How Japan transformed its Digital Agency through a product-led approach

Japan's story is one of those featured in the GovMesh Digest special report. You can find the individual stories on the other participating governments at GovMesh 1.0 here. 

Even as Japan’s Digital Agency – set up as a central agency to coordinate the government’s digitalisation - celebrated its first birthday three years ago, the country’s digitalisation progress was uncertain.

In his first tweet on the job in August 2022, former digital minister Taro Kono poked fun at Japan’s continued dependence on fax machines and floppy disks.

“What was once unimaginable is now becoming a reality” ran the slogan attached to that one-year birthday of the agency in October 2022, but at the same time the country was still hampered by 1,900 legal articles that specified the use of those outdated pieces of technology.

Two and a half years later, the Agency’s Chief Product and Strategy Officer, Sota Mizushima, described to the participants of GovMesh the process for eradicating those legal articles.

This included revising 4,365 provisions, creating a technology map to visualise the relationship between regulations and technologies, and developing a catalogue containing relevant information on almost 200 digital products and services within government.

In July 2024, Japan finally declared victory in the war on floppy disks.

For Mizushima, the victory is just one example of the success of an agency formed to fulfil the vision of “Government-as-a-Service” and “Government-as-a-Startup”, having grown from 571 to 1,013 employees over the past four years.

Of the employees, 43 per cent are drawn from the private sector and 44 per cent from public administration.

In doing so, the Japanese Digital Agency has achieved what many governments aspire to – a multidisciplinary approach to government digitalisation.

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The three steps to building a multidisciplinary agency

In practice, these multidisciplinary teams involve specialists from the private sector working horizontally across the agency to support civil servants across four groups of activities: strategy and organisation; common functions for digital society; services for citizens; and services for ministries and administration.

To get there, Mizushima told the GovMesh participants that the Japanese Digital Agency deployed three strategies: enhancing talent acquisition; fostering ownership in product development; and building a matrix organisation.

Creating ownerships and building a matrix organisation has been crucial to underpinning the talent acquisition.

Having separate reporting lines for administrative officials and specialists while maintaining horizontal structures of private sector specialists feeding into the Agency’s work has prevented silos and enabled the horizontal diffusion of ideas.

It has also mitigated any potential culture shock for those coming from outside the government, which Sota claims is essential to increasing psychological safety in the team and ultimately retaining the personnel.

Governments often struggle to maintain its top private sector talent, but the structure of the Agency allows private sector hires to report to peers from their discipline as well as the bureaucrats leading the organisation.

As it has grown, the Agency has also been able to bring more of its work in house. As Mizushima said, “today our employees are not just advisors, but actually get to make their own products”.

Designers design and engineers code, rather than reviewing outsourced products.

The practical implications of this organisational structure can be seen in Japan’s recent progress on its MyNa Portal, a digital platform for citizens to access public services, linked to their “My Number” cards (12-digital unique and unchanging ID numbers that are used for administrative procedures like social security, tax, and disaster response).

In 2021, the MyNa Portal team had a traditional set up, with a director taking overall control of a project through a top-down chain of command and outsourcing project development due to a shortage of internal government capacity.

By 2023, a new product team had been formed to develop and launch the Alpha version of the product, still sitting separate from the existing team. Their main role was to gather user feedback on an opt-in basis and to work on continuous improvements to the platform.

By 2024, combined teams were set up within a matrix structure, and product ownership jointly ascribed to the director and a CxO (giving ownership to the private sector specialists too).

Today, directors can ensure policy alignment of new tools and processes with overall government priorities, while the CxO is responsible for user-centricity and technological feasibility.

Cross-functional teams can form much more quickly around problems – rather than departmental structures – making it easier to test, develop and scale products.

Apart from scaling internal capacity – which has allowed the Agency to develop in-house a smartphone app for digital identification which has been downloaded 390,000 times since 2024 – this new team structure has produced different thoughts which has encouraged a dynamic approach to making design trade-offs.

Conversations about strong user experience vs. security and privacy; productivity vs security; product-first vs. law-first development have become more mature, with product teams able to challenge traditional civil servants without being shut down by hierarchy.

The approach has shown tangible results: a second version of the MyNa Point App, launched after the above restructures, led to an improvement of the average app store rating from 2.2 to 4.2 stars.

Sota concluded by outlining his plans to scale-up the government cloud, and rollout a smartphone-native digital ID.

Just as in getting rid of the outdated legislation, we should expect to see the product-led nature of the organisation making “what was once unimaginable” into reality here too.