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Interview

Japan can lead bridging of virtual-physical divide, top lobbyist says

CEO of insurer Sompo urges businesses to look beyond traditional industry lines

Sompo Holdings President Sakurada believes Japanese companies can excel 'real-world platforms' that blend manufacturing with services.

TOKYO -- Japanese companies should meld their strength in manufacturing and services to transcend industry lines as the country enters the new Imperial era, the new chief of a major business lobby said.

Sompo Holdings President and CEO Kengo Sakurada recently started as chairman at the Japan Association of Corporate Executives, or Keizai Doyukai. He spoke with Nikkei about his vision for Japan in the Reiwa era that began Wednesday with the accession of Emperor Naruhito.

As the head of a leading business lobby, Sakurada is focused on new technological developments across different industries, like the "internet of things" and financial technology. "U.S. and Chinese giants now essentially have a monopoly on platforms in the virtual world," he said.

But Sakurada stressed that Japanese players can still take the lead in platforms that play to their unique strengths in areas that combine making things with services. "We need to think about how to use data from the real world, not just the virtual world," he said.

Sakurada was particularly bullish on the concept of "anything as a service," or XaaS -- providing everything from mobility to computing as a service online. He noted how some Japanese companies already making inroads into the field, like Toyota Motor's foray into mobility as a service.

He also drew examples from his employer. Sompo "is analyzing insurance and nursing care data, protected for privacy, using artificial intelligence, and we will be able to use data to solve problems," Sakurada said.

The rapid advancements in information technology, such as the internet of things, are called the Fourth Industrial Revolution. Experts believe that the age of XaaS will come next, with the manufacturing and service sectors more intertwined than ever.

Sakurada sees opportunities there for Japanese players. But he also warned against fixating on traditional industrial lines, saying that "we won't survive if we think of industries vertically, like autos, or insurance."

"Looking at things horizontally instead of vertically means seeing things from the customer's perspective," he said.

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