rick@cs.arizona.edu (Rick Schlichting) (05/29/91)
[Dr. David Kahaner is a numerical analyst visiting Japan for two-years
under the auspices of the Office of Naval Research-Asia (ONR/Asia).
The following is the professional opinion of David Kahaner and in no
way has the blessing of the US Government or any agency of it. All
information is dated and of limited life time. This disclaimer should
be noted on ANY attribution.]
[Copies of previous reports written by Kahaner can be obtained from
host cs.arizona.edu using anonymous FTP.]
To: Distribution
From: David K. Kahaner, ONR Asia [kahaner@xroads.cc.u-tokyo.ac.jp]
Re: MITI's Outlook for Japan's Information Industry in the Year 2000
29 May 1991
ABSTRACT. MITI's view of the issues confronting Japan's Information
Industry for the year 2000.
INTRODUCTION.
Japan's Ministry of International Trade and Industry is one of the main
coordinating agencies for the growth of the Japanese computer industry.
Their plans, while not always fully carried out, set the direction for
funding and other detailed implementations. The summary below, is a
policy statement and is written in general terms. Nevertheless it
estimates that by the year 2000 Japan's Information Industry will account
for over 20% of the country's GNP. It emphasizes telecommunication and
increasing domestic demand, fueled, as usual by personal consumer demand
for information and associated services.
SUMMARY OF
"AN OUTLOOK FOR THE INFORMATION INDUSTRY FOR THE YEAR 2000"
Takao Hirosawa
Director, Electronics Policy Division
Machinery and Information Industries Bureau
MITI
1-3-1 Kasumigaseki, Chiyoda-ku, Tokyo 100
Tel: +81 3 3501-2964, Fax: +81 3 3580-6403
19 April 1991
I. BACKGROUND AND PERSPECTIVES
The steady progress being made in informatization in Japan is bringing
about a number of changes in the information industry.
(1) qualitative changes in the demands being levied on that industry;
(2) changes stemming from the industry's becoming more international;
(3) changes in the role the information industry is playing in
reforming the industrial structure of Japan; and
(4) structural changes taking place in the information industry itself
as a result of the liberalization of telecommunications laws and
the subsequent growth of the telecommunication services business
here.
These various changes make it necessary to analyze the information
industry in Japan from a semi-macro perspective in order to clarify the
direction in which it is heading.
II. CHANGING DEMANDS AND THE INFORMATION INDUSTRY
Advances in informatization are giving rise to major changes in the
demand structure of the information industry. This industry will have to
respond to these changes appropriately.
1. Demands Expected to Persist in the Future
The information industry will have to continue to respond to the existing
demand for
1) enhancement of equipment performance and reduction of cost for
information processing;
2) skilled human resources;
3) improved software development techniques; and
4) more advanced, diversified information processing.
To accomplish this, the industry must strive even harder to develop new
technologies, to train more highly-skilled human resources, to make
software production more efficient and to advance the state of the
industry itself.
2. Changing Demands
The progress in industrial usage of information technique, the increased
numbers of diversified users and the penetration of informatization into
everyday life are changing the demands being levied on the information
industry. These changing demands include:
1) a rising demand to promote OSI and to provide "system integration
services" to cope with increased systematization and networking;
2) a demand to change the division of labor and responsibility between
computer manufacturers, users and software producers and to provide
"professional services" in order to deal with increasing and
expanding applications of information systems brought on by the
further advance of informatization in industry;
3) an increased demand for easier-to-operate, more "user-friendly"
systems to meet with the growing numbers of personal users of
information systems and services;
4) a growing demand for standardized open interfaces to make better use
of increasing information-related assets such as software and
databases;
5) an increasing demand to improve information system security measures
via technology development and the use of system auditing services
to deal with the growing dependency on information systems in
Japanese economic and social endeavors;
6) a demand for improved information provision services to handle the
increased importance being placed on efficient information selection
and use; and
7) the demand to rectify the differences in long- and short-distance
telecommunications charges and to promote the informatization of
outlying regions of Japan in order to achieve well-balanced,
nationwide informatization as opposed to the informatization of
major metropolitan areas alone.
These changing demands characterize the future direction of the
development of the information industry in Japan. As such, they will
have to be appropriately dealt with by the information industry.
III. INTERNATIONALIZATION AND THE INFORMATION INDUSTRY
As Japan's overall economy becomes more and more international in nature,
the information industry, which is closely linked with
internationalization, will be required to deal positively and effectively
with this phenomenon. Especially, the future expansion of the domestic
market, which is open for foreign industries [note--DKK], may contribute
to the internationalization of the Japanese economy by offering foreign
industries and new markets.
1. Trend in Direct Investment of the Industry
Investments of foreign capital and overseas investments by Japanese
capital in the electronics and information services industries will be
increasing. In line with this, a horizontal division of labor is
manifesting itself with other industrialized countries, and a vertical
division of labor is coming into being between Japan and the developing
countries, thus internationalizing the industrial organization itself
will be accomplished. These factors raise hopes that the trade-related
earnings and expenditures of the information industry will achieve a
state of balance. Japan will have to more actively cooperate with
developing countries to support their efforts in informatization.
2. Information Industry Trade in Services
Traded with other countries in the form of information services is
expected to increase in the future. When this happens, information
services imported into Japan will continue to exceed those services
exported overseas. In response to demands from a number of foreign
countries, Japan will have to strive to increase provision of Japanese
databases to overseas users.
3. International Telecommunications
Demand for international telecommunication services should continue to
rise in the future, with the progress of internationalization of
industries' activities. Service menus and utilization charges that meet
with the new role of telecommunications systems as transportation medium
for service trade are required.
IV. INDUSTRIAL STRUCTURE CHANGES AND THE INFORMATION INDUSTRY
1. Supporting Economic Growth
1) As a Leading Industry
The information industry continues to have potential for high
growth, and is one of the major sources of continued growth in the
Japanese economy as a whole. This industry also has the role of
fostering the switchover of the Japanese industrial structure to one
that is driven by domestic demand.
Future growth of the information industry
based on a (nominal) 5% growth in GNP:
% of GNP : 1984 = 6.4% 2000 = 20.7%
Output value : 1984 = 20 trillion yen
2000 = 140 trillion yen
Average growth rate : 1984 - 2000 = 13.3%
2) Increasing Domestic Demand
Increase of consumer demand for home and personal services is the
key to domestic-demand-driven growth of Japanese economy and
information industry. The ratio of information industry demand
accounted for by this type of consumer demand is expected to grow.
Japan will therefore have to devise comprehensive measures aimed at
coping with "personalized" information.
2. Entrants to the Information Industry
Entry into the information industry has been quite lively in recent
years. This has been due in large part to firms moving their EDP
divisions outside the company, marketing of software developed in-house,
and providing in-house databases to outside users. The informatization
of traditional media industries like the newspaper and printing
industries has also made progress.
3. Mutual Inter-industry Dependence
Rising interdependence of each sector in the information industry will
result in a division of labor and close cooperation among the members of
this industry. The information industry will play a role of supporting
the business operations of other industries as a multi-layered
infrastructure.
V. INFORMATION INDUSTRY AS INFRASTRUCTURE
Informatization is an effective tool in attaining goals such as improved
lifestyles and animated economic activity. The information industry is
therefore being looked to fulfill the role of an infrastructure in the
Japanese economy. In the light of this, the stress should be put on the
some of the conditions such as listed below for the information industry
in order to play the role of an infrastructure.
1) due protection of intellectual property rights;
2) lifts of regulatory controls as a means of ensuring freedom of
private actions; and
3) to create better framework for offering wider telecommunication
services and for telecommunication rates.
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