Information and Communications Technology in Japan - Vinnova

V I N N O V A R E P O R TV R 2 0 0 5 : 0 4INFORMATION ANDCOMMUNICATIONS TECHNOLOGYIN JAPANA general overview on the current Japaneseinitiatives and trends in the area of ICTS H I G E Y U K I N A I T O & B O G U M I L H A U S M A N

Title: Information and Communications Technology in Japan. A general overview on the current Japanese initiatives and trends in the area of ICTAuthor: Shigeyuki Naito and Bogumil Hausman - ITPSSeries: VINNOVA Report VR 2005:04ISBN: 91-85084-28-XISSN: 1650-3104Published: May 2005Publisher: VINNOVA - Verket för Innovatonssystem /Swedish Agency for Innovation SystemsVINNOVA Case No: 2004-00761About VINNOVAVINNOVA, the Swedish Agency for Innovation Systems, integrates research anddevelopment in technology, transport, communication and working life.VINNOVA´s mission is to promote sustainable growth by developing effectiveinnovation systems and funding problem-oriented research. Through its activitiesin this field, VINNOVA aims to make a significant contribution to Sweden´sdevelopment into a leading centre of economic growth.The VINNOVA Report series includes external publications and other reports fromprogrammes and projects that have received funding from VINNOVA.The Swedish Institute for Growth Policy Studies (ITPS),is a Government Agency responsible for providing policy intelligence to strengthengrowth policy in Sweden. ITPS primarily provides the Government Offices,Members of the Swedish Parliament, other state authorities and agencies withbriefings based on statistical material, policy papers and key analyses. Business policyand regional development policy are areas given high priority. Changes in policyshould be based on:· Statistic data and analyses of the structure and dynamics of industry – to obtainan up-to-date view of future challenges and opportunities.· Evaluation of results and effects of policy measures and programmes – to providebenchmarks and learn from measures implemented earlier.· Policy intelligence in order to look outwards and ahead – what issues are likely tocome on the growth policy agenda in the future?These represent the principal missions of ITPS.I VINNOVAs publikationsserier redovisar bland andra forskare, utredare och analytiker sina projekt. Publiceringen innebär inte att VINNOVA tarställning till framförda åsikter, slutsatser och resultat. Undantag är publikationsserien VINNOVA Policy som återger VINNOVAs synpunkter ochställningstaganden.VINNOVAs publikationer finns att beställa, läsa eller ladda ner via www.VINNOVA.se. Tryckta utgåvor av VINNOVA Analys, Forum och Rapport säljs viaFritzes Offentliga Publikationer, www.fritzes.se, tel 08-690 91 90, fax 08-690 91 91 eller order.fritzes@nj.seVINNOVA´s publications are published at www.VINNOVA.se

Information and CommunicationsTechnology in JapanA general overview on the current Japanese initiativesand trends in the area of ICTbyShigeyuki NaitoBogumil HausmanSwedish Institute for Growth Policy StudiesScience & Technology OfficeTokyo, JapanJanuary 2005

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ICT IN JAPANAcknowledgmentsWe would like to thank Kyoko Nakazato for providing the first chapter on generalintroduction to Japan and Naoko Sekiguchi for her help with gathering some of thedata used in this report and converting them to graphs. Both are staff members ofthe Science & Technology Office in Tokyo.We have used some fragments from previously written ITPS reports produced atthe Tokyo Office by Sabine Ehlers and Shigeyuki Naito [ICT 2003].We would like to thank as well our colleges from VINNOVA: Jonas Bjarne andTorbjörn Fängström for valuable comments on a draft version of this report.3

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ICT IN JAPANForewordThis report is a result of a joint project between the Swedish Institute for GrowthPolicy Studies (ITPS) and VINNOVA's three growth areas in the area of informationand communications technology (ICT): Micro- and nanoelectronics, Telecomsystems and Software products. The aim of the project has been to identify, analyseand describe ICT relevant initiatives and trends in policy, research and business inthe USA, Japan and China. The goal is to provide VINNOVA with a platform formaking decisions concerning financing of needs-related research, development anddemonstration of sustainable growth in the ICT area in Sweden. It is our hope thatthe report will provide constructive input for a wider audience with an interest ininternational development in ICT.Information and communications technology is defined in the report as technology(hardware, networks, systems, software) which facilitates the exchange of informationbetween different people and machines. The focus of the report on ICT relevanttrends and initiatives, however, covers not only initiatives which can be directlyrelated to a specific area of technology (facilitative technology). It also coversinitiatives in different needs- and marketing areas which have an impact on ICTdevelopment taken up in the report. The study covers initiatives and trends whichcan be perceived today or are expected to emerge within the next 5 years.The report is one of three review studies concerning developments in the area ofinformation and communications technology:• Informations- och kommunikationsteknik i USAMartin Ahlgren, VINNOVA Rapport VR 2005:03• Information and Communications Technology in JapanShigeyuki Naito, Bogumil Hausman, VINNOVA Report VR 2005:04• Information and Communications Technology in ChinaMagnus Breidne, VINNOVA Report VR 2005:05Stockholm in April 2005,Per ErikssonDirector GeneralVINNOVA5

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ICT IN JAPANTable of ContentForeword............................................................................................................................. 5Summary............................................................................................................................. 91 Introduction to Japan.............................................................................................. 111.1 Geography...................................................................................................................111.2 Economy......................................................................................................................111.3 Trade ...........................................................................................................................121.4 Society.........................................................................................................................122 Introduction to ICT .................................................................................................. 132.1 Current Status of Networks .........................................................................................132.2 Japan as an International Competitive Power.............................................................182.3 Chapter Summary .......................................................................................................193 Politics...................................................................................................................... 213.1 National policy .............................................................................................................213.1.1 e-Japan Strategy ....................................................................................................213.1.2 e-Japan Strategy II .................................................................................................243.1.3 e-Japan Priority Policy Program - 2004..................................................................263.2 Chapter Summary .......................................................................................................314 Research and Development ................................................................................... 334.1 The Council for Science and Technology Policy and the Science and TechnologyBasic Plan (2001-2005) .............................................................................................................344.2 Ministry of Economy, Trade and Industry (METI)........................................................364.2.1 R&D Programs........................................................................................................374.2.2 New Industry Creation Strategy..............................................................................384.3 Information-technology Promotion Agency (IPA) ........................................................414.4 Ministry of Internal Affairs and Communications (MIC)...............................................434.5 Ministry of Education, Culture, Sports, Science and Technology (MEXT) ..................454.6 ITS related R&D ..........................................................................................................454.7 Chapter Summary .......................................................................................................475 Industry .................................................................................................................... 495.1 Overview of the ICT related industry ...........................................................................495.2 ICT Market...................................................................................................................525.2.1 Telecommunications Business ...............................................................................525.2.2 Broadcasting Business ...........................................................................................535.3 Electronics industry .....................................................................................................535.4 Import and Export from/to Sweden..............................................................................545.5 Chapter Summary .......................................................................................................566 Conclusions on future trends ................................................................................ 576.1 Future trends ...............................................................................................................596.1.1 Hardware and Terminals ........................................................................................596.1.2 System Software and Computing ...........................................................................606.1.3 Networks.................................................................................................................616.1.4 Content, applications and services.........................................................................616.1.5 Business models.....................................................................................................626.1.6 Usage .....................................................................................................................626.1.7 Security...................................................................................................................636.1.8 Policies ...................................................................................................................647 Some suggestions for future Japan-Sweden ICT actions ................................... 65Terminology .....................................................................................................................67References........................................................................................................................ 69Appendix I......................................................................................................................... 71ICT Companies trading between Japan and Sweden ...............................................................717

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ICT IN JAPANSummaryThe Japanese government (IT Strategic Headquarters) has succeeded with e-JapanStrategy to enhance ICT infrastructure in Japan by utilizing experts from industriesand academia, by improving competition policy (especially within the broadbandaccess network market), by allocating resources to ICT related, prioritized areas,and by promoting cooperation between different industries. However, the actualICT usage was still low. Therefore, the government launched consecutive strategyand Priority Policy Programs to enhance the actual use of the existing infrastructure.At the same time evaluation of the policy implementation got high priority.Japan’s total expenditure on R&D (FY2002) was 16 675 billion yen, reaching3.35% of GDP. About 70% was spent by industries, 20% by universities, and 10%by public institutions. 13.5% of total R&D expenditure was spent within the ICTarea. Council for Science and Technology Policy lead by the Prime Ministerlaunched the second-Term Science and Technology Basic Plan (2001-2005), whichplaced special priority on four fields: Life Sciences, Information and Telecommunications,Environmental Sciences, and Nanotechnology and Materials. As the resultof the plan and the e-Japan Strategy, Japanese ministries launched many R&Dprograms and projects ranging from semiconductors and displays to grid computing,photonic networks, Intelligent Transport System and Ubiquitous Network.Japanese ICT industry structure is unique. Japan can produce a whole range of devicesand components, from LSI and printed circuit boards, to finished products,such as PCs, mobile phones, telephone switches, and super computers. Ten largescaleelectronics manufacturers have played important role for the development ofthe ICT market in Japan. The market which was worth 116 trillion yen in 2002.In this report we present different technologies which are predicted to influence theICT development in Japan in the coming years. The technologies include:• Hardware and Terminals• System Software and Computing• Networks• Usage, content, applications and services• Business models• Security issuesThe report suggests some future studies and areas which should be of interest toVINNOVA. The issues include:• Ubiquitous network/computing and human interface• Connected Home• Test beds and market of ultra-high speed networks and mobile networks• Robotics9

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ICT IN JAPAN1 Introduction to Japan1.1 GeographyJapan is an island nation lying off the east coast of Asia. It has the general shape ofa crescent and extends 3,000 km from tip to tip. The country is made up of fourmain islands (Honshu, Shikoku, Kyushu and Hokkaido), which together with alittle fewer than 7,000 smaller islands are collectively referred to as the JapaneseArchipelago. The northern region featuring a sub arctic zone climate, the middle atemperate zone climate and the southern regions a subtropical zone climate. Theislands of Japan are bounded by the Pacific Ocean on the east and the Japan Sea onthe west.Japan’s land area is 378,000 km 2 , of which about the three quarters is mountainous.The main island has many mountains which are more than 3,000 meters high. As itis situated along the circum-Pacific volcanic belt, Japan has several volcanic regionsfrom the far north to the far south. Japan has almost 1/10 of the world's approximately840 active volcanoes, even though it has only about l/400 of theworld's land area. Though volcanoes can cause great harm through large eruptions,they also contribute an incalculable tourist resource [NIPPON 2002, JA 2004].1.2 EconomyThe Japanese economy is the second largest market economy in the world. In 2003it recorded a gross domestic product (GDP) of 501,498.8 billion yen (nominal),which is 0.8% increase from the previous year. Japan’s GDP per capita in 2003was 3,929,000 yen (US$ 34,863) (1000 yen is about 70 Skr).The Japanese economy has gone through a number of stages since the end of theWWII. First, a recovery period during which Japan built its economy back up tothe prewar level. Next, a high growth period which was driven by the heavychemical industry, then after the two oil crises, a stable growth period driven bytechnology intensive industries. And in the 1990s, a prolonged recession triggeredby the expansion and contraction of an economic bubble in the latter half of the1980s. The unemployment rate, which has remained below 2% until the mid-1970sbegan to creep up and the average unemployment rate in 2003 was 5.3%.It is considered that the evidence of prolonged economic demise lies in Japan's 50-year-old postwar economic system as well as in an increasing inability to respondflexibly to internal and external changes. Upon coming into power in April 2001,the Koizumi Cabinet has implemented policies covering regulatory reform, publiccompany privatization (e.g. postal service privatization) and administrative reform.Economic revitalization is being promoted with policies to improve efficiency inareas such as labor allocation, fund allocation and research and development. Majorchanges are also taking place in the corporate world as companies strive to increasecompetitiveness by moving away from traditional employment practicessuch as lifetime employment and seniority-based wages [NIPPON 2004, JA 2004,CabOffice a].11

ICT IN JAPAN1.3 TradeThe current account surplus grew to a record-high 15.7853 trillion yen, an 11.6%increase over the previous year. Top export item is automobile, while top importitem being crude oil as they had been the year earlier. This was the second consecutiveyear of growth in the surplus, with a main factor being an increase in exportsto China and Asia. Additionally, there was a capital account surplus for thefirst time in the 34 years since 1969, with a figure recorded of 8.1320 trillion yen.This turnaround is the result of a rapid increase in investment in Japanese stocks,based on high expectations for the recovery of the Japanese economy. The tradebalance also expanded for the second consecutive year. Although oil prices soaredbecause of the war in Iraq and imports were at all-time high, exports to Asia, centeringon mobile phone terminals and semi-conductors, also surged [Ministry FA].1.4 SocietyJapan’s total population stood at 127,619,000 in March 2004. Of them, approximately19 % was 65 old or older, and by 2050 this figure is projected to be 35.7%.At the same time, the number of children that women have in their life (fertilityrate) has been ever dropping and reached the level of 1.32 in 2002. This results inthat the number of people aged 65 years old or older exceeds the number of peopleaged 14 years old or younger. The challenge that Japanese society faces is that thesociety is ageing more rapidly than any other industrial country has ever experienced.There is growing concern over the consequences that the aging society will havefor the economy. To minimize the effects of the contraction of the working population,it will be necessary both to increase labor productivity and to promote theemployment of women and people over 65. In addition, fundamental reforms willbe necessary in pension and other social welfare systems in order to avoid largeinequalities between generations with respect to the burdens born and benefits received[CabOffice b].12

ICT IN JAPAN2 Introduction to ICTFrom the end of the 20th century to the beginning of the 21st century, we have seena lot of digital technologies emerge, or, in other words, we have seen a general shiftfrom analogue to digital technology. Since Japan is one of the leading technologydevelopers in the world (many new technologies have been commercialized here),this applies in a very high extent to Japanese homes. This can be illustrated by PCvs. TV set, Mini Disk vs. Cassette tape, MP3 player vs. vinyl LP, digital camera vs.traditional chemical film camera, DVD player vs. VTR, and Internet vs. traditionalsources of information like radio, TV and newspapers. This conversion to betterand newer technology is a never stopping process.Currently there is an ongoing battle over a new DVD standard capable of recording/playinghigh-definition broadcasts which is expected to become the leadingstorage/reproduction medium for visual images over the next 20 years. One of thecompeting groups consists of Toshiba Corp. and NEC Corp. while the other groupconsists of 13 Japanese, U.S., European and South Korean firms, including SonyCorp. and Matsushita Electric Industrial Co. The Toshiba-NEC group is pushingfor a standard called HD DVD, while the other group pushes for a standard knownas the Blue-ray Disk. The two standards are not compatible and cannot be integrated.HD DVD is a standard that tries to utilize conventional DVD characteristicswith much better quality, whether the Blue-ray Disk aims to create a new recordingmedium [NIKKEI a].Another issue is the rapid development of the telecommunication technology. Atthe end of 2003, household penetration rate for mobile phones was 93.9 percent, ofwhich 56.5 % were Internet compatible. The number of mobile phone subscribersexceeded the number of fixed phone subscribers. The household penetration ratefor PC was 78.2 %, facsimile: 53.9 %, car navigation systems: 30.6 % [JTH 2004].2.1 Current Status of NetworksBroadband digital networks are expanding rapidly in Japan (Japanese Ministry ofInternal Affairs and Communications uses "Broadband" for the access means ofDSL, cable TV, FTTH, and radio access; the actual speed can be said over 1.0Mbps). The number of broadband subscribers approached 15 million at the end of2003 fiscal year (Figure 2-1). Note the almost 50% increase in broadband subscribersfrom 2002 to 2003 (Figure 2-2). Japan has the third largest number of broadbandsubscribers in the world. Per capita, Japan is the ninth in the world (Figure 2-2, Figure 2-3) [MIC 2004], similar to Sweden.13

ICT IN JAPANFigure 2-1. Number of Broadband Subscribers.Note: DSL stands for Digital Subscriber Line, FTTH – FiberToTheHome.Source: Information and Communications in Japan, White Paper 2004, MIC.Figure 2-2. Internet Connection Methods for Home PCs.Source: Information and Communications in Japan, White Paper 2004, MIC.14

ICT IN JAPANFigure 2-3. International Comparison of Total Broadband Subscribers and Subscribers per100 inhabitants (2002).Source: Information and Communications in Japan, White Paper 2004, MIC.Japan’s broadband services are the world’s least expensive and highest speed. Acomparison of costs per 100 kbps is shown in Figure 2-4 [MIC 2004].Figure 2-4. International Comparison of Broadband Fees (cost per 100 kbps; July 2003).Figures for Sweden are about the same as for United States.Source: Information and Communications in Japan, White Paper 2004, MIC.The number of third-generation mobile phone subscribers has grown rapidly to16.69 million (of total 80 million of all mobile phone subscribers) in less than two15

ICT IN JAPANand a half years (since the start of services in October 2001) (Figure 2-5). Thenumber of mobile phones with digital camera subscribers is 47.86 million, exceeding60% of all mobile phones.Japan leads the world in mobile Internet access. Japan’s mobile Internet compatibilityrate (89.5%) is the highest in the world (Figure 2-6). The mobile Internetcompatibility rate is the percentage of mobile phone subscribers that include mobilephone Internet access [MIC 2004].Figure 2-5. Number of 3G Mobile Phone Subscribers.Source: Information and Communications in Japan, White Paper 2004, MIC.16

ICT IN JAPANFigure 2-6. Penetration Rates of Mobile Internet in Major Countries and Territories (mobileInternet subscribers of all mobile phone subscribers) (Sept. 2003). Figures for Sweden areabout the same as for Finland.Source: Information and Communications in Japan, White Paper 2004, MIC.As the consequence of the general development of broadband access technologiesthe number of IP telephones and Wireless Hot Spots are steadily increasing. IP telephonyhas been introduced by 7.3% of households and 11.1% of businesses andthe number of hot spots has more than tripled in just one year (Figure 2-7) [MIC2004].17

ICT IN JAPANFigure 2-7. Change in number of Hot Spots (end of fiscal 2003).Source: Information and Communications in Japan, White Paper 2004, MIC.2.2 Japan as an International Competitive PowerJapan has a rather good world market share of home appliances and audio-visualequipment, although is not superior when it comes to PC and related equipment,nor mobile telephone terminals. For example, in 2002 the world market share ofLiquid Crystal display TVs was 76.8 percent, Plasma display TV: 72.0%, Digitalstill picture camera: 65.5%, Plain paper copier: 74.4%, and Car navigation system:64.7%. On the other hand, market share of Note PC were 26.5 percent, DesktopPC: 4.6%, DVD-ROM drive for PC: 49.5%, and CDMA mobile phone terminals27.8%, other types of mobile phone terminals except CDMA: 21.2% [JH 2004,JTH 2004].In the near future, digital home (and car) appliances will be equipped with advancednetwork functions, which will enable them to exchange data and information.This vision is often called Ubiquitous Networks, where everything communicateswith everything. Since Japan has the world’s leading networked environment(see Chapter 2-1) the Japanese manufacturers have a unique advantage to develop,design, and test such new products directly in Japan. Therefore, both the governmentand related industries expect that emerging technologies, products and servicesfor the ubiquitous network society would drive Japanese economic growth,and increase their international competitive power.A survey dealing with ICT technological edges among United States, Europe, Japan,and other Asian countries shows that [WP 2004, JH 2004] Japan is a leadertechnology developer of displays, mobile terminals, digital home appliances, sensors,and radio frequency identifications. At the same time Japan is lagging in technologiesfor middleware such as security and authentication, and contents/applicationdevelopment such as contents description language. On the otherhand technologies for networks, such as Optical network and mobile network, arealmost equivalent between Japan and United States.18

ICT IN JAPANAnother related issue is that Japan (as shown in Fig. 2-8) is facing a growing industrialthreat from neighboring Asian countries like China, Taiwan and South Korea[NIKKEI b]. Those countries, historically well known for much lower productioncosts, have recently become advanced also when it comes to new technology development.Figure 2-8. Global shares of major digital products between different companies (August2004).Note: Companies without specified countries are based in Japan.2.3 Chapter SummaryJapan is the world leader when it comes to broadband digital networks access(DSL, cable Internet, wireless access, and FTTH) at home thanks to the disseminationof ADSL (nearly half of the Internet connection from home uses ADSL). Japanhas the third largest number of broadband subscribers, and the lowest broadbandfee (0.09 dollars per 100 kbps). For wireless networks, Japan is leading in themobile Internet penetration (89.5 % of mobile phone users could access the Internetfrom their mobile phone), and 3G penetration (17 million of total 80 million of allmobile phone subscribers).19

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ICT IN JAPAN3 Politics3.1 National policyThe IT Strategic Headquarters for the Promotion of an Advanced Information andTelecommunications Network Society was established in January 2001, in order topromote measures for making Japan an advanced ICT society. The body is comprisedof all the cabinet ministers as well as eight non-government experts such asNobuyuki Idei, chairman of Sony Corp, and Dr. Jun Murai, Professor of Keio University,and is lead by Prime Minister Junichiro Koizumi [SHH].3.1.1 e-Japan StrategyIn order to make Japan “the world's most advanced IT nation by 2005”, the IT StrategicHQ launched the e-Japan Strategy in January 2001, which focused on thedevelopment of infrastructure necessary for broadband and other advanced telecommunicationsservices [e-Japan a].Five Priority Policy Areas were decided:• Development of the World’s Most Advanced Information and CommunicationNetwork, aiming at the construction of ultra-high speed backbone networkfor all people to have constant access to the Internet at extremely lowprice, and also to promote the shift to the Internet with protocol IPv6.• Advancement of Human Resource Development, and the Promotion of Educationand Learning, aiming to improve information literacy by makingInternet access available at schools, and to foster IT instructors, technicalexperts, researchers, and digital content creators.• Promotion of e-commerce by deregulation and legislation for the new rulesconcerning electronic contracts and for the protection of consumers.• Promotion of the Digitization of the Administration and the Utilization ofInformation and Communications Technologies in Public Areas, aiming torealize e-government.• Ensuring of the Security and Reliability on Advanced Information andCommunication Network, by promoting the protection of personal information,carrying out R&D on cryptography, and establishing emergency controlsystem in organizations (this fifth priority policy area was added in e-Japan Priority Policy Program in March 2001).Based on the e-Japan Strategy, two Priority Policy Programs were formulated toimplement the above goals, and as a consequence a number of measures were carriedout by ministries and agencies. With support from the government, the Japaneseindustry made efforts towards constructing an environment enabling “highspeedInternet used by 30 million households and ultra-high-speed Internet used by10 million households”. The ambition has already been realized in a sense that theabove access capability is already in place (but the actual number of subscribers is21

ICT IN JAPANmuch lower, see Figure 2-1). The construction of systemic infrastructure related toe-commerce and e-government has also made progress.Some achievements towards “Development of the World’s Most Advanced Informationand Communication Network” are already mentioned in the Introduction toICT chapter. The following figures are just some examples of the development inthe policy areas [SHH, MIC 2004].Figure 3-1. Advancement of Human Resource Development, and the Promotion of Educationand Learning.Classrooms connected to the Internet in public schools160 000140 000120 000100 00080 00060 00040 00020 0000Number29,2%Achievement (%)21,1%134 73889 9458,3%36 834Mar. 2001 Mar. 2002 Mar. 200335%30%25%20%15%10%5%0%Source : IT Strategic HeadquartersFigure 3-2. Promotion of e-commerce. Scale of Business to Consumer Electronic CommerceMarket.Source: Information and Communications in Japan, White Paper 2004, MIC.22

ICT IN JAPANFigure 3-3. Promotion of e-commerce. Scale of Business to Business Electronic CommerceMarket.Source: Information and Communications in Japan, White Paper 2004, MIC.Figure 3-4. Promotion of the Digitization of the Administration and the Utilization of Informationand Communications Technologies in Public AreasOn-line electronic application, notification and other procedures14 00012 00010 0008 0006 0004 0002 0000100%96,1%90%Number80%Achievement (%)13 317 70%60%50%44,5%40%30%6 04720%124 0,9% 133 1,0% 612 4,5%10%0%Mar. 2001 Oct. 2001 Sept. 2002 Jun. 2003 Mar. 2004Source : IT Strategic Headquarters23

ICT IN JAPANFigure 3-5. Ensuring of the Security and Reliability of Advanced Information and CommunicationNetwork.Formulation of security policy at local authorities1 2001 0008006004002000NumberAchievement (Prefecture) (%)Achievement (City) (%)27012,8%8,1%70346,8%21,0%80,9%98529,2%Apr. 2001 Apr. 2002 Apr. 200390,0%80,0%70,0%60,0%50,0%40,0%30,0%20,0%10,0%0,0%Source : IT Strategic Headquarters3.1.2 e-Japan Strategy IIAfter the first phase of the IT strategy had been achieved at the beginning of 2003,the IT Strategic HQ evolved the strategy into the second phase of the expansion ofICT use and in July 2003 formulated the e-Japan Strategy II. The new strategytakes up seven areas for leading efforts [e-Japan b] to realize an “energetic, worryfree,exciting and more convenient” society:• Medical Services• Food• Lifestyle• Small and Medium Enterprises Financing• Knowledge• Employment and Labor• Public ServiceProgress in those seven areas should be done by effective utilization of IT. Theprocess to be driven by private sector supported by the government. Each area got adetailed implementation plan: objectives, policies, possible problems/solutions, andkey evaluation points. Based on the new strategy, a new priority program was decided,and a number of measures were carried out (see Table 3-1).24

ICT IN JAPANe-Japan Strategy II acceleration PackageAs the next step, in February 2004, the e-Japan Strategy II acceleration Packagewas adopted in order to accelerate implementation of the e-Japan Strategy II, andto achieve the goal of turning Japan into the most advanced IT nation in the worldby 2005.The e-Japan Strategy II acceleration Package included the following blocks ofissues [e-Japan c]:A. (Asia - International IT Strategies in Asia)Form the common IT base in Asia, such as an e-Passport scheme, and constructsecure and low-cost network infrastructure.B. (Block and Back-up - Security: Reinforcement of Security Measures)An IT Security Expert Meeting was set up, and a private-sector expert wasappointed as IT Security Advisor. Other IT security measures for the centralgovernment, local government and also private sector are to be taken.In order to ensure public safety and security, new schemes such as e-Passport or ID card will be considered.C. (Content - Promotion of Content Measures)Promote reuse of existing contents assets as part of broadband services. Investigatethe status of the Internet as a means of content distribution. Reinforcethe content production foundations. Expand the Japanese version ofthe Bayh-Dole system (a system that allows ownership of intellectual propertyrights that are the result of research and development conducted undercommission from the national or other government to be assigned to theparty concerning the research). Establish digital archives of governmentcontents, and expand its general use.D. (Deregulation - Promotion of IT Regulatory Reforms)e-Document Initiative: a uniform law (e-Document law) is to be adopted inorder for the public to be able to store documents and records as they arerequired to retain by law in electronic format. Promote the use of IT inmedical fields including electronic storage of medical information. Push forregulatory reforms necessary to coordinate real-world systems with cyberspacesystems.E. (Evaluation)Reflect on the evaluation results by the Expert Committee on IT StrategyEvaluation to the e-Japan Priority Policy Program-2004. The committeeevaluated the status of measures taken by the government under the e-JapanStrategy and e-Japan Strategy II.The committee will establish the cycle of “Plan-Do-Check-Action” withinthe e-Japan Strategy.25

ICT IN JAPANThe committee will continue evaluation of the status of implementation ofthe e-Japan Strategy and e-Japan Strategy II, and will take necessary measuresbased on the evaluation results.F. (Friendly e-Government and e-Local Government - Promotion of e-Government and e-Local Government)Promote telecommuting (teleworking) by national government employees.Realize one-stop service for import/export and harbor procedures. Expandgovernment procurement to include more startup companies with advancedskills in the IT field, in order to nurture such companies. Promote measuresfor creating e-local government.3.1.3 e-Japan Priority Policy Program - 2004Based on the policy strategies the e-Japan Priority Policy Program - 2004 wasformulated in June 2004 to incorporate priority policies and structural developmentto achieve its objectives for 2005 [e-Japan d]. The program covers also the directionto be taken for 2006 and thereafter. The program contains the following twoPriority Policy Programs:• Last Program - the name Last is used to indicate that this is the last prioritypolicy program to ensure the achievement of the 2005 goals.• Pre-program – a priority policy program to serve as initial step towards futuregoals in 2006 and beyond.In more details:• Last ProgramPromote the further acceleration of e-Japan Strategy II through the developmentand materialization of policies contained in the e-JapanStrategy II Acceleration Package.Further Promote effective IT utilization by focusing on the expansion ofthe Seven Leading Area policies contained in the e-Japan Strategy II.• Pre-programSow seeds of Japan’s future IT society by introducing policies that willhelp pave the way for Japan to continuing on its path as a highly technologicallyadvanced IT nation from 2006 and onward. Middle and longterm policies, which would serve as the seeds to sow future developmentand growth, are to be given priority.The following Five Priority Policy Areas are designated to be given priority asbase for future measures (see Table 3-1 and Table 3-2):• Development of the world’s most advanced information and communicationnetwork26

ICT IN JAPAN• Advancement of human resource development, and the promotion of educationand learning• Promotion of e-commerce• Promotion of the digitalization of the administration and the utilization ofinformation and communications technologies in public areas• Ensuring of the security and reliability of advanced information and communicationnetworksBy allocating resources into policies within the above five areas, the Japanese governmentaims to promote new values and industrial creativity suitable for the 21 stcentury. At the same time, the government aims to develop an environment wheremore people are connected (utilizing a whole range of devices) to worry-free anduser-friendly high-speed networks, in order to use new services and access varioustypes of content.In addition to the above mentioned five priority policy areas, some more generalcross-cutting issues were defined:• promotion of R&D (Table 3-3)• development of new IT-centered international relationships• bridging of the digital divide• addressing issues caused by changes in the socioeconomic systemA common ground for all the measures is the notion that the “the private sector hasa leading role to play with government support”. This requires reviewing of governmentalregulations to promote free and fair competition. While maintainingsafety and reliability, the government must ceaselessly re-examine future competitionpolicies to create an appropriate market environment. In addition, it must beassured that the private sector can benefit from the future economic gains.The government needs to actively implement actions concerning the objectiveswhich would not be necessarily realized by private sector-initiatives alone [eJapand]:• the realization of e-government• the improvement of a safe and secure IT utilization environment (assuringinformation security)• the bridging of the digital divide• the promotion of R&D for basic technologies• the promotion of international cooperation27

ICT IN JAPANTable 3-1. Number of measures in different priority areas.Source: e-Japan Priority Policy Program – 2004 by IT Strategic Headquarters.28

ICT IN JAPANTable 3-2. Budget for forming an advanced information and telecommunications networksociety (in million yen).Development of the World's Most Advanced Information andCommunication NetworkAdvancement of Human Resource Development, and thePromotion of Education and LearningFY 2002 FY 2003228 932 221 96696 462 112 514Promotion of e-Commerce 8 699 6 704Promotion of e-Government 953 978 575 571Promotion of the digitalization of the Administration and the 424 995 328 615Utilization of Information and Communications Technologiesin Public AreasReinforcement of Security Measures 22 275 26 389International Cooperation and Contribution 2 981 2 927Promotion of R&D 123 552 198 991Others 92 576 61 774Total 1 954 448 1 535 452Source: IT Strategic HeadquartersTable 3-3 Measures listed under promotion of R&D in the Priority Policy Program 2004.1. Strengthen Japan's world leading technology fields and advanced basic technologies1) 4G: R&D for realizing fourth generation mobile communicationsystemMinistryTargetMIC by 20102) R&D for ultra-high speed wireless LAN MIC in 20103) Development of technologies to enable the effectiveutilization of frequencies in terms of time and space4-1) Development of optic recording technology with 1Tbit/square inch-level high densityMIC in 2011METI in FY 20064-2) R&D on the technology for photonic networks MIC in 20105-1) Development concerning device technology forwireless appliances5-2) R&D on the key device technology for photonicnetworks5-3) Development of device technology utilizing newprincipals and new technologies5-4) Development of next generation semiconductordevice technology6-1) Integrated R&D concerning the usage of IPv6 intoinformation appliances6-2) Implementation of demonstration experiments forthe dissemination of information appliancesMEXT/METI in FY 2006MEXT/METI in FY 2006MEXT/METI in FY 2006METI/MEXT in 2007MIC by FY 2005METI by 200529

ICT IN JAPAN7) R&D for IT technologies to realize network robots MIC in 20088-1) R&D for IT technologies to realize network robots MIC in 20088-2) R&D for technologies which accelerate transmissionspeeds and provide more functions for largescalednetworksMIC in 20082. Technologies that would be more important, in order to realize “an energetic,worry free, exciting and more convenient society1-1) Development of grid middleware for the provisionof higher reliability and quality1-2) Development of the basic software which will contributeto the formation of an ultra-high speed computernetwork (Grid computer)1-3) Development of embedded software developingmethods which will be necessary for next generationinformation appliances1-4) Drastic strengthening of software developmentcapabilities in cooperation with industry and academia1-5) Enhancing next generation software developmentcapabilitiesMinistryTargetMETI in FY 2005MEXT in 2007METI in 2005METI in 2006METI in FY 20061-6) Development of open source software METI in FY 20061-7) Development of basic software to create highlyreliable software1-8) R&D on the software technology utilized for highersolution 3D images2) R&D on Information securityMEXT in FY 2007MEXT in FY 20083-1) R&D on human interface technologies MIC in FY 20053-2) Development of next generation displays (largesizeflat panel displays, such as, LCD, Plasma display,foldable organic electroluminescence display)METI in FY 20063. Application technologies that provide environment to enjoy new services andvalues at anytimeMinistryTarget1) R&D on electronic tags (RF-ID) MIC/METI in FY 20072) Formulation of guidelines for the safe utilization ofelectronic tags3) Promotion of R&D concerning the digitalization ofbroadcasting4) R&D to realize the practical utilization of the ubiquitousnetworkSource: Priority Policy Program 2004MIC/METI in FY 2004MIC by FY 2005MIC in 2007Note: MIC - Ministry of Internal Affairs and Communications; METI - Ministry of Economy, Trade andIndustry; MEXT - Ministry of Education, Sports, Culture, Science and Technology30

ICT IN JAPAN3.2 Chapter Summarye-Japan strategy was defined in 2001, aiming to make Japan the world’s most advancedIT nation by 2005. Goals considering information and communication infrastructurehave been achieved resulting in steady growth of number of broadbandsubscribers, number of Internet connected classrooms, growth of e-commerce market,and e-government readiness. However, the actual ICT usage was still low.Therefore, the government launched consecutive strategy and Priority Policy Programsto enhance the actual use of the existing infrastructure. Some key issueswere development of application areas like medical services and food along with ageneral promotion of R&D. The ambition was to develop the world’s most advancedinformation and communication network. At the same time evaluation ofthe policy implementation got high priority.31

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ICT IN JAPAN4 Research and DevelopmentJapan’s total expenditure on Research and Development (R&D) during fiscal year(FY) 2002 was 16 675 billion yen, an increase of 0.9 percent from the previousyear and has been increasing for three consecutive years.The ratio of R&D spending to GDP was 3.35%, an increase of 0.05 point over theprevious year, and its rate is the higher than the past years.The breakdown by institutions shows that industries spent most in Japan (69.4% inFY2002), universities in the second place (19.7%), and then NPO/public institutions(10.9%) [MIC 2003].Figure 4-1. R&D expenditure by institutions (in billion yen).R&D expenditure by Institutions (unit: billion yen)FY2002FY2001FY200011 577 3 282 1 81669,4%11 45119,7%3 23310,9%1 84369,3%10 86219,6%3 02811,2%2 22066,7%19,7% 13,6%0% 20% 40% 60% 80% 100%IndustriesUniversitiesNPO/Public institutionsSource : Report on the Survey of Research and Development 2003, MICThe breakdown by research areas (Figure 4-2) shows that the R&D expenditure(total for industries, universities, and public institutions) was spent mostly in theICT area in FY2002 (13,5%) with life sciences as a close second area (12,4%)[MIC 2003]. Note also the rising expenditure in material/nanotechnology startingfrom almost nothing in 2000 to 2,4% in 2002. During this time the expenditure onenergy R&D has decreased by 1,3%.33

ICT IN JAPANFigure 4-2. R&D expenditure by areas (in billion SEK).R&D expenditure by areas (unit: billion SEK)Material 23(1.9%)Ocean development 7(0.6%)FY2002Life science 148 (12.4%)ICT 161 (13.5%)Environment,49(4.1%)Energy 57(4.8%)Other (60.6%)Nanotechnology 6 (0.5%) Space development 19(1.6%)Material 20(1.7%) Ocean development 7(0.6%)FY2001Life science 141(11.9%)ICT 161(13.6%)Environment 49(4.1%)Energy 55(4.6%)Other (61.5%)Nanotechnology 5( 0.5%)Space development 18(1.5%)Ocean development 9(0.7%)FY2000Life science 127(10.9%)ICT 125(10.8%)EnvironmentEnergy 70 (6.1%)38(3.3%)Other (66.4%)Space development 21(1.8%)0%10% 20% 30% 100%Source : Report on the Survey of Research and Development 2003, MICIn Japan there are many public and private bodies supporting Research and Developmentwithin the ICT area. The following subchapters are going to summarize themost important actors.4.1 The Council for Science and Technology Policy and the Scienceand Technology Basic Plan (2001-2005)The Council for Science and Technology Policy (CSTP) was established as part ofthe government administrative reform in January 2001, to support the prime ministerand the cabinet with the S&T expertise. It aims to plan basic and comprehensivescience and technology policies, and to carry out comprehensive coordinationamong ministries and agencies, assuming a more general, global Japanese perspective.The council is lead by the prime minister, and its members are scientists, industryleaders and ministers of related ministries. The council has a secretariat consistingof about 100 people from the government, industry and academia.The mission of the council has been described in the third chapter of the Second-Term Science and Technology Basic Plan (2001-2005) (approved by the cabinet inMarch 2001) [ST 2005]. It aims at eliminating the administrative sectionalism toimplement policies described in the basic plan. The council is to cooperate with theCouncil on Economy and Fiscal Policy and the Strategic Headquarters for thePromotion of an Advanced Information and Telecommunications Network Society(IT Strategic Headquarters). Also, the council is to formulate promotion strategiesfor prioritized areas, principles for resource allocation and guidelines for projectevaluation. At the same time the council should promote high quality science andtechnology activities to contribute to the development of the world as a whole.34

ICT IN JAPANThe Second-Term Science and Technology Basic Plan (2001-2005) placed specialpriority on the following four fields of science and technology [ST 2005]:• Life Sciences• Information and Telecommunications• Environmental Sciences• Nanotechnology and MaterialsThe goal is to achieve sustainable economic development in Japan and to guaranteesafe and peaceful life for the Japanese people. To achieve this it is necessary tomake active and strategic investments in selective areas of science and technologyand to maintain and develop competitiveness of the Japanese industry.When it comes to the ICT area, the Science and Technology Basic Plan (2001-2005) claimed that R&D was important for formation and expansion of knowledgebasedindustries like ICT and high-tech industries, as well as for enhancing innovationsin existing industries such as improvement of manufacturing technologies.While pushing for electronic commerce, electronic governance, home affairs, remotemedical treatments, and distance-education/learning programs, such developmentalso has a great impact on socio-economic activities in Japan at all levels,from everyday life to industrial production. Advances in the ICT area have becomean important factor to promote safe and comfortable life of the Japanese people.It is important to promote R&D which introduces technologies necessary to realizean advanced ICT network society: a society, where people can use their capabilitiesto the maximum in a creative way through freely sending, receiving, and sharinginformation. The focus will be especially put on the following:• advanced network technology that enables all network activities to be performedsafely, at any time, at any place, and without stress• high performance computing technology that enables rapid analysis, process,storage, and search of a tremendous amounts of distributed information• human interface technology that allows everyone to enjoy the benefits of anICT society, not only individuals mastering complicated technical equipment• device technology and software technology to support the foregoing topicsIn order to promote the ICT related R&D, Japan will put emphasis on fundamentaland leading R&D fields that are strategically important and market related, and willpromote variety of those fields to speed the process of technological innovation. Toachieve this, the emphasis will be put on innovative individual researchers trainedby experts from private sector.35

ICT IN JAPANOther means are:• to promote institutional improvements• to ensure privacy and security of network activities• to provide test beds for developing technology• to work for international standardization• to foster education/learning for ICT literacy• to have readiness for handling disasters related to computer errors/serviceinterruptions and social worries caused by illegal use of network• to bridge the digital divideDue to some market-related and policy reasons, through the recent years differentS&T areas got different priorities. To glimpse at the transition of the S&T-relatedexpenditure over time see Figure 4-3 [CSTP 2003]. Note the difference betweenFigure 4-3 and Figure 4-2 indicating different R&D priorities done by industrycompared to universities.Figure 4-3. Transition of the S&T-Related Expenditure of 8 Areas (the government R&Dbudget excluding universities). The horizontal scale is in billion yen.NanotechnologyEnvironm ent and materialsM anufacturing technology2003Life science406.8 (20.1%)IT 175.3(8.7%)108.8 90.4 Energy 666.3(5.4%) (4.5%) (33.0%)SocialFrontierAtomic-energy infrastructure301.9 (14.9%)328.1 (16.2%) 250.3 (12.4%)20.0(1.0%)2002Life science393.4 (19.4%)IT175.8(8.7%)100.6 85.6 Energy 705.0(5.0%)(4.2%)(34.8%)SocialFrontierAtomic-energy infrastructure295.3 (14.6%)338.3(16.7%) 255.4 (12.6%)16.4(0.8%)2001Life science390.7 (19.5%)IT166.3 84.7 80.4 Energy 685.6(8.3%)(4.2%) (4.0%)(34.2%)SocialAtomic-energy infrastructure370.9(18.5%) 266.0 (13.3%)23.2(1.2%)Frontier306.2 (15.3%)0 200 400 600 800 1000 1200 1400 1600 1800 2000 2200(billion yen)Source: CSTP “State of S&T policies based on the 2nd S&T Basic Plan in FY2002”, May 27, 2003.4.2 Ministry of Economy, Trade and Industry (METI)The Ministry of Economy, Trade and Industry (METI) has been conducting R&Dprograms in cooperation with the New Energy and Industrial Technology Devel-36

ICT IN JAPANopment Organization (NEDO) and Information-technology Promotion Agency(IPA), in fields where private companies cannot develop the required technologydue to the following reasons:• the technology is so premature that no one yet can recognize how to turn itinto business• a new system is needed to enable researchers to cooperate beyond existingorganizations as the technology is interdisciplinary, taking account of technologicalpotentiality in Japan like mobile, optical communication and devicetechnologiesAs mentioned, METI enforces its ICT R&D budget both directly and through semigovernmentalorganizations, such as NEDO and IPA. ICT R&D projects especiallyfor social infrastructure, such as new router development, information security andauthentication technologies are carried out directly by METI officials (from planninga project, through public offering for the project implementation to postprojectevaluation). There are some exceptions: hardware R&D is carried outthrough NEDO while Software R&D through IPA.Table 4-1 shows that METI’s budget spent on software technology increased morethan 100% from 2002 to 2003/4. Notice as well large increase in hardware relatedR&D.Table 4-1. METI ICT R&D budget (in billion yen).FY2002 FY2003 FY2004Hardware 16.31 21.13 21.01Software 2.30 5.70 5.06Source: Information Policy Division of METI.4.2.1 R&D ProgramsThe following R&D programs are currently financed by METI:Program for Development of Information and Communications FundamentalTechnologies• Development of high-speed, high-function and high-reliability broadbandnetwork systemsDevelop fundamental technologies which would be necessary for next generationbroadband networks that realize a high level of speed, functionalityand reliability.• Development of high-speed and high-function wireless network systemsDevelop fundamental technologies which would be necessary for using newfrequency bands for telecommunication equipment. Improve the processingspeed of portable information appliances in order to cope with the expected37

ICT IN JAPANconsiderable increase in data being exchanged on wireless networks in thefuture.• Development of information and communication technologies using newtechnologiesDevelop information and communication technologies using new principlesand technologies as an advance investment in novel technologies that canbring about next-generation breakthroughs.Program for Next-generation Semiconductor Fundamental Technology DevelopmentDevelop fundamental process technologies for advanced semiconductor devicesto realize next-generation large-scale integrated circuits (LSIs) that satisfy therequirements for more functions and lower power consumption in informationand communication devices.Program for Development of Software Platforms• Developing software with a high level of reliability and safety, and softwarethat can easily connect various digital home appliances to enable variousservices and functions.• Building infrastructure for the creation of information systems with opensoftware with a high level of reliability and safety.• Developing revolutionary new software solutions, along with necessaryhuman resource development.Program for Development of Next-generation Display TechnologyAlong with the proliferation of broadband networks where images and videocan be easily exchanged, the demand for next-generation display devices forhome use is expected to grow rapidly. In order to allow more people to enjoythe benefits of broadband connections, fundamental technologies for highperformanceflat-panel and high-resolution display devices are to be developedunder this program.4.2.2 New Industry Creation StrategyThe Ministry of Economy, Trade and Industry announced its new industry creationstrategy in May 2004. The vision is that recovery of the Japanese economy and itssustainable growth needs a dynamic reform of Japan’s industrial structure, by revivingits strong manufacturing base and developing service industries. The reportstresses importance of policies encouraging not only capital investment but alsoinvestment in human resources and intellectual property. Part of the strategy is tocoordinate cutting-edge technologies, such as nanotechnology, ICT, and biotechnology,with traditional Japanese technologies, techniques, and craftsmanship.38

ICT IN JAPANThe strategy chose the following seven promising industry areas (the first four havecutting-edge character; the other three are to meet expanding market needs):• Fuel Cellso Expected large markets for use in automobiles and in homeso Base for friendly environmental policyo Challenges in durability and cost for commercialization• Digital Consumer Electronicso Integration of industry where Japan is already one of the world’sleaderso Creation of advanced technologies and increase of market shareso Challenges in vertical coordination, technical development, humanresources and intellectual property protection• Robotso Application area is to assist or replace people working within nursingcare, disaster relief, security and other operations with hard environmentalconditionso Japan is already one of the world’s leaders when it comes to roboticso Challenges in market creation, technical development and regulations• Digital Contento Expected significant growth based on rapid development of digitalconsumer electronicso Expansion of Japan’s contents industry has positive influence on thefuture global cultureo Challenges in distribution, human resources and fund procurement• Health and Welfare Devices and Serviceso Establishment of a healthy long-lived societyo Social participation of the elderlyo Welfare with minimal financial burdeno International expansion of health industryo Challenges in regulatory reforms, ICT and bio-technology• Environment and Energy Devices and Serviceso Recovery of clean water, air and soil39

ICT IN JAPANo Development of devices and services with advanced environmentaland energy technologyo Challenges in regulations, technical development and informationdisclosure• Business Support Serviceso Separation and outsourcing of non-core operations due to businessglobalizationo Expansion of new services utilizing ICTo Creation of new employmento Challenges in human resource development, quality and productivityTo choose the above seven areas, the following criteria were used:• Have significant importance that supports the Japan’s economic growth inthe future• Have strong domestic need that will contribute to the demand-led growth ofthe economy• Have a broad base, from law materials to final products, from medium-andsmall-sized enterprises to large corporations, and from large urban cities toregions• Areas where the market mechanism alone cannot endure the development, acomprehensive policy package is necessary with joint efforts by public andprivate sectorsTable 4-2 shows the estimated growth of the market size in each area according toa survey by METI [Nakagawa 2004]..Table 4-2. Market size by METI’s estimation (in billion yen).Current 2010Fuel Cells n/a 1Digital Consumer Electronics 54 96Robots 0.5 1.8Contents 11 15Health and Welfare 56 75Environment and Energy 52 78Business support 76 107Source: METI.40

ICT IN JAPAN4.3 Information-technology Promotion Agency (IPA)As mentioned in the previous chapter, IPA is financed by METI, and the objectiveof IPA is to promote the development of information technology by:• supporting development and greater use of innovative software• ensuring IT security and reliability• assisting the business development of information service providers• developing IT skills and knowledge• conducting Information Technology Engineers ExaminationIPA set down “Creativity”, “Competitiveness”, and “Security” as the three mainpillars of its Mid-Term Plan that is being implemented until March 2008. IPA willassist the development of software which promotes the popular use of informationtechnology. IPA, as a full supporter of small-scale businesses (the foundation ofJapan’s industry), will encourage software development by small and mediumsized IT start-ups, and will extend financial, technical and managerial support forIT investment in small-scale businesses.The followings are some of the IPA software development activities:Software development to promote the utilization of ITThe project is targeted at developing advanced software to promote the utilizationof IT in the leading fields described in the e-Japan Strategy II, such as:medical services, food, living amenity, financing of small and medium enterprises,knowledge, employment and labor, public service and e-commerce support/networksecurity & reliability. This project aims at assisting marketorientedsoftware development projects that are innovative and have highvalue-added character. The scheme provides support for commercialization andmarket development.Infrastructure for Open-Source Software (OSS)IPA is to build an infrastructure for the secure utilization of open-source softwareby helping upgrade the utilization and the development environments.Open-source software is expected to be highly effective in improving the qualityof technology, re-utilizing the results, and ensuring reliability and securitybecause the code is extensively checked by many highly skilled software experts.On the other hand, the infrastructure for using open-source software hasnot been fully established. For example, open-source software has weaknessesin support, development environment and user interfaces, and does not havemany corresponding applications or middleware products.The establishment of the Japan OSS Promotion Forum was announced at theJapan-China-Korea Open-Source Business Conference held on November 14,2003. The forum is held regularly, once or twice a year. The Ministry of Economy,Trade and Industry announced its support for usage of OSS by privatecompanies and other institutions. IPA will serve as the secretariat for the forum.41

ICT IN JAPANNext-generation software developmentThe project aims at developing innovative software intended for practical usewithin three to five years. IPA will invite project proposals, within the priorityarea guidelines, for next-generation software development which may be toorisky to be undertaken by private funds alone. IPA’s designated project manager(PM) will select outstanding proposals through a screening process and theselected projects will be provided guidance, advice, project management andfunding. Upon delivery of the developed software, the PM will test and evaluatethe software and if required, will provide advice to make it ready for practicaluse. In principle, the intellectual property rights to the developed softwarewill belong to the developers.IT SME Venture Support ProjectIn the current severe economic environment many small and medium-sized ITenterprises (SMEs), despite having excellent technologies, are having difficultycommercializing them because of lack of funds and experience. The aim of thisproject is to assist such SMEs in developing and commercializing software thatmeets market trends and demands.IPA will assign project managers (PMs) who will provide relevant SMEs withadvice, guidance and project management for processes ranging from developmentto commercialization. IPA will also provide part of the resources requiredto develop and commercialize the software. Again, in principle, the intellectualproperty rights to the functionally enhanced software products will belong tothe developers.Matching Fund Type Software development and promotionThis project aims at vitalizing the Japanese economy by developing and marketingsoftware that is beneficial to businesses and individuals. Within theframework of the specific development areas set by IPA, the software will bejointly developed and marketed by the developers and IPA.For each project, IPA assigns a project manager with full expertise and experiencein the related technology, marketing, and project management. Using thematching fund method where development and promotion expenses are shared,the developer and IPA share software development and marketing costs (on a50-50 basis). Furthermore, revenues resulting from the developed software willbe distributed between the developer and IPA.Business GRID Computing Development ProjectGrid computing is a form of distributed computing that involves coordinatingand sharing computing, application, data, storage, or network resources acrossdynamic and geographically dispersed organizations.This is a project to be carried out jointly by IPA and METI. It aims at makingGRID computing a reality in business fields that require a high degree of secu-42

ICT IN JAPANrity and reliability. The project goes on during a three-year period that began in2003. IPA will make efforts to carry out research and development of the requiredsoftware (including middleware) and to establish system developmentinterfaces as international standards.4.4 Ministry of Internal Affairs and Communications (MIC)The Ministry of Internal Affairs and Communications (MIC) has recently changedname from Ministry of Public Management, Home Affairs, Posts and Telecommunications(MPHPT).The following are some of the MIC-supported R&D activities:R&D on basic technologies for ubiquitous networksUbiquitous networks allow all users to access and exchange information of anykind freely at any time, from anywhere, and from any appliance through the useof broadband and mobile access as well as intelligent home appliances andRFID tags that can access networks.The ubiquitous network society is expected to be realized through the combinationof Japan’s technologies related to optical communications, mobile and intelligenthome appliances which are highly reputed around the world. In orderto realize this ubiquitous network society, MIC is promoting efforts towards theconstruction of R&D networks that might be used as test beds. The followingR&D areas are prioritized:• Photonic network technology• Control and management technology• Ultra-high-function network technology utilizing nanotechnology• Quantum information and communications technology to realize cryptographiccommunications• Diverse network connection technology• Ultra-small chip networking technology• Ultra-high-speed certification technologyThe R&D test-bed networks promote the upgrading of network technology andthe development and demonstration of new service applications. They will alsoplay an important role in realizing the practical shift to the Ubiquitous Networksociety.An example is the Japan Gigabit Network (JGN), which was operated from fiscalyear 1999 to fiscal year 2003. It was used by a total of 650 organizationsand more than 2,000 researchers and provided tremendous results. The JGN II,a new R&D test-bed network (20 Gbps max., the follow up to JGN) began operationin April 2004.43

ICT IN JAPANTechnology for the realization of a ubiquitous network societyRFID (Radio Frequency Identification) tags have features that do not exist inbar codes. For example, by using radio waves, it is possible to read informationcontained in RFID tags from distant places and to read information from multipleRFID tags all at once. In addition, it is expected that RFID tags will becomea basic tool connecting people and goods with networks in the ubiquitous networksociety. The RFID tags, being light, small and cheap, are perfect to beembedded in all kinds of physical objects. Since fiscal year 2004, MIC has beensupporting projects working on the technologies for exchanging the attributiveinformation in RFID tags between different platforms to link RFID tags withnetworks and to control access rights to the RFID tag based information.The vision is that by connecting ubiquitous networks with the personal robotsand industrial robots that are expected to be used in homes and offices in thenear future (network robots), some social problems related to aging and medicaltreatment and care can be solved. In a five-year plan starting from fiscalyear 2004, MIC has been supporting R&D on such issues as “people-friendlycommunication technology” and “network robot linkage technology.”In fiscal year 2003, MIC began supporting comprehensive R&D on networkhumaninterfaces including issues as practical multilingual voice translationsystems for network-connected mobile terminals and technologies for preventingthe harmful physical effects of optical stimulus from rapidly changing visualcontent.In March 2004 MIC convened a research group on ubiquitous sensor networktechnology. The technologies to perceive the conditions of people, things andthe surrounding environment, and to transmit this dynamic information for furtherprocessing, are to be studied.Advances in space communicationsSpace communications have many favorable features, for example the capacityto provide wide-area and simultaneous communications of a disaster-proofcharacter. The technology is used in a wide range of fields including communications,broadcasting and positioning technology. To support its growth MIC ispromoting the development of demonstration satellites and satellite experiments,including R&D on the quasizenithal satellite system, the ultra-highspeedInternet satellite, the Engineering Test Satellite VIII, and the Global PrecipitationMeasurement (GPM) initiative [MIC 2004].As shown in Table 4-3, MIC gave priority to R&D on technologies to realize aubiquitous network society. Also, following the e-Japan Strategy and the consecutivepriority policy programs, security and international issue were given high priorities.44

ICT IN JAPANTable 4-3. Financial means provided by MIC for different R&D activities (in million yen).FY2003 FY2004Realization of a ubiquitous network society 7 171 11 499Promotion of digital broadcasting 23 618 25 167Promotion of network contents distribution 2 318 2 505Promotion of information security 3 047 4 096Development of wireless broadband environment 2 119 2 516Promotion of international ICT strategies 5 581 6 909Promotion of ICT in administration and public services 12 968 14 056Source: Information and Communications in Japan, White Paper 2004, MIC4.5 Ministry of Education, Culture, Sports, Science and Technology(MEXT)NAREGI (National Research Grid Initiative) is one of the collaboration projectsamong industry, academia and government, initiated by the Ministry of Education,Sports, Culture, Science and Technology (MEXT). The five-year project, started inApril 2003, aims at the creation of an environment for next-generation computingsystems. The background aim is to strengthen Japan’s international competitivenessin the ICT field. A major objective of the project is the research and developmenton application software for use in the nanotechnology and biotechnologyfields. The NAREGI project had a huge impact even on other scientific areas thatare closely related to industrial applications, such as new communications principles,electronic devices, optical devices, molecules, and the development of newdrugs. MEXT allocated 3,200 million yen for this project in FY2004 [NAREGIWeb, STT 2004].4.6 ITS related R&DAnother important separate area for R&D activities is ITS (Intelligent TransportSystem). ITS is very ICT intense using both communication networks and IT devices.The area is very important for Japan and is supported by a number of differentministries and agencies (see Table 4-4).45

ICT IN JAPANTable 4-4. Financial means provided for ITS related R&D activities (in million yen).Area ofDevelopmentAdvances inNavigationSystemsETC (ElectronicToll Collectionsystem)Assistance forSafe DrivingOptimization ofTraffic ManagementIncreasingEfficiency inRoad ManagementSupport forPublic TransportIncreasingEfficiency incommercialvehiclesSupport forPedestriansStandardizationand othersBudget ItemOperatingExpensesFY2002Advances in Road Traffic Information Part of 16852Million yenR&D for Realization of Various Services UsingDSRC (Dedicated Short Range Communications)used in ETCPromotion of Comprehensive R&D of DrivingSupport Realized by Road-to-Vehicle Cooperation(repeated)Technology Assessment Task, Safe DrivingAssist System for Advanced Safety Vehicle(ASV) (repeated)Technology Assessment Task, Safe DrivingAssist System for New Generation IntelligentVehicle (NGIV)Survey and research on the optimization oftraffic managementModel Project of Environment Friendly TrafficControlVerification Model Tests for Controlling SignalsBased on the Real-time InformationComprehensive promotion of R&D on thecomputerization of road traffic managementrelatedapplication and grant procedures andon the information of road management (repeated)R&D on Efficiency in Establishing Road EvaluationSystemsThe project making road transportation businesshighly efficient by utilizing InformationTechnology (Informing the best route to thedestination by utilizing real-time bus locationdata)Assistance for bus use promotion and othercomprehensive schemes (repeated)The project making road transportation businesshighly efficient by utilizing InformationTechnology (Real-time Safety ManagementSystem)Assistance for bus use promotion and othercomprehensive schemes (repeated)Comprehensive promotion of R&D on pedestriansupport, etc. (repeated)OperatingExpensesFY2003Part of 15256Million yenMinistryMLIT0 Part of 15256 MLITPart of 16852(repeated)95(repeated)Part of 15256(repeated)99(repeated)MLITMLIT186 185 MLIT121 105 NPA1213 74 NPA419 27 NPAPart of 16852(repeated)Part of 15256(repeated)MLIT0 Part of 15256 MLIT0 103 MLITPart of 1740(repeated)Part of 1740(repeated)MLIT55 0 MLITPart of 1740(repeated)Part of 16852(repeated)Part of 1740(repeated)Part of 15256(repeated)MLITMLITTechnical Cooperation regarding Traffic Safety 7 5 NPAR&D of regional ITS info-communication systemGlobal promotion of ITS info-communicationsystemsR&D on information and communications technologiesfor ITS implementations100 97 MIC16 16 MICPart of 1350 819 MICProject to standardize ITS 420 390 METIDeveloping Traffic Information infrastructure(Internet ITS)100 Part of 3000 METI46

ICT IN JAPANStandardization of an Information ServiceSystem based on New-Generation InternetTechnologyPromoting Car Sharing of Clean Energy Vehicleswith ITS TechnologiesResearch and study of emergency informationprovision utilizing ITS technologies in a time ofdisasterSurvey on the benefit in terms of safety of roadtransport by making transport business highlyintelligentAdvanced vehicle identification utilization projectsPart of 900 Part of 1000 METIPart of 17000 0 METI14 29 MLIT16 10 MLIT171 200 MLITNPA: National Police AgencyMLIT: Ministry of Land, Infrastructure, and TransportMIC: Ministry of Internal Affairs and CommunicationsMETI: Ministry of Economy, Trade, and IndustrySource: ITS Annual Report 2003, ITS Japan4.7 Chapter SummaryJapan’s total expenditure on R&D (FY2002) was 16 675 billion yen, reaching3.35% of GDP. About 70% was spent by industries, 20% by universities, and 10%by public institutions. 13.5% of total R&D expenditure was spent within the ICTarea. Council for Science and Technology Policy lead by the Prime Ministerlaunched the second-Term Science and Technology Basic Plan (2001-2005), whichplaced special priority on four fields: Life Sciences, Information and Telecommunications,Environmental Sciences, and Nanotechnology and Materials. As the resultof the plan and the e-Japan Strategy, Japanese ministries launched many R&Dprograms and projects ranging from semiconductors and displays to grid computing,photonic networks, Intelligent Transport System and Ubiquitous Network.47

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ICT IN JAPAN5 Industry5.1 Overview of the ICT related industryJapanese large-scale companies have played major roles in the introduction of awide variety of ICT products, both for development and production. These companiesare Hitachi, Sony, Matsushita (Panasonic), Toshiba, NEC, Fujitsu, MitsubishiElectric, Sanyo, Sharp and Oki. They have worked together with national researchinstitutes such as AIST (National Institute of Advanced Industrial Science andTechnology) and NICT (National Institute of Information and CommunicationsTechnology) and the public owned telecom carrier NTT.Most of these large-scale companies have manufactured a wide variety of ICTproducts.• electric and electronic components• semiconductors and integrated circuits• PC and work stations• mini/main frame computers• operating systems• computer languages and compilers• application programs• wired/wireless telephones• facsimiles• transmission systems• telephone switches (private branch exchanges)• routers• set-top boxes• home appliances (white goods, audio and visual products)• car navigation systems• car components and units• traffic (train) control systems• industrial control systems (industrial robots)• submarine cables and repeaters• communication satellites• defense systems49

ICT IN JAPANThose companies used to compete with each other as shown in Table 5-1. On theother hand, sometime they join forces to gain better impact with their products:• Hitachi and Mitsubishi Electric have a joint venture of System LSI• Hitachi and NEC have a joint venture of DRAM (Dynamic Random AccessMemory)• Toshiba and Matsushita have a joint venture of TFT LCD• Fujitsu and Hitachi have a joint venture of Plasma display panels• NEC and Toshiba have a joint venture of space systemsTable 5-1. World/Domestic market share of some ICT products in 2002 (1 means the largestmarket share holder).ArticlesWorld market shareHitachi Sony Matsushita Toshiba To-Ma*NEC Fujitsu Mitsubishi Sanyo SharpDVD player 1 2 4Video camera 1 3TFT LCD 5 3Solar battery 5 1Digital Camera 1Domestic market sharePersonal Computer 3 5 1 2PC server 1 3Unix server 3Facsimile 3 5 4Cell phone unit 2 4 1 5 3PDA 1 5 2Internet provider 2 1Logic IC 4 2 1 5Car navigation 4 2 3CRT TV & LCD TV 2 1 4 5 3LCD 3 2 5 1Plasma TV 1 4 3 5VCR 4 1 3DVD recorder 5 1 2 4Video camera 1 2 5Refrigerator 4 1 2 3 5Air conditioner 5 1 3 2Microwave 4 2 3 5 1Vacuum cleaner 3 2 1 5 4Lithium-ion battery 2 3 4 5 1Note: *To-Ma: Toshiba-Matsushita.Source: “Shijou Senyuritsu” (Market share) by Nihon Keizai Shimbun.The nine major Japanese large-scale electronics manufacturers (listed in Table 5-1,except Oki) sales in 2002 fiscal year totaled 46 trillion yen, which is a 0.3 percentincrease over the previous year. The investment to facilities and equipment was 2.4trillion yen (an 11.6 percent increase over the previous year), and the R&D expen-50

ICT IN JAPANditure was 2.8 trillion yen (a slight increase over the previous year) [Shijou]. Thesales break down of the companies ratio is shown in the Table 5-2 [EIA 2004].The companies’ profiles could be described in the following way. Hitachi, Toshiba,Mitsubishi Electric are comprehensive manufacturers of electrical machinery. AlthoughICT equipment including semiconductors and consumer electronics aretheir mainstream products, heavy electric equipment such as power generators,industrial equipment, and defense systems are part of their product portfolio. NECand Fujitsu have strong focus on ICT including semiconductors. Matsushita issimilar to NEC and Fujitsu, but also produces consumer electronics. Sony, Sharpand Sanyo are focused on consumer electronics, although, Sony owns contentsbusiness and Sanyo produces commercial use electric systems and batteries.Table 5-2. Sales break down of large scale electronics companies.Hitachi Sony Matsushita Toshiba NEC Fujitsu Mitsubishi Sanyo SharpSales (trilliion yen) 8.3 7.4 7.5 5.7 4.8 4.8 3.3 2.5 2.2R&D expentiture (%) 4.8 6.2 7.8 6.4 6.7 5.3 4.3 5.4 7.3Sales break down (%)Info. com systems 19 59 14 78 85 17 19Electronics devices 15 30 20 20 15 12 20 30Consumer electonics 12 61 16 36 20 53 49Industrial systems 22 4 23 38 9Financial services 6 7 3Contents 19Game 13Battery/Dry cell 13 10Others 26 2 7 15 8 14 4Source: Denshi Kogyo Nenkan (Electronics Industry Almanac 2004) by Dempa Shimbunsha (Japanese).Historically, in many cases Japanese companies had the ambition to develop theirown versions of products developed by other foreign companies. Using reverseengineering, the Japanese companies gained the required knowledge, contactedoriginal manufacturers and bought know-how and licenses for their own production.Finally, they developed Japanese original version of such products by themselves,or together with other Japanese makers and/or national institutes.Another possible reason for making Japanese versions of foreign products was toovercome the language problem. End-users wanted, and still want, to handle morethan 10,000 different Kanji and two other different character sets, especially forinformation handling systems (computers and computer controlled systems).Therefore, software modifications were required which was a barrier for foreigncompanies to enter the Japanese market.Through the years the large-scale companies joined different national ICT R&Dprojects and got access to both government budget for R&D and very skilled researcherswith ICT competence. This was not so easy for medium and small scalecompanies. For example, NTT developed the original Japanese telephone switches51

ICT IN JAPANin the 1960s, together with Oki, Fujitsu, NEC and Hitachi. In parallel the Japanesegovernment launched the “VLSI Project” in the 70s, the “Super Computer Project”and the “Fifth Generation Computer Project” in the 80s, “Sigma Project” aimingfor software reuse for UNIX platforms in the late 80s, the “Friend 21 Project” fornext generation human interfaces and the “Real World Computing Program” in the90s.5.2 ICT MarketThe market value of Japan’s ICT industry in 2002 was 116 trillion yen, which wasa 2.7 percent decrease from the previous year. This was the first decrease since1995. One of the reasons was a reduction in investment in computers and peripheralsas well as wired and wireless telecommunication equipment. In addition, theshare of the ICT industry as a proportion of the total industrial market value stoodat 12 percent, which was a 0.2 percent decrease from the previous year [MIC2004].Figure 5-1. Transitions in the market Size and Proportion of the Information and CommunicationsIndustry to Overall Industries.Source: Information and Communications in Japan 2004, White Paper 2004, MIC5.2.1 Telecommunications BusinessThere were 12 518 telecommunications carriers in Japan at the end of 2003. Newentrants during 2003 numbered 1 567 companies. Operators providing Internet servicestotaled 8 860.Fiscal year 2002 sales for the telecommunications business totaled 18.7 trillion yen,which was a 0.2 percent decrease from the previous fiscal year [MIC 2004].52

ICT IN JAPAN5.2.2 Broadcasting BusinessThere were 1 072 broadcasters (an increase of 46 over the previous fiscal year) atthe end of 2003. Commercial broadcasters totaled 1 070 companies, of which 362were terrestrial broadcasters, 134 satellite broadcasters, and 571 cable televisionbroadcasters.Fiscal 2002 sales for broadcasters totaled 3.7 trillion yen, which was a 0.6 percentdecrease from the previous fiscal year [MIC 2004].5.3 Electronics industryThe electronic industry production in 2003 was about 19.3 trillion yen, accordingto METI (Ministry of Economic, Trade and Industry). This was a 6.6 percent increaseover the previous year, but almost equal to 1987.The break down of the electronics industry was the following (see Table 5-3):• The production of consumer electronics equipment was about 2.3 trillionyen, a 14.2 percent increase over the previous year. The increase wasmainly due to the high end digital equipment, such as Flat Panel TVs (LiquidCrystal Display (LCD) and Plasma Display Panel), DVD recorders,digital cameras, and car navigation systems. Conventional audio equipment,such as CD/MD players decreased by 13 percent from the previous yearmainly due to shifting of the production overseas.• The production of industrial electronic equipment, which includes mobilephones, was 7.8 trillion yen in 2003, a 3.6 percent increase over the previousyear. Mobile phone sales dropped in 2002, but jumped up in 2003 dueto the popularity of digital camera embedded mobile phones and also thesteady shift from 2G to 3G (the third generation mobile phone system).• Electronic parts and devices production was 9.2 trillion yen, a 7.4 percentincrease over the previous year. This was due to the strong markets for mobilephones, digital audio and visual equipment and car navigation systems.• The increase of LCD (22 percent from the previous year) was due to theboom of LCD TV and new models of mobile phones. At the same time Japanlost its leadership in production of large size LCD panels for TV andPCs to the Korean companies (see Figure 2-8). However, Sharp is stilldominant on the Japanese domestic market when it comes to large sizeLCD panels and small and medium size LCD panels used for production ofPDAs and mobile phones. Most of the mobile phones in Japan use largercolor LCD panels with higher resolution than the ones in US and Europe.The development caused by digital cameras being embedded in mobilephones.53

ICT IN JAPANTable 5-3. Electronic industry production in 2003.(million yen) year on year (%)Consumer electronic equipment 2,313,147 114.2Video equipment 1,983,215 122.0Audio equipment 329,932 82.4Industrial electronic equipment 7,800,587 103.6Communications equipment 3,413,075 115.0Telecommunications systems 686,083 86.8Radio communication systems 2,726,992 125.3Computers and related equipment 2,699,390 90.7Electronic application equipment 807,841 111.7Electric measuring instrumentation 502,581 115.3Electronic business machines 377,700 88.8Electronic components and device 9,182,322 107.4Electronic components 2,927,431 100.2Passive components 860,104 100.1Connecting components 794,417 102.4Electronic boards 789,936 101.8Transducers 94,851 80.6Others 388,123 98.5Electronic devices 6,254,891 111.1Electronic tubes 319,678 104.3Discrete semiconductors 961,825 108.6Integrated circuits (ICs) 3,463,804 108.1Liquid crystal device (LCDs) 1,536,584 122.0Total 19,296,056 106.6Source: Denshi Kogyo Nenkan (Electronics Industry Almanac 2004) by Dempa Shimbunsha (Japanese).5.4 Import and Export from/to SwedenIn 2003 Japan imported 38 billion yen worth ICT equipment from Sweden, andexported for 50 billion yen to Sweden, i.e. a roughly 25% trading advantage to Japan.For a detailed list of Swedish companies active in Japan and Japanese companiesactive in Sweden see Appendix I.54

ICT IN JAPANTable 5-4. Japan import from Sweden (value unit: 1000 yen).Article groupValue2001Telephony, Telegraphy 40 600 600Audio and Visual Apparatus 15 407 525Electrical Measuring 4 700 689Electrical Power Machinery 2 674 384Domestic Electrical Equip. 1 445 9452002Telephony, Telegraphy 26 822 874Audio and Visual Apparatus 18 510 969Electrical Measuring 5 465 906Electrical Power Machinery 2 140 437Domestic Electrical Equip. 1 297 9272003Telephony, Telegraphy 17 736 480Electrical Measuring 5 142 939Audio and Visual Apparatus 4 296 836Electrical Power Machinery 1 573 389Electrical Apparatus 1 309 321Source: Trade Statistics, Ministry of Finance.Major products in the article groups from the value point of view (see Table 5-4)[MF 2004] were:• Telephone switches and radio transceivers in the “Telephony, Telegraphy”group• Parts for radio communication equipment in the “Audio & Visual apparatus”group• Console panels for electronic control systems, and numerical control systemsin the “Electrical apparatus” group• Refrigerator, vacuum cleaner, and their parts, and electric heating resistor inthe “Domestic electric equipment” groupThe drastic decrease of export value from Sweden to Japan (especially for Telephony,and Audio and Visual Apparatus) is strongly related to postponed investmentsin facilities and equipment to be done by telecommunication carriers (see Table 5-5).55

ICT IN JAPANTable 5-5 Investments in facilities and equipment done by telecommunication carriers (unit:billion yen). FY stands for fiscal year.FY 1999 2000 2001 2002Fixed 1,889 1,702 1,277 1,134Mobile 1,564 1,811 1,699 1,313Source: Denshi Kogyo Nenkan (Electronics Industry Almanac 2004) by Dempa Shimbunsha(Japanese)Table 5-5 shows that the investments done by fixed operators have steadily decreasedover the years. As the result the investments done by mobile operators becamehigher than fixed in FY 2000. However, even mobile operators’ investmentshave decreased after FY 2000.The problem is that telecommunication carriers, both fixed and mobile, have reducedtheir investments as a measure against continuous decreasing of ARPU (AverageRevenue Per User). At the same time a peak of investments in the 3G infrastructureseemed to have passed and the process of replacing metal wires by opticfibers is about to be completed.5.5 Chapter SummaryJapan can produce a whole range of devices and components, from LSI and printedcircuit boards, to high-end products, such as PCs, mobile phones, telephoneswitches, and super computers. Ten large-scale electronics manufacturers haveplayed important role for the development of the ICT market in Japan. The marketwhich was worth 116 trillion yen in 2002.56

ICT IN JAPAN6 Conclusions on future trendsThe Japanese national ICT policy has been mainly driven by the e-Japan Strategy I& II, and e-Japan Priority Policy Program 2004. The Japanese government, withits IT Strategic Headquarters, has succeeded in enhancing ICT infrastructure, butactual ICT usage is still below the expectations. For example, according to figuresfrom February 2004 published by MPHPT the actual use of DSL was 28.7%,CATV - 11.1% and FTTH - 5.8%. Percentages refer to the share of actual userscompared with the number of potential users. When it comes to E-governmentreadiness index (based on website assessment, telecommunication infrastructureand human resource endowment) (Table 6-1) Japan is on the 18th position (Swedenon second). Measured by usage component index (based on individual, businessand government usage) (Table 6-2) Japan is on the 11th position (Sweden on 5th).The set goal “To become the world’s most advanced IT nation by 2005” is still tobe reached. As a result the government has shifted its focus from ICT infrastructureto ICT usage, and is consulting experts from both industry and academia to defineappropriate measures.Table 6-1. E-government readiness index (based on website assessment, telecommunicationinfrastructure and human resource endowment).57

ICT IN JAPANTable 6-2. Usage component index (based on individual, business and government usageof the ICT technology).Source: Global Information Technology Report 2003-2004, WEFThe Japanese domestic market is still very strong with many leading players in theICT field (for example more than four PC manufacturers and four IC makers). Japanis leading in the field of mobile communications, small mobile terminals, ultrahighspeed network technologies, ITS, robotics, and aims to realize the ubiquitousnetwork society by 2010.58

ICT IN JAPANJapan tends to be very technology focused in its ICT development, thus Sweden,with its more human-centered perspective, can be a very good source of inspiration.Also, Sweden could be a very good coach to enhance ICT usage in Japan.6.1 Future trendsHere we present different technologies which are predicted to influence the ICTdevelopment in Japan in the coming years. We used some material from previousreports produced at the ITPS Tokyo Office by Sabine Ehlers and Shigeyuki Naito[ICT 2003].6.1.1 Hardware and TerminalsHardware development sets the hard limits for possible ICT evolution. Ubiquitouscomputing demands cheap and durable displays, small and powerful batteries andvirtually free and unlimited memory and processing power.PC, PDA or mobile: with regards to personal terminals, we are converging towardsa one-type general purpose personal terminal for ubiquitous use, or diverging towardsspecialized terminals depending on context.Relevance of JapanWith regards to network components, the Japanese government has invested substantialfunds in R&D on backbone and access-line photonic network technology,as well as Internet node full fiber optic technology, aiming at a nationwide Terabitultra-high-speed photonic network (Table 3-3). A gigabit-per-second class network,JGN (Japan Gigabit Network) has been in operation as a test bed connectingnational research institutes and shared use research facilities, and JGN II with theperformance of 20 Gbps at the maximum on major part of its network is also inoperation.When it comes to electronic components, Japan, utilizing its accumulated semiconductorcompetence, very early began researching nano-technology. The area is nowone of the focus areas in the R&D strategy of the Japanese government (Figure 4-3).Due to increased competition from Korean companies, most Japanese LSI makershave abandoned memory devices and instead focus their R&D on system-on-chip,a crucial technology for designing small terminals or networked home appliances.The government also pushes hard for R&D on fundamental process technologiesfor advanced semiconductor devices to realize next-generation large-scale integratedcircuits (LSI) with the budget of 11.4 billion yen for fiscal 2004.In a similar way, the Japanese companies who previously worked on LCDs arenow giving this area up to their Korean competitors, and instead focus their resourceson new types of displays, such as Plasma Display Panels (PDP) and electronicpaper. The government has also allocated considerable funds for this in theirR&D budget: 840 million yen for FY2004 (Figure 2-8, Table 3-3 and Table 5-3).59

ICT IN JAPANNEC and Sony seem to deliver soon next-generation DVDs for PC with differentstandards. This might lead to another battle of the VHS and Beta for home videostandards.When all devices become wireless, the portable energy source, or the battery, becomesa limiting factor with regards to weight, size and time before recharge. Fuelcell development may be the technology to solve these problems, and much researchis focusing on this (Chapter 4.2.1).Japan has for decades produced and delivered robots to manufacturing plants allover the world. Recently other types of robots have come into the spotlight, forexample entertainment robots such as AIBO and PINO, humanoid robots such asASIMO, therapeutic robots such as Paro as well as some emergency rescue robots(Chapter 4.2.1).The Japanese world-leading hardware industry has helped create a vital, fastmovingconsumer electronics market where all options are available, giving anearly indication of user preferences and behavioral patterns.6.1.2 System Software and ComputingIn order to realize the ubiquitous network society, things around us need to be intelligent.Embedded systems have in many applications already replaced traditionalmechanical controls. In order to connect them and make them able to communicatewith each other, control software and communication protocols will be crucial.User interfaces for input and output will become increasingly important as the terminalsbecome smaller and ubiquitous, and that are more packed with functions.The ability of the industry to design appliances that are easy to use and understandis also crucial in order to make the technology accessible for all consumer groups.Relevance of JapanThe open software architecture TRON is used in more than 50 percent of the appliancesusing embedded real-time operating systems produced in Japan. The TRONindustry group has formed a new framework and a new development platform,which enables designers to reuse middleware [TRON].The Japanese government recognizes that while the required IT infrastructure nowlargely is in place, IT usage is still not at top global level. Emphasis is therefore putnot only on training the users, but also on developing user interfaces that make thetechnology accessible for all.Grid computing enables the sharing of power and resources of many computers,distributed and connected by networks. This has been suggested as a solution forhigh performance computing, and the government assigned four billion yen for gridcomputing research for fiscal year 2004. Also, it should be mentioned that Japanstill has three major super computer makers: NEC, Fujitsu and Hitachi.60

ICT IN JAPAN6.1.3 NetworksNetworks are the crucial part of the basic enabling technology. There are manydifferent technical issues related to networks: How can the high-speed backbonenetwork be realized? What access network will become dominant and in what context?How do we make access available and affordable for everyone? The issuesare further complicated due to different type of networks are expected to transparentlywork together.Relevance of JapanThe Japanese government has formulated very ambitious goals for their high-speedbackbone network, and are investing considerable research funding and prestige torealize it. Regarding the access network, the broadband connection fees in Japan onthe fixed side are now the lowest in the world due to price competition.In connection with an early introduction of 3G telecom segments, this has madeJapan one of the few markets in the world where consumers already have access tomost network types, including major types of 3G networks, several hot-spot networks,as well as commercial VoIP.With 3G already in commercial service by the three national mobile carriers, themany world-leading Japanese ICT companies are focusing their mobile telecomresearch on 4G.Japan, with its challenging traffic situation, has also focused much attention andresources on developing a nationwide intelligent transport system (ITS). The ownersof the approximately nine million VICS (Vehicle Information and CommunicationSystem) [VICS] on-vehicle units can, in addition to receiving near-real timetraffic information, also receive a variety of on-demand information. Research isalso made in the areas of safety, traffic management and emergency vehicle support.Because of the imminent crisis due to the lack of IP addresses allocated for Asia,Japan is a driver of the transition to IPv6. This new standard will in addition to avirtually limitless supply of addresses, necessary for the emergence of ubiquitousnetwork, also offer higher security, better quality and the ability to transmit in realtime.6.1.4 Content, applications and servicesIn a world where ICT is ubiquitous, how can it be used to improve and enrich ourlives? What will we be able to do, where, when, using what and to what price? Thecurrent issues include questions like: What services will be offered for leisure andbusiness users respectively? What information and news-based services will beoffered? What form will communication and social services take? What servicesshould be commercial and for which public (for example information, education,health related services…)?61

ICT IN JAPANRelevance of JapanJapan has succeeded with what no other market has, namely to offer attractive, affordable,abundant mobile content for the consumers and to create a vital and profitableindustry segment. “DoCoMo i-mode” has been a famous business model byits revenue sharing between the carrier and content providers, and also its adoptionof the Internet standard, such as HTML and GIF format. It will be interesting to seeif this will help the 3G market to take off, and if the experiences will be relevant tothe business segment of the future ubiquitous ICT-society.6.1.5 Business modelsDuring the first century of telecom, the business model was simple: a national governmentaltelecom operator sold voice communication and the subscribers paid fortime and distance. With time the national carrier was privatized, which introducedcompetition to the telecommunication business. With further emergence of e-mail,the Web, mobile Internet, digital content, e-commerce etc, the business landscapechanged completely. Content became digital, distance lost its relevance, the role ofthe incumbent organizations changed and new players appeared: payment providers,information brokers, content providers, web hotels, ISPs…The challenge, not yet overcome in Europe, is how to create business models whichmake the new industry viable for all necessary players while making the pricingmodels and commercial relationships comprehensible and worthwhile to the consumers.Relevance of JapanBy focusing on evolution instead of revolution, ensuring that both content providersand users where with them every step of the way, the Japanese operators introducedthe most successful business model for mobile internet and content so far:the i-mode model. The same industry is now trying to repeat the success with W-LAN and 3G.6.1.6 UsageICT has the potential to influence all aspects of our lives. Tele-working could potentiallyaffect our professional identities, the balance between our work and familylife, how we live as well as the demands put on the public infrastructure. Communicationservices such as SMS, chat and online communities are already affectingthe way especially young people socialize. E-commerce is influencing how weshop as well as the demands put on merchants. The Internet is also affecting thevery nervous system of our society: the way citizens can influence and participatein the political process.The current issues include questions like: How and for what is it desirable that thesociety, the industry and the citizens use ICT? How do we get there? How to buildcompetence, and educate the users? How to build trust and acceptance? How tobridge the digital divide?62

ICT IN JAPANRelevance of JapanJapan is lagging behind Sweden in general ICT use, both in the private and industrialsector. One of the reasons has been slow PC penetration to the Japanese homesdue to the different Japanese character set. Even in 1995 when Microsoft releasedWindows 95, the PC penetration was less than 20 percent. At the same time theword-processor penetration was about 40 percent, which was twice as much as forPC. For comparison in 2003 the PC penetration was 78.2 percent while wordprocessor26.7 percent. The problem is that Japanese use three different charactersets in a mixed way: Chinese characters (ideogram, more than 10,000 characters),Hiragana characters (phonogram, 50 characters), and Katakana characters (phonogram,50 characters). Furthermore Japanese write horizontally from left to right,but also vertically from top to bottom. When writing vertically, next line shouldstart to the left of the previous line. These difficulties made the Japanese dedicatedword-processing equipment popular for a very long time. The situation changedrapidly when computer application programs started handling Japanese.It is expected that the general ICT use should improve radically in the near futuredue to the fact that the mobile and fixed infrastructure is now in place, and privateconsumers have access to a complete range of choices when it comes to services,networks and terminals.Japan is facing similar problems as Sweden when it comes to overcoming a geographicand demographic digital divide due to an ageing society and disproportionatelyunder-populated areas. The area of education and trust is also a shared concern.6.1.7 SecurityPayment, authentication, integrity and privacy are all issues that have to be solvedto create the consumer trust necessary to enable e-commerce, e-government, e-health and all the other e-babies to take off for real.Companies on their side need to control access and protect their innovations andintellectual assets, which are to an increasing degree in a digital format and thereforecan be copied and transferred to any corner of the world in a matter of seconds.IPR issues along with questions how to regulate and control misuse andcriminal use of the Internet have to be addressed on a national as well as internationallevel.Relevance of JapanWhen it comes to computer security, Japan has traditionally focused on the “hard”issues. Introduction of PKI (Public Key Infrastructure) and other technologies on anationwide scale has been discussed as a tool to improve e-security, especially inthe area of e-government.However when it comes to authentication, integrity and privacy, Japan can be consideredas lagging behind Sweden.Conversely, due to their leading position in the mobile internet area, Japan has beenconfronted with some of its dark sides before any other country, including prostitu-63

ICT IN JAPANtion and other crimes linked to mobile dating services, and rampaging mobilescams and spasm. The legislative bodies and the operators have taken a number ofmeasures to combat these issues.6.1.8 PoliciesWhen it comes to policies, the general question is what the government can andshould do to support and enable use of ICT in a beneficial way, for the growth ofthe economy and the improvement of quality of life for all citizens.Chapter 3 mentioned many good examples of government policies to make Japan“the world's most advanced IT nation by 2005”. The other issues are: What part ofthe spectrum should be regulated and how? Should the policy be based on commonsinstead of ownerships, and the spectrum regulated with technology instead oflaws? Should Broadband connection (FTTH - Fiber To The Home) be provided asa facility with only the provision of services being market driven? Maybe the networkshould be “stupid” with intelligence only at the edges. Should the governmentsupport 3G and the established industry or should it let the unregulated W-LANtechnology have a part of the market? Should VoIP be supported and regulated as acommercial service, competing with traditional telephone services? How to solveissues around roaming, antenna sites, etc?Relevance of JapanJapan is the second largest economy in the world, with large funds invested intoresearch and development. As already discussed in previous chapters, since severalyears the Japanese government has identified ICT as a means to create growth inthe economy. In 2001 the e-Japan strategy was established with the explicit goal tomake Japan the world’s leading ICT nation by year 2005.Japan has succeeded in constructing a world-leading ICT infrastructure thanks tothe efforts done by both the industry and the government. For example, a very lowprice of ADSL Internet connection is a result of the government encouraging opencompetition between ADSL carriers. However, the actual usage of the ICT infrastructureis rather limited and as discussed in previous chapters the government (ITStrategic HQ) launched consecutive strategy and priority policy programs in orderto improve the situation. Some of the policies were based on methods widely usedin companies to achieve a given goal, such as the PDCA (Plan, Do, Check and Action)cycle. Such methods seem to be working fine so far.64

ICT IN JAPAN7 Some suggestions for future Japan-Sweden ICTactionsUbiquitous network/computing and human interfacesAll Japanese industries, universities, and government are tackling to realize theubiquitous network society and ubiquitous computing. The work is done in differentways and at different levels, examples include RF-IDs, home networks,human interfaces, network agents, mobile communications, mobile terminals,media conversion, networked robots and services/applications. The Ministry ofInternal Affairs and Communications (MIC) announced u-Japan Plan, whichaims to realize ubiquitous network society by 2010.Historically Japanese ICT development has been very technology driven andhardware oriented. For example, despite previous declarations that humanmachineinterfaces are going to be very important in the near future and largebudgets has been assigned by the government for Human Interface R&D in thelast 15 years, we have not yet seen a common universal interface with the sameinteraction pattern independently from the considered technical device.In Sweden, there are some research projects being part of the EU DisappearingComputing Program, which are focused on users’ behavior and users’ needs.Some other projects consider the fusion of Art and Technology as an eleganthuman interface. These different approaches may be a very good source of inspirationfor Japanese researchers.Connected HomeLast year, by an initiative of the Swedish Institute for Future Studies and theITPS Tokyo office, bi-lateral communications and visits started in the field ofConnected Homes (Smart houses, networked home appliances and future living).Two delegations from Sweden, one delegation from Japan and some individualresearchers (both Japanese and Swedish) visited the respective countries.Both countries show a high interest in connected homes and are ready to establishfurther collaboration. Although this field is part of ubiquitous networks, itshould be exposed separately to attract the required attention.Test-beds and markets of ultra-high speed and mobile networksTwo ultra-high speed network test-beds, JGN and JGN II, are in operation inJapan. The possibility of making them available for tests and development byresearchers, research institutes and companies in Sweden might be investigated.Japan is the world leader when it comes to commercial mobile networks basedon 2.5G and 3G (W-CDMA and CDMA-2000) technologies, mobile terminals,in-car terminals (car navigation system) and services. The Japanese market isthe best choice to test new mobile services and applications, provided for exampleby Swedish companies.65

ICT IN JAPANRoboticsAs mentioned in Chapter 6, Japan is one of the leading countries in the roboticsresearch field. Robots require good sensors, actuators, control algorithms, lightbatteries, and system technologies. Some of the Japanese robots can be used asresearch platforms to test control algorithms and new commercial applications.For example, the latest AIBO (Sony’s pet robot) can function as a watch dog.When the AIBO is set to the watch dog mode and senses a moving object, itwill automatically turn its head towards the object, and record both still pictureand sound of the object, then send the information to the owner via e-mail. Theowner also can send commands to AIBO at home via e-mail. Swedish researcherscould utilize such hardware as platforms, and conduct novel research oncontrol algorithms for autonomous systems.DelegationsIn order to learn about advances in everyday usage of ICT gadgets, and to seethe latest advances done by Japanese researchers within the ICT area, Swedenshould , on a yearly basis, send a delegation to Japan (consisting of researchers,policy makers, and representatives from industry). At the same time, followingJapanese interest, the delegation could give seminars to present up-to-date informationon the ICT advances in Sweden (ICT policy, latest research results,and market trends, etc.).ReportsMore detailed studies covering specific area of the Japanese ICT industry (inthe similar manner as this report) could be done in order to find ICT-areas ofgreat interest for future Japan-Sweden ICT-actions.66

ICT IN JAPANTerminologyB-to-BB-to-CCDMA-2000CRTCryptographyDSLDSRCDVDETCFTTHFWAGIFHot SpotsHTMLICICTIP telephoneIPv6ISDNPCPDAPDCARF-IDBusiness to BusinessBusiness to Consumerthird generation mobile telecom technologyCathode Ray Tube as used by non-flat TV sets and computermonitorsScrambling plain text to cipher text in order to prevent third partyeavesdropping, and to protect private information.Digital Subscriber LineDedicated Short Range Communications, so far in Japan it is usedfor ETC (Electronic Toll Collection) system, which consists of incarunit and road-side unit, and collects automatically toll road feewithout stopping at a toll gate of highway.Digital Versatile Disk or Digital Video DiskElectronic Toll CollectionFiber To The HomeFixed Wireless AccessGraphic Interchange Formatwireless LAN nodes, which provide Internet connection.HyperText Markup LanguageIntegrated CircuitsInformation and Communications TechnologyInternet Protocol telephone, uses the Internet protocol packetswitchedconnections to exchange voice and other information.Internet Protocol version 6, the latest level of the Internet Protocol.Integrated Services Digital Network, an agreed standard for sendingvoice, video, and data over digital or normal telephone lines.ISDN connections consist of two 64Kbps lines, both lines can beused simultaneously to offer speeds of 128Kbps.Personal ComputerPersonal Digital AssistantPlan, Do, Check, ActionRadio Frequency Identification67

ICT IN JAPANTele-commute Tele-commuting, tele-working: use of ICT to work outside of thetraditional workplaceTFT LCD Thin Film Transistor Liquid Crystal DisplayTRON The Real-time Operating system NucleusVCR Video Cassette RecorderVICS Vehicle Information and Communication SystemVTR Video Tape RecorderW-CDMAWideband Code Division Multiple Access, a third generation mobiletelecom technology68

ICT IN JAPANReferences[CabOffice a] The Cabinet Office, Quarterly Estimates of GDP,http://www.esri.cao.go.jp/jp/[CabOffice b] The Cabinet Office, Countermeasures for declining of birthrate andageing society, http://www8.cao.go.jp/kourei/[CSTP 2003] Council for Science and Technology Policy (CSTP) “State of S&Tpolicies based on the 2nd S&T Basic Plan in FY2002”, May 27, 2003.[EIA 2004] Denshi Kogyo Nenkan (Electronics Industry Almanac 2004) by DempaShimbunsha (in Japanese)[e-Japan a] e-Japan Strategy(http://www.kantei.go.jp/foreign/it/network/0122full_e.html)[e-Japan b] e-Japan Strategy II(http://www.kantei.go.jp/foreign/policy/it/0702senryaku_e.pdf)[e-Japan c] e-Japan Strategy II Acceleration Package(http://www.kantei.go.jp/foreign/policy/it/040318senryaku_e.pdf)[e-Japan d] e-Japan Priority Policy Program 2004(http://www.kantei.go.jp/foreign/policy/it/040615summary/040615gaiyo_e.pdf)[Fujitsu] Fujitsu company history[Hongo 2004] Interview with Mr. Hongo, Information Policy Division of METI,2004.[ICT 2003] “Issues affecting the future of ICT” by Sabine Ehlers and ShigeyukiNaito, ITPS Tokyo, January 2003[IPA Web] Information-technology Promotion Agency, Japan (IPA),(http://www.ipa.go.jp/)[ITS 2003] ITS Annual Report 2003, ITS Japan[JA 2004] Japan Almanac by Asahi Shimbun (2004)[JEITA] JEITA (Japan Electronics & Information Technology Industries Association)Statistics[JH 2004] Jouhouka Hakusho (Informatization White Paper) 2004 Japanese edition,JIPDEC[JTH 2004] Jouhou Tsushin Hakusho (Information and Communications WhitePaper) 2004 Japanese edition, MIC[MF 2004] Trade statistics, Ministry of Finance(http://www.customs.go.jp/toukei/info/topmenu_e.htm)[MIC 2003] Report on the Survey of Research and Development 2003, MIC69

ICT IN JAPAN[MIC 2004] Information and Communications in Japan, White Paper 2004, MIC(http://www.johotsusintokei.soumu.go.jp/whitepaper/eng/WP2004/2004-index.html)[MIC Web] Ministry of Internal Affairs and Communications (MIC)(http://www.soumu.go.jp/)[Ministry FA] Ministry of Foreign Affairs, http://web-japan.org/index.html[Nakagawa 2004] Nakagawa Report (“N Report”) – Toward a Sustainable andCompetitive Industrial Structure-, (New Industry Creation Strategy), May, 2004,Ministry of Economy, Trade & Industry (METI)(http://www.rieti.go.jp/en/events/bbl/04070101.pdf)[NAREGI Web] NAREGI Website (http://www.naregi.org/index_e.html)[NIKKEI a] NIKKEI Weekly[NIKKEI b] The Nikkei Business Daily[NIPPON 2002] NIPPON the Land and Its People by Nittetsu Human Development(2002)[NIPPON 2004] Business Facts and Figures, NIPPON 2004 by JETRO (2004)[Oki] Oki Electric company history[SHH] IT Strategic Headquarters Homepage(http://www.kantei.go.jp/foreign/policy/it/index_e.html)[Shijou] Shijou Senyuritsu (Market share) by Nihon Keizai Shimbun[ST 2005] Science and Technology Basic Plan 2001-2005(http://www8.cao.go.jp/cstp/english/basicplan01-05.pdf)[STT 2004] Science & Technology Trends (Quarterly Review), April 2004 by NationalInstitute of Science and Technology Policy, MEXT.[TRON] T-Engine Forum (http://www.t-engine.org/index.html)TRON Association (http://www.assoc.tron.org/)[VICS] VICS Home page (http://www.vics.or.jp/english/index.html)[VP 2002] Effective innovation systems and problem-oriented research for sustainablegrowth, VINNOVAs Strategic plan 2003-2007, VINNOVA Policy VP 2002:4[WP 2004] Information and Communications in Japan, White Paper 2004, Ministryof Internal Affairs and Communications.70

ICT IN JAPANAppendix IICT Companies trading between Japan and SwedenSwedish ICT Companies active in JapanSwedish ICT Companies in JapanABB K.K.Anoto Nippon K.K.Axis Communications K.K.Decuma AB, Japan OfficeEklow Scandinavia Ltd.Electrolux (Japan) Ltd.Elekta K.K.Emhart Far East Corporation, Japan BranchEnea OSE Systems K.K.Facit K.K.Gammadata Scienta K.K.GSE Systems, JapanHabia Cable Asia Ltd.HMS Industrial NetworksIAR Systems K.K.IFS Japan, Inc.Intentia Japan K.K.Micronic Japan K.K.Mydata Automation K.K.Nihon TelecaNippon Ericsson K.K.OpticoreORC Software K.K.Radi Medical Systems K.K.Telelogic Japan Ltd.www.abb.co.jpwww.anoto.co.jpwww.axiscom.co.jpwww.decuma.com/index.htmlwww.eklow.co.jpwww.electrolux.co.jpwww.elekta.comwww.emhartglass.com/www.enea.comwww.facit.co.jpwww.gammadata.sewww.gses.com/www.habia.se/www.hms.sewww.iarsys.co.jpwww.ifsjapan.co.jpwww.intentia.co.jpwww.micronic.sewww.mydata.comwww.teleca.comwww.ericsson.co.jpwww.opticore.com/www.orcsoftware.comwww.radi.sewww.telelogic.co.jp71

ICT IN JAPANJapanese ICT companies active in SwedenJapanese Companies in Sweden (Area of ICT; 37companies)ALPS ELECTRIC CO., LTD.ANRITSU CORP.CANNON INC.Clarion Co., Ltd.DENSO CORP.EIZO NANAO CORPORATIONFUJITSU LTD.FURUNO ELECTRIC CO., LTD.HAMAMATSU PHOTONICS K.KHitachi Home & Life Solutions, Inc.Hitachi Maxell, Ltd.IIYAMA CORPORATIONJEOL Ltd. (Nihon Densi)KAGA ELECTRONICS CO., LTD.Konica Minolta Photo Imaging , Inc.KYOCERA MITA JAPAN Corp.Matsushita Electric Industrial Co., LtdMatsushita Electric Works, Ltd.NEC Corp.NIKON CORP.NITTO DENKO CORP.Oki Electric Industry Co., Ltd.OLYMPUS CORP.OMRON CORPPENTAX CORP.Pioneer Corp.Sharp Corp.SONY CORP.TAMURA CORP.TDK CORP.TERASAKI ELECTRIC CO., LTD.TOSHIBA CORP.Victor Co. of Japan, Ltd.Yamaha Motor Co., Ltd.YAMAHA CORP.YASUKAWA Electric Corp.YOKOGAWA ELECTRIC CORP.www.alps.co.jp/index_e.htmwww.anritsu.co.jp/E/www.canon.com/index.htmlwww.clarion.co.jp/english/index.cfmwww.denso.co.jp/ja/www.eizo-nanao.com/company/index.htmlwww.fujitsu.com/www.furuno.co.jp/www.hpk.co.jp/eng/main.htmwww.hitachi-hl.com/english/index.htmlwww.maxell.co.jp/e/index.htmlwww.iiyama.co.jp/index.htmlwww.jeol.co.jp/english/index.htmlwww.taxan.co.jp/english/index.htmlkonicaminolta.com/index.htmlwww.kyoceramita.com/panasonic.co.jp/global/www.mew.co.jp/e/corp/index.htmlwww.nec.com/www.nikon.co.jp/main/index_e.htmwww.nitto.com/www.oki.com/www.olympus-global.com/en/global/www.omron.com/index2.htmlwww.pentax.co.jp/japan/globalsites/www.pioneer.co.jp/index-e.htmlsharp-world.com/index.htmlwww.sony.net/www.tamuragroup.com/www.tdk.co.jp/tetop01/index.htmwww.terasaki.co.jp/tj/web/top.nsfwww.toshiba.co.jp/index.htmwww.jvc-victor.co.jp/www.yamaha-motor.co.jp/global/index.htmlwww.global.yamaha.com/www.yaskawa.co.jp/en/www.yokogawa.com/72

VINNOVAs publicationsMay 2005See www.VINNOVA.se for more informationVINNOVA AnalysisVA 2005:01 Wood Manufacture - the innovationsystem that beats the system. Onlyavailable as PDF. For Swedish versionsee VA 2004:0202 Nationella och regionala klusterprofiler- Företag inom bioteknik, läkemedeloch medicinsk teknik i Sverige 200403 Innovation policies in South Koreaand Taiwan. Only available as PDF04 Effektanalys av nackskadeforskningenvid Chalmers - Sammanfattning. Briefversion of VA 2004:07, for brief versionin English see VA 2005:0505 Impacts of neck injuries research atChalmers University of Technology -Summary. Brief version of VA 2004:07,for brief version in Swedish see VA2005:0406 Forskningsverksamhet inomproduktframtagningVA 2004:01 The Swedish National InnovationSystem 1970-2003 - a quantitativeinternational benchmarking analysis02 Trämanufaktur - det systembrytandeinnovationssystemet. For Englishversion see VA 2005:0103 Impacts of the Swedish CompetenceCentres Programme 1995-2003. Forbrief versions in English and Swedisxhsee VA 2004:05 and VA 2004:0604 Telecom Dynamics - History andState of the Swedish Telecom Sectorsand its Innovation System 1970-2003.Final Report. Only available as PDF05 Impacts of the Swedish CompetenceCentres Programme 1995-2003- Summary Report. Brief version of VA2004:03. For brief version in Swedishsee VA 2004:0606 Effekter av det svenska kompetenscentrumprogrammet1995-2003- Sammanfattande rapport. Brief versionin Swedish of VA 2004:03, for briefversion in English see VA 2004:0507 Effektanalys av nackskadeforskningenvid Chalmers. For breif versions inSwedish and English see VA 2005:04 andVA 2005:05VA 2003:01 Innovationssystemanalys inomflygindustri och luftfart. Förstudie02 Swedish Biotecknology - scientificpublications, patenting and industrialdevelopment04 Svensk sjöfartsnäringsinnovationssystem - igår, idag ochimorgon02 Stimulating InternationalTechnological Collaboration in Smalland Medium-Sized Enterprises.A Study of VINNOVA’s SMINTProgramme.03 Regional ekonomisk tillväxt iSverige 1986–2001. En studie avtillväxtens utveckling i Sveriges lokalaarbetsmarknader.VINNOVA ForumVFI 2004:01 Informationssamhället - åter tillframtiden (Innovation policy in Focus)02 Svensk innovationskraft - visionenmåste vara starkare än motståndet(Innovation policy in Focus)VFI 2003:01 Commercialization of AcademicResearch Results (Innovation policy inFocus)VFI 2002:01 Betydelsen av innovationssystem:utmaningar för samhället och förpolitiken (Innovation policy in Focus)02 Innovationspolitik för Sverige: mål,skäl, problem och åtgärder (Innovationpolicy in Focus)03 Teknikparkens roll i det svenskainnovationssystemet - historienom kommersialisering avforskningsresultat (Innovation policy inFocus)VINNOVA InformationVI 2005:01 VINNOVA in brief. For Swedishversion see VI 2004:0202 Årsredovisning 2004VI 2004:01 Årsredovisning 200302 VINNOVA i korthet. For Englishversion see VI 2005:0103 VINNOVAs activities withinBiotechnology.04. VINN EXCELLENCE CENTER.For English version see VI 2004:0505 VINN EXCELLENCE CENTRES.For Swedish version se VI 2004:0407 Kompetenscentrum i siffror08 The Swedish Competence CentresProgramme. Third InternationalEvaluation - Group 2-6 (19 Centres)and Overall Impressions andProgramme-wide Issues.VI 2003:01 Verksamhet inom Transporter02 Årsredovisning 200204 The Competence Centres Programme.Third International Evaluation. Group1 (8 Centres)05 The Concept of Innovation Journalismand a Programme for Developing it.Only available as PDF06 EUREKAVINNOVA PolicyVP 2005:01 Kunskap för säkerhets skull.Förslag till en nationell strategi försäkerhetsforskningVP 2004:01 Nationell strategi förtransportrelaterad FUDVP 2003:01 VINNFORSK - VINNOVAs förslagtill förbättrad kommersialiseringoch ökad avkastning i tillväxt påforskningsinvesteringar vid högskolor.HUVUDTEXT. For appendixes see VP2003:01.101.1 VINNFORSK - VINNOVAs förslagtill förbättrad kommersialiseringoch ökad avkastning i tillväxt påforskningsinvesteringar vid högskolor.BILAGOR. Main text see VP 2003:0102 Behovsmotiverad forskning ocheffektiva innovationssystem förhållbar tillväxt. VINNOVAsverksamhetsplanering 2003-2007. ForEnglish version see VP 2002:04, for fullSwedish version see VP 2002:0303 VINNOVAs forskningsstrategi.Strategi för hållbar tillväxt04 Nationell Innovations- ochforskningsstrategi för områdetMiljödriven teknikutveckling.Only available as PDFVP 2002:02 Nationellt inkubatorprogram03 Behovsmotiverad forskning ocheffektiva innovationssystem för hållbartillväxt. En fördjupad version av

VINNOVAs verksamhetsplanering2003-2007. For short Swedish versionsee VP 2003:02, for short English versionsee VP 2002:0404 Effective innovation systems andproblem-oriented research forsustainable growth. VINNOVA’sstrategic plan 2003 - 2007. For Swedishveersion see VP 2002:03 and VP2003:0205 Nationell strategi för FoUinom området tillämpning avinformationsteknik.VINNOVA ReportVR 2005:01 Effektivt arbete i processindustrin.Hur man gör. Från strategi tillgenomförande02 Teori och metod för val av indikatorerför inkubatorer. Only available as PDF03 Informations- ochkommunikationsteknik i USA. Enöversiktsstudie om satsningar ochtrender inom politik, forskning ochnäringsliv. Only available as PDF04 Information and CommunicationsTechnology in Japan. A generaloverview on the current Japaneseinitiatives and trends in the area ofICT. Only available as PDF05 Information and CommunicationsTechnology in China. A generaloverview of the current Chineseinitiatives and trends in the area ofICT. Only available as PDF06 Under production07 Samhandling för innovationsleddtillväxtVR 2004:01 Nya material och produkter frånförnyelsebara råvaror. En framtidsbildoch vägen dit. For short version see VR2004:0202 Nya material och produkter frånförnyelsebara råvaror. Short version ofVR 2004:01.03 Evaluation of the NUTEK-VINNOVA programme in ComplexTechnical Systems 1997-2001.Utvärdering av ett FoU-program iKomplexa Tekniska System 1997-200104 Förnuft och känsla - en narrativ studieom äldre kvinnors bilkörning. Onlyavailable as PDF05 Equipment for Rational Securingof Cargo on Railway Wagons.Utrustning för rationell säkring av lastpå järnvägsvagnar (jvgRASLA). Onlyavailable as PDF06 Innovationspolitik för ITS. En studieav aktörsnätverk kring IntelligentaTransportSystem. Only available asPDF07 Svensk forskning - rik på upplevelser.Only available as PDF08 Fånga Vinden! - en klokbok förtillväxt09 Utvärdering av det NationellaFlygtekniska Forskningsprogrammet10 Forskning och Innovation iSmåföretag. SBIR - Small BusinessInnovation Research. Ett amerikansktprogram för behovsmotiveradforskning utförd av mindre företag11 Arbetsgivarringar i Sverige -förekomst, funktion och nytta12 Evaluation of the Öresund contractsfor cross-border R&D cooperationbetween Denmark and Sweden13 Det öppna svenska innovationssystemet- en tillgång för SverigeVR 2003:01 Fysisk planering i det digitalasamhället. Telematik 200402 Kina störst på mobiltelefoni -konsekvenser för omvärlden. Telematik200603 Framtidens fordon - mötet mellan tvåmobila världar. Telematik 200604 Efter 11 september 2001: - Kanstorebror hejdas? Telematik 200606 Kunskapskultur och innovation.Innovationssystem kringenergirelaterad vägtransportteknologi.Förstudie. Only available as PDF07 Förändrad finansiering avtranportforskningen. Only available asPDF08 Inledande laboratorieförsök - ProjektAIS 32. Delrapport 1. Only available asPDF09 Inledande fältförsök - Projekt AIS 32.Delrapport 2. Only available as PDF10 Hur går det till i verkligheten?Innovationsprocessen utifrån 18 fall11 Returlogistik - Utveckling avlogistiksystem för returgodsflöden.Only available as PDF12 Genusperspektiv på innovationssystem- exemplet svensk musikindustri

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VINNOVA´s mission is to promote sustainable growthby developing effective innovation systemsand funding problem-oriented researchV E R K E T F Ö R I N N O V AT I O N S S Y S T E M – S W E D I S H A G E N C Y F O R I N N O V AT I O N S Y S T E M SVINNOVA, SE-101 58 Stockholm Besök/Office: Mäster Samuelsgatan 56 Tel: +46 (0)8 473 3000 Fax: +46 (0)8 473 3005VINNOVA@ VINNOVA.se www.VINNOVA.se