 So welcome back to the Japan update this year. We're on to our second panel, Science, Defence and Technology in Japan. So for those of you who don't know me, I'm Shiro Armstrong. I'm the Australia Japan Research Centre at the ANU and it's my pleasure to bring this update to you with my colleagues Lauren Richardson and Ipe Fujibara. Before I start, let me acknowledge and celebrate the first Australians on whose traditional lands we meet and pay our respects to the oldest past and present. And of course here in Canberra, we're on Manawar country. So in this session we're bringing together the digital economy, new defence issues and the every important energy transition that Japan has embarked on, started to transition and embarked upon. We bring those three, seem to be disparate topics together in the form of thinking about Japanese innovation and Japan as a technology leader. So for this session we've got three panellists. We'll bring them now and then hand over to hear presentations from each. So first we have Jun Makoyama, who's a fellow at the Asia-Pacific Initiative. Ms Makoyama holds a BA in law, political science from CAO and the Master of Public Administration from Harvard University's John F. Kennedy School. Prior to joining the API, she was 10 years in business development and investment in Mitsubishi Corporation. Our second speaker will be Yuki Tatsumi, a senior fellow and co-director of the East Asia Program and director of the Japan Program at the Stimson Center in Washington DC. Before joining the Stimson Center, Yuki was at the Center for Strategic and International Studies. Also at Washington and earlier was a special assistant for political affairs at the Embassy of Japan in Washington. Many of you will know Yuki is a leading commentator and analyst on US-Japan alliance, Japan security policy and Japanese domestic politics and US-Asia policy. And finally, last but not least, Associate Professor Llewellyn Hughes, a colleague of ours here at the Crawford School of Public Policy at the ANU. Llewellyn is a PhD from MIT and trained in political science but is a specialist on energy policy. So with that, let me hand over first to Jun Makoyama to talk to us about the digital economy. Over to you, Jun. Thank you, Sheryl. Hello, everyone. My name is Jun Makoyama and I'm a fellow at Asia Pacific Institute. There's been a lot of change in the past year in Japan on digital policy, so I'd like to spend a few minutes talking about Japan's recent digital policy. So in context of COVID-19, I was a working member of the Independent Investigation Commission on the Japanese government's response to COVID-19, which analyzed early last year's response, government's response to COVID-19. And during the interview with then-Health Minister Katsunobu Kato, he said the delay in digital transformation was the great challenge in responding to the pandemic. And what does that mean? You might have seen these articles about Japan's tax machines. So during the early stages of the pandemic, Japanese government could not effectively collect information on number of patients, number of deaths, vacant beds, etc., because information exchange was based on papers. Fax machines were used between local governments and hospitals and the central government. So COVID-19 response team, including data scientists and epidemiologists, had real difficulty collecting accurate real-time data. And that has led to governments developing many systems, but that initiative also often failed. For example, HRSA's Health Center Real-Time Information Sharing System was created to resolve that such issue of using paper-based information, but it was criticized its poor usability and the Conduct Tracing app, COCO, was criticized that it has not been compatible with the OS updates on Android. And these old systems failed basically and caused a vast criticism from the Japanese society. And I think that this was the worst one, government's cash distribution operation. So in response to COVID-19, governments tried to distribute cash grants to its citizens. And comparing to other countries like Germany or South Korea or the US, they spent a few days, or at least a month to do this operation. But in this photo, you can see a local authorities office packed with people, because this is Japanese government's online application required, my number card, which was needed to use to get these grants. But only 60% of citizens had this my number card and people stormed into these local offices to actually apply for the card. So the online system was built to avoid and prevent physical contact, but this didn't actually achieve the purpose of that. So such disastrous situation led to push for creating a new digital agency, which was launched last week. And what kind of challenges they faced, I have a slide here. In procurement, they had a one-year budget cycle, and they used waterfall methodology, and they had very stringent procurement policies, which relied really on big vendors like Kujutsu and NEC or entity data, and didn't really manage the system development properly. And also the human resources. So Japan has lifetime employment, and most of the public servants rotate in cycle of two years. So they lacked expertise and didn't accumulate knowledge to actually use that kind of expertise in the digital field. And also this usual silo between the ministries or the segmentation between local government and central government was also a huge obstacle. And also use of personal information. Japan has very strict my number law, which prohibited use of tax, for example, tax information to distribute cash, because there was a Supreme Court ruling that government should decentralize the use of the hold of personal information. So government is very cautious about use of personal information, and this has caused a lot of complex operation in simple things like distributing cash. So the agency was launched last week, and this was pushed very hard by the current Prime Minister Suga. And I think we are very hopeful that this agency is altering the status quo. The minister here I devoted his political career in this area, considering that there were previous ministers who didn't really use computers. This is a great, but the right person to actually read this initiative. He uses keywords like government as a startup and trying to really challenge the change in this Japanese society. They have three pillars, including updating of government services, but also digitization of the society as a whole, focusing on health care education and disaster management. I think the very challenge this agency has is that it has recruited talents from private sector. 100 people out of 600 employees are from private sector, which is very rare in Japan. And also, it's notable that they are at a very high level of management. Chief architect or CEO or CBO are all from private sector. And also, it is interesting that we have also director general level from private sector, which means that actual decision making could be done by the private sector for people. So, but the last week, Prime Minister Suga announced it's his stepping down from the administration. And still, I'm very hopeful that an optimistic that this organization will succeed in the future because he has authority and momentum and support from the private sector and citizens at the moment. And also, most of the potential successors, as I see the names, likely to support the agency. One candidate I'm concerned about is Sanae Takahichi-san, who actually mentioned using my number to tax the rich people, which might again cause the controversy of use of personal information in Japan. And that might be one factor that could stall this movement. But otherwise, I think I'm very looking forward to developments of this transformation. And one also caveat that I wanted to mention is that during this creation of new agency, two aspects were not prioritized. One is cyber security. That doesn't mean that this agency doesn't concern cyber security, but similar to the digital systems developments, cyber security management in Japan, Japanese government is very fragmented in many agencies and also ministries. And this was left as it is. And I think this has to be sorted out in the near future. And also, if you see the new agency's website, you'll only probably see one page or English website page. I think global interaction and how to connect with the global other countries agencies will be one of the issues that the new agency has to work on. Otherwise, I'm very looking forward to this transformation. And this is all from me. Thank you. Thanks so much, Jun. That's a big change for Japan. Maybe we'll get rid of fax machines finally and all the paperwork that we have to do with hard copy signatures and everything as we all know when we deal with our Japanese colleagues. Moving right on to Yuki Tatsumi and we'll come back for questions later. I'll just remind everybody to put their questions in the Q&A function in Zoom and we'll get to those in the discussion. Over to you, Yuki. Thanks, Shiro. And thank you for Australian National University for giving me this opportunity. And I very much enjoyed the Jun's presentation about digital agency because that is actually the new agency that I was very curious about how it's going to evolve. So it sounds like this is from a very much of a work in progress. So I'm very much looking forward to continue to watch the evolution of this agency. And my task here tonight this evening in DC time, but then for your afternoon is to talk a little bit about the challenges for Japanese defense policy, both existing and the upcoming. So here is, I would like to do three things in my limited time for the opening remarks and I'm very much looking forward to receiving Q&A and the continue the conversation afterwards. So first I would like to identify a couple of things that are considered that Japan considers as a major challenge for its defense policy. I'm mainly taking hints from the latest defense white paper that was published in early August. I think I would highlight a couple of things that when it comes to how Japan's defense establishment is thinking about how to cope with the emergence of the new technology such as artificial intelligence, big data and so forth. Secondly, I would actually like to talk a little bit about the spend a little bit more time about the impact that could have a current political uncertainty following a Prime Minister Suga's announcement of his stepping down as of this past weekend on to Japan's policy. And I would like to finish up my remarks by identifying a couple of the Malmokas to watch as I'm moving forward for the next three to six months. So moving right on, let me talk a little bit about the how Japan identifies its defense policy challenges. And then again, my hand, I take these hands from the latest defense white paper that was that that was published in the August one. And I would like to mention that now full English translation is available on the Japanese Ministry of Defense's website, which is actually kind of unheard of because they used to have at least several month delay in coming up with the English translation. So this is a major step forward and I actually would like to congratulate Jay monster efforts to pushing out their information on the public domain. One thing that I would like to note is from the 2021 defense white paper is that China features big as Tokyo's top security concern. If you even if you only read the introduction that was written by incumbent Defense Minister Nobuo Kishi. He started out by he starts out his introduction to the defense white paper by referring to Beijing's quote, unilateral attempts to change the status quo in East and the South China seas unquote, particularly emphasizing the problematic aspect of a Chinese Coast Guard law enacted in February 2021. And obviously for Japan, North Korea's nuclear program and ballistic missile program is a major security concern so that does follow closely as a security challenge as the security challenges top item that the Japan continues to keep a close tab on. And this year's defense white paper also reiterates Japan's commitment to the promoting free and open in the Pacific concept. And one thing I would like to note is that the important is that it places on the security cooperation between bilateral US, not just bilateral US Japan alliance but beyond the display bilateral alliances, namely India, Australia, Canada, New Zealand, Germany, UK and France. And that is actually a major shift. I think Japan has talked about the active reaching out to other security partners in the in beyond the US Japan alliance but I don't think I don't think any past white paper has discussed the security cooperation outside of the in outside of the inter Pacific partners such as European partners to the to this to this degree. In that context, I would also like to know that that there, this white paper attracted a quite bit of attention, because it did articulate Japan's interest in the stability of the cross time relations and the importance that it has on the security. And this is actually the very first time that the Japan's defense white paper discussed this in in such a clear and unambiguous term. So this is one thing to note. And obviously, the United States and the alliance with the United States is the most important for Japan's defense defense policy. So it does emphasize the continued focus on the robust US Japan alliance and defense cooperation in that context. And just an addendum on August 31 Japan's Ministry of Defense has released the new budget request for the upcoming fiscal year 2022 through 2023 budget request. And this is actually a quite a big sea change because it does have a 7% increase from last year's requested amount. And that I think is the biggest increase that I've seen in this request amount. At least in the last 10 years and I really haven't personally could recall the such a big increase in the percentage compared to the previous year. Now, I would like to note, given the current situation in the in the Japan's first Japanese government's response in the COVID-19 and the spread of the death variants and so many things that the Japan has been actually quite falling behind in terms of rolling out of vaccinations and so forth. This could this 7% increase may not hold, depending on the negotiation that Ministry of Defense will have with the Ministry of Finance but I just would like to note that the Ministry of Defense did request this much a bigger increase compared to previous year, and that is very actually not worthy. And under this new new budget request space, cyber and electric magnetics gets the lot of attention on this budget. But speaking to the theme of this panel, which is the emerging technology and digitalization of the economy and how Japan might or might not be able to cope with the emerging technologies. Quite frankly, Japan's Ministry of Defense really still hasn't quite figured out how how to do or what to do with the AI and the other emerging technologies, but they at least began in this budget request put put in the kind of a placeholder to begin them studies of how to incorporate those things into the defense capability. However, all these things could be actually a significant impact could be influenced either positively or negatively, depending on how current political uncertainty will shake out. As all of us know, Prime Minister Suga announced that he would not seek re-election as ruling the Liberal Democratic Party's president. What that means is he would step down on September 30 as his term as the LDP president expires. And now LDP has to pick a new president and then I think we have seen a flurry of speculation and speculative reports on who's going to be running, who would support FUN, and who might be the top candidate to challenge whom and all that sort of things. But what even complicates the picture is the Japanese House of Representatives lower house election needs to happen after because it sometime in a fall because it's term expires on August 22. So original plan before Suga's announcement of not seeking re-election and stepping down is that LDP would hold its own presidential election within September. And depending on the results, there may or may not be a change in a Prime Minister, very a caretaker government, quite possible. And LDP will go into the upcoming lower house election with the new phase or same phase depending on how the presidential election would have shaken out and lower house election would have happened in October. But now there is a great deal of certainty on when actually this lower house election will take place. Some media reports speculate that it may actually please into November beyond the expiration of the current terms of the diet, which will be the first, which will be the first time occurrence since the Japan's current parliamentary democracy system started. So that will be a quite unusual event if that comes to play. Focusing back on the upcoming LDP presidential election. Everybody kind of thought that former Foreign Minister Kishira was going to be the top contender for the possession. But since the announcement of a Prime Minister stepping down, there were all kinds of maneuvering going on. And the most recent formula is that maybe there will be a coalition between a couple of groups to push a popular Foreign Minister and current admin reform minister Taro Kono into the opposition. So we'll see that happens. But so all that political maneuver could quite impact how this defense budget holds and what the Japan's foreign policy and security policy priority is going to be. So quickly wrapping up a couple of my marker, my markers to watch. So obviously who will succeed Suga as a Prime Minister is the biggest, the biggest topic of interest. But then following that, what his or her cabinet will look like, especially who would fill the possession of Foreign Minister Defense Minister and the, because we're talking about digital economy and technology here. Ministry of, Ministry of Economic Economy Trade and Industry will will be. And obviously the results of upcoming full lower house election slated to happen either sometime between late October around Halloween times through the early November. So depending on that, the personality that holds those offices and the results of the election could really impact not really necessarily impact the defense budget and the general trend that the Japan set itself, but nuances and and the prioritization of among those items could change. So I will wrap it up as that. Thank you. Thanks so much, Yuki. Yeah, look, it all comes down to the Prime Minister still and the uncertainty there and that's exactly where Jun left off. So I look forward to coming back to a lot of those issues too, especially on the kind of placeholder on artificial intelligence and these new issues but let's hope the next presentation the next issue doesn't depend so much on who becomes Prime Minister but we'll hear from the Prime Minister or well on that. So now on energy transition and sort of innovation policy there. I'll hand over to Llewellyn. Thanks. Hi everybody. Let me also recognize the Wurundjeri people whose land I am on down here in Melbourne and recognize their elders past and emerging. So I've been asked to talk a little bit about what's going on with Japan's energy and climate policy. Of course there's going to be a lot of interest and questions about what the decision by the current Prime Minister Suga Yoshihide to not run as the president and therefore no longer be the leader of Japan. What that means across different policy areas and particularly in the energy and climate space. And it's particularly germane in this area of policy because the current Prime Minister has actually had an enormous impact on Japan's energy and climate policy. You know for those of you who have followed Japanese policy making politics in Japan you know there used to be a kind of you know one would typically assume that a change in the Prime Minister wouldn't have a significant effect on policy. Because most policies being developed within ministries and agencies in a fairly technocratic bottom up kind of process. But in the short but very sweet period of the Suga administration I think we clearly have seen a different model for developing energy and climate policy coming out of the government of Japan. And that has led to some very significant announcements which have been made. So I'll just want to review this very quickly and then you know like all good academics I believe that good things come in threes. And so I'm going to give you an argument and my argument is going to be that Suga as Prime Minister has successfully managed to embed a number of the changes in fact three big changes in energy and climate policy which mean that the changing of the Prime Minister is not likely to see a significant change in direction in terms of Japan's climate and energy policy. In fact if Kono Taro becomes Prime Minister I see upside in terms of more rapid energy transition. Firstly just to note that the Japan's energy and climate policy has really been under shifting grounds over the last little less than a year. As you can see here Prime Minister Suga used actually his first major speech to the Japanese Parliament to announce a 2050 economy wide greenhouse gas net zero announcement and in the case of Japan unlike for example Australia that basically means the use of energy and energy conversion about nine out of every 10 units of greenhouse gas emissions come from the energy sector as opposed to let's say agriculture. So you know we're really talking about energy transition when we talk about a net zero goal for Japan. In addition in December 2020 we've seen the green growth strategy I'll talk about that in a minute. We've also seen some discussions about carbon pricing and border carbon adjustments and I'm happy to talk about that in Q&A as well if you want an update on where that stands. And then most importantly for me in April 2021 we've seen that mid-century net zero target shifted forward in time in a way that influences investment decisions today and that's happened because of the announcement of a 46% greenhouse gas emissions reduction target by 2030 relative to 2013. That's very very ambitious. If you look at the previous goal for example which was enshrined in Japan's nationally determined contribution to the United Nations framework on convention on climate change. It committed Japan to a 26% reduction in emissions by 2030 relative to 2013 something that Japan was on track to achieve. So this is a substantial increase in near term ambition focused particularly on the energy sector. So some really really big changes. I don't have time to go into this now but one of the big things that's happened in decision making is essentially Japan has adopted what's called the back casting method. And what that really means is establishing an ambitious target and then innovating to achieve it rather than looking at what's possible now and then thinking about how you might incrementally improve upon that. And you've seen that play out in for example renewable energy renewable electricity targets and how those have changed over the last over the last few months. So I said you know we've only got a little time I said there were three reasons why I think that the Suga administration has successfully embedded or is in the process of successfully embedding this new ambition in climate and energy policy within Japan's policy making landscape in a way that will mean it will outlive his administration. The first of those is because of Japan's nationally determined contribution. Now this is something for those of you who don't follow international climate policy making essentially a commitment which governments around the world have committed to make to as part of the framework convention which you know where they state what the ambition of the government will be and the idea is to ratchet those up over time. In fact in 2020 Japan reiterated its previous target but that is now in the process of changing. And as you can see in front of you the new nationally determined contribution which is an international commitment and therefore really does kind of lock the Japanese government in after Prime Minister Suga incorporates this much more ambitious target in the languages in front of you here that is to roughly half Japan's emissions relative to 2013 by 2030. Now this NDC is currently under a domestic public comments process. It finishes on the 4th of October. And so once that's been completed and we have kind of social license around this number. I expect Japan to submit this and to have this incorporate that as new international commitment. That's a big change. The second reason that I think that this new ambition around climate energy policy will outlive the Suga administration is because of something called the basic energy plan. Japan is a law called the basic energy law. It was put in place in 2001 and it requires the cabinet to review Japan's midterm energy policy settings every three years. The last one was done in 2018, which means that we are reviewing it again this year. And just in July actually the full draft of that document was released. And as you can see here it shows a significant increase in renewables deployment as a target relative to the previous target. That is about a 14% increase in generated electricity relative to the 2030 target. And that is met by a reduction of 7% in electricity generated by coal and a reduction of 7% of electricity generated by gas. I think that as we move towards this it's safe to say that Japanese demand for Australian thermal coal and Japanese demand for Australian natural gas in the electricity sector have peaked. And so we are going to see that gradually decline over time. But the key point is that again the draft basic energy plan is currently under a public comments process. That process will also be completed by the 4th of October. It takes about a month for those to be collated. So I expect the basic energy plan to be approved by cabinet and therefore locked in moving beyond the SUGA administration. The third reason I think that Japan's new ambition, which we have Prime Minister SUGA to thank for is because of its green innovation plan. Japan's developed a very comprehensive set of sectoral plans across different segments of the economy. Those are shown for you here. To kind of celebrate the Australian government putting its own offshore wind power legislation to parliament last week, which will see us build an offshore wind sector as well. It's worth noting that one of the key areas in which Japan is really pushing is in offshore wind. It has for example a deployment goal of up to 45 gigawatts of offshore wind by 2040 with about a gigawatt or about four projects a year every year moving forward. And we're about to find the results of those. This kind of planning is at a very detailed stage. If you look at offshore, for example, we've got industry targets around domestic content. We've got supply chain development and so on and so forth. And this kind of sectoral industry policy planning around energy transition is in place across each of those 14 sectors which I described to you a moment ago. So both in terms of the NDC also the public comments process around Japan's basic energy plan which will be improved by cabinet and because the sectoral plans around energy transition are already in place. That provides strong evidence to me that whatever we see from the next administration, there's going to be significant continuity in this new ambition that we've seen from the Japanese government. Let me just finish by saying just one comment about the implications of this. For Australia, this is a really significant change. Japan has been a partner for Australia in the development of Australia's resources particularly around gas but also around coal. But it's clear that Japanese energy markets are increasingly policy driven. That is, it's not the underlying economics necessarily fuels which is driving their use but rather this ambition around energy transition and these very detailed plans which are being put in place. And that means that for Australia intelligence about those changes, what are the policy instruments? When are they being put in place by what does that mean for Australian demand? And what are the new opportunities that we're seeing for example in green ammonia but I think in many other areas as well and how might we take advantage of those? One of the arguments I've been making is that we need some better platforms around track 1.5 and track 2 discussions to enable us to better chart what will be a shared energy future in energy transition between Australia and Japan. Let me stop there. Look forward to the discussion. Great. Thanks so much Lou Allen and thank you for keeping to time for all three speakers. I might get Jun and Ruki to reveal themselves and turn their cameras on. And we've got some questions in the Q&A and a few questions that have been answered already by our speakers. So let me just start with the political uncertainty and the now jockeying for Prime Minister because all three of you raised that and that is a topic that we're all watching very closely. Lou Allen you mentioned with a possible Prime Minister Kono that this energy transition, the commitments might be accelerated. Maybe I'll just ask you to run through a couple of the other candidates Lou Allen and then I'll get to Yuki and Jun too of the prospects for energy transition with the other candidates say Kishida and Ko. And then obviously Yuki to yourself you said you know change in nuance and emphasis a bit but if you could flesh that out a bit including there's a question in here about a female candidate that's also running. And then Jun, just a quick commentary on the potential impact of the leading candidates. Sure. So my understanding is although you've got to kind of read the paper every morning and I haven't had a chance to do that that the currently the the the only formally committed member of the LDP to run in the presidential election is Mr. Kishida and that we, you know we're seeing lots of jockeying but it's not yet clear, for example, how a subtle or others within the LDP are going to line up and what that might mean for eventually other candidates revealing their hands. The reason that I say Mr. Kono provides a lot of upside if you want to see energy transition is because of his role firstly as the Minister of Defense and previous cabinet and then as the Minister for Administrative Reform. In both those portfolios he has demonstrated himself to be very bullish on the potential role of renewable electricity within Japan's energy system. When he was Minister of Defense he played a key role in ensuring that developers of onshore wind in particular were able to coordinate well with the Ministry of Defense around radar issues, because you know when you have significant numbers of turbines within the range of radars which Japan has particularly on the Japan sea side that that those turbines can interfere with the performance of those radars. When he was Ministry of Defense he played a key role really in helping ensure that that coordination has been has been well also for the offshore wind sector. As Minister for Administrative Reform he set up a Renewables Task Force which essentially he's been using to make recommendations to different ministries, AMLIT, the Ministry of Land Transport, METI and others about how more quickly you might see what regulatory reforms are needed in order to more quickly deploy renewables. Mr Kishida has said some things but if you look at his policy platform it's much less front and centre. He has noted that energy system reliability requires continuous use of coal. He has done some things within the LDP when he was the Chairman of the Policy Affairs Research Council just in terms of organising how policy gets made within the LDP. But there's much less known about the other potential candidates on that score. Thank you so much. Yuki. Yes, thank you for that great question. So and a conventional wisdom is that the former Minister Kishida is leading a candidate to succeed Prime Minister Suga. But like Llewellyn said, Llewellyn alluded to there are so much movement behind the same going on right now. And I am very closely watching whether Taro Kono will formally announce his candidacy before the end of this week because another top contender or at least in the field of a public opinion Mr Kishida is actually ranks the third as the person who the public would like to see as the next Prime Minister. So number one is Taro Kono and the second, number two is former Defense Minister Shigeru Ishiba. So there has been a whirlwind of speculation that perhaps Mr Ishiba might choose not to run and then rather bring all of his supporters to support Mr Kono's candidacy and to accelerate the generational change and then also address the kind of existing and brewing frustration within the LDP of the, I guess, a diplomatic speaking not so inclusive decision making processes that unfolded under former Prime Minister Abe and now under a Prime Minister Suga. So all I'm saying is the, I don't think any one of us here today has a crystal ball on how it all shakes out. But regardless of who gets who gets elected. It could be very short lived Prime Ministership because the lower house election follows very, very shortly after the LDP presidency. So if LDP doesn't do well in that election, whoever sits on the top will be a hold accountable. So we'll just have to see and then I'm just afraid. I just pray that Japan will not devolve back into the 2007 after Mr Abe stepped down where we see different Prime Ministership every year because now is exactly not the time that Japan can afford to have that kind of unstable leadership. Thanks, Yuki, and we'll come back to this issue in the next panel, of course, as well. And to you, Jun, specifically on the prospects of different candidates for, you know, affecting this really whole of society digital transformation Japan needs to undertake. Right. Just a little bit of comments on digital policies. I think Hamiya Kishida-san has been in the same faction as Hirai Minister, Digital Minister. So I think if it becomes Kishida-san, then the current movement will not change. And also Kono-san, Taro Kono and Minister Hirai, it works closely together. So I think these two candidates, I see their support in the current digital transformation. Ishiba-san, I'm not sure. And also, because Sanae Takahichi-san has been former Minister of Interior and also Communications, I think she might have different views as to digitalization. So I think we have to watch closely if she gets selected. And then in final comments, I totally agree with Yuki-san's view that Japan needs to, the next Prime Minister may be short-lived and Japan cannot afford to have that era back again. So yeah, that is my comment. Thanks, Jun. While we're with you, maybe I'll follow up based on your presentation and setting up a digital ministry and coordinating across government. It all looks really promising and we know Japan when it starts to implement things can be very effective and quick. But Japan is rather behind, as you showed, with fax machines on some issues, in some areas, way ahead of the rest of the world when it comes to technology and innovation. But it seems a lot of areas very slow to change. The prevalence of fax machines is a case in point. You answered one of the questions here in the Q&A on what the barriers are. But maybe that's worth just reflecting on for the rest of us. And for me, working from home isn't all that fantastic all the time. But the occasional flexibility to do so, I would have thought, is now that it exists in Japan, do you think there are prospects for workplaces to be more flexible? And that'll help with labour force participation, people commuting less. Or are we going to go right back to when things open up, right back to long hours in the office, staying late at night? I think the pandemic had a huge impact on how people work in Japan. And I'm hoping that the transition will not go back after everything goes back to normal. But I think, for instance, like Mr. Kono Taro, he is pushing to strongly with this reform. So I think, depending on the leaders, Japan's trajectory will change. But definitely, I think the labour force is a huge key to determining what the next steps will be for Japan. Look, we might, there's a question here to Llewellyn that you said you'll answer live. I might just add to everyone, thanks for asking the questions here. And it's great that our panellists are able to answer some of these via text. It's a try to limit the Zoom fatigue for everyone and having short panels, but there's an opportunity to engage with the panellists while we do so. The question is from Anonymous, how much of the energy transition is actually possible? And I won't respond to the rest to ask the rest of the question, but you get the idea, Llewellyn. Yeah, and thanks for the question. So this is a question not of the direction of change, but rather the pace of change. That is that it's clear that Japan is going to decarbonise its energy system. The real question is how quickly that can happen. And I think there's lots of debate there, right? So I haven't done the numbers in a careful way, but if you look at the model results of how Japan gets to net zero, for example, by mid-century, it's an extremely challenging target. That's an extremely challenging target also for really every economy, whether you're developed or developing. And so, you know, are there enormous challenges? Yes. I think the best way to think about that problem is sectorally. And what I mean by that is when we talk about energy transition, we're actually talking about a large number of energy transitions, each of which are occurring under different time scales. If you think about how long a steel foundry lasts, for example, compared to a coal-fired power plant or whatever it might be, when the investment decision is made about what to do with that when it reaches the end of its operating life, that's when the key moment occurs. But I do see a lot of positive movement in Japan more so than previously. One of the key issues, for example, that the government faces around the issue of grid, the transmission grid, because renewable energy resources are not in the same place as often where the large fixed-point fossil fuel intensive power generation facilities are current in Japan. And, you know, the country's just developed a national grid plan for the first time, following the Europeans. And we're now seeing a feasibility stone, which will be done with the first draft completed by the end of this year for a high-voltage DC cable running from Hokkaido down to Tokyo Electric, which will enable a lot more offshore wind capacity to flow from the location where that wind is down to the major population centres. So I think that, you know, there are challenges. I think there are challenges about time rather than about direction. And while, and I see room for optimism. Thanks a lot. Yeah. And that, as you said in your presentation, the pace of that change is going to affect the Australia-Japan relationship significantly and how Japan relates to the rest of the world. Yuki, to you, you mentioned in your presentation, you know, the Ministry of Defence in its latest white paper is talking about artificial intelligence and big data, but it just needs more money. And so it's going to, you know, go to battle with Ministry of Finance as usual to try to get that. Is this, you know, we expect Japan and Japan's self-defense forces to be at the technological frontier, really. But from what you're saying, it sounds like, you know, this is an area where Japan's probably a little bit behind, but Ministry of Defence paying lip service to try to get some more funding. Is that a fair assessment? And then I guess another question is, you know, surely space and other areas are really new frontiers for Japan and thinking about defence and how is Japan working with countries like Australia in that space? Thank you. And I think the, rather than, I think I'm paying, just paying a lip service is a little bit too harsh on the Ministry of Defence. Rather, I would characterize it as they're just about to begin to grapple with the magnitude of the change that those technologies might bring in to the way that they conceptualize what the defence operations and different self-defense force operation might look like. And then on top of it, how Japan will capitalize on its existing technology within the country. But, you know, let alone cooperating with the US and the other security partners such as Australia. So we will see how much of a budget for a study that Ministry of Defence might able to snatch based on this budget request. But they are, I mean, based on the conversation that I've had with my friends over there, they are quite serious about these new technologies and how do they are keenly aware that they need to address these challenges. But I think the source of the challenge come from twofold. And first and foremost, most of those advanced technology lives in private sector and not in the national defence circles. And the traditionally speaking, and I think I would love to hear what June might have to say about the current trend, but the scientific R&D world has been known historically very, very adverse to support national security related research and materialization of those technologies into actual defence systems. So if that trend continues, then Ministry of Defence really have a limited in country resources to pull it from. So I don't know what the implication might look like, but I'll just throw it out and then I would love to get June's opinions on that. Thanks, Yuki. And that's exactly what I want to ask June as well because there's a question here from Jennifer Jacket on strategic rivalry over advanced technology between the United States and China and where Japan really fits into this with sensitive technology protection. And I'll talk a little bit about this outside of the technology realm, but more generally in the next panel. But on this issue, Japan is the third largest R&D spender in the world. A lot of that's in the private sector. June, you showed that the new digital agencies bringing people in from the private sector and that's where all the dynamism and innovation is. How does Japan see this being squeezed between the United States and China in this space? And are you worried about that for development of technology in Japan, as well as the push for digitalization more broadly? Yes, I think paradigm is shifting very quickly in Japanese government and also in the private sector because previously private sector was just private sector. Just thinking about their global economy and pursuing their interests that the recent China-U.S. conflict or the context. Japanese government is currently building its capabilities to tackle national security from an economic perspective. So I think private sector is certainly concerned, but at the moment I think they haven't found the right path to actually balance the political aim and also the development of this technology and building their markets and profits. So I think this is one of the most focused area for the Japanese government in the next few years. And also just mentioning about Yuki-san's points about Japanese universities and research centers reluctant to contribute to the defense industry. I think this context hasn't been changed. Even I think Prime Minister Suga is not appointing people in the new academic circle has also started this conflict. So I think this trend hasn't changed. So Japanese government has the difficult issues to manage going forward. Thanks Jun and we've run out of time for this panel, but we will continue some of this discussion in the next panel, which is half an hour away, including trying to get this balance right that Jun talked about between economic interests and national security. But I think that was a fascinating panel for me talking about Japan at the forefront or not of technology in some areas. The challenges that lie ahead, the energy transition still taking advantage of the COVID pandemic and what that's meant for being able to work from home, whether that's just a temporary blip or whether we can really take advantage of that in Japan. And then again on the defense issues and thank you to our panelists very much for bringing some light to these topics and for answering all these questions in the Q&A. So we're going to keep this room open. We're not going to lose you as we did last time between sessions. The Q&A is still there. You can have a look at some of the answers. But let me take this opportunity on behalf of everyone to thank our three panelists. Thank you very much everybody.