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Innovation magazine that generates hints for the future


The Fruit of Hope Growing at the Edge of Civilization

Shigeki Hayashi, Senior Executive Managing Directors, Division Manager of Financial Technology Solution Division



May 20, 2021

In the center of Vienna, the former capital of the Habsburg Empire, the Trinity Column, which commemorates victory over the plague in the 17th century, soars in golden color. The Baroque column evokes not only religious elements but also the suffering of the Great Plague in a condensed and sublime form. In Japan as well, a massive Buddha statue was erected in Yamatoji. We are once again made aware of the existence of historic buildings all over the world that have overcome pandemics. We exist in repeating history.
It was Professor Jared Diamond who made the world aware that social resistance against communicable disease had resulted in the destruction of the other side when civilizations came into contact with each other in the past, but now that the border has been closed, I realize that contact between civilizations still involves difficulty. There is no doubt that now is a turning point, as to whether our society will survive or perish.
Looking at the turning point in terms of social change, a revolution in social structure has begun quietly, just as the Industrial Revolution was not achieved overnight.

Toward a response to climate change

The SDGs, which call for sustainable growth, have taken root in Japanese society, but decisions on carbon-free policies, which can be said to be a further turning point in history, have been announced in major countries. Without being limited to carbon, the “climate change response” in general is also becoming an important perspective.
While the claims are idealistic, the reality is that like the SDGs, regulated businesses championing a moral cause will probably come first. Criticizing this is not productive. Meanwhile, the simple act of faithfully complying with regulations can easily undermine a company’s competitiveness in the end. Considering that regulations dealing with society as a whole will be implemented in light of the actual conditions in different countries, the transition stage always needs to be additionally considered. It is necessary for society and companies to be able to communicate what kind of transition stage must be considered. It is not enough merely to disclose these regulations—they need to be positioned within their own strategies and then disseminated, including with regard to transition-related costs.
One of the characteristics of climate change regulations is the necessity of dealing with financial supervisory authorities. Financial regulation comes from Europe. In Europe, dealing with climate change has political incentives, and as a result, it will probably move to world-standard financial regulation. This is not limited to dealing with financial institutions, and as with the SDGs, the idea of “supply chain response” is expected to have a significant impact on financial institutions’ business partners, especially listed companies.
The time will come when not only carbon-free policies, but also the ability to respond to disaster risks, the ability to respond to climate change, and efforts for the future will be evaluated.

Towards realizing a redesign of the entire social system

In response to climate change, there is a palpably strong political will to transform society through technological innovation. However, rather than regulations that can be achieved through technological innovation in industry, it is changes in social structure that are indispensable. We have experienced changes in our lives and work styles amid the difficult situation posed by this pandemic, and have probably socially learned how to reform ourselves without preconditions. In other words, it can be said that the social system as a whole is ripe for redesign. It is the use of digital technology that will bring about the realization of this redesign. By collecting and analyzing data relating to society in general, such as business processes and daily life, and by analyzing huge amounts of social data on the basis of hypotheses, it is possible to examine strategies for redesign strategies in advance.

The first perspective when examining strategies for redesign in advance is to break away from the traditional concept of supply and demand. Efficient large-scale production and extreme price consciousness are causing the disposal of goods and the distribution of goods around the earth. What I am talking about is the realization of a society that pursues production control and maximization of the surplus of each entity by analyzing production, distribution, and consumption on the basis of a huge amount of data such as climate data.
The second perspective is alchemy. I dare to use such a provocative word because the power of digital technology can convert things that have been discarded as worthless into gold in terms of value. Digital technology, like alchemy, is still in the pre-modern era. In order to regenerate what was discarded in each stage from production to consumption, capital investment that transcends the commercial point of view will be required at all stages. If there is an effective digital policy here, it will be several times more effective than capital investment. From a welfare perspective, particularly efficient investment of public capital should be achieved digitally.
The third perspective is the formation of a culture that boasts diverse values. What we should aim for is the formation of a society in which we can mutually recognize diversity, such as national and local societies, ethnic groups, ideological claims, and cultural thought, and define our own happiness. If digital technology helps measure happiness, it will enable the formation of a society that does not depend on production and consumption.
The more than one thousand Buddha statues in Sanjusangendo in Kyoto show that such religious diversity has come to fruition at the edge of civilization. I hope that the response to climate change will consist of more than just dealing with regulated businesses, and will take the form of digitalization that represents a crystallization of diversity.

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