ICT Utilization in Japan (1)

Overview of Japan’s ICT
(From MIC White Paper on Information and Communications in Japan, 2014)
October 15th, 2014
Hirosato HAYASHI
Director,Economic Research Office
Ministry of Internal Affairs and Communications
1
Characteristics of ICT Investments in Japan (1)
• Japan tends to invest at a lower rate in ICT than other countries.
• The more a corporation simultaneously works to bring in ICT and to affect organizational change, the
more management improvement benefits it will see.
Relationship between ICT adoption / organizational
change and management improvements
ICT investment ratios (ratio of ICT investment to all capital investments)
50
[%]
Magement improvement benefit score
(six categories, total of 18 points)
Japan
日本
米国
U.S.
英国
U.K.
Germany
ドイツ
The more a corporation simultaneously works to bring in ICT
and to affect organizational change, the more management
improvement benefits it will see
12
8.9
45
9
40
35
0.9
3
30
6.0
2.9
6
Japan invests at a lower rate
in ICT than other
countries
ICT化の進展
ICT
adoption
progress
（高）(high)
ICTICT化の進展
adoption
progress (low)
0
25
Initiatives /
reform score
(four
categories, total
of 21 points)
20
Organizational-change /
組織改革・
human-capital
initiatives
(low)
人的資本の取組（低）
（低）
ICT adoption
progress score
(eight categories,
total of 24 points)
Organizational-change /
組織改革・
human-capital
人的資本の取組（高）
initiatives
(high)
Comparison of organizational-change / human-capital initiatives between industry sectors
15
5
Score
4
10
4.0
3
5
2
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
0
1
0
3.7
3.3
2.7
2.6
2.6
2.0
1.8
1.5
1.3
Agriculture, forestry,
Manufacturing
農林水産業
製造業
fisheries
（n=100）
（n=738）
Construction
Electricity / gas
建設業
電力・ガス等
（n=452）
（n=125）
Commerce
商業
（n=512）
Finance /
金融・保険業
insurance
（n=364）
Real
estate
不動産業
Transportation
運輸
ICT
情報通信業
Services
サービス業
（n=238）
（n=300）
（n=369）
（n=818）
2
Characteristics of ICT Investments in Japan (2)
• Japanese corporations invest in ICT more to cut costs than to increase sales.
• Sixteen percent of corporations are harnessing ICT to raise profits, but many corporations have room
to improve their business performance with ICT. Corporations expanding their ICT investments will
contribute to the growth of Japan’s economy.
Purpose of ICT investments: boosting sales versus cutting costs
Set
as a target and saw results
目的として設定し効果もあり
Set as a target
目的として設定
50%
Looking at the target achievement rates for ICT
investments shows that cost-cutting targets
outweigh sales-boosting targets
40%
30%
20%
33% 33%
41%
28%
45% 46%
31%
30%
26%
41%
46%
53%
53%
47%
41%
47%
51%
30%
60%
59%
52%
ICT contributions to corporate profits
Target achievement rate
目的達成率（右軸）
(right axis)
37% 49%
34%
33%
44% 43%
27%
25%
40%
33%
38%
50%
33%
47%
40%
19%
10%
All sectors
全体（n=4016）
16.1%
36.5%
47.4%
Services
サービス業（n=818）
17.6%
33.5%
48.9%
Transportation
運輸（n=300）
Real
estate
不動産業（n=238）
15.7%
Commerce
商業（n=512）
15.2%
Electricity
/ gas
電力・ガス等（n=125）
Set as a target (average): 31%
Saw results (average): 14%
Average achievement rate: 44%
向上
効果
Set as a target (average): 36%
Saw results (average): 19%
Saw results (average): 12%
Average achievement rate: 52%
Average achievement rate: 45%
Improve ambition従業員の意欲や満足度の向上
and satisfaction of employees
Improve capabilities to formulate and execute business
経営計画の立案と実行能力の向上
plans
組織構造の改善または改革
Improve or reform organizational
structures
Improve accuracy and speed of decision making by top
経営トップの意思決定の正確性や迅速性の向上
management
異業種間の交流の活発化
Stimulate exchanges between different
business divisions
Promote collaborations and ventures with other
他社との協働・連携の促進
companies
Set as a target (average): 27%
社内効果
Internal
benefits
Set as a target (average): 34%
Stimulate exchange and application
of information within company
社内の情報活用や情報交流の活発化
benefits
利益 Cost-cutting
コスト削減効果
Improve satisfaction既存の顧客の満足度の向上
levels of existing customers
Improve work productivity
per employee
一人あたりの作業能率の向上
Improve business processes
and operational efficiencies
業務プロセスや作業効率の改善
Reduce
staff
人員の削減
Lower 在庫の圧縮
inventory
Increase return
on investment (ROI)
投資収益率（ROI）の向上
Increasedprofits benefits
Improve ability to intake customer feedback and create new
顧客の意見を吸い上げ、新しいビジネスを創り出す能…
businesses
Improve product-planning capabilities and proposal
商品企画力や顧客への提案力の向上
capabilities to customers
Develop new
customers
新規顧客の開拓
既存市場の売り上げの向上
Increase sales
in existing markets
Increase 新市場の売り上げの向上
sales in new markets
売上向上効果
Increased-sales
benefits
External
社外効果
benefits
30%
Agriculture,
農林水産業（n=100）
forestry,
fisheries
53.3%
31.4%
52.8%
36.8%
42.5%
41.6%
42.5%
35.8%
21.7%
0%
39.0%
45.3%
15.9%
10.0%
53.8%
32.8%
10.4%
Manufacturing
製造業（n=738）
48.3%
43.3%
13.4%
Finance
/ insurance
金融・保険業（n=364）
49.9%
35.0%
15.2%
8.3%
Construction
建設業（n=452）
13% 15% 15% 12% 14% 10% 16% 13% 21% 28% 18% 11% 8% 18% 16% 16% 17% 20%
0%
ICT did not contribute
to increased profits
利益増加ICT非貢献
ICT
情報通信業（n=369）
50%
50%
Profits did not
increase
利益非増加
ICT contributed to
increased
profits
利益増加ICT貢献
59.0%
31.0%
20%
40%
60%
80%
100%
Economic growth driven by ICT investment
Corporations work to
adopt ICT and to
affect organizational
change
Growth rate of information capital stock
from 3.2% to 6.8%
Higher ICT investment boosts Japan’s real GDP growth rate by
0.5%
Saw results (average): 17%
Average achievement rate: 51%
Note: 2013’s real GDP growth rate was 2.3% (second preliminary figures)
3
Structural Change of ICT Industries in the World
The ICT market, which continues to enjoy solid growth worldwide, is shifting from hardware to software
and from voice to data.
Average annual growth rate
4,323
from 2013 to 2018
4,189
+3.4%
4,053
4,500
4,000
3,641 3,654
3,771
3,500
Market size [in billions of dollars]
Breakdown of the global growth rate of the ICT market (estimated)
906
3,000
285
140
2,500
922
299
140
964
320
143
3,912
1,012
+5.0%
1,062
1,117
1,177
+6.9%
342
147
366
151
391
154
418
157
+2.4%
2,000
1,500
1,719 1,749 1,773
1,641 1,633 1,655 1,686
+1.7%
669
660
689
726
755
778
797
Data centers
Software
Corporate IT services
Infrastructure software
Storage
IT product support
Mobile phones
Computers / tablets
Servers
Corporate network devices
Fixed (data)
Printers
Corporate
communication
applications
Mobile (voice)
Fixed (voice)
Note: Bubble size indicates 2013 market size
Percentage of the ICT industry in 2013 [%]
Market capitalization of global ICT stocks (using FT500’s industry classifications)
+3.9%
2012 2013 2014 2015 2016 2017 2018
Communications
Corporate application software
The global stock market continues
to shift from fixed to mobile and
from hardware to software
0
Devices
Mobile (data)
Strong growth is expected in corporate
IT services, mobile, and software. Voice,
on the other hand, will experience
negative growth.
Market capitalization [in millions of dollars]
1,000
500
Average annual growth rate from 2013 to 2018 [%]
Global growth rate of the ICT market (estimated)
IT services
General industry
Media
Software / computer services
Mobile communications
Fixed communications
Hardware / devices
Electrical and electronic components
4
Characteristics of Japan’s ICT Industry
NTT, KDDI, Softbank
SCSK, Trend Micro
Toho, avex
Oki Electric Panasonic, Sony
Japan
Note: Bubble size indicates sales in 2013 or latest year available.
Note: Named corporations are leading players in the corresponding layer.
Operating profit ratio (2013 or latest
year available)
Operating profit ratio (2013 or latest
year available)
Japan’s ICT industry is heavily
weighted toward manufacturing and
telecommunications, and operating
profit ratios in manufacturing remain
low
China
Operating profit ratio (2013 or latest
year available)
Although China’s ICT industry
structure resembles Japan’s, its
expansion, with a growth rate over
30% in all layers, is remarkable
Sales growth rate (2013 / 2010)
Content
Platforms
Software
Communications
U.S.
Overall, the U.S. industry has high profit
ratios and little variance in sales between
layers
Communication device
manufacturing
Other manufacturing and
components
Sales growth rate (2013 / 2010)
Sales growth rate (2013 / 2010)
Operating profit ratio (2013 or latest
year available)
ICT industry structure in four countries (comparison of sales by layer)
• Japan’s ICT industry is heavily weighted toward manufacturing and the telecom business, whereas the industry in the United States,
overall, has high earnings and a good balance between layers.
• The ICT industry in China has a similar to structure to Japan’s, but sales growth rates are remarkable in all layers. Manufacturing
accounts for a large percentage of South Korea’s ICT industry.
Samsung and other
manufacturers account for a
large percentage of South
Korea’s ICT industry
Content
Platforms
Software
Communications
South Korea
Sales growth rate (2013 / 2010)
Communication device
manufacturing
Other manufacturing and
components
5
Key Factor for Success in the ICT Industry
An analysis of transitions and changes at leading ICT corporations around the world
underscored the importance of the pursuit of economies of scale, speed, and personnel and
technology.
Example of international horizontal specialization: Use of EMS
Key Factor for Success in the ICT industry
U.S. (SMT) U.S. (TAB)
U.S. (LCD)
U.S. (LCD)
U.S. (DVC)
U.S. (NOTE)
U.S. corporations
make maximum use of
LCD: LCD televisions
EMS
Capturing growth
成長市場の取り込み
markets
(developed
countries and
（先進国と新興国）
emerging nations)
Pursuit of economies of
scale
International
国際水平分業
horizontal
specialization
EMS percentage in 2013
J (NOTE)
Responding to the globalization of the ICT industry
Incorporation
of a global
environment
J: Japanese corporations
SK: South Korean corporations
C: Chinese corporations
U.S.: U.S. corporations
U.S. corporations
C (SMT)
C (NOTE)
J (DSC)
J (LCD)
J (SMT)
C (TAB)
SK
(NOTE)
SK (DSC)
C (LCD)
SK (TAB)
DSC: Digital still cameras
DVC: Digital video cameras
SLR: Digital single-lens-reflex cameras
NOTE: Notebook computers
TAB: Tablets
SMT: Smartphones
South Korean corporations* Bubble size and value indicates average
produce large volumes on production volume per corporation in 2013 [in
their own
thousands of units]
South Korean corporations
SK (SMT)
J (SLR)
Note: EMS are manufacturers who
J (DVC)
manufacture and assemble products
and components by bulk order from
multiple corporations
Global production share in 2013
Example of accelerating decision making: IBM (U.S.)
Choice and focus on
a business domain
IBM (U.S.) changed to a globally optimized organization in response to advancing
globalization. The company accelerated its decision making by optimally deploying
its internal functions in different countries.
Speed
Single-country optimization model
(export model)
Personnel
development and
training
Strategy
HR
Planning
Develop
ment
Procurem Productio
ent
n
Sales
Manage
ment
Develop
ment
Procurem Productio
ent
n
Global optimization model
(global integration)
Sales
Manage
ment
Home country head-office functions
Country
A
HR
Planning
HR
Country
C
Home country head-office
functions
Planning and
management
Personnel and
technology
Manage
ment
Strategic and
organizational
aspects
Execution
Prompt decision
making
Multi-country optimization model
(multinational)
Develop
ment
Country
E
Country
G
Country
F
Country
H
Procurem Productio
ent
n
Country
D
Sales
Country
L
Country
J
Country
I
Country
B
Local subsidiary functions in each
country
Local subsidiary functions in each
country
Planning
Country
K
Functions in each country
6
Prospect of Overseas Expansion of Japan’s ICT Industry
Japan’s ICT corporations see India, China, and the ASEAN region as the most promising,
and a majority predicts higher domestic investment and more hiring in tandem with more
overseas expansion.
Predictions of future growth of overseas expansion (survey)
Most promising countries / regions according to ICT corporations (survey)
0
Response rate [%]
Japan’s ICT corporations see India, China, and the ASEAN region as promising
[No. of respondents]
5
10 15 20 25 30 35
輸出（直接／間接）
Exports
(direct / indirect)
31.3
[same industry] Own
capitalization (100% investment)
［同業種］独資（100％出資）
India
Direct直接投資
investment
China
Vietnam
Brazil
Myanmar
12.8
3.4
[different industry]
Own capitalization (100% investment)
［異業種］独資（100％出資）
2.9
[different industry] Merger with local corporation
［異業種］現地企業との合弁（50％以上）
(investment of 50% or more)
[different industry] Merger with local corporation
［異業種］現地企業との合弁（50％未満）
(investment of less than 50%)
3.0
2.0
［異業種］その他
[different industry]
Other investment
1.2
業務提携
Operational partnership
17.3
Predictions in tandem with future growth of overseas expansion (survey)
Indonesia
Thailand
A majority of respondents who forecast greater overseas expansion also
predicted higher domestic investment and more hiring
0%
20%
40%
60%
80%
Singapore
Russia
ICT devices
18.4
［同業種］その他
[same industry]
Other investment
U.S.
Broadcasting /
publishing
21.6
[same industry] Merger with local corporation
［同業種］現地企業との合弁（50％以上）
(investment of 50% or more)
[same industry] Merger with local corporation (investment
［同業種］現地企業との合弁（50％未満）
of less than 50%)
Domestic
国内投資
investment
Software
Electrical
devices
SIer / NIer / information services
Precision
devices
Other
Note: A survey of employees with understanding or awareness of certain management polices at ICT corporations
Comm
unications
38.5
Domestic
国内雇用
hiring
51.6
33.2
Expand
拡大
50.4
Maintain
維持
Reduce
縮小
100%
9.9
16.4
Note: Respondents who answered “Will increase” about future
overseas expansion
7
ICT Utilization in Japan (1) — Analysis of Big Data
Domestic data distribution in 2013 was about 8.7 times higher than eight years ago, and the
application of data is generating various kinds of new value, such as contributing to a sales
boosting effect totaling ¥60.9 trillion.
[Transitions in domestic data distribution]
[Estimate of data-use benefits in sales (2012)]
（TB）
14,000,000
13,516,492
Total for all industries was ¥60.9 trillion
Equivalent to 4.6% of sales by all industries in 2012 (¥1,335.5 trillion)
12,000,000
Distribution in 2013 was
13.5 exabytes (about 8.7
times more than eight
years previously)
10,000,000
Breakdown
Distribution industry (wholesale and retail)
All other industries
¥28.1 trillion
¥32.8 trillion
8,020,140
8,000,000
[Analysis of the relationship between data distribution
volumes and economic growth]
6,050,339
6,000,000
 Data sets where an increase in data distribution shows a positive effect on real GDP
4,913,064
4,076,772
4,000,000
Customer data, accounting data, POS data, work operations logs,
voice logs, fixed and IP phones, mobile phones, e-commerce logs,
GPS data, e-mail, blogs and articles, access logs, movie viewing
logs
3,477,480
2,614,878
2,004,730
2,000,000 1,556,589
Note: The prefix exa means 10 to the power of 18, or
1,000,000,000,000,000,000.
（見込） )
(estimated
2013年
2012年
2011年
2010年
2009年
2008年
2007年
2006年
0
2005年
 Data sets where an increase in data distribution has yet to show an effect on real GDP
RFID data, meteorological data, traffic information, security
cameras, sensor logs
8
ICT Utilization in Japan (2) — G-Spatial Information and Open Data
• Local governments are actively looking to expand applications for GIS, particularly in the area of
disaster management.
• However, the provision of open map information needed by corporations has not progressed sufficiently.
[Promising fields for GIS application expansion]
[Public data being provided or being
considered for provision as open data]
20%
40%
60%
80%
City infrastructure
57.6%
49.7%
Tourism
55.5%
52.6%
Healthcare, nursing, and
welfare
53.9%
52.6%
40.9%
35.6%
Traffic
37.8%
34.0%
Education
Various kinds of information in
energy and the environmental
33.8%
29.4%
Industry
32.2%
28.9%
Government services
30.2%
26.8%
Employment
FY 2014 survey(N=733)
0%
100%
49.4%
48.6%
Security
Local communities
(Local governments)
82.5%
78.1%
Disaster management
(Corporations)
（企業）
（地方公共団体）
（地方公共団体）
(Local
governments)
0%
[Public data needed as open data]
20.3%
18.1%
9.1%
7.7%
FY 2013 survey（N=895)
Survey and statistical data sets
Information on government
services and resident services
Information on disaster
management
Information on public facilities
(location, usage instructions, etc.)
Sightseeing information
Healthcare, nursing, and welfare
information
Information on education
Map, topography, and geological
feature information
Information on public
transportation
Information on energy and the
environment
Information on land uses and
infrastructure
Information on crime prevention
Information on the location and
changes to private-sector…
Local community information
Information on employment
Information on industry
20%
40%
60%
70.4%
23.0%
14.0%
50.7%
42.3%
22.0%
38.0%
17.0%
32.4%
18.0%
22.5%
15.0%
22.5%
11.0%
21.1%
17.0%
16.9%
14.0%
16.9%
11.0%
14.1%
14.0%
12.7%
16.0% ■ Public data
that is being
11.3%
provided
9.0%
(N=71)
■ Public data
9.9%
being
8.0%
considered
7.0%
for provision
7.0%
(N=100)
4.2%
10.0%
※オープンデータを実施中または実施の方向で検討中と答えた自治体への質問
Note: Question
asked to local governments that had indicated they provide or are
considering the provision of open data
0
80%
20
40
60
59
地図・地下data
Maps and underground
43
Public transportation
交通
Disaster management and
防災・保安・安全
security
38
City planning and
construction
35
都市計画・建築
Healthcare
and nursing
医療・介護
30
Statistics
and surveys
統計・調査
30
Individual / resident
個人・住民情報
information
19
Disclosure
methods
公開方法等
18
Meteorological information
貴省
16
Bids, procurement, and
入札・調達・補助金等
subsidies
13
Environment
and energy
環境・エネルギー
12
Patents
特許
11
Company
information
法人情報
8
Permits許認可
and licenses
8
Radio電波
spectrum
4
Laws and ordinances
4
法令
Other
その他
42
（社）
80
ICT Utilization in Japan (3) — ICT Applications in Medicine and Healthcare
9
• There is a growing number of advanced ICT applications in medicine, such as healthcare services using EHR or the
cloud.
• MIC has set up the Conference for Smart Platinum Society Promotion to promote the nationwide development of a
coordinated healthcare and nursing information platform.
EHR reducing loads on facilities (Sado Himawari Net)
•
•
A network for participating hospitals, medical clinics, dental clinics, pharmacies,
nursing homes, and others to share patient information — such as disease type,
medication details, and examination results — centered on receipt data (started
operation in April 2013).
The network is expected to enable clinics, hospitals, and nursing homes to provide
unified healthcare and services, understand therapeutic precautions, check for jointly
prescribed drugs and contraindicant drugs, and avoid redundant dosages and
examinations.
Specific health guidance using the cloud (Harasuma Diet)
•
•
•
Hitachi developed the Harasuma Diet, a cloud-based healthcare assistance service
for the Specific Health Checkups and Specific Health Guidance program started in
2008.
Aiming to reduce metabolic syndrome cases and improve lifestyle diseases, the
service helps users manage their weight who enter data each day about their weight
and diet.
The Harasuma Diet service encourages users to improve their lifestyles and lose
weight and has a function where public health nurses and other practitioners can
send regular comments to users.
Cloud Server
・Disease name
・Prescription
・Test result
・X-ray image
・Endoscope image
・Medical checkup data
etc.
Interactive network
Pharmacies
Automatic data collection
Various
database
systems
of
hospitals
Communication tools
Nursing homes
Medical checkup
providers
Medical test
providers
Home medical care
services
MIC’s Conference for Smart Platinum Society Promotion
•
•
The conference promotes the nationwide development of a coordinated healthcare and nursing information platform based on a high-quality,
inexpensive, minimal model using the cloud. It also promotes the establishment of ICT health models (disease prevention) to extend health and allow
people to live independently.
Under a policy of future overseas expansion in the ICT healthcare field as a leading problem-solver in the area of super aging societies, the conference
is promoting international collaborative frameworks, including collaborations with overseas universities, research institutes, and ICT businesses, when
examining expansion models.
ICT Utilization in Japan (4) ー ICT Applications in Disaster Prevention and Traffic
10
 In the field of disaster prevention, utilization of cloud technology in disaster prevention system has attracted
attention based on the experience of the Great East Japan Earthquake.
 In the field of traffic, sophistication and streamlining of on-demand traffic service using ICT are promoted.
Fujinokuni disaster prevention information share system
FUJISAN (Shizuoka Prefecture)
• Construct a system enabling sharing of information in real time among
related organizations using cloud GIS aiming at rescuing victims within 72
hours after occurrence of disasters.
• By the adoption of cloud, even if a prefectural government building is
damaged by disaster, risk that all system is damaged can be avoided.
Moreover, the system operation has flexibility that allows ten times of users
than normal time to use the system.
On-demand bus (Tamaki town, Mie Prefecture)
• Data that has input based on telephone from passengers to operators is
transmitted to on-demand traffic server. Then, operational boarding time
candidate is indicated to passengers. In this way, operation and introduction
cost of the system is reduced significantly compared to conventional type of
system.
• The FY2012 extra budget for “project of development of safe and lively city
planning using ICT” is used for constructing a common platform where data
related to information for citizens, on-demand bus utilization data, service
utilization data for citizens, etc. are accumulated and linked with each other,
to be utilized for creating new services.
Basic Resident Register
Nursing Care Insurance
Fixed asset valuation
etc.
Usage history of
On-demand bus
PR magazines
Contact information
Disaster prevention wireless
Local government services
Nursing care services
Disaster prevention
communication
Disaster prevention
communication
On-demand bus
Medical checkup
communication
Shopping assistance
Food delivery service

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