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Today technology plays a crucial role for the success of companies, and digital transformation helps business to achieve environmental sustainability and to adapt to market changes. This article examines the significance of digital transformation for Japanese companies in achieving of green transformation. Green transformation attracts the attention of Japanese companies as a strategy for corporate growth and competitiveness. In addition, green transformation is seen as an opportunity to create new business models applying the experience of digitalization and digital transformation. The green transformation process is observed on the cases of Japanese companies and shows that Japanese business often consider green transformation as a tool to improve energy efficiency and reduce carbon dioxide emissions.

Geopolitical risks, business globalization, increasing complexity of transactions have required companies to adapt to changes. This chapter examines the digital transformation of supply chains and digitalization challenges in Japan. Many companies seem to realize the importance of digital transformation; however, on their way to digitalization companies face numerous challenges like a shortage of human and financial resources, a lack of awareness and understanding of digital transformation processes, etc. Moreover, Japanese culture does not easily fit digital transformation which also slows down the pace of transformation. As a result, the supply chain processes in the Japanese manufacturing companies remain old-fashioned, fragmented, siloed, with a lack of global vision and proper understanding of potential risks. To meet the needs of diverse customers, ensure global supply, and compete in uncertain environment, the SCM of Japanese companies has to be digitally upgraded and become more complex to achieve end-to-end supply chain optimization and an advanced decision-making.

The digital transformation of small and medium-sized enterprises (SMEs) is becoming an important challenge and an aim for economic growth and development in different countries. Digital transformation enhances competitive advantage, improves business efficiency and ensures economic growth of companies worldwide. Considering that the SMEs in Japan account for over 99,7% of the total number of enterprises, the digital transformation of SMEs is becoming an important instrument for the Government of Japan to ensure economic growth of the national economy. SMEs have limited resources and capabilities and this fact creates a number of barriers to implement the digital transformation. These barriers include the limited financial resources, companies’ management, technological, digital security barriers, and others. In the case of small and medium-sized companies in Japan, most of the barriers are related to management and business culture of SMEs. Since the Japanese government has high expectations for SME productivity, competitiveness and economic contribution as drivers of economic growth and national competitiveness, in such an environment, the support of the government is becoming the basis and an essential condition for SMEs to advance along the path of digital transformation. The government support measures are aimed at training SME personnel, upgrading the skills of managers and owners, and providing consulting services to implement the digital transformation. In addition, the Government of Japan provides tax deductions for companies to implement the digital transformation, encourages companies to employ the electronic document management systems, and ensures the cybersecurity improvements for business community