What Is DX in Japan? Meaning, Origins & Examples

Everything from your morning mail to your retail experience is getting a digital makeover. At least, that's the promise.

So what is DX in Japan, exactly? Here's the nutshell version of what you should know about DX (digital transformation) in Japan.

Quick note before we start: this DX means Digital Transformation, the business and technology strategy. It's a different DX from the medical abbreviation "Dx," shorthand for diagnosis, which is actually the most common way people use this exact acronym. If you're here for the business meaning of DX, particularly as it applies in Japan, you're in the right place.

What is DX in Japan?

In Japan, the initialism DX stands for Digital Transformation and refers to digital disruption that brings about changes that enhance people’s lives. 

Who coined the term DX (digital transformation)?

The term DX is widely attributed to Eric Stolterman Bergqvist, Emeritus Professor at Umeå University in Sweden, who published a 2004 paper describing the concept of digital transformation. 

What does the X stand for in DX?

DX is an abbreviation for “digital transformation.” While D stands for digital, the X draws from the Latin root word trans(formation)—meaning “across” or “beyond”—and symbolizes the intersection or crossroads that society is presently facing.  

DX isn't the same as basic IT-ification

It's worth separating DX from simple digitization or IT-ification, since the two get conflated often. IT-ification (IT化) generally aims at making existing processes more efficient, digitizing a paper form or automating a manual task. DX goes further: it aims to transform a company's business model, products, and organizational culture using data and digital technology, not just make existing processes faster. Technologies like AI and IoT support DX efforts, but adopting them alone doesn't make a company's transformation a DX success unless the business itself changes as a result.

Why is the Japanese government pushing DX?

In September 2018, Japan's Ministry of Economy, Trade and Industry published its DX Report, which introduced the now widely cited "2025 Digital Cliff" (2025年の崖) warning: if Japanese companies fail to modernize complex, aging, and poorly documented legacy IT systems, the country could face economic losses of up to 12 trillion yen per year starting in 2025. The report also highlighted the human resource risks companies would face if DX were neglected, including a looming shortage of engineers who understand these older systems as they retire.

Legacy systems remain a central obstacle years later. Around 70% of Japanese companies say legacy systems hold back their DX efforts, and a 2024-2025 survey led by METI, the Digital Agency, and Japan's Information-technology Promotion Agency found that 61% of business enterprises still operate at least one legacy system today.

Since then, the Japanese government has launched a number of initiatives to promote digital reforms across local governments and the private sector. These initiatives include laws that promote a digital-first approach, the creation of Japan’s Digital Agency, the push toward unanimous use of My Number cards, issuing grants promoting digitalization, etc.

Unfortunately, Japan’s 2022 placement in the Global Digital Competitiveness Ranking was 29th, a backward slide of 7 placements from their 22nd finish in 2018. Japan still has far to go compared to other countries’ digital advances. 

Examples of DX in Japan

Corporations and businesses in Japan are encouraged to adopt a digital transformation strategy that will improve business processes and increase profits. Here are some examples of companies that have done so:

MailMate—digitizing postal mail

MailMate is a startup in Japan that digitizes postal mail, making digital copies available via an online dashboard and eliminating the need for a physical mailroom. 

Companies can now outsource their mail handling to MailMate’s software, which will save them manhours and physical space and make paper file retrieval as easy as digital. 

FamilyMart—unmanned payments

FamilyMart, a major convenience store chain, addressed challenges like operational costs and the need for contactless payments during the coronavirus pandemic by implementing an unmanned payment system. 

This system, using cameras and other devices, allows for swift electronic payments by recognizing products in real-time, reducing labor costs, and enabling quicker, contactless shopping experiences for customers.

Kajima Corporation—resolving labor shortages 

Facing a shortage of next-generation workers, Kajima Corporation, a major construction firm, adopted AI and robots with a strategy focusing on having half the work done by robots, half of the management done remotely and digitalizing all processes. 

The technology Kajima uses enables machines to perform construction autonomously, as demonstrated successfully at a dam site, thereby addressing the worker shortage in the construction industry through digital transformation (DX).

Yamaha Motor—optimizing internal processes

Yamaha Motor, renowned for manufacturing motorcycles, faced operational inefficiencies due to localized optimizations like unique systems at each overseas factory and branch. 

To counter this, they initiated top-down awareness reform from management, established a "Digital Strategy Department" with diverse personnel, conducted numerous PoCs annually, and standardized core systems and data usage across locations, leading to reduced manpower needs, enhanced engineering efficiency, and a lower manufacturing defect rate.

Seven & i Holdings—Last One Mile DX platform

Seven & i Holdings, known for its supermarkets and convenience stores, faced challenges in enhancing the efficiency of e-commerce delivery services to deliver new customer value digitally. 

To address this, they launched the Last One Mile DX platform, utilizing AI to optimize vehicle/driver allocation, delivery routes, dynamic pricing, and pickup timings, aiming to reduce delivery distances by up to 40%, vehicle usage by about 45%, and enable deliveries in as little as 30 minutes, thus blending real and digital experiences for customers.

Kubota — reducing equipment downtime with AR diagnostics

Kubota, known for agricultural and construction machinery, partnered with digital consultancy Monster Lab to build Kubota Diagnostics, a smartphone and tablet app that uses AR and 3D models to help service engineers diagnose equipment failures on-site. Diagnosis time had previously been a major contributor to total equipment downtime, especially when engineers needed to escalate unfamiliar issues back to head office. The app was first deployed with Kubota Tractor Corporation in the US before expanding to other markets, including Japan.

Toyota — accelerating materials research with AI

Toyota has applied materials informatics, using AI to analyze and model candidate materials, to speed up parts of its materials research and development process. Rather than relying solely on traditional physical testing cycles, this approach lets engineers narrow down promising material candidates faster using data-driven prediction, freeing up research time for later-stage physical validation.

Frequently asked questions

What does DX stand for?

DX stands for Digital Transformation. The D comes directly from "digital," while the X stands in for "trans," drawn from the Latin root of "transformation," a convention that also gives us words like "crosswalk" using X for "cross." This is different from "Dx," the medical abbreviation for diagnosis, which is a separate and unrelated use of the same two letters.

What is DX in Japan specifically?

In Japan, DX refers to a national push toward digital transformation across government and business, formalized by Japan's Ministry of Economy, Trade and Industry starting in 2018. It goes beyond simply digitizing paper processes: DX in Japan is meant to transform how companies operate, compete, and deliver value using data and digital technology, with government initiatives like Japan's Digital Agency and My Number Card adoption supporting the push.

What is the business meaning of DX?

In a business context, DX means using data and digital technology to transform a company's products, business model, and organizational culture, not just to make existing processes faster. A company that digitizes its paper invoices has adopted IT, but a company that redesigns how it delivers value to customers using that same data has achieved DX. The distinction matters because many companies invest in digital tools without making the deeper business changes that define genuine DX.

What is the difference between DX and IT-ification?

IT-ification, or IT化, aims to make existing processes more efficient by digitizing them, automating a manual task or replacing a paper form with a digital one. DX goes further, using data and digital technology to change the business itself, its products, its model, or its culture, rather than just speeding up what already exists. Adopting AI or IoT tools supports DX efforts, but tools alone don't make a transformation a DX success without a change in the business itself.

What is Japan's 2025 Digital Cliff?

Japan's 2025 Digital Cliff (2025年の崖) is a warning introduced in Japan's Ministry of Economy, Trade and Industry's September 2018 DX Report. It states that if Japanese companies fail to modernize complex, aging legacy IT systems, the country could face economic losses of up to 12 trillion yen per year starting in 2025, driven partly by a shortage of engineers who understand these older systems as they retire.

Who coined the term digital transformation?

The term is widely attributed to Eric Stolterman Bergqvist, an Emeritus Professor at Umeå University in Sweden, who published a 2004 paper describing the concept. Japan later adopted and formalized its own national push around the term starting with METI's 2018 DX Report, giving "DX" a distinctly Japanese policy meaning on top of its original academic origin.

How does DX affect foreign companies expanding into Japan?

Foreign companies entering Japan increasingly encounter DX-related expectations and infrastructure, from digital-first government filings to My Number Card-linked administrative processes. Understanding Japan's DX push helps foreign businesses anticipate which processes are digitizing, which government services now expect online submission, and where digital-first competitors may already have an advantage in the local market.

Is DX in Japan the same as digital transformation elsewhere?

The core concept, using data and digital technology to transform business models and culture, is the same globally. What's distinctly Japanese is the scale of government involvement: METI's formal 2018 definition, the creation of Japan's Digital Agency, and national initiatives like the 2025 Digital Cliff warning have made DX a coordinated national policy priority in Japan in a way that's more centralized than in many other countries.

In closing

Japan’s digital makeover aims to enhance and simplify processes between residents and local governments and improve economic competitiveness for businesses and corporations. 

While there’s far to go before Japan can become on par with other countries leading the way, business owners can learn and benefit from keeping track of businesses that are actively pushing DX in Japan forward. 

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