Japan targets Web 3.0 and metaverse in bid to catch up

After years as a tech laggard, Japan is pushing hard to catch up in emerging technologies such as NFT, Web 3.0 and the metaverse.

In his latest pronouncement, Prime Minister Kishida Fumio said the government aims to expand the use of Web 3.0 and NFTs and accelerate the startup sector.

His speech earlier this week followed the announcement by NTT Docomo, the biggest mobile operator, that it would invest 60 billion yen (US$416 million) in the metaverse.

Figure 1: On top of the government's push, NTT Docomo is investing $416 million in a new metaverse company.
(Source: Pitinan Piyavatin/Alamy Stock Photo)

Kishida, who has been in office for just under a year, said the government aimed to increase the number of startups by tenfold in five years. He talked about creating "the second and third Toyota, Honda, and Sony" in new areas such as biotech, AI and robotics.

While he did not go into specifics, he said the government would introduce measures "to expand the use of Web 3.0 services that utilize the metaverse and NFT." Three months ago, the government set up a Web 3.0 office to support the use of blockchain in business and government.

Kishida also promised "drastic expansion of preferential treatment in public procurement, preferential tax treatment and financial support" to nurture the tech sector.

Separately, NTT Docomo has just set up a new metaverse company, NTT Qonoq, which will drive the NTT Group's metaverse and XR business.

Fusing the real and virtual worlds

The new company is starting with a staff of 200 and plans to invest 60 billion yen ($416 million), although Docomo did not specify the time frame.

Announcing the initiative last week, Docomo said Qonoq would help create a future where XR will "enable new experiences that fuse the real and virtual worlds and will be utilized in many fields."

For consumers, this would mean services that integrate XR into their daily lives, Docomo said.

For business customers, the new company would bring together the XR know-how and solutions across the NTT Group to support operational transformation in industries such as manufacturing, distribution and retail.

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Besides digital tech, Kishida has said Japan will focus on science and technology-based innovation, startups and green business.

One of his signature policies is the Japan Digital Garden City, which aims to accelerate the 5G rollout, deploy a new subsea fiber network around the country and extend digital technologies to rural areas.

He has also successfully enticed TSMC to build a $7 billion semiconductor fab in southern Japan, aided by $3.6 billion in incentives.

But he isn't the first Japanese leader to try to resurrect its once-dominant hi-tech economy. He has his work cut out for him in a country where fax machines are widely used and many transactions still require a personal seal.

In the last 12 months, Japan has fallen even further in global digital rankings, as recorded by IMD business school. It has slipped one position from last year to 29^th, well behind neighboring economies Singapore (4^th), South Korea (8^th), Hong Kong (9^th), Taiwan (11^th) and China (17^th).

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— Robert Clark, contributing editor, special to Light Reading