February 4, 2020
The Ministry of Economy, Trade and Industry (METI) and the Tokyo Stock Exchange (TSE) jointly held five series of the Competitive IT Strategy Company Stock Selection program, as one of the efforts for encouraging companies to strategically invest in the field of IT to contribute to the improvement of corporate value and to the enhancement of competitiveness in the mid- to long-term.
In light of the recent trend of digital transformation (DX) appearing worldwide, a digital shift that, on the premise of using digital technologies, dramatically changes business models and other conventional methods and leads to new growth and enhanced competitiveness, METI and the TSE, in the 2020 program, will focus on DX and start selecting the stocks of outstanding companies as “Digital Transformation Stocks (DX Stocks).”
As a preparatory effort for selecting such stocks, METI will conduct a Questionnaire Survey on Digital Transformation (“DX Survey”) 2020 from February 6 (Thur.) to March 3 (Tue.), 2020, targeting domestic TSE listed companies, i.e., those listed on the TSE first and second sections, Mothers and JASDAQ.
1. Objective for selecting DX Stocks
Recently, in accordance with the dissemination of AI, IoT, big data and other digital technologies, the trend of DX has become apparent worldwide, which is a digital shift that, on the premise of using digital technologies, dramatically changes, beyond the conventional ranges in which IT is utilized for business, business models, organizations, practical tasks, corporate culture, corporate climate and other conventional ideas and leads the outcomes to new growth and enhanced competitiveness in order to achieve creation of customer value.
Expecting the full arrival of the new digital era, METI considers it a significant challenge for Japanese companies to accelerate DX. From this viewpoint, under the Act on Facilitation of Information Processing, which was revised at the 200th ordinary session of the Diet, METI established a Study Group on a New Governance Model in Society 5.0 in order to formulate digital governance codes, or a collection of guidelines stipulating basic matters to which businesses should refer in advancing DX efforts, and to develop a system for issuing certifications to businesses engaging in such efforts in accordance with the guidelines. Since then, the study group has been advancing discussions on these issues.
In line with these actions, METI and the TSE, in 2020, will change the current title of the “Competitive IT Strategy Company Stock Selection” program, which they have conducted five times, to the new “Digital Transformation Stock (DX Stock) Selection” program, and they will select stocks of outstanding companies by focusing on DX.
Specifically, in line with the results of the discussions held by the study group, METI and the TSE will introduce the following perspectives into the criteria for selecting DX Stocks.
- Dialogues with stakeholders
- Changes in business models
- Placing weight on efforts to which business management are committed or which are characterized in management strategies
A) Developing organizations and human resources to which business management is committed
B) Efforts (projects) which are characterized in management strategies
C) Measuring the current situations of achievements based on KPIs
For details of the new program, visit the following website and see the materials distributed at the explanatory meeting jointly held by METI and the TSE on February 4 (Tue.), 2020.
2. Selecting a winner of the DX Grand Prix as well as companies as Noteworthy DX Companies
Following on from the 2019 program, among the selected companies as outstanding stocks in the 2020 program, METI and the TSE will select a leading company engaging in the best practices for advancing DX in the new digital era as a DX Grand Prix winner. Moreover, among companies that have failed to be selected as outstanding stocks, METI and the TSE will select companies appraised by the members of the examination committee for their characteristics in light of the purpose of the stock selection as Noteworthy DX Companies.
3. Conducting the DX Survey 2020
For collecting materials based on which METI and the TSE will select outstanding companies as DX Stocks, a DX Grand Prix winner or Noteworthy DX Companies, METI will conduct a questionnaire survey targeting all TSE listed companies, i.e., those listed on the TSE first and second sections, Mothers and JASDAQ. To the companies that submitted a response sheet filled out with answers, METI will send feedback and provide information that may help the companies further advance their DX efforts.
METI strongly recommends that the target companies submit the response sheets even if some questions are not answered since METI and the TSE may select companies engaging in outstanding DX efforts as Noteworthy DX Companies and, for the companies which have failed to be selected, the feedback may become a trigger for them to recognize the challenges they are facing.
Moreover, in principle, METI will publicize the companies that have participated in the survey as companies proactively facilitating DX efforts, except those that have declined to be publicized.
Following on from FY 2019, the survey will be conducted via the website exclusively for this purpose. On January 30 (Thur.), 2020, METI sent guidelines for the survey including an ID for inputting answers, a password, and other data to the personnel in charge of investor relations (IR) of the respective target companies. The response period of the survey is from February 6 (Thur.) to March 3 (Tue.), 2020. Please note that the response must be submitted by 18:00 on the closing date.
For details of the survey, visit the METI website or contact the Japan Users Association of Information Systems (JUAS), the secretariat of the survey.
Inquiries about the survey:
Personnel in charge, Secretariat of the DX Survey, JUAS
Telephone: 03-3249-4101; Email: email@example.com
Division in Charge
IT Innovation Division, Commerce and Information Policy Bureau