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The Hanko - Suga's Trojan Horse

When I first came to Japan as a student over 20 years ago, my Sempai guided me though all the university entrance procedures. What stood out most was the need to have a Hanko, or a personal seal. As a new gaijin in Japan, carrying a Hanko was cool - I felt part of the team and owning my own hand-carved katakana seal proved it.

After graduating and moving into the real world, the coolness factor vanished. It was replaced by a recurring nightmare. The all-powerful Hanko was needed for everything. Bank account? Hanko. Marriage? Hanko. Business registration? Hanko. EVERYTHING needed a bloody Hanko. This isn’t just a gaijin sob story - it's worse for Japanese workers.

The Hanko is a handbrake on getting things done. Every contract requires a Hanko to be certified by law. Go in person with a particular Hanko certification, and physically put a seal on the paper. The government recently identified over 10,000 (Yes OVER ten thousand!) procedures that needed a Hanko, and this was just in the public sphere! The private sector is in on the game too. It is almost impossible to open a bank account or buy real estate without a Hanko. Despite its antiquatedness, ease of falsification, and downright inefficiency, it is still widely used. Even with widespread agreement that the Hanko impacted productivity and restricted digitalization, every attempt to reduce its importance fell flat. Then came COVID-19 and PM Suga.

COVID-19 brought home how low tech much of Japan had become. As the state of emergency was enacted and physical contact restricted, Japan found itself less able to adjust to work outside the office. The numbers speak for themselves. A Ministry of Health, Labour, and Welfare (MHLW) study showed that less than 30% of office employees worked from home during the lockdown from April-May 2020. The reason - companies were not equipped with IT to enable remote work. Japan has long prided itself on doing business face-to-face, but even the powerful business lobby, the Keidanren, realized it was time to give up the old ways.

Prime Minister Suga, who took power in late 2020, made "digitalization of the government" one of his top priorities. A Digital Ministry was set up and funded. Taro Kono, Japan's minister for administrative reform, ordered government offices to stop requiring Hanko stamps on all official documents. A sign of desperation but also one of necessity. It will not be easy to dismantle a system that has been in official use since the Meiji Era. Nevertheless, the entire digitalization project rests on the speed at which these antiquated procedures can be eliminated. The death of the Hanko is the trojan horse that will allow digital transformation to take hold, not just in the public sector, but across the entire society.


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