooo, this is a quick note on a link that made me go, WTF? Find all past links here.