[ Keidanren ] [ Policy ]

A Proposal to Make Japan an IT Superpower

- For the Full Use of "Digital Opportunity" -

(Tentative Translation)

May 29, 2000
(Japan Federation of Economic Organizations)

1. A domestic agenda for promoting the IT Revolution
  1. Creating systemic arrangements that encourage IT-related corporate activities
  2. Establishing e-Government
  3. Improving information literacy
2. An international agenda for promoting the IT Revolution
  1. Creating an environment that is conducive to the worldwide development
    of IT-related corporate activities
  2. Conquest of the "digital divide"
3. Political leadership in the promotion of the IT Revolution


The revolution in information technology (IT) has set in motion momentous changes in the socioeconomic structure, changes that are taking place on a global scale. Affecting individuals, corporations, and society as a whole, these changes are brimming with what might be called "digital opportunity."

Bringing freedom from the constraints of space and time, the IT Revolution will make it possible for people around the world to access information and communicate with each other at any time and place, and will thereby enrich our quality of life. In addition, it will furnish new tools that allow the aged and disabled to lead independent lives and participate actively in society. For corporations, the IT Revolution is opening up opportunities for reinforcing competitiveness and generating new industries and business. The IT Revolution has the potential to usher in sustainable economic development, expanded employment opportunities, and regional revitalization by providing tools to resolve issues associated with low birthrates, the aging of the population, and geographical handicaps. Prosperity in the 21st century may very well hinge on our efforts to promote the IT Revolution and make the benefits available to all individuals and corporations.

By its very nature, the IT Revolution is crossing national borders and accelerating the globalization of socioeconomic activities. If it is to achieve genuine success, "digital opportunity" will have to be made available to people around the world through wide-ranging international cooperation centered around the Group of Eight (G8) countries. For this reason, the adoption of the IT Revolution as a major topic of the Kyushu-Okinawa Summit Meeting in July of this year is a welcome development.

As the chair of the Summit Meeting, Japan must exercise leadership by striving to lay a solid foundation for the promotion of the IT Revolution and its global success. To this end, Japan itself must make a prompt and definite commitment to actively utilize IT, aiming to make the nation the world's most advanced center of "digital opportunity" and the driving hub of the IT Revolution. Japan also must make efforts to ensure that the benefits of the IT Revolution spread throughout the world.

Business and government each has an extremely vital role to play in the promotion of the IT Revolution. Amid intensifying competition, corporations must make maximum use of "digital opportunity" and lead the IT Revolution. It is particularly important for them to re-engineer their business processes with a view to bolstering their competitive strength and breeding new industries and businesses. The government, on the other hand, must engage in the critical task of preparing an environment that will make the fruits of the IT Revolution fully available to all of Japan as well as the rest of the world.

In pursuit of that goal, Keidanren hereby proposes the following approaches to the government of Japan.

  1. A domestic agenda for promoting the IT Revolution
  2. The Japanese government should accelerate approaches aimed at making Japan the site of the world's most advanced IT-related corporate activities. This would furnish individuals, corporations, and society as a whole with bigger and better "digital opportunity," while at the same time ensuring economic vitalization and structural reform.

    1. Creating systemic arrangements that encourage IT-related corporate activities
      1. An environment should be cultivated that is conducive to the use of the information and telecommunications infrastructure.

        1. The information and telecommunications infrastructure is at the very core of the networked society. The reduction of communications costs and the increase of serviceableness in this infrastructure demand the satisfying of user needs and the prompt application of the fruits of technological innovation through the workings of free and fair competition among market entrants.
        2. From this standpoint, the government, in order to increase the benefits enjoyed by users, must strive to foment a transition in systemic arrangements from the current regulation-oriented setup to one that encourages free and fair competition. At the same time, the government must reinforce capabilities for monitoring to ensure that competition in the market is fair.
        3. The IT Revolution is expected to bring an expansion of services that fuse communications and broadcasting or that otherwise cannot be clearly classified as either. The flexible and rapid provision of such services will require the replacement of the existing systemic framework - which is premised on the conventional division between communications and broadcasting - with one grounded in a holistic treatment of the two.

      2. Rules and other provisions should be created that reflect the characteristics of electronic commerce.

        1. Electronic commerce is powering the emergence of new employment opportunities. The further development of economic activities conducted on electronic networks demands a deepening of trust - among both corporations and consumers - in transactions carried out in cyberspace. To this end, the government should embark on a comprehensive and intensive preparation of rules and other regulations that match the characteristics of electronic commerce.
        2. More specifically, the government should establish a system for electronic signature and certification that has the flexibility to adjust to fast-paced technological innovations and changes in user needs. It also should erect a legal framework that strikes a proper balance between protection and the use of information on individuals. An additional task is the prompt review of those parts of the existing system that are premised on transactions that require documents or face-to-face dealings and physically existing business offices, and that therefore do not take into account network transactions. In order to allow for the proper circulation of information assets such as computer programs and digital content, new contracting rules must be created that take into consideration the new characteristics of information assets.
        3. Furthermore, the competent authorities ought to clarify and announce interpretations of existing laws and regulations within a prescribed period of time after the receipt of inquiries. That would prevent legal ambiguity from impeding the growth of new network-based economic activities.
        4. Disputes may occur even in transactions between bona-fide businesses and bona-fide consumers. To heighten the level of confidence in electronic commerce, it is vital that a scheme be instituted for the swift settlement at a reasonable cost of any disputes that may arise. In this regard, conditions must be created that will improve the capabilities of alternative dispute resolution (ADR). Similarly, steps should be taken that allow for an effective response in the event of infringement of copyright or acts of libel on the Internet. These include the establishment of legal grounds for suppression as required for prompt redress for the victim and specification of the offender, and clarification of the responsibilities and obligations of businesses and consumers in electronic commerce.

      3. IT capabilities need to be reinforced.

        1. The IT Revolution is being accelerated by industrial technological innovation. It is the role of government to assist such innovation by amplifying programs of basic research in the IT field and supporting closer collaboration among industry, academia, and government in the area of fundamental research and development.
        2. When providing financial support for projects that involve pre-competitive research, the government needs to shift its current policy somewhat, striving for a greater focus on research themes that possess intrinsic marketability. For example, the government has conventionally set specific targets for technological development and then organized projects for their attainment that involve a limited number of corporations. In place of this rigid approach, the government should adopt a more flexible one, whereby its only tasks would be to determine the priority fields and to reinforce the framework for establishing and promoting actual projects, which would be based on applications received from corporations. For research programs in universities, the government should bolster the assistance it gives to areas and subjects that possess promising market potential. This will make for even closer interaction between industry and academia.
        3. The government should also commence a revision of immigration control regulations, in order to facilitate residence in and immigration to Japan of talented engineers and researchers from other countries.

      4. Measures that help to ensure information security need to be enhanced.
        The assurance of an adequate level of information security is indispensable for the steady progress of the IT Revolution. The agenda in this area includes the prompt revamping of laws and regulations related to matters such as electronic signature and certification, as well as closer collaboration between governmental institutions and private corporations in devising countermeasures against hackers and cyber terrorism. Cooperation among industry, academia, and government should be fostered in the area of research and development in order to increase the level of information security. This is particularly important when it comes to national security issues.

    2. Establishing e-Government
      1. IT is a very effective tool for effecting governmental administrative reform. As the supplier of administrative services and the biggest user of networks, the government should make active use of IT, employing it as means to increase the efficiency of its business, achieve a wider disclosure of governmental information, and improve its services.

      2. The establishment of e-Government requires, first and foremost, concrete and clear targets in terms of efficiency, disclosure, and service quality improvement. Proper evaluation of the progress being made is also essential. The government must also promote an intensification of information systems that cross agency boundaries, for both internal operations and interfaces with the private sector. Plans with just such an aim need to be drawn up, and those plans should be long term in scope. It is particularly important for central and local governments to join in integrated approaches on this front.

      3. The government should also strive to adapt technological innovations and reduce administrative costs by incorporating technology that ensures interoperability and by outsourcing work to the private sector.

    3. Improving information literacy
      1. With the progress of the IT Revolution, proficiency in the use of information networks is coming to constitute a basic required skill. The improvement of information literacy is critical for upgrading the quality of life. Japan must aspire to build a society in which all persons of all generations - regardless of differences of income, age, education, geography, or physical limitations - as well as all corporations, come to realize that "digital opportunity" exists and they need to take full advantage of it. A prerequisite for building such a society is an increase in information literacy, which should be accorded an importance on a par with the basic skills of reading, writing, and arithmetic.

      2. The government must make arrangements immediately that facilitate the use of the Internet at any time by educational institutions on all levels, from primary and secondary education to lifelong education. In addition, education must emphasize familiarity with and active use of information networks. Related programs should include thorough instruction in the ethics governing network use. It will also be necessary to make full provisions for so-called information training for teachers, in order to raise their level of skill as well as to outsource information instruction to experts and instructors attached to corporations or non-profit organizations.

      3. For the aged and disabled, IT can expand opportunities that lead to a self-supporting life and greater participation in society. To derive such effects, however, the maximum use of private-sector energies will be required, in order to develop technology and equipment that are easy to use and to supply content designed for the visually or aurally impaired.

  3. An international agenda for promoting the IT Revolution
  4. The IT Revolution provides an opportunity for sustainable economic growth on a global scale in the 21st century. While the IT Revolution will proceed under private-sector leadership,, achieving such growth will require political initiative to solidify the foundation for the worldwide sharing of "digital opportunity," as well as unimpeded access to all kinds of information by all people through information networks.

    In this area, the Japanese government should work in close cooperation with the other G8 and concerned countries, particularly in the following areas.

    1. Creating an environment that is conducive to the worldwide development of IT-related corporate activities
      1. It is imperative that an environment be created that will allow the entire world to enjoy the fruits of the IT Revolution through the dynamism of market competition. To this end, market-led standardization should be promoted to ensure interoperability across national borders. Control of the international movement of information on private individuals should be left to the autonomous restraints of private corporations.

      2. It is also essential to achieve international harmonization and reciprocal recognition of all sorts of rules governing electronic commerce in areas such as electronic signature and certification, jurisdiction, and ADR. Regarding the imposition of taxes on electronic commerce, there is a need for international rules that are grounded in the principles of fairness, neutrality, and simplicity. Arrangements for business-method patents will require both international harmonization in respect to the conditions for invention, as well as agreement on appropriate examinations of novelty and progressiveness, so that the patents do not hinder corporate IT activities.

      3. Authorities must also redouble efforts to build an international framework of cooperation to fight high-tech crime.

      4. In this international effort to condition the surrounding environment, it will be important for government and business to work together when constructing global partnerships and making rules. Keidanren is prepared to make an active contribution to this end.

    2. Conquest of the "digital divide"
      1. As the IT Revolution effects sweeping socioeconomic changes worldwide, many developing countries are being faced with the reality that they lack an adequate core infrastructure of information-communication networks and the elements that underpin it. In many cases, they are also saddled with a shortage of the skills needed to make full use of networks. This situation is precarious, and it fills many people with apprehensions that this "digital divide" may work to widen the North-South economic gap.

      2. On the other hand, the "digital opportunity" afforded by the IT Revolution has the potential to change this fear into hope. IT can catalyze the economic advancement of developing countries and shrink North-South economic gaps in the process.

      3. To help replace the "digital divide" with "digital opportunity" around the world, the Japanese government should make every effort to contribute to the establishment of a global information community, one ushered in by the free flow of information of all kinds. At the Kyushu-Okinawa Summit, the Japanese government should exercise leadership by pushing for the preparation of an action plan that encourages global participation in the IT Revolution.

      4. At the same time, the Japanese government must redouble its own programs that aim at the expansion of "digital opportunity" in developing countries, as well as emphasize IT in its economic development policies. The government should seek to apply various policy measures systematically, striving to match particular measures with the particular needs of the developing countries in question. More specifically, matters such as the construction of connectable information-communication networks and the development of human resources through instruction in information systems should be made priority themes in Japan's official development assistance (ODA). The field of telecommunications accounted for only 2.2 percent of Japan's total ODA in 1998, and its share has been declining. It is essential that Japan strive to reverse this trend, and in the process help to narrow the North-South "digital divide." Policy for development in the areas of education, medical services, sanitation, and the preservation of cultural assets also ought to encourage IT utilization. To improve information literacy in developing countries, the government should facilitate the independent endeavors of Japanese corporations. Additionally, the government should support the smooth integration of developing countries into the world of global electronic commerce.

      5. In terms of other Asian countries - with which it has deep economic ties - Japan should cooperate closely with them, to ensure the conformity of various rules concerning IT-related corporate activities. An exemplary action in this area would be the establishment of a multilateral certification scheme for electronic signature and certification provisions. Any consideration of free-trade agreements with other Asian countries should involve an effective IT investment regime as a priority item. Japan's primary focus in the region must be to stimulate the spread of the IT Revolution and to cultivate stronger partnerships in the linguistically diverse region through international activities and collaborative efforts at the corporate level.

  5. Political leadership in the promotion of the IT Revolution
  6. If Japan is to evolve into a country with an abundance of "digital opportunity" and make an important contribution to the rest of the world, the government must mount a comprehensive and strategically minded effort that crosses agency boundaries and unites all official institutions in a concerted action. It also must respond flexibly and rapidly to the fast-paced changes in the IT field without undue adherence to precedent approaches.

    To this end, political leadership is a critical factor. The government should institute the post of chief information officer (CIO), to be filled by a minister whose status would be on the order of the deputy prime minister. In addition, a special department with permanent staff should be organized to support the CIO. Individuals from the private sector should be utilized as staff members in that new department. Through these measures, the government will be able to reinforce and step up activities aimed at fomenting the emergence of a society in which people in Japan and all other countries are able to recognize and take advantage of practical "digital opportunity."

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