【Leader’s Voice Interview】Rococo President Kazuhiko Hasegawa: The “2025 Digital Cliff”
At 11:00 a.m. on July 3, 2025, Kazuhiko Hasegawa, President of Rococo, was interviewed for the “Leader’s Voice”column of The Nikkei.
At 11:00 a.m. on July 3, 2025, Kazuhiko Hasegawa, President of Rococo, was interviewed for the “Leader’s Voice”column of The Nikkei.
For the full interview, please visit:
Kazuhiko Hasegawa, President of Rococo
During the interview, President Kazuhiko Hasegawa discussed the “2025 Digital Cliff” and the challenges facing corporate information systems in Japan.
This article provides a brief overview of what the “2025 Digital Cliff” means.
What Is the “Digital Cliff”?
The term “Digital Cliff” is a metaphor describing a situation in which structural changes or accumulated risks become critical around a certain point in time, potentially causing businesses or social systems to face a crisis comparable to falling off a cliff.
In Japan's information systems industry, the term is particularly associated with the “2025 Digital Cliff” and the challenges surrounding legacy systems.
The 2025 Digital Cliff
The Fiscal Cliff of 2025
The concept was first introduced by Japan's Ministry of Economy, Trade and Industry (METI) in its 2018 DX Report.
The report warned that Japanese companies could face several major information system-related challenges around 2025:
1. Aging Core Systems
Many companies continue to rely on customized legacy systems built more than 20 years ago, making it increasingly difficult for them to adapt to the rapid changes of the digital era.
2. Increasing System Complexity and “Black Box” Systems
Many systems have been developed independently over time without unified standards.
As engineers with knowledge of these systems age or retire, it becomes increasingly difficult for younger employees to take over their maintenance and operation.
3. Severe Shortage of IT Talent
The programming languages and architectures used by legacy systems have become outdated in many cases.
As the number of engineers familiar with these systems declines, the cost of maintaining and operating them continues to rise.
4. Inefficient IT Investment
An estimated 70–80% of IT budgets are spent on maintaining the status quo rather than driving innovation.
5. Loss of Global Competitiveness
Without effective digital transformation (DX), companies may struggle to improve operational efficiency and maintain their competitiveness in the global market.
The report points out that without timely reform, corporate information systems could face serious consequences, including difficulties in maintaining and operating legacy systems, rapidly increasing costs, and declining digital competitiveness.
Japanese companies could potentially face annual economic losses of up to ¥12 trillion as a result.
Conclusion
The period around 2025 represents a critical turning point for Japanese companies as they advance their digital transformation (DX) initiatives.
For companies with years of experience providing digital transformation services, this period also represents an important opportunity to support organizations in modernizing their systems and building a stronger foundation for the digital future.