Lecture 5
Well-Being Policy and Measurement: Beyond-GDP Indicators and Distributional Questions

Keisuke MURAKAMI

Project Professor, Graduate School of Public Policy, University of Tokyo

Former Director General, Digital Agency, Government of Japan

Keisuke MURAKAMI is Project Professor at the Graduate School of Public Policy, University of Tokyo. 

After graduating from the College of Arts and Sciences at the University of Tokyo, he joined the Ministry of International Trade and Industry (MITI, now METI) in 1990, and later earned a Master's degree in Applied Economics from the University of Michigan.

Over the course of his career at METI, he played a leading role in shaping Japan's information and content policy, contributing to the enactment of the Product Liability Act, WIPO copyright treaty negotiations, the Exploratory Software Project (Mitou), the IT Skill Standards, and the e-Japan Priority Policy Program. He also launched the Cool Japan strategy, took part in international climate negotiations including COP15 and COP16, and led the design of Japan's Feed-in Tariff (FIT) system for renewable energy.

From 2014, he was involved in regional revitalization at the Cabinet Secretariat and Cabinet Office, working on the regional revitalization grant system and the Super City legislation. During the COVID-19 pandemic, as Director of the Business Support Department at the Small and Medium Enterprise Agency, he oversaw subsidy programs supporting small and medium-sized enterprises.

In September 2021, he was appointed Director-General of the newly established Digital Agency, where he led the nationwide rollout of the “My Number Card” and its integration into smartphones, the digitalization of administrative procedures, and digital transformation across education, healthcare, and disaster preparedness. He stepped down in July 2025 and assumed his current academic position in November of the same year.

(1) Introduction to the lecture

Norie KAWAHARA opened the fifth lecture of the Spring 2026 semester of the Surviving Cancer in Asia: Cross-boundary Cancer Studies lecture series by noting that, in the syllabus, this is the session in which the course turns to think directly about well-being, beyond-GDP indicators, and distribution. Well-being sits at the center of the course as a whole, and Dr. Kawahara expressed her hope that today’s session would treat well-being not only as something to measure, but as something to build into society.

She recalled that across the previous lectures the course had examined the social value of prevention for universal health coverage (UHC) and well-being, and that the fourth lecture had shown that prevention is no longer only a medical issue but shapes the economy itself, with prevention coming to be understood as a social investment. From the Malaysian case, the course had also learned how many of those insights flow from Japan.

This leads to a larger question: what kind of society are we trying to build through prevention? The answer is not GDP alone. Through home-visit surveys in Malaysia and well-being research across Asia it has been possible to learn just how important it is to look closely at everyday life. Income and medical costs do not show everything. Can people get around? Do they have time? Are they taking care of someone? Can they get the information they need? Do they feel they can trust the system? Only when such conditions come together can people move toward prevention and live with illness. When the team interviews people in the field, the conversation begins with daily life — what they dream of, what they hope for, how they want to live — and what becomes apparent in deep interviews is that economic wealth alone does not always lead to well-being: people may have money and yet still feel loneliness or a loss of meaning.

Today’s keyword is therefore well-being, understood not as the single question “are you happy?” but as a richer enquiry into whether people’s lives are truly improving, whose lives are improving, and who is being left behind. It requires looking across many areas of life, from health and education, to the environment, human connections, trust, participation, and hope for the future, which is why beyond-GDP and distributional questions matter so much: they push us to ask what kind of society we are designing, and for whom.

Dr. Kawahara invited the audience to receive Prof. Murakami’s lecture not simply as a lecture on how to measure well-being, but as a lecture on how to make well-being real in society. Prof. Murakami joins the series as a scholar able to connect the goal of well-being with what it takes to make it real — data, digital transformation, digital public goods, and a trusted digital ID system — and from his hands-on experience in policymaking the audience would learn how to build well-being into institutions in an age of population decline, with Japan as the case.

(2) Japanese Growth Strategy and the Essential Role of Digital Tech: Rethinking the Utilization of Data Going Forward

Keisuke MURAKAMI opened by explaining that he would introduce the background to the necessity of local-economy vitalization under a declining population, and then situate the rationale for well-being policy within the Japanese government’s response to that structural shift.

Population growth and decline

Tracing Japanese demography from 800 AD, Prof. Murakami observed that during the Edo period the population grew from roughly 12 million to 31 million as new agricultural land was opened, but stagnated for the latter 150 years of the period because of a “population black hole”: arising from concentration of population in Edo itself. Rural surplus sons migrated to the city to enter commercial and service positions but found it very difficult to marry and raise children, while their home villages, having exhausted the land, could not sustain growth either. Industrialization in the latter half of the nineteenth century and the twentieth century then drove a rapid expansion, with Japan’s population peaking in 2008 at 128 million.

Today, with the national birth rate at approximately 1.2, which is below the 2.0 required for population maintenance, the country has entered a sustained phase of population decline, and the same Tokyo concentration that stalled growth in the late Edo period is once again at work. Tokyo is the only prefecture with a birth rate below 1.0, so further population concentration in the capital accelerates national population decline. Standard projections place Japan’s population at around 71 million by 2100. The economy and society must therefore be re-thought against this structural backdrop.

Stagnation in labor productivity

Per-capita labor productivity in Japan grew steadily until around 2000, then plateaued, and the same is true on a per-capita GDP basis. In 2000, Japan ranked second in the world in per-capita GDP, after Luxembourg, but today, depending on the exchange rate, the country sits at around thirty-seventh or thirty-eighth. Because per-capita GDP, labor productivity, and salary trends move together, stagnant productivity translates directly into stagnant wages.

The reason can be seen in the composition of industries. Manufacturing once acted as the growth engine, and from the 1960s through the 1980s, Japan’s high-speed growth was driven by a large structural migration of workers from low-productivity agriculture to higher-productivity manufacturing. After the collapse of the bubble economy in the 1990s, however, manufacturing companies stopped expanding their labor forces. The high-productivity service industries that lie above manufacturing on the productivity ladder — finance, real estate, electricity and gas, ICT, and R&D — are predominantly headquartered in Tokyo and other major cities, and their gateway is narrow. The majority of workers, perhaps 60 to 70%, instead spill over into low-productivity regional services, including distribution, transportation, medical and care, hotel and restaurant, amusement and life-support, and education. 

International comparisons also show innovation to be stagnant in both manufacturing and services, with Japanese firms reporting the lowest rate of new product or service launches among advanced economies. A clear gap between metropolitan and regional prefectures runs through both productivity and wages (Figure 1). 

Labor-market structure

The Japanese labor market has expanded from roughly 40 million workers in the 1980s to approximately 56 million today, but the entire net increase has come not from regular but from non-regular employment, which has grown from around 6 million to roughly 20 million, while regular employment has held steady at approximately 35 million. Non-regular workers now account for around 40% of the workforce, and the structural wage and training gaps between the two groups have not narrowed.

Dispatched-worker businesses operated by large human-resources companies have a built-in incentive to expand the non-regular workforce because dispatched workers’ salaries flow through the agency’s top line. At the same time, the contractual constraints under which dispatched staff must operate confine them to narrowly defined, labor-intensive tasks, which is structurally low-productivity work.

Logically, the rising share of non-regular employment should have driven national average productivity down, yet productivity has not fallen. The implication is that some structural productivity improvement, plausibly driven by digital technology and industrial restructuring, has just barely been keeping pace. How to raise productivity in the labor-intensive regional service industries is therefore the key question for the next phase of Japan’s economy in the future. 

DX and digital public goods

Prof. Murakami turned to digital transformation (DX) as the principal lever for boosting labor productivity in regional Japan. The “X” in DX, he stressed, stands for breaking down organizational silos. It is not internal digitization on its own, but cross-organizational digital platform sharing built on data linkage and coordination. The key to success is therefore not technology, because the technology already exists, but rather imagination and vision (Figure 2). 

He illustrated the point with the rollout of the My Number Card, which he had overseen as Director-General of the Digital Agency. The card is now held by more than 100 million people, with over 80% of the Japanese population in possession of the digital ID. 

When the Agency approached golf-course clubhouses, most had already digitized their check-in, payment, and member-card processes, and saw no reason to adopt the card. The persuasive argument lay one level up: a leading online golf reservation service, Golf Digest Online (GDO), would otherwise need to interface separately with each clubhouse’s own card, at high cost. If the function required is simply to certify that the person at the front desk is the person who made the reservation, the My Number Card provides shared, low-cost, high-security authentication, reducing GDO’s integration cost and clubhouses’ risk. 

A further layer was added by linking the card to a regional-economy fan-club point system. For example, a player using a card-certified membership could redeem points at local shops around the course, opening a new marketing alliance between the clubhouse and the surrounding rural community. 

On that combined argument, rural clubhouse owners agreed to a trial. The lesson, Prof. Murakami emphasized, is that DX is blocked not by lack of technology but rather by sectionalism and risk aversion. Therefore, what is needed is the imagination and curiosity that have the power to break through the various reasons not to act.

From supply-oriented to demand-oriented economy

During a phase of population growth, the demand side aligns itself with supply side. For example, passengers wait at the bus stop for the scheduled bus, employees arrive by the start time set by the workplace, consumers travel to the store, students gather at the school, patients visit the doctor, goods move on the supplier’s instruction, and citizens go to city Hall to apply for procedures. 

In a state of population decline, where both labor and demand are shrinking, the supply side must instead anticipate the demand side’s circumstances, for example: pick-up vehicles adjust to passengers’ schedules, workplace rules align with employees’ lifestyles (for example with kindergarten opening times), products are delivered to the home, students choose schools and curricula on their side with online delivery, patients select facilities and doctors served online or on-demand, goods move automatically on the basis of real-time signals, and administrative procedures are triggered by push-type notifications. 

This reversal is structurally enabled by data and digital infrastructure. Only by capturing real-time demand-side data can a shrinking workforce of drivers, teachers, and doctors, etc., continue to deliver personalized services with minimal personnel.

Collaborative business models in a stagnant market

In an expanding economy, each firm in healthcare, education, shopping, transportation, or energy can reasonably expect to recoup separate digital investments, and competitive investment proceeds in parallel. 

Conversely, in a contracting economy, separate investment becomes uneconomic; shared investment in cross-sector digital infrastructure — data integration, payments, authentication, autonomous-driving platforms — becomes essential for collective viability. 

To the traditional binary model comprising self-help (market) and public help (government), Japan must therefore add a third domain of mutual help, sustained by community power, in which data platforms and other digital common goods are jointly built and operated across sectoral and administrative boundaries (Figure 3)

To cite a specific example, after-school programs for children and outreach health programs for senior citizens who have surrendered their driving licenses both require transport, but no single sector’s shrinking budget can afford to fund such transportation services alone. Therefore, new collaborations must be designed across education, healthcare, and transportation simultaneously, in a mutually supporting system. 

Digital public goods and the role of dominant players

On the topic of competitive, collaborative, and public domains, Prof. Murakami noted that data platforms belong in the collaborative domain. The digital public goods sitting in this layer, including reliable open data, secure open digital tools, secure ID, etc., share an interesting scalability characteristic. When a market is fragmented across many small payment or certification services, all of them fall into deficit, but if one dominant player can occupy most of the payment market or certification market in Japan, the business can scale past the threshold of affordability, at which point the infrastructure can be managed by the private sector rather than the public sector. 

This complicates public budgeting, because a successfully scaled service may be financially viable as a private offering for both public and private use. The price of that outcome, however, is that the provider must become dominant and cover a wide range of service sectors. A dominant private operator that no longer requires public budget still must take its place as one of the collaborative domains — and that market position has to be supported by a fair community spirit, mostly under well-being initiatives.

Well-being as the unifying frame

With regard to well-being, Prof. Murakami emphasized that its power lies in the fact that the concept does not divide by industrial or administrative sector. All sectors, from transportation, education, and healthcare, through to all the other services find their final purpose in well-being, which is precisely why well-being can serve as the common ground on which collaborative-domain services are negotiated across the silos that otherwise obstruct shared digital investment. The content of well-being itself is a hard question to answer, but well-being improvement is the sort of initiative that every industrial and administrative sector can share.

When government officials say, “this is not my sector’s issue,” the well-being framing can return them to a starting point – shoshin in Japanese – referring to an initial mental state, unpolluted by the accumulated know-how and sensibilities of each sector. 

Based on this logic, the Digital Agency published a local well-being indicator service through which each local government can test its own well-being status. The indicator itself does not solve any problem, but it can light the fire of motivation within local governments to begin new collaboration on serious local issues. Without such indicators, each administrative sector merely argues over which budget should pay for what. Well-being can therefore become, in practice, the key to creating collaborative-domain services, and the creation of collaborative-domain services is in turn the key to breakthroughs in the productivity of local service industries.

Drawing together the arc of the lecture, Prof. Murakami summarized that the discussion had moved from the labor productivity issues facing the Japanese economy, through the necessity of collaborative domains for supporting service-industry productivity under population decline, to the necessity of well-being discussions as a methodology for new social communication and for rebuilding social communities apart from the existing sector-by-sector silos. Well-being itself, however, is not the final goal. Rather, it is the methodology that supports the work of reaching the goal, and the question of how to use well-being indicators and well-being analysis is therefore the key. 

The task ahead is to think about how to use well-being analysis to solve society’s problems, including in Japan, using it as the basis for a restart of rural communities.

(3) Student Assignment

Students were given the following assignment. 

When promoting public–private partnerships, who should determine the boundary between the “cooperative domain” and the “competitive domain”? In situations of population decline and stagnant markets, rather than each company making isolated digital investments, it is necessary to jointly develop cooperative domains such as data-sharing infrastructure, payment systems, authentication systems, and autonomous driving platforms.

In Asia, there are countries where the influence of companies in healthcare, insurance, telecommunications, payments, and platform businesses is extremely strong. To what extent should these areas be treated as public, cooperative domains, and from what point should they be left to competition among private companies?

Who—government, businesses, citizens, or patient groups—should decide this boundary, and how should it be determined? Please present your opinion. 

(4) Discussion

Dr. Kawahara observed that the lecture had provided a very important framework for thinking about Asia’s future and well-being, and that what emerged most strongly was that digital transformation is not only about technology but about trust, public value, and the redesign of society.

A student asked what Professor Murakami regarded as the biggest current obstacle to expanding use of the My Number Card in Japan. Prof. Murakami replied that the first major use case is the social-insurance card, since all Japanese residents are now required to use the My Number Card to certify insurance status when receiving medical services, and that around 70 to 80% of people have already begun using the Card in this role. The certification function is also widely used for tax filing. The second large target is the mobile driver’s license, which is now in service but in a transitional period: holders can presently obtain the My Number-based license while also continuing to carry the existing physical license, and the challenge is how to shift fully to the digital form and, beyond that, from physical card to smartphone-based credential. Use cases are also expanding beyond public into private services. Matching-application providers, for example, have increasingly begun to use My Number Card verification — not as a duty but because, for users genuinely seeking a partner, Card-certified status carries considerable weight — and similarly interesting cases continue to emerge in the market.

Dr. Hotta observed that he agreed strongly with the assertion that well-being is not the goal, and asked, with respect to dominant private services that may form part of collaborative domains, whether such providers need to be domestically owned or whether subsidiaries of global — in particular American — platform giants could play that role, and how moral hazard among dominant private companies in the collaborative domain might be avoided given the contesting interests of shareholders, executives, employees, and clients or citizens.

Prof. Murakami agreed that this is a critical point. Logically, collaborative fields can come to be occupied by dominant players who then monopolize the market and capture monopolistic rents. Social regulation is one available response but is difficult to calibrate, since what constitutes an adequate profit rate for a social service is itself hard to define. A stronger and ultimately more important corrective is community power. The question of what kind of community force can socially discipline effective but dominant players, and contain their economic incentive to capture monopolistic profit, is, in his view, the central future issue.

Dr. Kawahara closed by reflecting that the session had been a very deep and valuable learning experience, allowing the audience to learn from Japan’s concrete experience at the level of leading policy practice and regional institutional building. The insights would, she said, greatly inform the course’s continuing discussion of Asia, health, prevention, and well-being.