Download Japan`s strategies for taking the lead in the Fourth Industrial

"Vision of New Industrial Structure"
- Japan's strategies for taking the lead in the
Fourth Industrial Revolution Interim Report by New Industrial Structure Committee
April 27th, 2016
METI
"Japan Revitalization Strategy" Revised in 2015 (Decided at the Cabinet
Meeting on June 30th, 2015)

Innovation in IoT, Big Data and AI has been advancing more rapidly and impactfully than ever.

It is crucial to have vision common to both the public and the private so that the private sector can
make proper investment and as such the government can promptly take measures to make or
modify rules that will facilitate such investment.

In this regard the study should focus on (ⅰ) how and when the reform should be performed for
IoT/Big Data/AI (i.e. the reform of industrial structure, employment structure, and economic and
social system), (ⅱ) potential business opportunity, (ⅲ) task that the public and the private should
engage in (e.g. regulatory and institutional reform, R&D/equipment/investment in human
resource), clarifying timeframes for each task.

The study has been so far implemented for the formulation of "Vision of New Industrial Structure" (in
August 2015) by “New Industrial Structure Committee” (chaired by Motoshige Ito, professor of Tokyo
University) set up within "Industrial Structure Council" in joint work with the relevant government
ministries and agencies.

The interim report was issued on April 27th, 2016.
Relevant government ministries and agencies
The Cabinet Office; the Fair Trade Commission; the Financial Services Agency; the Ministry of Internal Affairs and
Communications; the Ministry of Finance; the Ministry of Education, Culture, Sports, Science and Technology; the Ministry
of Health, Labor and Welfare; the Ministry of Agriculture, Forestry and Fisheries; and the Ministry of Land, Infrastructure,
Transport and Tourism.
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Table of Contents
１. What is happening now?
２. Japan's basic strategy
３. Changes in society and conversion of industrial structures through the revolution
４. Changes in employment structures through the revolution
５. Estimates involving industrial and employment structures
６. Japan's specific strategy
i. Developing environments for promoting data utilization
(establishing data platforms, creating data distribution markets, promoting utilization of personal data, developing security-related technology and ecosystems that produce skilled human resources,
ideal approaches to intellectual property policies in the revolution and ideal approaches to competition policies that address the revolution)
ii. Fostering and securing human resources, improving flexibility in employment systems
(establishing an educational system that meets new needs, securing human resources with a global mindset, promoting increased participation of more various sources of labor, increasing
the flexibility of labor markets and employment systems)
iii. Accelerating innovation and technology development (“Society 5.0”)
(establishing an open innovation system, developing innovation bases from which Japan will lead the rest of the world / establishing national projects therefor / accelerating social
implementation thereof, e.g., AI, strategically promoting the management of intellectual property and international standardization)
iv. Fortifying financial functions
(Fortifying equity finance toward the supply of risk capital, encouraging investment in intangible assets to address the revolution, further enhancing the functions of finance and settlement, positioning FinTech
at the core)
v. Facilitating smooth conversion of industrial and employment structures
(establishing a governance system in which business owners are able to swiftly and boldly make decisions, developing systems and environments in which business owners are able to
revitalize and reorganize business in a swift and flexible manner)
vi. Disseminating the outcomes of the revolution to SMEs and local economies
(establishing platforms on which IoT and other new technologies are introduced to and utilized within SMEs and communities)
vii. Further enhancing economic and social systems to address the revolution
(ideal approaches to regulatory reform so as to address the revolution, improving administrative services through the utilization of data, enhancing the development of business overseas
through strategic collaboration and cooperation between industries, ensuring the outcomes of the revolution permeate society)
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１． What is happening now?
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What is happening now? (ⅰ) - Technological breakthroughs 
All business and information available to society in the “real world” can be freely controlled through digitized networks.
(IoT)

Large volumes of data can be analyzed to create additional value. (Big Data)

Self-learning machines can analyze data and situations more rapidly and objectively than human
beings. (Artificial intelligence: AI)

→
Automation can be applied to more diversified and complicated tasks. (Robotics)
That which was previously impossible is now possible for society.
Hence the potential dramatic changes in industrial and employment structures.
Increased volume of data
Improved processing
capability
Discontinuous progress of AI
Data volumes worldwide can
be doubled every two years.
Exponential progress can
be seen with performance
of hardware.
AI technology can enhance
discontinuous progress
with the support of deep
learning etc.
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What is happening now? (ⅱ) - Fourth Industrial Revolution 
These technological breakthroughs includes the changes below:
① Shift from mass production/uniform services to customized production/services based on
individual needs (customized medical treatment, immediate custom-made clothing, educational
service depending on individual understanding)
② Free matching of society’s unused potential assets with needs of individuals (Uber, Airbnb, etc.)
③ Support or replacement for human labor, recognition/learning capability (automated driving,
manufacturing/management, delivery by drone)
④ Creation of new services、shift to after-market services for products and goods (from simple
sales of equipment to added services of operation/security/insurance using sensor data), significant
efficiency improvement throughout the entire supply chain with data sharing (integration of
production equipment and logistics/delivery/payment systems)
⑤ Technology used in the revolution is common foundational technology for innovation across all
industries, and allows for addressing new needs (genome editing technology × biodata=new drug
discovery, new type of farm product, bioenergy, etc.)
First Industrial
Revolution
Harness fossil fuel
energy
(by steam engine)
Second Industrial
Revolution
Energy innovation
(electricity, internal
combustion engine)
Third Industrial
Revolution
Automation
(Computer)
Forth Industrial Revolution
Autonomous optimization (AI thinks
on its own, takes optimal action
based on a large volumes of data.
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Global strategy by leading overseas players
From Internet
to the real world
Range of cloud services expanding,
including information not only on the Internet
but also from real life
(From Internet to real world)
(ii) Accumulating data in cloud servers, processed with
artificial intelligence
Google
Amazon
Facebook
Ensuring the protection of their manufacturing
industry know-how in which they specialize,
and globally developing business using technology
to their advantage
(From real world to Internet)
Standardizing manufacturing systems established in Germany and exporting them overseas
(i) Sharing data related to factories and products around the
world between companies, factories, and even machines
GE
Siemens
Bosch
IBM
Intel
etc.
(i) Collecting data related to factories and
products around the world
Examples from
manufacturing
sector
From real world
to Internet
etc.
(iii) Giving optimum instructions to factories
(iii) Optimally controlling factories
(ii) Accumulating and processing data with the
high-performance manufacturing facilities at hand
Equipment for factories is shifting toward affordable devices
that receive instructions from the cloud and execute them.
Source: FY 2014 Measures to Promote Manufacturing Technology
Maintaining value of high-performance equipment
in factories, which is Germany’s strength
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Companies aiming to create new society with data (ⅰ)
Changes taking place for human roles and work
Robot Taxi
Realization of unmanned
taxi service
Aiming to realize a futuristic, unmanned taxi
service using automated driving system
technology which detects vehicle
surroundings and more. Services are
expected to be available within specific
section between the airport and Tokyo.
Also it is expected that this technology will
contribute to retention of public transport
networks including buses where there is a
problematic lack of drivers.
Aerosense, ALSOK, SECOM
Use of drones in construction
management of buildings, etc.
Drone photography of construction sites
from above increase safety by allowing
work on high-rise building sites to be
checked with designs kept on Cloud
services.
exMedio
Use of AI for dermatological
diagnosis support system
They developed free support service for
diagnosis of dermatological disease called
"Hifumiru" which operates with the help of
photographs of afflicted body parts and
medical patient interviews with affiliated
dermatologists over smartphones.
<taking photograph of building
materials from above>
Change how people move and live
○ Challenge
・Provide statutory measures for Road
Traffic Law, Road Transport Vehicle
Law and international conventions for
automatic guided driving.
Source: Materials submitted by Mr.Tomiyama at the
second Public-Private Dialogue
Eliminate risky work
AI to assist with doctor's diagnosis
○ Challenge
○ Challenge
・Provide statutory measures for issues
such as flying beyond line-of-sight,
long-distance communication and
collision prevention, encouraging
usage.
・Upgrade performance of diagnosis
support system using AI.
・Disseminate guidance prepared
through review of diagnosis aid
software.
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Companies aiming to create new society with data (ⅱ)
To the world of discontinuous customization
Seiren
Terumo
Realization of rapid, custom
production in response to
consumer needs
They developed a unique system called
"Viscotecs" generating final product
from instant printout based on
combined data of customer's favorite
fabric and design.
Applicable to such materials as
aluminum, wood and ceramics.
build-to-order manufacturing
individual manufacturing
individual order
manufacturer
consumer
Prevention of lifestyle-related
disease using medical
prescription/medical
examination/health-related data
With the permission of employees,
combine their daily exercise data with
medical records focusing on obesity and
to analyze health improvement effects of
walking, contributing to the furtherance
of good health/the prevention of lifestylerelated diseases.
individual order
consumer
・Align price of made-to-order
product with price of mass
produced item
○ Challenge
・Ensure optimal product liability.
Source: Materials submitted by Mr/Ms
Tomiyama at 2nd Public-Private Dialogue
Delivery of adaptive learning,
depending on student understanding
They have developed learning platforms
such as "Juken Sapuri” (Exam-taking
course), "Benkyo Sapuri” (Learning course)
which provide various web-based, selfdirected learning opportunities. Additionally,
a study is under way to deliver optimal
recommendations on learning based on their
actual learning level and less favorite
subjects, using AI.
medical
prescription
medical
examination
records
build-to-order
manufacturing
individual manufacturing
manufacturer
Recruit
Amount of activity
Number of steps
Vital data
・Prolong healthy life expectancy
with customized health service
○ Challenge
・Provide medical care/health information
and implement optimal utilization of
those services according to revised
Personal Information Protection Law.
・Ensure effective learning with
individual/optimal learning aid service
○ Challenge
・Pursue partnership with schools and
other education organizations and
develop infrastructure for use of
adaptive learning at schools.
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Technology (Common Platform Technology × Industry Core Technology )× Relevant Data
Technology
Common
platform
technology
(AI, IoT,
Robotics)
Relevant data
Various goods and services
Financial
technology
Data on trade/distribution
Data on financial markets
Credit by data on trade/settlement,
Robo-Adviser (asset management), etc.
Drug discovery
technology
Health and
medical data
Personalized medicines,
Personalized cosmetic
and beauty services, etc.
Biological data
New drug discovery, new type of
farm product, advanced materials
manufacturing, bioenergy, etc.
Energy load device
control technology
Customer data
Energy demand response,
monitoring services, etc.
Production
control technology
Accidents and
near-miss data
Enhancement of safety/productivity with
early detection of failure/fault sign,
improved insurance/rating, etc.
Bioinformatics
Genome editing
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Envisioned reform of leading sectors (illustrative) (1)
Manufacturing innovation, industrial
security, supply chain and retail
○ Directions of change
・Enabling instant response, made-to-order
production with mass production factory.
・Realizing zero waste and lead time by data
linkage through production, logistics and
sales.
・ Full scale use of drone for logistics.
・ Constantly monitoring the plant equipment
to detect failure/fault sign early and issue
warnings appropriately.
Autonomous driving and mobility
○ Directions of change
・ Improved efficiency in logistics with
realization of longitudinal column travel.
・ Increased utilization of full automatic guided
vehicle system in various sectors. Start-up of
advertising business and services to utilize
time spent while driving.
・ Resolution of issues regarding people
vulnerable to traffic, traffic accidents,
congestion and environmental impact.
[PM’s statement at the second meeting of the Public-
[PM’s statement at the second meeting of the Public-
Private Dialogue]
• Aim to realize parcel delivery service using drone within 3
years from now if possible.
• To this end set up the Public-Private Council to discuss how
it specifically should be treated between users and the
relevant government offices. A policy to establish it should
be formulated at such council by summer this year.
Private Dialogue]
• Develop system, infrastructure and verification by 2017 for
autonomous driving service and transportation on expressways
which will be in use at 2020 Olympic & Paralympic Games.
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Envisioned reform of leading sectors (illustrative) (2)
Health, medical, and nursing care
Finance (FinTech)
○ Directions of change
・ Realization of more convenient
settlement, remittance and funding
etc. through a small amount settlement,
remittance and swift data-based credit
review which will be all executed online.
・ Realization of efficient corporate
back office and household finance
through real-time visualization of
corporate management, accounting and
household finance.
○ Directions of change
・ Realization of customized services of
health and prevention through
utilization of health/medical data.
・ Mitigation of local burden of medical
care/nursing care through implementing
medical care robots with advance
recognition/control assisted by AI.
[PM’s statement at the second meeting of the PublicPrivate Dialogue]
• Publish new guidelines applicable commonly
to review of diagnosis aid software by this
spring so that diagnosis aid system using AI
can be utilized at local medical institutions.
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Envisioned reform of leading sectors (illustrative) (3)
Smart housing, smart communities,
and energy
Education
○ Directions of change
・ Realization of smart communities
where supply and demand for energy
are comprehensively managed including
demand side as per characteristic of each
region.
・ Deployment of diversified services by
acquiring and utilizing various data within
household and communities. let alone data
on energy.
○ Directions of change
・ Realization of customized
learning according to a leaner's
degree of proficiency and
favorite subjects by expanding
adaptive learning etc.
[PM’s statement at the third meeting of the PublicPrivate Dialogue]
• Strengthen drastically incentive to conserve electricity.
Create "Negawatt trade market" by 2017 where one
trades electricity conserved by utilizing residential
photovoltaic power and IoT.
• To this end formulate trade rules for providers and
establish telecommunications standard to remotely
control energy equipment within current fiscal year.
・Provision of easy access to
knowledge or skills needed for
each occupational activities at
any time as per individual
needs while making learning
materials used openly and
utilizing online classes.
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Envisioned reform of leading sectors (illustrative) (4)
Agriculture
○ Directions of change
・ More improved productivity by labor saving
through introduction of robot and automatic
guided driving system etc. and by formation
of tacit knowledge on production lines
・Realization of improved quality control
through ensuring traceability etc. by enabling
partnership among production, process, logistics and
distribution based on ICT.
・ Provision of farm products in response to
different consumers' needs through utilization
of data on sales performance etc.
Tourism
○ Directions of change
・Provision of customized tourist experience to
meet individual interests and preferences
through collection and utilization of
behavioral data of tourists.
・Increase of options in accommodations and
transportation for tourists by expanding
sharing and matching services, and entry of
individual in tourist services as providers.
[PM’s statement at the fourth meeting of the PublicPrivate Dialogue]
• Introduce cutting-edge technology into agricultural
sector. Commercialize automatic guided riding system for
agricultural equipment on cultivated land by 2018, and
create system necessary for enabling unmanned system
through remote monitoring by 2020.
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(Reference) Economic value by leading sectors
 Chief think tanks project significant impact of IoT on such sectors as
manufacturing, distribution/retail/logistics, finance, medical/health, public
service.
[Economic value generated by IoT by sectors (global base)]
(Aggregate economic value generated by IoT from 2013 - 2022)
3.9
Manufacturing
innovation
ものづくり革新
2.3
流通・小売・物流
Distribution/retail/logistics
1.3
金融
Finance
1.0
医療・健康
Medical/health
スマートハウス、スマートコミュニティ
Smart
house/smart community/
energy infrastructure
エネルギーインフラ
0.9
0.9
教育サービス
Educational
service
0.6
メディア・コンテンツ
Media content
Agriculture
農業
0.2
Public services
公共サービス（含む行政）
(including administrative
services)
4.6
(Economic value of IoT as of 2025)
* Mobility (automatic driving system etc.)
(trillions of dollars)
0.9
( Source：METI's document on categorization and integration based on Cisco, McKinsey report)
[*Economic value]
Value on the whole including increased sales by suppliers as well as
increased value on the part of users such as companies which
introduce IoT to pursue cost reduction through higher operating
efficiency and increase sales through advanced marketing practices.
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２. Japan's basic strategy
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Two scenarios of Forth Industrial Revolution -Japan now at “turning point"[As-is scenario] - Retaining industrial/employment structure 
4th Industrial Revolution




Leaving walls between companies, keiretsu and
industries as well as retention of self-sufficiency
Relying on overseas data platforms
Retaining immobile labor market
Preserving exiting industries
Continuing traditional education/training of
human resource




Added value taken by overseas data
platform providers
Japanese industries becoming sort of subcontractors or poor
players due to such platforms
Collapse/bipolarization of middle class workers (loss of
employment opportunities due to mechanization or
digitization, decrease of wages)
Subject to gradual innovation focusing on only hardware
[Reform scenario] - Shift and mobility of industrial/employment structure 






Discovering and acquiring new demand by taking
advantage of AI technologies and data
→creating innovative services and products
Creating data platforms that have no
boundaries among companies and keiretsu.
Utilizing flexible labor market and foreigners
Ensuring industrial metabolism
Switching over to human resource education
through use of data
Becoming the core of international network
(human resource, technology, funding, data)






Resolving social issues by creating new
services/products, acquiring global markets and
added value
Increasing productivity and wage to compensate
decline of population
Spreading profit among SMEs and regional economy
Concurrently reorganizing industries and
mobilizing employment
Realizing disruptive innovation for software etc.
Reform with burden or current stable
situation with declining economy
It is speed with which reform is deployed.
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Basic approaches for dominant sectors
1.
(ⅰ) Understand directions of global technology and industries and strategies of leading companies
around the world.
(ⅱ) Analyze Japan's "strengths/weaknesses," and clarify sectors of "sectors with the greatest
opportunity for improvement".
2. Share this approach with companies all over Japan and then create various strategies for the government,
private sectors and research institutes.
(ⅰ) Share long-term visions for the future (society, technology, industry, employment) with public
and private sectors.
(ⅱ) Determine specific goals, setting interim deadlines.
(ⅲ) Develop a roadmap which defines all elements required for achieving goals and implement specific,
short-term reform (regulatory reform, business promotion, private business activities, etc.)
3.
Based on these strategies,
(ⅰ) Take the lead in driving reform for specific obstacles once their prospects are identified.
(ⅱ) With respect to obstacles whose prospects are uncertain due to the possibility of different scenarios,
make attempts to implement new ideas without waiting for the consensus.
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Importance of utilizing real data

Utilization of "data" is the source of added value in respect of the Forth Industrial
Revolution.
Virtual data
1st stage
Data generated from websites (search etc.) and online activities such as SNS.
→These platforms are controlled by overseas IT companies (Google, Amazon, Apple, etc.)
2nd stage
Real data
Data obtained from sensors etc. detecting activities in the real world of individuals and companies, such as
data on health information, travel and operation at factories and etc.
→Japan has possibility of acquiring platforms for such data if Japanese companies
successfully approach these data.
Real data consists of confidential data due to corporate competition and huge volume of data which should be
shared to compose big data with great advantage arising from corporate cooperation.
It is crucial to identify "cooperative domains" and "competitive domains", and to build "platforms"
which shares and utilizes data coming borderlessly from offices/companies/keiretsu
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(Reference) Basic cycle for data utilization
1
5
Societal
implementation/
Industrialization
Obtain
data
4
2
Analyze by AI, etc.
6
Exchange/transmit
data
Practical
application
3 (big data, etc.)
Establish business model which offers the entire basic cycle.
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Japan's strength/weakness for data utilization
Strength：Hardware (1) (5)
Weakness: Software (2) (3) (4), concepts and systems to enable connection hardware and software
that integrate hardware and software
Data cycle (evaluation)
☆Strength ★Weakness
☆The most advanced low birth rate and
aging population
☆Global market share of automobile etc.
☆Consumers able to recognize and
assess quality products
★Technology of 3D printing and its
limited utilization
4
☆Super computer technology
5
Obtain
data
1
2
☆World's cutting-edge high speed
data network
★Maintenance cost of data center
Exchange/transmit
data
Analyze with AI, etc.
★Development and utilization of AI
technologies
★Development of software products
★Basic research of mathematics and medical
fields, etc.
★Data scientists, security specialists, etc.
6
Societal
implementation/
Industrialization
☆Global market share of robots,
sensors, etc.
☆Data on quality school teachers
(tacit knowledge on the local level)
★Global market share of mobile OS,
device, etc.
Practical application
(big data, etc.)
3
☆Local big data (medical care, transportation, etc.)
★data sharing, data exchange
Establish business model which offers the entire basic cycle.
★Regulation systems to facilitate new business
★Scale and speed of industrial reorganization
★Legacy cost of IT systems elaborated for each individual company
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Japan's strategies (1) - 7 policies -
(Redesign of socio-economic system for the future)
(1) Develop environment for promoting data utilization
•
Building data platform, creating data distribution market
•
Facilitating utilization of personal data
•
Building ecosystem that produces security technology /human resource
•
Formulating strategies on intellectual property in the Fourth Industrial Revolution
•
Formulating strategies on competition policy in line with the Fourth Industrial Revolution
(2) Enhance flexibility in the development/recruitment of human resource and
employment system
•
Building educational system in response to new needs
•
Acquiring talents globally
•
Promoting diverse types of employment,
•
Enhancing flexibility in labor market/employment system
(3) Accelerate innovation and technological development ("Society 5.0")
•
Building an open innovation system
•
Develop innovation bases that lead the world/Establishing national projects/accelerating societal
implementation (e.g. AI),
•
Promoting strategically intellectual property management and international standardization
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21
Japan's strategies (2) - 7 policies -
(Redesign of socio-economic system for the future)
(4) Strengthen financial capabilities
•
Fortifying equity finance for the supply of risk capital
•
Encouraging investment in intangible assets in line with the Fourth Industrial Revolution
•
Improving capabilities of finance and settlement focusing on FinTech
(5) Facilitate shift of industrial /employment structure
•
Building a governance system to enable swift and positive decision-making
•
Developing systems and environments to enable swift and flexible business revitalization/reorganization, etc.
•
Enhancing flexibility in labor market/employment system (stated again)
(6) Spread effect of the Fourth Industrial Revolution into SMEs and regional economy
•
Introducing IoT etc. into SMEs and regional economy, and building base for utilizing them
(7) Ensure sophisticated system of economy and society for the Fourth Industrial Revolution
•
Ensuring optimal regulatory reform in line with the Fourth Industrial Revolution
•
Improving administrative services using data
•
Performing enhanced global deployment through strategic partnership etc.
•
Spreading advantage of the Fourth Industrial Revolution into the society in general
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22
3. Changes in society and
conversion of industrial structures
through the revolution
METI
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Societal needs to be realized by the Fourth Industrial Revolution
 "Societal and structural issues (e.g. customer's true needs) which go beyond our capabilities can be
addressed by utilizing innovative technology/data such as AI.
 Competition will be conducted as to who will discover or acquire this new frontier expected to be
spread globally.
Move safely
Make effective use of travel time
Societal and structural issues
facing Japan and the world






Low birthrate and aging population
Decline of regional economies and
communities
Limited energy and environmental
constrain
Food issues
Water issues
Other
Live "smartly"
Keep healthy,
support the elderly
Live safely and securely
Learn effectively
Get "smartly"
Use convenient
infrastructure
Enjoy entertainment
Share efficiently
Easily borrow fund and manage asset
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(1) Expansion of mobility industries impacting employment


Opportunities are constantly arising for new value chains / industries by responding to societal needs.
For example progress in automatic guided driving/drone technology is giving rise to new services and products,
affecting a variety of industries.
around 2030
2018Newly
created role
and value
(9)Expansion of
sharing service
(6)Reduction of
car insurance
premiums
(4)24/7
Autonomous
driving by
industries
(2)Drone
delivery
(1) Platooning
(2) Unmanned
drone logistics
(partial)
(8)Unmanned
transportation
service
(5) Service using time in
the car
(Culture/entertainment)
(7) 24/7 autonomous
logistics (including
public roads)
(8)24/7
autonomous use
by industries
(3)
Advertising
(2) Drone delivery
(expanded)
(1)
Platooning
Level 2/3：Combined Function Level 4：Full Autonomous driving**(Limited
Automation/Limited Selfto expressways)
Driving Automation (requires
driver's support*)
** Unmanned operations
Relevant
industries
(e.g.)
* (3) Advertising, or (5)
entertainment or business
services are available
utilizing former driving
time (now freed due to
autonomous driving
systems).
•
Impact on
employment
(example)
(1)(2) Improvement of
labor market with
logistics etc.
[About 40,000 surplus
of job offers for truck
drivers]
(10)Fully autonomous
cars for private use
(6)Reduction of car
insurance premium
(5)Service using
time in the car
(Culture/
entertainment)
...
(3) Advertising
(1) Platooning
Level 4：Full Autonomous driving
(Level 4) (ordinary
road/expressway etc.)
make progress across
industries as increasing
Agriculture/fishery, food, wholesale ・・・etc.
range of non-manual
operations become
possible.
Information service, advertisement 、casualty insurance,・・・etc.
...
Manufacturing (Automobiles /accessories, drones,)、Automobile maintenance,
passenger road transportation, freight road transportation, retail, information
communications,・・・etc.
•
(4) Improvement of labor market
in a variety of industries including
logistics and agriculture.
•
(7)(8)(9) Significant change in
employment structure for
professional drivers.
•
(3)(5)(6) Creation of employment
by creating new services.
•
(3)(5)(9) Creation of additional
employment by creating new services.
...
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Spread of vision “move" and its impact on society (pros and cons)
 Spread of impact from industry/employment occurs, and concurrently impact on
different societies may arise in/out of Japan.
Individuals
○ Resolution of issues on people having difficulties in moving
[7 million "the weak for shopping", about 40 million people
without driver's licenses]
Domestic
○ Improvement in distribution of daily necessities for remote
islanders
[Total population of all remote islands: 319,000]
○ Safer traffic due to decrease of traffic accidents
[Traffic fatalities: 4,117(2015)]
[Economic loss due to accidents: 6.3trillion yen(2009)]
○ Freer work style with effective use of commuting time
[About 20 minute (one-way) average commuting time by
car]
●Necessity of acquiring new work skills or more needs of
transition of labor force with change in employment
structure
Overseas
○ [People without driver's licenses: about 6 billion ]
○ [Traffic fatalities:1.25million]
[Economic loss due to accidents: over 100 billion USD
(especially 1-2% loss of GNP in emerging countries)]
Society
○Decrease of environmental burden (CO2 etc.) by
realization of uncongested traffic on ordinary roads or
expressways
[Annual economic loss: 3.3 billion people/hours,10 trillion
yen]
[CO2emission by domestic transportation sector: 220
million tons (17% of total emission]
○Faster emergency response for freight etc. in case of
disaster
●Integrated control system of traffic and drone by
connecting respective data results in significant increase of
risk in case of failure
●Changes in labor market, employment system, social
security system etc.
○[Energy consumption worldwide for transportation sector:
103 trillion Btu (20% of total)]
Source: Accenture Mr Hodo's presentation materials at 3rd New Industrial Structure Committee, "For abundant automobile society" by Japan Automobile Manufacturers
Association, "Status of traffic accidents and traffic safety policy" by Cabinet Office, "Report on the weak for shopping" by Ministry of Economy, Trade and Industry, "CO2 emission
for transportation sector" by Ministry of Land, Infrastructure and Transport, "Report on result of research of basic traffic situation" by Ministry of Land, Infrastructure and
Transport, "Status of remote islands" by Ministry of Land, Infrastructure and Transport
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Multiple ways for meeting various needs of “move"
 Possible shift from traditional types of industries to industries responding to changes in social needs
(e.g. from automobile manufacturing industry to mobility smart service industry)
 This shift will bring about shift from reorganization within same industry to reorganization among
totally different industries. As a result major changes of industrial structure will occur.
Business entities
Current
Traditional axis
of reorganization
Mobility
Providers
○ Automobile
manufacturer
(1) Gradual approach for
upgrading automatic guided
driving
Full automatic guided
vehicle/drone
(2)Disruptive approach for
realizing automatic guided
driving
Unmanned
transportation
service in limited
areas
Ride sharing
Platooning
○ Logistics
provider
(truck/railway/
drone etc.)
Restructuring axis in the
Fourth Industrial Revolution
Unmanned transportation service
Alternative
○Transportation
business
(bus/taxi etc.)
○ Sharing
service
provider
Mobility
of goods
around 2030
○ Drone manufacture
○ Information service
Human
mobility
2018-
Expansion of sharing service
Unmanned
truck
Full unmanned
logistics
Complimentary
Drone for last
one mile
delivery
"Move"
automati
cally,
safely,
freely
and
inexpens
ively
Drone for main
network
※ Trial is expected for late 2020's according to Public-Private ITS Vision/Roadmap 2015.
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(2) Industries flock to market related to “smart life“, impacting employment.

Utilization of real housing data produces various new services and products, affecting various
industries.
Newly
created role
and value
About middle of 2020's
Current
(7) Shift to mass customization
(7)
(4) Health information
service
(1) Display device utilization
(2)Display
energy
use
Energy
Smart house
Relevant
industries
(e.g.)
(5) Autonomous efficiency of
retail (shopping)
(6) Integration of
devices and advertisement
(5) Partial autonomous efficiency of
retail (shopping)
(4) Systematic use of
EV (electricity storage)
(1)Wide area control of supply/
demand of electricity
(1)
(2) Visualization
(3) More efficient home delivery
(use of information delivery times)
(4) Partnering health service
and medical care
(5)
(6) Optimal advertisement
based on personal behavior
(8) Monitor/security of equipment
(3) Further efficient regional logistics
(enhancement of predicative capability)
(2) Watch
(6) Electricity interchange with home to home
(by fulfillment of parity)
(3) Incentive
for electricity saving
(1) Wide area control of supply /
demand of electricity
(8) Various services
delivered through data platform
(9)
(4) Systematic use of
EV (electricity storage)
(1)
(2) Visualization
(2) Sophisticated watch
(3) Incentive
for electricity saving
(1) Control of supply/demand
of wide-area electricity
Phase1/2 (Current status)
Phase3 (Expanded linkage of devices)
Phase4 (Reciprocal data use)
Prior application of home
Prior application of data from
security services and
Expanded effect to general housing / real estate related
smart meters (installed in all
automatic ordering
industries
houses by 2024)
fulfillment etc.
Retail, advertising, security, freight road transportation and medical/nursing care…etc.
Prior application of
Manufacturing (storage battery, EV), information service (aggregator business, negawatt trade)・・・etc.
electricity storage use
and electricity points
Manufacturing (electrical appliances, housing, household appliances), electricity/gas/water (retail), ・・・etc.
Electricity/gas (retail), electric equipment maker, construction/real estate leasing (housing), ・・・etc.
Impact on
employment
(e.g.)
•
(1)/(2) Fewer meter
readers
•
(1) Less manpower for
repair, maintenance and
recall etc.
•
(3)/(4) Creation of new services
(aggregator etc.), increase of
employment due to increase of
demand on products (EV etc.)
•
(3) Improvement of logistics labor
market due to decrease of failed
deliveries to empty homes
• (5)(6)(7)(8)(9)/(7)(8) Creation of additional
employment by creating new services.
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Spread of vision “smart life" and its impact on society (pros and cons)
Individuals
○ Realization of “smart life” friendly to environment
[Electricity generated by residential photovoltaic power
(aggregate): 8.65 million kW]
Domestic
○ Easier working by married couples through reduction of
household workload - clothes washing/cleaning etc.
[Post marriage female employment rate: 65.3%, Post
child delivery female employment rate: 23.1%]
○ Resolution of issues of live-alone elderly under
monitoring
[Number of deaths at home of over 65 years live-alone
elderlies in 23 wards in Tokyo: 2,869]
○ Decrease in deaths at home (heat shock etc.)
[Number of unexpected deaths at home: 14,000]
●Risk of using housing data for criminal activities
Overseas
○ Upgrade of living standard through communitydistributed power sources in areas with inadequate
infrastructure in emerging countries
[Number of people living where there is no electric
power : about 1.2 billion- 17%of world
population(2013)]
Society
○ Realization of 3E+S (Energy security, Economic efficiency,
Environment, Safety)
○ Improvement of efficiency of energy use at home
[Energy use percentage at home: 14.4％]
○Realization of efficient distribution in response to needs
for sufficient food
[Food loss rate: 3.7％]
○ Increase of recall recovery rate and recovery rate of
waste household electric appliance by identifying product
locations
[Number of serious product accidents due to nonresponse to recalled products: 100 cases per year]
○ Further enhancement of disaster-response capabilities
● Risk of cyber terrorism due to expanded networks
○ Contribution to achievement of goal for controlling global
warming by improving efficiency of energy consumption
[Goal: "Limit temperature increase to 2 degrees Celsius by
2050"]
○ Reduction of food loss worldwide
[Number of people with insufficient food: about 800 million]
Source: "Statistics on food loss/household research 2014" by Ministry of Agriculture、Forestry and Fisheries, "White paper on energy usage 2015" by Agency of Natural Resources and
Energy, "Walls blocking female continuous employment" by Cabinet Office, "White paper on aging society 2015 (full version)" by Cabinet Office, "Demographic survey 2014" by Ministry
of Health、Labor and Welfare, "Renewable global status report 2015" by REN21, "World Food Programme “ by Hunger Statistics, "Tasks for product safety policy 2014" by Ministry of
Economy、Trade and Industry
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Multiple ways of meeting the various needs of “smart life"

Create new value by comprehensively utilizing integrated data inside home and in community.

New businesses may emerge that acquire most of their value by securing a competitive advantage
through providing platform of such data integration.
Current
From 2017
About middle of 2020's
→ Integration of data on energy and housing/
creation of added value diversified through
utilization of data
(1)Centralized approach
Intensive on
large scale
Phase1
Phase2
Distributed locally
to area with
demand
Energy
(2)Decentralized approach
Smart house
Home
energy
Phase3
(Flexible and efficient
energy supply system)
Phase2’
(Use of user
resources)
Phase1
e.g self-learning/optimization
by EcoCute and air-conditioner, etc.
Devices such
Phase1
as home
electric
(enhanced functionality
appliances
single device)
household
appliances
Retail
Health/medical prevention
Logistics
Restructuring axis in the Fourth Industrial Revolution
(wide area optimal)
(area optimal)
within
Phase2
e.g. visualization of electricity usage
by smart meter
Phase2
(networking of devices:
visualization, remote control, etc.)
Phase3
e.g.control of multiple devices
via HEMS
Phase4
(Information collection by
Platform and reciprocal
data use
Phase3
(upgrade in linkage with
other devices and services)
In a smart house, various upgrades occur in each device/service, integrating them into the platform.
⇒ Further advancement and resolution of issues in each domain (retail, heath etc.)
...
Obstacles exist
for corporate
partnership,
data use,
platforming.
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(3) (1) Industries flock to market related to “Keep healthy," impacting employment.
Current
around 2030
during 2016-
Newly created
role and value
(5)Personalized
health
service
(2)Digitization
of medical
information
(2)Digitization
of medical
information
(1)Digitization
of fitness
information
(1)Fitness
service in
linkage with
prevention
(3)Visualization
of health
condition
Phase1：Grasp of
basic needs, collection
of quality data
Relevant
industries (e.g.)
(10)Person
alized
(9)Personalized guidance
medicines、
on nutrition
personalized
cosmetic and
beauty services
Clustering data by
integrating health
related data,
medical
prescription,
medical
examination,
clinical data
(7) Monitoring
service
(4)
medical examination
recommendations
(2) Digitization of
medical
information
(3)Visualization
of health
(1) Further
improved fitness
service
Phase2：Improvement of health and
prevention based on relation
between health and symptoms
Industries that develop more
advanced data connection
than data clusters (see
description on the left) will
be first players.
(8)Health
minded
community
building
(6) Insurance to
cope with risk of
life style diseases
(5)Personalized
health
service
(4)
medical examination
recommendations
(3)Visualization
of health
condition and
life style
Phase3：Optimizing and
platforming through AI, etc.
Manufacture (food, cosmetics, household appliance),
Finance(insurance), ・・・
Information service/software...
Medical institutions, entertainment (fitness), manufacturing (health equipment, wearable devices,
apparel), communication ...
•
Impact on
employment
(e.g.)
(4)(5) Decrease of needs for
medical/nursing care due to rise of
independent elderlies will mitigate
tightened labor market (this will enable
focusing work force towards people
truly in need of medical/nursing care).
•
(6)(7)(8)(9)(10) Creation of
employment due to new services
including "prevention and early
diagnosis/early care-" related
personalized services.
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(3)(2) Industries flock to market related to “support he elderly" impacting
Employment
employment.
support
-2030
Current
Newly created
role and value
Excretion
support
equipment
Digitization
of nursing
care data
Transfer support
equipment(care
giver)
Optimal
individual
planning
Digitization
of nursing
care data
monitoring
service
(1)Efficient
administrative services
Relevant
industries
(e.g.)
Transfer
support
Equipment
(care receiver)
Optimal
individual
planning
monitoring
service
(2)Reduction of medical/care
services workload
Reduction of direct services workload
Efficient indirect
services
Smart nursing-care
facility
Transport
support
service
Communication
Robot
service
Excretion
support
equipment
Food intake
service
Transfer support
Equipment (care
receiver)
Transfer support
Equipment (caregiver)
Digitization
of nursing
care data
Optimal
individual
planning
Monitoring
service
(3)Efficient medical/care
services
Information service...etc.
Manufacture (robots), medical equipment...etc.
Information communication, optical equipment, real estate, construction (housing) ...etc.
Impact on
employment
(e.g.)
• Efficient nursing care is
expected by ensuring
utilization of patient
monitoring and digitization of
care record.
• Efficient nursing care is expected by
introducing excretion support
equipment.
• Reducing nursing-care worker
turnover is expected through
mitigating workload by introducing
robots.
• With task of nursing care directly
replaced by robots etc., drastic
improvement of productivity with
nursing care service is expected,
allowing resources to be focused on
people truly in need of human care.
→
Responding to the issues of shortage of nursing care workers, improving working conditions, and
controlling taxpayer's burden.
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Spread of vision “keep healthy, support the elderly" and impact on society (pros and
cons)
Individuals
○ Average life expectancy and healthy life expectancy are
becoming longer, creating an ageless society.(living until
the final days in his/her own way)
[Percentage of population over 65years: 25％, Difference
between average life expectancy and healthy life
expectancy is about 10 years.]
Domestic
○ Independence/self-control of people in need of nursing
care, progress of social participation
[Number of elderly with difficulties in daily lives: 209 of
1,000 people]
○ Living securely until final days with nursing care
[Percentage of single elderly households in 2035: 37.7%]
○ Realization of optimal workload of medical/nursing care
[National medical expense: 40 trillion yen, lifestyle
diseases as percentage of medical expenses: about one
third]
Overseas
○ Increased average life expectancy, reduction of difference
between average life expectancy and healthy life
expectancy
[Percentage of people over 65 years old worldwide : 12％
on the average, average life expectancy: 71years, difference
between average life expectancy and healthy life
expectancy: about 10years]
Society
○ Reduction of fiscal burden of social security
[32.7% of general account expenditure, medical expense:
11.4trillion yen, nursing care expense: 2.7trillion yen]
○ Resolution of supply-demand gap in nursing care workers
[Gap of labor market estimated in 2025: 310,000 people,
estimated in 2035: 680,000 people]
○ Improvement of working conditions of nursing care
workers through higher productivity
[Average salary of nursing care workers at welfare
facilities: 218,900 yen compared to 324,000 yen average
salary of all industries]
○ With prolonged healthy life expectancy, entry into labor
market in the future may be on the rise despite projected
population decrease.
●Possibility of increase of people unable to receive nursing
care service unless industrial structure is reformed.
○ Optimal ratio of medical expenses
[Percentage of medical expense compared to GDP: 9.3%
(OECD member country average)]
○ Increasing need for nursing care services in Asian countries
where aging populations are on the rise, and response to
increasing need for preventive care in developed countries
Source: Materials for the Fourth Committee about healthy life expectancy/average life expectancy：WHO 2012 Comprehensive Survey of Living Conditions 1 in 2010, Report "Workshop for
nursing care service responding to future needs in nursing care service," " Projection of the number of households for Japan (nationwide projection) compiled in January 2013" by National
Institute of Population and Social Security Research
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Multiple ways to meet various needs of “support the elderly"
Current
-2030
Efficient direct services of
nursing care
・Alternative nursing
care with robots
Reduction of direct workload
of nursing care
・ Utilization of excretion support
equipment
・ Utilization of robot suits, etc.
Efficient indirect nursing care
services
・Digitization of nursing care records
・Utilization of watch sensor
・PDCA, etc. on enhanced
quality/productivity based on data
Labor-intensive
service model
・paper nursing care
records
・Watch/patrol at
night, etc.
3． Sophisticated innovation scenario
○ Realization of drastic streamlining
and workload reduction through
progressive robot technology /
innovation
○ Advanced equipment / services
dominating Asian markets where
aging population is on the rise.
2． Enhanced productivity scenario
○ Realization of ability to address
increased needs, securing nursing care
workers, control of national burden
through enhanced quality/productivity
based on IT / sensors / robots
○ Improved quality of nursing care
service - realization of nursing care at
home without burden to family
members
1． Stagnant productivity scenario
○ Increase of national burden
○ Shortage of nursing care workers
○ Increase of nursing care worker
turnover, etc.
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(4) Industries flock to markets related to “smart procurement," impacting
employment.
Current
around 2020
Newly created
role and value
(4) Mass
customization
(3) Ensuring
sophisticated
safety
(1)
Reduction of
lead time
(3) Ensuring
sophisticated
safety
(2) Reduction of
waste (materials
inventory)
(1) Reduction
of lead time
Phase1/2:
Optimization of supply
chain
(5) Prolonged
product life
cycle
(3)
Realization
of smart
security
(2) Reduction of
waste (merchandise
inventory)
(1) Further
reduction of
lead time
Phase３：Provision of
customized products by
understanding customer needs
Commercialize
products after
estimating
needs and
creating trends
Realization of mass
customization that
realizes fulfillment of
individual needs
Relevant
industries
(e.g.)
(6) Expansion of
domains of newly
created services
and products
(6) Creation of
new services and
products
(8) Creation of
trend by
identifying
potential
needs
(7) Maintenance
of products /
zero downtime
(4) Mass
customization
(5) Prolonged
product life
cycle
(2) Zero
waste, zero
inventory
Phase 4: Sophisticated projection
through AI
Medical care (Health), all types of industries or sectors
including waste processing
Logistics, distribution ...
Manufacturing, communication, information service...
Improve working
conditions and labor
market for factory
workers
•
•
Improvement of
logistics labor market
•
•
Change in necessary
skills / type of work for
factory workers
•
Impact on
employment
(e.g.)
Expected increase in demand of
labor in many industries due to
creation of new services and
products
Change in necessary skills / type
of work for factory workers,
logistics workers, back office
workers, etc.
•
Expected increase of demand of labor in
many industries due to creation of new
services and products
•
Expected increase of demand of labor in
domestic factory workers due to return of
manufacturing sites to Japan, facilitated
by reduction of lead time.
•
Change in necessary skills / type of work
required for factory workers, logistics
workers, back office workers, etc.
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Spread of “smart procurement " vision and its impact on society (pros and cons)
Individuals
○ People may be able to purchase whatever they want,
whenever necessary and at fair prices.
Domestic
○ Consistent level / expansion of job openings due to
development of new demand, increased
competitiveness thanks to acquisition of domestic
production sites
[Active opening ratio: (jobs on production line) 1.23
(February 2016)]
●Need for change in worker skillsets, concerns about
reducing job openings due to decline in international
competitiveness
(e.g. ：machine → IT)
Overseas
○ People may be able to purchase whatever they want
whenever necessary and at fair prices.
○ Reduction of waste worldwide
[2.1billion ton]
Society
○ Realization of zero waste during production process
(strengthen international competitiveness, reduce
environmental impact)
[Emission of CO2 from industrial sector(factory etc.):
about 430 million tons (32.8% of total)]
○ Further construction of manufacturing facilities for
sophisticated products in Japan (creation of new jobs,
ripple effects for regional economies)
[Overseas production rate for manufacture: 24.3％
(2014)]
○ Control of illegal dumping of waste household electric
appliances with increased networking of goods
[Number of collected waste household electric appliances
illegally dumped: (estimated record) 74,600]
○ Overseas deployment of smart factory system that
realizes international contribution and market
deployment by Japanese companies
[GDP ratio for manufacturing: approx. 16%]
○ Recovery of waste material value with up-cycling,
recycling and parts collection etc.
[1.3 trillion USD market potential (Accenture's
projection for 2030)]
Source: "Statistical data on general waste and industrial waste" by Resource Recycling Promotion Center, "Status of venous industry and challenges" by Ministry of Economy, Trade and
Industry, "Statistical research on food loss and household research 2014" by Ministry of Agriculture、Forestry and Fisheries
"Status of illegal dumping etc. of waste household electric appliance 2014" by Ministry of the Environment, "Status of general job reference February 2016" by Planet Aid, Accenture Mr
Hodo's presentation at 3rd New Industrial Structure Committee, Ministry of Health,Labor and Welfare,"Emission amount of greenhouse effect gas 2013 (preliminary)" by Ministry of the
Environment,
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"Survey of Overseas Business Activities" by Ministry of Economy, Trade and Industry, McKinsey"Manufacturing the future: The next era of global growth and innovation"
36
Multiple ways of meeting various needs of “smart procurement”


Creation of new value by comprehensively utilizing integrated data on manufacturing / distribution
/ retail etc.
Emergence of new business entities that secure a competitive advantage by utilizing technological
innovation including AI is possible.
Current
Players with
manufacturing facilities
Manufacturer
Optimization of
production by
"visualization" and
"data use" at factories
Efficient supply chain
through collaboration
Players without
manufacturing facilities
IT service provider
Preventive
maintenance /
insurance service
using AI
Preventive
maintenance /
insurance service
using sensor data
Component /
material
provider
Distributor
(Retail/Wholesale)
More efficient sales
activities
using distribution data
(POS,EDI data etc.)
-2030
around 2020
Mass customization
(instant customization of
mass production, optimal
control of robots with AI)
Commercialize
products by
estimating
needs and
creating trends
with big data
and AI
Monozukuri
(manufacturing)
Venture
Provision of services
utilizing big data on customers
Consumer
Consumers to participate in
production process
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37
4. Changes in employment
structures with the revolution
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Focal point of change in employment structure (1)
 Progress of labor saving in non-routine tasks besides routine tasks with emergence of robots etc. It is
highly probable that middle-skill white-collar jobs, a major portion of the workforce in Japan, will
decrease significantly while such progress leads to filling the overall manpower shortage.
 Changes in business processes in line with the Fourth Industrial Revolution will bring about new
employment needs including middle-skill workers. Therefore it is necessary to develop human resources
to respond to changes in the employment structure and to shift the labor force to growth areas.
Change of jobs in line with the Fourth Industrial Revolution
＜Upstream jobs (management / planning / product planning / marketing, R&D)＞
• Increase of high-skilled jobs due to expansion of business / markets in various industries
(Occupations such as) management / strategy staff, M&A staff, data scientist, product planner for mass
business, marketer / R&D staff, IT engineer to allow R&D findings to materialize)
• Also increase of middle-skilled jobs to help with high-skilled workers such as data scientist etc. *This varies
depending on how fast technological innovation progresses.
(Occupations such as) operation staff to implement business creation process
• Also increase of jobs for middle-skilled workers due to mass customization
(Occupations such as) product planner / marketer who develop niche business, IT engineer to allow R&D
findings to materialize
＜Manufacturing / Procurement＞
• Decrease in manufacturing jobs due to labor saving / unmanned factories with use of IoT and robots etc.
(Occupations such as) production line workers, product / delivery inspectors
• Decrease in procurement jobs due to automated, efficient supply chain management utilizing IoT.
(Occupations such as) corporate procurement employees, shipment/delivery employees
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Focal point of shift in employment structure (2)
Change of jobs in line with the Fourth Industrial Revolution
＜Sales＞
• Decrease low-value-added sales jobs due to efficient, automated functionality of new technologies such as
analyzing customer data and matching products /services with such data through AI and big data
(Occupations such as) salespeople for low priced/regular insurance, cashiers for supermarkets
• Increase in jobs for sales etc. of products/services which people buy chiefly for their safety
(Occupations such as) salespeople for customized, high-value insurance, corporate salespeople with
sophisticated consulting skills which will become a competitive advantage.
＜Services＞
• Decrease in jobs for simple, low-value-added services due to AI and robot replacement (jobs which robots can
handle through imitation because AI can easily complete tasks based on past data or where the nature of the
job is repetitive)
(Occupations such as) waiter/waitress at normal restaurant, room clerk at low/middle grade hotel, call center
staff, bank clerks, warehouse workers
• Increase in jobs for high-value-added services for which direct human involvement enhances the quality/value
of the services
(Occupations such as) staff at exclusive restaurants, caregivers for expensive nursing care services, artist
＜IT＞
• Increase of jobs for not only high-skilled work that produces new business but also middle-skilled work due to
mass customization
(Occupations such as) manufacturing sector IoT business software developer, IT security staff
＜Back office＞
• Decrease back office jobs due to AI and global outsourcing substitutes
(Occupations such as) accounting staff, human resources department payroll staff, data entry staff
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Envisioned reform of employment structure in line with the Fourth Industrial Revolution
(illustrutive)
Target
As-is scenario
Optimal jobs in terms of quality and quantity
with global market in possession
Losing markets with decrease of jobs and
deteriorated quality
Jobs to create new business trend
by developing AI and robot
Outflow overseas
Significant decrease
AI and robot etc. will replace
traditional jobs including
workers at low value added
production line,
salesperson, back office staff.
(example) Management strategy prepared by
global companies, Top-level data scientists and
R&D staff etc.
Jobs to work together with AI and robot, etc.
(example)
・Planning of various business
・Support work to help with high-skilled data
scientist etc.
(coordinator to incorporate change of business
process into operation)
・Planning/marketing for customized product/
service expected to dramatically increase in the
future
Jobs independent from AI and robot, etc.
(example)Human interaction
・High value added sales/service which can bring about
enhanced quality/value of service through direct human involvement
Tendency of low
wage/salary for many jobs
Accumulate jobs
internally and externally
New
employment
responding to
needs
Jobs to be replaced by AI and robot, etc.
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5. Projections involving
industrial and employment
structures
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Summary of Projections (towards 2030)
Status quo scenario



Added value will flow overseas due to reliance on overseas platform providers by Japanese industries to provide
business.
Inability to generate added value that can respond to societal challenges will bring about low added value and low
growth rate for domestic industries.
Workforce concentrating into jobs with low added value and low growth rate that compete with industries of
machine/software will produce a society where low-wage workers are the standard.
Reform scenario



Ability to generate added value that can respond to social challenges will bring about acquisition of industries with high added
value and high growth rate on global basis.
Enhanced productivity caused by developed services based on technological innovation and increased entry into labor market will
resolve issues of decreasing workforce.
Workforce's shift to jobs which require solely human element in harmony with machine/software will let workers earn high
wages/salary.
[Projected result]
※2015-2030(annual rate)
As-is scenario
Reform scenario
Real GDP growth rate
＋0.8％
＋2.0％
Nominal GDP growth rate
＋1.4％
＋3.5％
Wage increase rate
＋2.2％
＋3.7％
Nominal (2020)
547 trillion yen
(2030)
624 trillion yen
GDP
592 trillion yen
Fourth Industrial Revolutiondriven added value: 30 trillion
yen
※This projection result requires continuous study in accordance with the reform’s ever-changing "vision."
846 trillion yen
METI
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43
Projected result of industrial structure
(GDP growth rate / number of workers / labor productivity)
Sector
(1) Raw materials
Agriculture/fishery, mining
etc.
(2) Process manufacturing
(intermediate goods etc.)
Petroleum products, pig iron/crude
steel, chemical fiber etc.
(3) Customer response
type manufacturing
Automobiles, communication
equipment, industrial
machinery etc.
(4) Service /technology provision
Construction, wholesale,
retail, finance etc.
(5) Information service
Information service, service
for businesses
(6) Hospitality service
Hotel, restaurant,
entertainment etc.
(7) Infrastructure network
Electricity,
telegraph/telephone etc.
(8) Others
Medical/Nursing Care,
governments, education etc.
Total
Optimal state envisioned
with reform scenario
Nominal GDP growth rate
(annual rate)
※Comparison between 2015 and 2030
Labor productivity
(annual rate)
Number of workers
※ ( )denotes number of workers in 2015.
As-is
Reform
As-is
Reform
Expected to grow in accordance with
national economic growth
＋0.0%
＋2.7%
－0.81million－0.71million
Expected to grow with efficient production of
standardized products, and by deploying widelyused product development cycle
－0.3%
＋1.9%
－0.58million －0.43million
Expected to create new value, significantly
increase added value and minimize decrease
in workers by deploying customized services and
shift to new service industry etc.
＋1.9%
＋4.1%
Expected to increase added value by securing
leading position in systemization/platforming of
services using customer information
＋1.0%
＋3.4%
－2.83million －0.48million
(20.26million)
＋2.0% ＋3.6%
Expected to significantly increase added value
and employment as core sector for the Fourth
Industrial Revolution, driving economic growth
＋2.3%
＋4.5%
－0.17million＋0.72million
＋2.5% ＋3.8%
＋1.2%
＋3.7%
－0.80million＋0.24million
＋1.6%
＋3.8%
－0.53million －0.07million
＋1.7%
＋3.0%
＋0.51million＋0.28million
＋1.4%
＋3.5%
－7.35million －1.61million
Expected to increase added value and employment by
expanding local markets through identification of
potential demand based on customer information
Expected to increase added value enhancing quality of
entire system, efficiency of supply and entry into
different areas by integrating other service industries
Expected to have suppressed increase in
workers due to efficient provision of social security
etc. with AI, robot etc.
(2.78million)
(1.52million)
－2.14million－1.17million
(7.75million)
(6.41million)
(6.54million)
(3.88million)
(14.21million)
(63.34million)
As-is
Reform
＋2.3% ＋4.7%
＋2.9% ＋4.2%
＋4.0% ＋5.2%
＋2.1%
＋3.5%
＋2.6% ＋4.0%
＋1.5%
＋2.9%
＋2.3% ＋3.6%
※Each sector represents a category representing individual activities related to goods/services in accordance with industrial classification based on activities in the Input-Output Table. For example if company performs
efficiently automobile manufacture by introducing IT, its activities are divided into automobile manufacture and information service, and each activity is respectively categorized into "customer response manufacturing" and
"information service."
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Changes in number of workers by occupation (increase rate)
※Comparison between 2015 and 2030
Occupation
(1) Upstream jobs
Management strategy staff, R&D
staff etc.
(2) Manufacturing/Procurement
Production line workers,
corporate procurement staff
Optimal state envisioned with
reform scenario
－1.36million
Expected to be on the decrease regardless of success
of reform due to replacement by AI and robot
－2.62million
Expected to increase jobs for sales etc. of
products/services with sophisticated consulting needs as a
competitive advantage.
(4) Sales (high possibility of replacement)
Expected to be on the decrease regardless of success
of reform due to streamlining/automation with AI and
big data
Staff at exclusive restaurants, caregivers
at expensive nursing care service etc.
(6) Services (high possibility
of replacement)
Staff with typical restaurant,
call center staff etc.
(7) IT
IoT business manufacturing software
developer, IT security staff etc.
(8) Back office
Accounting staff, personnel staff
for salary management, data entry
staff
(ⅸ) Others
Construction workers etc.
Total
As-is
Expected to increase core manpower to engage in new
businesses including planning of management/product,
marketing, R&D
(3) Sales (low possibility of
replacement)
Salespeople for customized highvalue insurance etc.
Salespeople for low priced/regular
insurance, cashiers for
supermarket etc.
(5) Services (low possibility
of replacement)
Number of workers
by occupation
Expected to increase jobs for high value added sales/services for
which direct human involvement creates enhanced quality/value
of services
Expected to be on the decrease due to streamlining / automation
with AI and big data
※As-is scenario shows slight increase as it serves as a source of
employment.
Expected to increase jobs for IT as it meets needs from
manufacturing as a whole which is pursuing IoT and
improved security
Expected to be on the decrease regardless of success of
reform due to replacement with AI and global outsourcing
Expected to be on the decrease due to
streamlining/automation with AI and big data
Number of workers
by occupation (annual rate)
Reform
As-is
Reform
－2.2 %
＋1.2 %
－2.97million
－1.2 %
－1.4 %
－0.62million ＋1.14million
－1.2 %
＋1.7 %
－0.62million
－1.3 %
－1.4%
－0.1 %
＋1.8 %
-0.51million
＋0.1 %
－0.3 %
＋0.45million
－0.2 %
＋2.1 %
－0.8 %
－0.8 %
＋0.96million
－0.68million
－0.06million ＋1.79million
＋0.23million
-0.03million
-1.45million
-1.43million
-0.82million
-0.37million
－1.1 %
－0.5 %
－7.35million
－1.61million
－0.8 %
－0.2 %
(Source) Compiled by METI based on "Collaborative research result on probability of computerization for occupations in Japan" by Nomura Research Institute and University of Oxford(Dr. Michael A. Osborne, Dr. Carl Benedikt Frey)
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(Reference) Projection of industry and employment structures
Projections regarding macro-economic trends such as 2030 GDP, income level, production value by
sectors, number of workers by sectors, number of workers by occupations, while considering dramatic
improvement of productivity triggered by the Fourth Industrial Revolution, smooth transfer of economic
resources to growth industries, shifting employment with business process changes, all of which are
derived from a combination of (１) Macro-economic model,(２) Industrial structure model, (３)
Employment structure model.
(１) Macro-economic model
 This model shows the supply/demand
adjustment state which represents
short/medium-term change of GDP
based on total demand including
consumption and investment while
long-term GDP is affected by potential
GDP supply restrictions.
 As-is scenario produces a low
potential growth rate vector.
 The reform scenario indicates upward
potential growth due to the Fourth
Industrial Revolution. Furthermore,
consumption/investment expands
with subsequent potential demand
and projected increased economic
growth rate.
(２) Industrial structure model
 This model, based on trends in the
past 20 years, projects the
percentage of final demand by
sectors in 2030, the interim
investment structure and labor
productivity.
 Production value by sectors is
projected by the following: final
demand from macro-economic model
analyzed by percentage of final
demand by sectors and this calculated
final demand is multiplied by inverse
matrix coefficient derived from
intermediate input structure.
(３) Employment structure model
 Number of workers by occupation
is projected with number of
workers by industry sectors
multiplied by ratio of occupations
to sectors.
 Reform scenario surmises that
increased occupations indicate jobs
with low possibility of replacement
by AI/robot and decreased
occupations indicate jobs with high
possibility of replacement based on
collaborative research by Nomura
Research Institute and University
of Oxford.
 Number of workers by sectors is
projected with production value by
sections divided by labor productivity.
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＜Main premises of projection＞
 Size of workforce
Figures until 2014 are derived from actual figures.
Regarding figures after 2015, as-is scenario used a
projection based on "Zero growth/status of participation,"
and the reform scenario used a projection based on
"Economic revitalization/progress of labor participation“
using data derived from "Estimated labor supply/demand"
(May 2014) by JILPT (hereinafter referred to as "estimated
workforce")
※ Note: Number of workers in 2030 is affected by long-standing
decrease of productive age population due to low birth rate/aging
population.
 Price increase rate
With respect to the baseline price increase rate for, as-is
scenario referred to “Projection on medium / long term
economy / finance (January 21, 2016)" (hereinafter referred
to as "medium/long term projection") by Cabinet Office, and
reform scenario referred to the same with respect to price
increase index for economic revitalization case. Figures in
2023 were used to assume figures after 2024.
 Foreign exchange rate
Figures till 2015 are derived from actual figures. Figures in
2015 used to assume figures after 2016.
 Structural / frictional unemployment
 Finance
2.8％ - used as assumption based on relationship of past
With respect to each item of national expenditure, general
unemployment and vacancy rate (job openings to potential
government fixed capital formation is expected to increase
number of employees)
with domestic corporate goods price index in the "medium /
long term projection" and other expenditures (excluding
 Working hours
social security) increase with the consumer price index
Average working hours - calculated using "numbers of
(virtually no change). Social security expenditure is expected
working hours by gender / age in 2014 "from " Basic
to increase with nominal GDP growth and wage increase
Survey on Wage Structure" by Ministry of Health, Labor
rates.
and Welfare and "numbers of workers by gender / age
from "estimated workforce."
 Consumption tax
It is assumed that consumption tax will be raised to 10％ in
 Fixed capital consumption rate / Capacity utilization
2017.
index
8.6％ or less - used as assumption based on relationship of past
capital investment and private corporate capital stock. For
capacity utilization index, figures in 2014 were used as
assumption.
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６．Japan’s detailed strategies
i. Environmental development for
promoting data utilization
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48
(1)Development of data platforms and creation of a secondary market for data
Challenges
•
If data remains enclosed within each companies as it is now, data platforms, which is the basis of global data utilization, will
have to rely on foreign countries.
•
On top of such development of data platforms, it is important to simultaneously promote data exchange based on the market’s
mechanism by vitalizing negotiation-based transaction and create a market place where data can be openly traded with third
parties, etc.
Basic Direction of Efforts
•
•
Promote the development of global data platforms in areas where Japan’s strengths can be leveraged. Internationalize such
efforts by creating successful cases as soon as possible.
In the future, data producers and data users need to be matched up and a system (secondary market for data) where data
flows and is mutually used and applied needs to be established. Rights, responsibilities, and transaction rules between the
producers and users of data need to be clearly stipulated and discussions towards the development of technical aspects and
actual systems for the development of a secondary market of data is to take place.
Short Term Efforts
•
•
•
•
•
Development of data platforms (Smart factories, industrial safety, automatic driving map, healthcare/medical, etc. )
Improve environment for future platform development (Environment for verification, creation of rules and systems, promotion of
international standardization, etc.)
Confirm current contracts regarding data use and application. Create templates for contracts and model provisions.
Promote precedent cases working towards the creation of a secondary market for data.
Switch from the conventional face to face and written operation to promoting the use of IT as a rule.
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49
Clarification of competitive area and cooperative area
～e.g.(1) Cooperative area in the manufacturing scene
For manufacturing sites to connect with each other
between companies (large corporations and SMEs)
and organizations, it is important to carefully
[Cloud]
determine how to collect what type of data for
Data Cooperation (2)Distribution
Data Cooperation collaboration↓
 A public-private working group for related
(3)Sales
(1)Procurement
companies was created (July 2015) and is
working on model cases, information sharing,
and standardization such as the IEC and ISO.
Creation of Platform
[Instruction by the Prime Minister based on the 5th Public-private
Dialogue]
[Edge]
•Create advanced systems to share and use data from the
Data in
Data possible
Competitive to be share
Area
Data in the Production Scene
manufacturing scene collected by sensors amongst factories and
companies at 50 locations throughout the nation by 2020.
•Collaborate with Germany, with which Japan shares a strong
manufacturing industry, in international standardization.
(*Attended by a broad range of manufacturing related companies)
○Control/network equipment manufacturers (Mitsubishi Electric, Hitachi, etc.)
○IT vendors (Fujitsu, NEC, etc.)
○Users (MHI, Toyota Motors, Nissan Motors, etc.)
○Others, trading companies, think tanks, etc.
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Clarification of competitive area and cooperative area—e.g.(2) Cooperative area in
industrial safety.
 Efforts in industrial safety are similar amongst companies and have high potential of progress in data sharing as well as its
effectiveness.
 Start on the organization of data that can be shared as well as on the verification of the effectiveness of data sharing by
collaboration amongst companies in the same industrial complex.
 Reflect the results of the verification process in new regulation systems and promote continuous monitoring utilizing IoT etc.
Support insurance development and other efforts, too.
＜Examples of topics to be verified＞
(1) Parts management for common
equipment
(Packing & sealing for rotating
machinery, etc.)
(2) Continuous monitoring of operation
status (early detection of anomaly/signs)
・Alert “Anomaly”
Past ・Long detection lead time
→ Large impact on production
Upper limit alarm Normal
Super Certified
Companies
Certification Criteria (Additional)
Organic collaboration
・Utilization of IoT, Big Data, etc.
of verification and
・High level risk assessment
regulations systems.
・Evaluation of saftey capability by
third party, etc.
・Alert “unusual situation”
・Shorten detection lead time
New→ Minimal impact on
production
Signs
Index for status management
Early detection
＜Regulation system for high level Selfcontrolled Safety＞
Privileges in regulations
depending on ability to
maintain safety.
•
•
Certified
Companies
Certification Criteria
・Creation of an organization
specializing on safety.
・Implementation of PDCA
・Ensure sufficient education and
training etc.
•
Allow use of new
inspection methods
Allow lower frequency
of inspection to
enable long term
continuous operation
Allow broader minor
changes of facility by
“filing a report” only,
etc.
Companies
Lower limit alarm
Time flow
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Clarification of competitive area and cooperative area
―e.g.(3) Cooperative area related to autonomous driving maps

Various autonomous driving related data exist

Of those data, economies of scale can be expected by inter-company collaboration in 3D map information etc.

In Europe, 3 German automobile manufacturers have jointly bought a map company.
《Dynamic Information(＜1sec) 》
ITS’s predictive information (vehicle
information in the vicinity, pedestrian
information, traffic light information.
Autonomous driving related data
linkage
Scope of Cooperative Area and area of
competition needs to be determined.
《Quasi-dynamic Information(＜１min) 》
Accident information, traffic
information, small-area weather
information, etc.
[PM's statement at the 5th Public-
《Quasi-static Information＜１ｈour)》
Traffic regulation information, road
construction work information, large
area weather information
《Static Information(＜１month)》
Road surface information, traffic lane
information, 3D structure information,
etc.
Base
Private Dialogue]
•
Make autonomous driving maps ready
for practical use as early as 2018.
•
Gather automobile manufacturers and
map companies to create a crosscompany unified specification and
create a proposal for international
standardization by the end of FY 2016.
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(Clarification of competitive Area and cooperative area
―e.g.(4) Cooperative area related to healthcare and medicine.
 Utilize the massive amount of treatment and examination data, etc. compiled
(to create big data) for drug development and R&D of treatment methods, etc.
根拠に基づく
Optimal
treatment
based
on evidence
最適な治療
Solid line ≒ named data
Dotted line ≒ anonymous data
Medical institution
医療機関
Island / rural clinic
離島・僻地診療所
Development
人工知能を適用
of AI-applied
した医療システム
medical system
開発
Hospital
病院
Collecting
収集機関
body
Institutions that can properly
医療情報を預かり、
manage and anonymize
適切な管理のもとで
medical data
匿名加工等が可能な機関
Clinical
research,
臨床研究
epidemio・疫学研究
logical
用データ
research
data
Health service
健康サービス提供者
providers
Medical device maker
医療機器メーカー
新技術、
Scientific
discovery
of 科学的発見
new technology
Medical education
医育機関
新薬/新技術
Efficient
R&D for
drug discovery
開発の効率化
Pharma
製薬企業
Clinics
診療所
Effect
1 Medical
services and administration
効果①
医療サービス、医療行政
Effect
2 Clinical
research, epidemiological research, AI, etc.
効果②
新技術/臨床研究、疫学研究、人工知能等
Effect
3 New
industry/health services for individuals etc.
効果③
新産業/個人の為の健康サービス等
Public administration
行政
Determine
health
先制的な行政
Policy on the basis of
データに基づいた
pre-emptive
医療政策の決定
administrative data
新サービス、
Development
of new
services
and products
商品の開発
Health-related
companies
健康関連企業
(Source： Excerpts with partial changes to material from the Council for Next Generation Medical ICT Platforms.
[PM's statement at the 5th Public-Private Dialogue]
In order to utilize data for new drug and treatment development, legislation to create an organization that
engages in simple and easy collection of large amount of treatment/ examination data, anonymizes and safely
manages the data is to be developed by the end of next year.
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(Clarification of competitive area and Cooperative area
―i.e.(5) Cooperative area related to healthcare and medicine.
 Promote the utilization of receipts, health check-ups, and healthcare related
data, with the consent of the data source individual, by creating a
“Healthcare Data Consortium”, capable of data analysis, from entities,
mainly “health conscious” companies, that accumulate and utilize their
employees’ and other data.
Company/insurer
Healthcare
related information
Intervene at an
appropriate timing
Health check-up
Feedback loop
健
康
Recovery
本人
Healthcare
related information
Examination data etc.
Doctor/public
health nurse
Healthcare
related information
Medical institution
Instruction
on exercise
Must consult
medical institution
Healthcare related data
(steps walked, pulse,
temperature, weight,
blood pressure, sleep…)
Health check-up
Integrate
Health level
Health check-up data
Healthcare
related information
Medical receipt data
Verification image of utilizing medical receipt,
health check-up and healthcare related data
to prevent the aggravation of lifestyle related diseases
Make symptom
Worried about Alert if symptom
transparent to
a symptom
worsens
ensure continuous
treatment
(Source: Reference material from Ministry of Economy, Trade, and Industry, NextGeneration Healthcare Industry Council, Health Investment Working Group (10th
meeting))
[PM's statement at the 5th PublicPrivate Dialogue]
• Start verification project compiling
and analyzing receipt, health
check-up, and healthcare data
held by medical institutions,
companies and insurers by the
end of this FY.
• Start efforts that provide stronger
incentives to medical insurers to
contribute to prevention and
health promotion, including the
above effort.
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54
(2) Promotion of personal data utilization
Challenges
•
Clarification of rules on obtaining consent from the data source individual and on the anonymization
process is insufficient. Social recognition on the merits of personal data utilization is insufficient.
•
There are cases where useful data remain scattered, not compiled to a sufficient size.
•
There are cases where companies and administrative bodies possess large amounts of personal data
which are kept idle and remain both unutilized by themselves and not supplied to third parties.
Basic Direction of Efforts
•
Keeping in mind the balance with ensuring protection of privacy, accelerate clarification of rules on
obtaining consent from the data source individual and on the anonymization process, and publicize the
rules.
•
Develop an organization that engages in simple and easy collection of large amounts of treatment/
examination data, anonymizes and safely manages the data (by the end of next year).
•
Look into creating an organization that records personal data with the involvement of the data source
individual and compiles the data for uniform management in order to provide various companies with the
data.
Short Term Efforts
•
•
•
•
International standardization of guideline to obtain consent from data source individuals.
Create guideline for anonymization process (To be developed by certified personal information protection
organizations of each industry)
Materialize the plan of creating a proxy organization that does not require consent of the data source
individual in the healthcare and medical field, etc.
Consider a framework of utilizing personal data with the involvement of the data source individual.
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(Reference)Efforts in the UK ～midata～
(参考)英国の対応
 The UK is running a public-private joint project “midata” since 2011, which is a
framework that enables consumers to freely access their own personal data obtained
by private companies, also making it possible for the data to be provided to third
party companies as needed.
UK: How midata works
fields
Electric power
providers
Financial
Institutions
(banks, credit
cards, etc.)
(1) Request data disclosure
Participants: British government, consumer
organizations, regulators (ICO, OfCom,
OfGem), private companies (Google, British
Gas, Lloyds TSB, 02, etc.)
Mobile
Communications
carriers
(2) Obtain data real time (machine readable format)
(3) Provide data
(5) Advice,
recommendations
Individual
Third part company
(4) Data analysis
(Reference)
EU Data Protection Regulation Draft Article 18 (Rights to data portability)
2 The data subject holds the right to obtain those data he/she provided the controller in a structured and commonly used
electronic format, and also holds the right to transfer data from one electronic processing system to and into another,
without being prevented from doing so by the controller.
Source: Ministry of Economy, Trade and Industry
Industrial Structure Council New Industrial Structure Committee (7th meeting)
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(3) Development of ecosystem that produces security technologies and human
resource for security
Challenges
•
In order to strengthen cyber security, the government needs to take leadership and collaborate with
players from the industrial side to create an eco-system where an industry is created around security.
Basic Direction of Efforts
•
Develop an eco-system where actual incident management, analysis of new attack information, R&D
based on such information, and development of human resource based on such practice collaborate and
look into creating a system where security countermeasure needs are created in the industrial side.
•
Clarify standards related to security countermeasures and introduce a system of evaluation in by market.
•
Further, consider utilizing frameworks of regulation in fields where the maintenance of a certain
standard of service and security is needed according to industry law.
Short Term Efforts
•
•
•
•
Spread the Cyber Security Management Guideline.
Accelerate the development of technology and human resource that will lead to strengthening cyber
security countermeasures.
Strengthen security countermeasures at important infrastructure companies.
Strengthen recruitment of human resource for security (develop human resource for security through the
creation of national qualifications and other measures and promote the recruitment of qualified human
resource)
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(Reference) Cyber attack update
○Many incidents of leakage of important information have occurred by targeted cyber attacks to
governmental organizations and companies.
○On top of information leakage, there is an increased risk of cyber attacks that result in physical
damage targeting social infrastructures and IoT systems. With the 2020 Tokyo Olympics and
Paralymic games ahead, the risk will grow further.
[Percentage of Targeted Attacks with Confirmed
Information Leakage、 etc]
23.8％
25%
20%
[ Cyber Attack to IoT System]
17.2%

19.6%
15%
10%

5%
0%
2011年度
2012年度
2013年度

July 2015, a security researcher proved that Chrysler’s
“Connected Car” system (a system which enables the
driver to start the engine and understand the current
position of the vehicle using GPS through a smartphone)
had vulnerabilities through which it can be hacked.
Specifically, he pointed out that a third party could stop
the engine or control the brakes by remote operation
using a smartphone.
Chrysler recalled 1.4 million vehicles.
(Source)Drafted by the Ministry of Economy, Trade, and Industry based on the IPA “Information Security
Incidents Damage Situation Survey” 2011, 2012, 2013.
Source：Wired Magazine
[Attacks to Public and Industrial Infrastructure Overseas]
Damage to blast furnace of a steel refinery (German, 2014)
Fraudulent manipulation of control system was gained by
targeted attack. Resulted in damage of blast furnace.
Large scale blackout in Ukraine (2015)
Fraudulent manipulation of control system was gained by
targeted attack. Resulted in a large scale blackout effecting
millions of homes in western Ukraine for 3 to 6 hours.
Source: Ministry of Economy, Trade and Industry, Industrial Structure Council, New Industrial Structure Committee (7th meeting)
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(4) Intellectual property policies in the face of Forth Industrial Revolution
Challenges
•
A new system for intellectual property encompassing new informational assets such as creations using
artificial intelligence and databases compiled by sensors, etc. is needed.
Basic Direction of Efforts
•
Clarify how to handle creations using artificial intelligence etc. as intellectual property.
•
Prevent free rides on related technologies and databases.
•
Secure appropriate compensation when technology or data is shared with a third party.
•
In order to promote innovation by smooth utilization of data, develop a new system for existing
intellectual property, taking the balance of protection and utilization into consideration.
Short Term Efforts
•
•
•
Consider how future intellectual property protection should be established regarding new informational
assets such as creations using AI, databases, etc. as well as related technologies.
Develop plans to promote the collaborative utilization of intellectual property.
Develop a new copyright system (a rights limitation system with a certain level of flexibility, etc.)
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(Reference) Protection of database comparison of systems by nation
 Japan, US, and the UK all protect databases with creativity by copyright laws.
 On the other hand, there are no systems that grant rights to databases
deemed not creative in Japan and the US, while the EU protects their right by
granting a “special right”.
※Databases deemed not creative can be protected as “trade secret” if it is not made public.
Certain protection may apply through conduct control by tort law, etc..
EU
Japan
USA
Creative
Protected by Copyright Law
Not Creative
Sui generis right(Special Right)
Content: Right to prohibit actions of extracting
substantial parts of the database’s content or
the secondary use of the content.
(None)
(None)
Source: Reference material for the Ministry of Economy, Trade Industrial Structure Council New Industrial Structure Committee (7th meeting),
Mr. Miyake’s reference material at the Study Group on Cross-sectional Systems toward the Forth Industrial Revolution.
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(5)Modality of new rules of competition corresponding to
Forth Industrial Revolution
Challenges
•
In order to develop a fair environment for competition and to promote innovation, parts of platformers
not encompassed by existing laws need to be enumerated and the need of new policies, including not
only aspects pertaining to competition related policies, for new problems that arise where existing laws
do not or may not effectively cover need to be evaluated.
•
In the event that the Fair Trade Commission confirms incidents where fair competition is being inhibited
or incidents against the Anti-monopoly law, quick and strict legal action must to be taken.
Basic Direction of Efforts
•
Collaborate with related governmental agencies to understand the competitive environment in the digital
market and scrutinize key issues and challenges.
•
Clarify what cannot be encompassed by existing laws and consider how Japan should deal with parts not
covered and consider the need of new methodologies in a broad range of existing systems.
•
Streamline the environment for enforcing the Anti-monopoly act and the Fair Trade Commission will take
quick and strict legal action if it confirms any violation.
Short Term Efforts
•
Reorganize ideas on how to correspond to platforms and consider what measures need to
be taken.
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(Reference) Statement of objection sent to Google (April 20 th, 2016)
On April 20th, the European Commission sent a Statement of Objection to Google stating
the company is forcing manufacturers of smart phones and other mobile devices to preinstall its application and set as default, leading to close off ways for other company’s
applications from the market and stifling competition.
Concerns of the European Commission(Press Release)
Google’s Comment (Statement by
Executive Vice President on same day)
 Google requires to pre-install Google Search (search app), Google Chrome (browser) and
other apps as default as a condition to license Google Play (Application Store) to Android
devices.
→Points out the following three effects
(1)
Makes it difficult for Google’s competitors to have their search apps and
browsers installed as default to smartphones and other mobile devices.
(2)
Lowers incentive for manufacturers of smartphones and other mobile devices to
set search apps and browsers that compete with Google Search and Google Chrome as default.
(3)
Lowers incentive for consumers to download competing search apps and
browsers.
 Since its release in 2007, Android has served
as the engine for both mobile software and
hardware innovation, empowering many
manufacturers of smartphones, etc. and has
allowed developers of all sizes to reach
consumers. As the result, users enjoy
extraordinary choices of apps and devices at
ever-lower prices.
 Android is an open-source system meaning that it can be freely used and modified.
However, Google, as a condition to pre-install Google Play and Google Search to a modified
operating system (Android fork), requires a manufacturer to enter into an “AntiFragmentation Agreement” that commits to not to sell devices running on Android forks.
→Denies consumers’ access to innovative smart device services enabled by superior OS
(Android fork)
 Google takes the European Commission’s
concerns seriously but also believes that its
business model is giving consumers OS with
unprecedented performance while keeping
manufacturers’ costs low and flexibility high.
 Google grants significant financial incentives to manufacturers of smartphones, etc. on
condition that they exclusively pre-install Google Search as search apps on their devices.
※Statement of Objection
•
•
•
•
Statement of Objection is one of the procedures preceding the European Commission’s decision on a cease and desist order or penalty, and
outlines objections raised against the party and its supporting evidence.
Companies receiving the statement have 12 weeks to present their argument in writing and to submit supporting evidence, and may also
request an oral hearing.
The sending of the statement of objection does not prejudge the final outcome of the investigation and European Commission will take decision
after receiving counterarguments from related parties.
There is no legal deadline for the Commission to make decisions.
METI
(Source)European Commission’s press release, Google’s blog
62
６. Japan’s specific strategy
ii. Fostering and securing human
resources, improving flexibility in
employment systems
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(1)Development of an educational system encompassing new needs
Challenges
• With the introduction of artificial intelligence etc. to the workplace, skills required, job descriptions and businesses themselves
have greatly changed. In order to nurture capabilities to open doors to new generations and create new values, the existing
educational system and learning system needs to further evolve.
Basic Direction of Efforts
• Reform content and methodology of education through active collaboration with private entities and by effectively utilizing ICT,
such as making programming education a compulsory subject in elementary and secondary education.
• Develop and recruit top class human resource that can lead global competition in the forth industrial revolution and create
new business trends through reform of higher education.
• Convert content of higher education and continuous learning by workers to an educational content that matches the society’s
needs for the forth industrial revolution.
Short Term Efforts
•
•
•
•
•
•
Make programming education a compulsory subject, evolving in tandem with children’s development, which will serve to nurture logical thinking
abilities etc. in elementary and secondary education. Provide related assistance such as in the development of teaching materials and dispatching of
human resource.
Develop content and utilize human resource from the private sector through collaboration of the public education world and the industrial sector.
Strengthen learning by the individual’s proficiency level by utilizing IT (Verification of using adaptive learning, etc.)
Draft action plan based on the Government, University, Industry Research Roundtable on the Development of Human Resource in the Science and
Technological Area (surveys to understand actual conditions, matching science and technology related human resource with jobs etc. )
Work on the details of creating higher education organizations offering practical vocational training. (IT data, tourism, design, etc.)
Create a “Forth Industrial Revolution Ministerial Meeting for Human Resource Development (tentative)” to discuss “industrial policies”, “employment
policies”, “education and human resource policies” all in one.
[PM’s statement at the 26 th Council for Industrial Competitiveness]
• Make programming education a compulsory subject from elementary and secondary education.
• Make full use of IT to assist in each student studying at their varying levels of proficiency.
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Programming education around the world --A trend of becoming a
compulsory subject

In order to develop human resource that meet the needs of a forth industrial revolution,
countries around the world are making programming education a compulsory subject.

In Japan, programming is only included in junior high school industrial arts and
homemaking class in its measurement and control unit, and as an elective in high school
IT information courses.
 Israel
 Programming education is a compulsory subject
school since 2000.
in high
 UK
 Programming education is a compulsory subject for children
between age 5 and 16 as “computing class” since
September 2014.
(Source)Department for Education Web (UK)
 USA
 The “Every Student Succeeds Act”, including computer
science in its curriculum, was enacted on December 10 th,
2015. Computer Science will now become a compulsory
subject throughout the US in the future.
 Finland
 Programming education has become a compulsory subject
for children between age 7 and 16 with its curriculum
revision of 2016.
(Source)White House Web (USA)
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“Comprehensive Human Resource Development Initiative Toward the Forth Industrial Revolution”
Source：26th Council for Industrial Competitiveness Reference
～Efforts at the Elementary/Secondary Education Stage～
“The Next Generation School” (A new education program will start from 2020)
Develop Information Utilization Skills Integral to the Next Generation
In order to open new horizons for the new generation, skills needed
to utilize necessary information to create new values and skills to
identify and solve problems utilizing ICT will be developed, according
to the developmental stage of children.
ICT will be effectively leveraged in the process of identifying and
solving problems, etc. for each and all subjects, in lines with the
characteristic of the subject.
Programming education will become a compulsory subject,
according to the developmental stage of children. Opportunities to
learn programming through experience will be secured in
elementary school, programming education regarding contents will
be included in junior high school, and information class will
become an all-high school wide compulsory course.
material submit by the Minister of Education, Culture,
Sports, Science and Technology
Creation of a “Next Generation School”, Catering to the Needs of AL and Individual Learning
For the comprehensive development of basic knowledge and skills such as
vocabulary and reading comprehension, as well as creative problem solving
skills, teaching will be improved from a perspective of proactive deep
learning through dialogues (active learning).
The disparity in academic abilities, stemming from gaps in vocabulary and
reading comprehension skills which start from lower grades of elementary
school will be resolved, and increased evolutionary learning and other
measures will ensure children are taught according to the needs of the
individual.
Secure opportunities for children to learn and experience in a variety of fields
in science, arts, and culture.
With the best mix of enhanced teaching by teachers in the classroom and
capitalizing on the merits of diversity, each child will be taught carefully
according to their individual understanding level and problem solving skills will
be developed.
Team schools and the “Headquarter for the collaboration of schools in the
area” will be utilized to provide diverse learning and experience opportunities
outside of the education program for children.
In order to develop capabilities and skills needed for the next generation and to create valuable learning achievements,
informatization of schools centering on contents created by effectively mixing knowhow and human resource from the
private sector and the knowledge accumulated by teachers and schools is integral.
The public sector and private sector will collaborate to create an “education program with doors opened to society”
The Ministry of Education, Culture, Science and Technology, Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communication will
collaborate to create a public-private consortium consisting of school officials, ICT related companies, and start-ups and will start working on the development and
sharing of good educational contents and dispatch instructors to schools.
Efforts to make schools ICT-ready to support leading edge education will be accelerated. An “Acceleration of Information of Education Plan” will be drawn up to
promote the creation of environment for the informatization of schools centering on contents, and support industry-government-academia collaboration towards
effective utilization of ICT according to the actual situations of ICT environment at each school.
*The Ministry of Economy, Trade, Industry will especially support in the promotion of contents development in collaboration with ICT companies and securing instructors. The Ministry of Internal
Affairs and Communication will support from the aspects of utilization of the cloud, equipping with Wi-Fi, and nationwide road tours.
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(2)Recruiting global human resource
Challenges
•During a time of transition, shifting workforce to growth areas, human resource from overseas needs to
be recruited in specialized and technical areas not only at the top level but for middle skill level as well.
Basic Direction of Efforts
•
In order to change “unclear job descriptions”, ”long work hours”, “compensation system that doesn’t
correlate with performance”, “little career paths at headquarters”, “Japanese language barrier” in
Japanese corporations, a workstyle revolution will be promoted through the formation of pressure from
the labor market as well as capital market.
•
Create a better environment, such as cutting down on the time needed to apply for permanent residence.
Short Term Efforts
•
Create the “Japanese Version Green Card for Highly Skilled Human Resource from Overseas” which will
offer one of the world’s fastest application. (Shorten the required period of stay before applying for
permanent residence for highly skilled human resource from overseas )
[PM’s statement at the 26th Council for Industrial Competitiveness]
•
Introduce the “Japanese Version Green Card for Highly Skilled Human Resource from Overseas” which
will have one of the shortest period of stay requirement before applying for permanent residence.
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International comparison of permission for permanent residence/green card
•
The UK and US clearly state categories for permanent residence application such as entrepreneurs, corporate
employers with a certain income or above for the UK and large scale investors, managers/board members of
multinational companies, special skilled workers/knowledge workers for the US.
•
Permission for permanent residence in Japan requires a longer period of stay to apply compared to the US, etc., and
there is no clear statement of type of human resource, such as entrepreneurs, investors, researchers, etc., that the
government is looking for.
Period of Stay Required
for Application for
Permanent Residence
Application by Mail
or Internet
Employment by
Company
１０ years as a general
rule
Directly submit to
Immigration Counter
Required (Incl.
self-employment)
(1)Good behavior and conduct
(2)Asset and skill to maintain a living
(3)Matches the benefits of Japan (No
criminal record, tax records, period of
stay)
UK
5 years as a general rule
Internet from
overseas, mail
domestically
Depends on
Category
Not required for
investors


Entrepreneurs/investors
Corporate employers with a certain
income or above
US
No requirement
Internet from
overseas, mail
domestically
Depends on
Category
Not required for
investors


Investors
Managers/board members of
multinational companies
Special skilled workers/knowledge
workers
Not available for new
applications, available
for renewals.
Required


Japan
5 years exception:
“Contributors to Japan”
“Highly Skilled
Professionals”
-
3 years for some
entrepreneurs
Green
Card
Korea
5 years as a general rule
- Advanced Science &
Technology Area
PhD: 1 Year or longer
BS: 3 Year or longer
- Point System: 3 Years
or longer
Type of Permanent Resident Sought
by Government



Entrepreneurs/investors
Researchers in advanced science
and technology
Human resource in specialized
profession
Expatriates of multinational
68
companies
METI
(3)Promotion of a diverse workforce
Challenges
•
In order to battle and succeed in fast-changing global competition, it is critical to make the most out of
diverse human resource, regardless of nationality, sex, and age, and optimize recruiting and placement.
Basic Direction of Efforts
•
Promote “Workstyle Revolution” by the formation of pressure from the labor market and capital market.
•
Similarly, utilize pressure from the labor and capital markets to create an employment environment where all can take part,
so that women and the elderly can take part in the workforce.
Short Term Efforts
•
Promote “Workstyle Revolution”
•
Create opportunities for dialogues between companies promoting diversity as a management goal and
the capital market (on the modality of human resource strategy, etc. )
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(Reference) Diversity in Japan (women/foreigners)

Compared to the percentage of women in the workforce, the percentage of women in managerial
positions is, in an international comparison, low.

Both the percentage of total population for the number of foreigners and working foreigners are low.
Diversity of nationality at the top level of companies is also low.
[International Comparison of Foreigner Population and Number of Working Foreigners
[International Comparison of percentage of women
in managerial positions and board members]
Total Population
Managerial Position
Workers in general
50.0
45.0
42.3
40.0
35.0
30.0
25.0
Board Member
(2013, Unit: million)
Japan
Korea
Singapore
Germany
UK
12,741
4,926
541
8,272
6,313
Foreigner
population (Ratio)
(Unit: million, US
2011, Japan 2014,
Others 2012)
212(1.7％)
149(3.0％) 149(28.1％) 721(9.0％)
479(7.5％)
Working foreigners
(Ratio) (Unit:
million)
79(1.2％)
2014
76(2.9％)
2013
264(8.8％)
2013
124(37.0％)
2012
245(6.1％)
2014
20.0
15.0 11.2
10.0
5.0
2.1
0.0
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(4) Improve flexibility of the labor market and employment system
Challenges
•
Japan continues to have a membership style (workers ascribe themselves to companies and the
companies invest in human resource) employment system.
•
Need to transform into an employment framework which can smoothly react to global and speedy
changes in business.
Basic Direction of Efforts
•
Consider plans to improve mobility in the labor market by providing assistance to shift workforce with
small risk. Further, there is a need to develop a system to promote reorganization of companies and
industries as well as promote active regeneration of businesses.
•
Change to a labor law system that stands on the precondition that evaluation and management will be
based on the individual’s performance.
•
Look into changing the social security system based on the majority of population being employed by a
single company for a long term.
Short Term Efforts
•
Add the “improve productivity” and “enhance competitiveness” point of views to “equal pay for equal work”
•
Create a “Forth Industrial Revolution Ministerial Meeting for Human Resource Development (tentative)” to
discuss “industrial policies”, “employment policies”, “education and human resource policies” all in one.
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(Reference) Improvement of workforce mobility
 The largest inhibitor of changing domains that make up a business portfolio or pulling out
of a business domain is said to be the “disposition of employees”
 As it is crucial to shift the workforce to growing industries and businesses, improvement of mobility within
the labor market through assistance for shifting the workforce with small risk as well as developing a system
to promote active regeneration of businesses may be needed.
[Top Inhibitor of Closure of Business Domain] n=4,377
[HR & Labor Related Concerns for M&As n=895]
Number
of Times
Difficulty in the disposition
of employees in the domain
Percentage
400
1,379
31.5%
Relationship with supplier
and customer
765
17.5%
Fear of damaging corporate
image
700
16.0%
250
Historical and personnel
related background of
domain
590
13.5%
200
Cost of pulling out of
business
476
10.9%
100
Competitors continue the
business
Legal and other institutional
background
33
0.8%
6
0.1%
(出所)ＲＩＥＴＩ森川副所長レポート
『日本企業の構造変化：経営戦略・内部組織・企業行動』
Others
428
Source: Ministry of Economy, Trade and Industry
9.8%
380
350
300
274
150
150
53
50
38
0
Unifying Difficult to
working
reduce
conditions number of
employees
Losing
talented
human
resource
Difficult to
agree with
labor union
Other
(Source) General Research and Study 2013, “Research and study on creating fair fules in the M&A market”
(Study on the relationship etc. between listed companies and their shareholders)
Industrial Structure Council New Industrial Structure Committee (7th meeting)
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(Reference) To a mutually independent partnership between “company” and
“individual” (1) Crowdsourcing as the initial stage

Croudsourcing, an online system to match up outsourcing contracts, is starting to gain grounds in Japan.

Currently, work such as system development, web page production, and writing are the main types of work handled.
However, the types and amount of work may grow and the quality may become more sophisticated in the future.
Efforts in Japan (Lancers, Crowd Works)
Created a business matching mainly IT related contract
work for clients, including large companies, with
individual workers. A track record of number of orders
and evaluations by clients determine the workers’ market
value, creating a clearer correlation between the
individual’s “track record and skill” and “compensation
table” than the real world.
※Registered users: Lancers- over 700,000 (undisclosed/estimate), Crowd Works – 8 million (as of December 2015)
(Reference) Crowdsourcicng Association website
InnoCentive
Efforts in the US
Upwork
・Largest crowdsourcing company in the US. Covers skilled work such
as programming, writing, translation, and designing to simple work
such as clerical paperwork, bringing together a diverse crowd of
workers from around the world. (Registered users: 9.3 million)
・The individual freelancer’s track
record and evaluation is
transparent through ratings by
clients.
(Reference) Upwork website
・Crowdsourcing company created in the US to solve scientific problems in
research and development. Sophisticated topics such as starting a
business, chemistry, computer science, engineering, food/agriculture,
life science, math/statistics, physics are handled.
・Used by large companies and the
government, etc. As the topics
handled are more sophisticated
than conventional crowdsourcing,
the time frame per contract is
long (1 to 2 months) and the
compensation is high (USD 2,000
to millions)
(Reference) InnoCentive website
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(Reference) To a mutually independent partnership between “company” and
“individual” (2) Diverse workstyle as a transition
 In order for the individual to be able to attain their individual workstyle of preference, a
diverse forms of workstyle such as double work, human resource loans, regular
employee dispatch, etc. have started.
en Factory: Active Support of Double Work
 Highlights “No Mono-work” in its human resource policy and actively
encourages engaging in a business besides one’s main occupation. En
Factory calls this “parallel work” and approximately half of its employees
actually “parallel work”.
 In a bi-annual internal study group, parallel workers report their
achievements to all employees.
 Examples of “Parallel Work”
 At en Factory: Service Supervision / Parallel work: BCP Consultant
 At en Factory: SE / Parallel work: Regional vitalization coordinator
(Reference)en Factory website
Survey on Efforts Related to Side Businesses and Double work 2014 (Small and Medium Enterprise Agency)
Panasonic: Regular Employee Dispatch
 Rolled out a regular employee dispatch operation for
highly skilled engineers who wish to develop their
career as a specialist and not as management.
 Engineers enrolled in this system will have the
opportunity to continuously be involved with high level
projects, thus keep up or improve his/her skill level
and market value.
(Reference) Panasonic website
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６．Japan’s specific strategy
iii. Accelerating innovation and
technology development
(“Society 5.0”)
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(1)Development of an open innovation system
Challenges
R&D at companies, universities and R&D entities close doors from each other leading to insufficient inter-organizational
mobility in funding, human resource, technology and data amongst them.
We have yet to see Japanese start-ups that have the capability to compete on a global scale and Japan remains left out
from global networks of entrepreneurs and their supporters.
•
•
Basic Direction of Efforts
Regarding academic-industrial collaboration, triple the size of investment to universities and R&D entities in the next
ten years.
Strengthen support systems to connect start-ups from the local market to the global market. Become a hub of the
global network of entrepreneurs and their supporters. Strengthen strategic collaboration between large corporations
and start-ups.
•
•
Short Term Efforts
Strengthen efforts for the promotion of serious academic-industrial collaboration in research (develop an academicindustrial collaboration system involving the entire organization at universities. Strengthen intellectual property
management, etc.).
Provide support and create environment for the promotion of open innovation between large corporations and start-ups.
(support research & development, create templates for contracts, etc.)
Create environment to promote active investment to mid to long term innovative R&D at companies that lead to innovation.
Create a governmental organization consortium to carry out all policies related to start-ups that connect local areas in
Japan with the world.
Strengthen functions to provide financing to start-ups (vitalize corporate venture capitals, etc.)
•
•
•
•
•
[PM's statement at the 5th Public-Private Dialogue]
•
Strengthen the academic-industrial collaboration system and target tripling corporate investment into
universities and re R&D entities within the next ten years.
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(Reference)Japan’s current innovation eco-system (1/3) (technology)

Half of all companies see no progress in open innovation compared to 10 years ago.

Of all technologies, 61% are developed by a single company and 64% remain idle without being commercialized which
indicates that open innovation, both spin-ins and spin-outs, have not progressed. Especially, collaboration with startups are especially slow to progress for both spin-ins and spin-outs.
＜Has open innovation
become more active
compared to 10 years ago?＞
More active
No change
Less active
Less active
3%
More active
More active
47%
No change
50%
(n=111)
(Source) Industrial Structure Council,
Committee on R&D and Innovation
3 rd
Small
Spin In
＜Percentage of independent development and
collaborative development with external organizations＞
Independently
Group company
Domestic competitor
(horizontal cooperation)
Domestic company in the
value chain (vertical
cooperation)
Other domestic company
(collaboration with different
industry)
Domestic University
Domestic public organization
Domestic start-up
Overseas University
Overseas public organization
Overseas company
(excluding start-ups)
Overseas start-ups
Commissioned from other
companies, etc.
(％)
61.4
8.4
2.7
5.6
3.9
8.6
3.1
0.9
1.2
0.3
1.5
Spin Out
＜Disposition of technology/ideas not commercialized＞
(％)
Keep idle
63
Commercialize at a group
company
Try to utilize at a different
company
Spin-off of
employees/organization
(start-up)
Continue discussions
behind the scene
10
6
2
20
(n=97)
0.4
2.1
(n=97)
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(Reference)Japan’s Current Innovation Eco-system (2/3) (Human
Resource)
 Extremely low mobility amongst human resource in research, and more dynamic
interchange of talent across organizational borders is needed.
■Mobility of human resource in research by organization type as of 2013.
Companies
Human resource in research
Approx. 666,000
Universities
Approx. 1,200
Human resource in research
Approx. 200
Approx. 389,000
Approx. 500
Approx. 7,400
Approx. 15,200
Overseas
Approx. 5,200
Public research
Organizations, etc.
Human resource in Research
Approx. 86,000
*For movement between domestic organizations, the figure represents the number of “researchers that have joined from external organizations”.
*Source for the number of researchers at domestic universities, incoming and outgoing researchers (mid-long term) is the Ministry of Education, Culture,
Science and Technology “General conditions of international research and development”.
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Source: Ministry of Economy, Trade and Industry Industrial Structure Council New Industrial Structure Committee (7th meeting)
(Reference) Japan’s current innovation eco-system (3) (Funding)

“Organization” to “organization” academic and industrial collaboration is slow to evolve, as seen in the
fact that when compared to overseas, the rate of funding provided to researches at Universities from
companies is low and that the average budget per research is low, etc.
■Percentage of total research budgets of
companies contributed as research funds of
Universities.
Nation
2008(％)
2012(％)
Japan
0.44
0.46
US
1.06
0.91
Germany
3.65
3.65
UK
1.96
1.71
Korea
1.78
1.34
China
3.99
3.32
Source：Drafted by the Ministry of Economy, Trade and Industry based on the
OECD「Research and Development Statistics」
Source: Ministry of Economy, Trade and Industry
■Joint research budget per research at
Japanese and other Universities.
10 million yen per
research is the prevalent
budget size at
Universities overseas.
3 to 5
million yen
Above 10
million yen
5 to 10
4%
million yen
%
Less than
9%
1 million yen
39%
1 to 3
million yen
The average budget is
approx. 2 million yen at
Japanese Universities
43%
Industrial Structure Council New Industrial Structure Committee (7th meeting)
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(2)Creation of world’s leading innovation centers, development of national
projects, acceleration of implementation to real life (Artificial intelligence, etc.)
Challenges
• Japan has been left out of the global innovation network in all aspects such as human resource, technology, and funding.
• In order to create innovations that can lead the forth industrial revolution, a new large scale national project is needed, something similar to
efforts on artificial intelligence in the US and Europe.
• Japan lacks sufficient environment, systems, locations where top global researchers can freely engage in leading edge research encompassing
all the way to implementation in real society.
Basic Direction of Efforts
• Strengthen technology intelligence across government related organizations. Take global trends into consideration and draft and
implement a technology strategy in important fields (integrated research of artificial intelligence, which is a generic technology, and
robotics, bio, energy/environmental technologies, etc.).
• Attract top class human resource from around the world and develop five universities and R&D entities into leading edge strategic
research centers.
• Strengthen functions of universities and R&D entities, collaborate with Innovation Network Japan, and strategically implement
achievements to real society.
Short Term Efforts
• Create “Strategic Conference for Artificial Intelligence Technology” through the collaboration of public research organizations which will serve
as the commander in the promotion of artificial intelligence R&D. Draft a technical roadmap for R&D goals and its commercialization (by the
end of this fiscal year). Work on launching an AI national project that can lead the world.
• Take a unified approach for the promotion of technology development utilizing deep learning and introduction to the working scene and its
verification. Accelerate innovation and implementation to real society.
• Attract top class human resource in a variety of fields and organize the environment (compensation rules, regulation systems, etc.) to
develop a global open innovation center to promote open innovation.
• For national projects in general, take global trends into consideration, and drastically cut down on the number of project in order to select
and concentrate.
• Further strengthen the function of implementing R &D achievements to real society at universities and R&D entities. (Fraunhofer Model)
[PM's statement at the fifth meeting of the Public-Private Dialogue]
•
Create at least five academic-industrial cooperation strategic research centers with the world’s top class professors and
research facilities for companies by the end of the next fiscal year.
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(Reference) Isolation from global networks (1/3)(technology)
 The number of international joint authorships of papers have greatly increased around
the world between 2003 and 2013. While joint authorships between European nations
and the US have increased, the increase for Japan is relatively small.
Poland
Turkey
Sweden
Russia
Iran
Belgium
Turkey
Italy
Russia
Iran
UK
Spain
France
Japan
Sweden Belgium
Poland
Netherlands
Germany
South Korea
Switzerland
Netherlands
Germany
South Korea
Switzerland
Italy
France
Japan
Taiwan
Canada
Spain
UK
Taiwan
Canada
US
China
US
China
Australia
India
Australia
Brazil
India
Brazil
*Size of the circle of each nation represent the number of scientific articles (articles carried in academic journals and articles included in proceedings at international conferences)
*The lines connecting nations represent the number of international joint authorship articles, and larger the number the thicker the line.
Source: Drafted by the National Institute of Science and Technology Policy based on “Scopus” by Elsevier
Source: Central Education Council, Excerpt from Summary of Deliberations “Graduate School Education Reform Playing a Leading Role into the Future”
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(Reference) Isolation from global networks (2/3)(Human resources)
 Looking at the movement of researchers worldwide, the US is at the
core of international research networks. On the other hand, Japan is
left out of international research networks.
or more
*The thickness of the arrows are based on the number of researchers moving between the two nations (1996 to 2011). Source of the number
of moving researchers is the “Number of researchers” in OECD reference material “International flows of scientific authors, 1996-2011”.
*Data represented in this chart is only for the two nations between which over a total of 2,000 researchers moved during the designated time.
Source: Drafted by the Ministry of Education Culture, Science, and Technology based on OECD’s “Science, Technology and Industry
Scoreboard 2013”
Source: Central Education Council, Excerpt from Summary of Deliberations “Graduate School Education Reform Playing a Leading Role into the Future”
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(Reference) Isolation from global networks (3/3)(Funding)

Although funds from overseas are increasingly making up a larger percentage of total research funds
used in Japan, the percentage continues to be much lower than that of other major nations.
<Breakdown of research funds used in Japan and
the percentage of research funds coming from overseas>
-- : Companies -- : Universities -- : Public organizations
Amount of research fund (million yen)
Percentage of research fund from overseas (%)
Percentage of overseas funding
in major nations’ research funds
(data from 2012)
Japan
US Germany France
China
Source: Ministry of Education, Culture, Science, and
Technology, Science and Technology Policy Bureau,
Science Technology Catalog 2014
Research funds・・・ Personnel expenses, raw material, purchase of tangible fixed assets, lease obligation, etc.
(Source)Ministry of Internal Affairs and Communications 2013 Science Technology Research Survey
UK
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Develop a system for research on artificial intelligence

Create the “Conference for Artificial Intelligence Strategy” under the direction of the PM. Starting this fiscal year, this conference
will be the commander in facilitating collaboration in AI technology R&D amongst the Ministry of Internal Affairs and
Communications, Ministry of Education, Culture, Sports, Science and Technology and Ministry of Economy, Trade and Industry.

Draft a roadmap for R&D goals and its commercialization (by the end of this fiscal year)
Conference for Artificial Intelligence Strategy
○Commander of the 3 Ministry collaboration for
artificial intelligence R&D and innovation policies
(Chairman, advisor (CSTI), industrial sector, academia, executives in supervisory
roles from 5 companies, bureau directors from 3 Ministries)
(Secretariat to be co-hosted by the 3 Ministries)
Conference for Research Collaboration
(Director’s Meeting)
○Overall coordination of research (approve on detailed
theme for collaborative research)
National Institute of
Information and
Communications
Technology(MIC)
Director of CiNet Center: Toshio Yanagida
RIKEN
AIP Center
(MEXT)
Director: Masashi Sugiyama
Conference for Industrial Collaboration
Collaboration
National Institute of
Advanced Industrial Science
and Technology
AI Research Center
(METI)
○Overall coordination on the collaboration of R&D and
industries (human resource development, standardization,
road maps, technology, intellectual property trend analysis,
regulation reform analysis, etc.)
Task Force
○Work on the actual promotion of tasks by setting task forces
by issue, for example, on the drafting of a road map.
Director: Junichi Tsujii
Deploy Achievements
Government/companies, etc. in the Field of Exit
[PM's statement at the 5th Public-Private Dialogue]
•
Integrate industry-government-academia and create the “Conference for Artificial Intelligence Strategy” which will preside over
related government agencies. Draft a roadmap for R&D goals and its commercialization (by the end of this fiscal year)
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Artificial intelligence and deep learning
Education
Secretary
Assistance to white collar jobs
Deep learning and its impact on industries
Translation
EC for foreign countries
Home choirs, nursing care
Understanding others
Large scale
Automatic operation logistics
Substitute emotional labor
comprehension of knowledge
Automation of agriculture
Optimization of production equipment
Comprehension of
language
Crime prevention & surveillance
Environment
Security
recognition
Marketing
Robust
autonomous
and behavior
Diagnostic imaging
behavior
in
the
face
of
according to
Advertisements
change of environment context
Behavior prediction
Technology to
Abnormality
“touch softly”
detection
Improvement of
image recognition
accuracy
USA & Canada take the lead
2015
2006
(1) Image
(2)
Recognition
2020
Multi-modal
Recognition
(4)
(3) Behavior
Interaction
2025
(5)
Symbol Grounding
2030
(6)
Knowledge Acquisition
Source: Ministry of Economy, Trade and Industry Industrial Structure Council New Industrial Structure Committee (2nd meeting)
Presentation material by Associate Professor Yutaka Matsuo
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Next generation R&D for artificial intelligence-direction of R&D and sample projects
AI is a technology that can be integrated with a variety of fields. Taking into consideration the strengths of Japan, below are the
main fields with which integration should be promoted.
--Manufacturing: Integrate with Japan’s strong manufacturing capabilities, the world’s top class industrial robots and automobiles to create an unmatched
manufacturing industry.
--Human Life: Integrate with Japan’s high quality service industry, medical/nursing care service, logistics, etc. to provide a rich prosperous lifestyle.
--Science / Engineering: Integrate with the world’s top class fundamental science to promote the development of science and technology.

Indicate the direction to which R&D is to evolve, attract leading edge technology and human resource from overseas research
organizations and universities, and engage in R&D with both public and private sectors, who will become users, taking part. Further,
align R&D achievements with challenges and data at the exit, and provide total support using tools to implement achievements to
real life, such as human resource development, standardization strategies, etc. so that all efforts will find a way out.
AI for
Manufacturing
(AI × Robotics)
Future Image to be Accomplished by Projects (examples)
ex)Improve productivity in manufacturing through work assistance for small quantity
large variety production using teachingless industrial robots, failure prediction
during assembly work, etc.
Human Life
ex) Support to various industries through consumer behavior analysis will bring various
added values to services, leading to the improvement of life satisfaction.
Science/Engineering
ex) In life science, clinical medicine, material science and engineering, etc., new
hypothesis and theories etc. will be automatically generated based on a variety of
experimental data, leading to the acceleration of fundamental research.
(AI × IoT)
(AI × Big Data)
Planning to look into flagship projects integrating multiple fields
(Ex. :Fundamental technologies for ultra high speed development of advanced materials project)
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(3) Strategically promoting the management of intellectual property and international standardization
Challenges
•
Lack system to propose high quality international standardization as an “all Japan” effort after confirming areas of
competition and collaboration.
•
Human resource that can strategically secure international standardization and work on intellectual property management
while connecting them to management strategies and collaboration with R&D efforts eyeing international standardization
are needed.
Basic Direction of Efforts
•
The government will provide one-stop support from intellectual management, development of human resource that can
work on international standardization, formulation of standardization strategies at companies, to the creation, proposal,
and negotiation of international standardization drafts.
•
In government lead R&D initiatives, make up projects that eye strategic acquisition of rights and international
standardization from the beginning.
Short Term Efforts
•
Reinforce international standardization activities by the National Research and Development Agency (involvement through
project management, etc.).
•
Increase standardization education at universities, etc. (in both humanities and science courses) and newly create a
qualification system related to standardization.
•
In order to incorporate standardization as part of business and management strategies at companies, promote the creation
of Chief Standardization Officer positions.
•
Support of global business development through creating a leading patent review system etc.
•
Take a comprehensive look at the modality of industrial property rights taking into consideration changes in industrial
structure and subsequent changes in corporate patent strategies.
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(Reference) Types of international standardization and case studies
Type of Standardization
(1)
Standardization of
Product Specification
Combination of Standard and
Patent(Typical patterns)
Blue-ray Disc 〔Panasonic/SONY, etc.〕
Standardize including
company’s patent.
Standard
Patents
License
Standardized peripheral
interface to company’s patent
(2)
Standardization of
Interface Specification
Standard
Patents
etc.
Patents
etc.
Evaluation
Standard
Source: Ministry of Economy, Trade and Industry
・Internationally standardized the specifications for Blue-ray Discs
・Patents needed to conform with the standard is licensed for low cost to all
parties without discrimination.
QR Code 〔Denso〕
・Standardized the basic specification of QR
codes and provided it at no cost.
・Reading technology for QR codes remains
in a black box and reading devices and
software are sold for profit.
⇒Attained top share in Japan as reading
device manufacturer.
Standardized the evaluation
method of product including
company’s patent.
(3)
Standardization of
Performance Criteria
/Evaluation Method
Case Study
*Excerpts from ”Analysis of Strategic Cases Related to Intellectual Property and
Standardization (2014 edition)” (Ministry of Economy, Trade, and Industry)
QR Code was
standardized
and made
available at no
cost
Secure profit
by reading
device
Crystal Device 〔Quartz Crystal Industry Association of Japan〕
・The industry as a whole created an
IEC quality evaluation standard
for crystal devices.
Created a grade for high quality crystals that
only Japanese companies can produce.
・Manufacturing technologies
remained a black box thus
competitiveness maintained.
Industrial Structure Council New Industrial Structure Committee (6th meeting)
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(Reference) US and Europe take the lead in international standardization
President: Junji Nomura
Chair：Tyco
Chair：Rockwell Automation
Siemens
Market Strategy Board
・Project Team “”The future of factories”
Standardization Management Board
・8th Strategic Group “Forth industrial revolution/smart manufacturing”
・Technical Committees(*)
Ex. 65th Technical Committee
Industrial Process Measurement and Control Devices


Chair： Siemens
President: Zhang Xiaogang
Chair： Deutsche Telekom
Technical Management Board
・Strategic Advisory Group “Forth industrial
revolution”

・Technical Committees(*)
Ex. 184 th Technical Committee
”Automation system & integration”
Chair： Schneider Electric
* Committee to draw up international standards of
technical elements
(Source) Reference material by Yasuyuki Nishioka, Professor at Hosei University
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６．Japan’s specific strategy
ⅳ. Fortifying financial functions
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(1)Fortifying equity finance toward the supply of risk money
Challenges
•
In order to vitalize innovation at start-ups and elsewhere, equity finance functions by private equity (PE
funds) and venture capitals (VC) etc. need to be strengthened to supply more risk money to support bold
decision making of corporate management.
•
Given the current background where large Western corporations are using their huge financial powers to
buy out technology start-ups, a strategic approach involving both public and private entities is needed.
Basic Direction of Efforts
•
Stronger equity financing capabilities by diverse financial entities, namely corporate venture
capitals (CVC), is needed.
•
Upon verification of achievements by public-private funds etc., consider further strengthening
their function.
Short Term Efforts
•
Create systems to increase financing to venture capitals, etc. from companies, institutional investors, etc.
and grow the venture capital industry.
•
Consider strengthening support functions such as political investment by public-private funds that will
support side by side.
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(Reference) Capturing financing for growth from the
global capital market
 Companies that have created strong expectations for growth of business through a
virtuous cycle of data utilization have captured high levels of financing from the global
capital market which lead to their speedy growth investment such as M&As.
(billion dollars)
Aggregated market value
Aggregated market value
= net profit x 10
Net profit
(Reference) Drafted by the Ministry of Economy, Trade, Industry based on Google Finance (November 23rd, 2015 closing price)(Reference
material for 3rd Secretariat Meeting)
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(Reference)Capital strength is the key to M&A investment to
technology start-ups

R&D key to the forth industrial revolution requires a larger scale investment than conventional investments for
internet start-ups (on top of human resource investment to programmers, etc., investment for facilities and
machinery is needed).

IT companies like Google and Apple utilize their huge M&A resources ,earned from their main business, for
active M&As of technology startups. This size of M&A resource plays a large part in competitiveness.
*M&S Resources: Operating cash flow less investment in tangible fixed assets such as capital investment, etc.
Knowledge
Intensive
Low
Internet
Start-ups
Top Companies
Listed in the
1st section
of the TSE**
25
Alphabet(Google)
13
Amazon.com
3.8
Facebook
4.2
Manufacturer
(average)
製造業(平均)
Non-manufacturing/
非製造・非金融業(平均)
non-finance (average)
Reference) Toyota
参考）トヨタ自動車
5 Companies
spent
approx.11trillion
yen a year(Approx.
99 billion n USD)as
investment resource
>
Size of
investment
needed grows
54
Microsoft
GAFA
+M
Intensiveness)
AI, Bio, Material,
Robotics, etc.
Apple
Money(Degree of Capital
Technology
Start-ups
Comparison of “M&A Resources*”(billion dollars; average for 2013-2015)
High
Labor
Intensive
Top 135 TSE 1st
Section companies
spent approx.
10trillion yen a
year(Approx. 91
1.0
0.3
14
billion USD)as
investment resource
** Companies listed in the 1st section of the TSE that have over 10 billion USD average sales
in the last three years. (73 manufacturers, 62 non-manufacturing/non-finance companies)
Source: Analysis by Ministry of Economy, Trade and Industry based on SPEEDA
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(Reference)Creation of Innovation Through Growth Investment

In the last two years, Google has bought over 10 start-ups that develop and sell artificial intelligence and robotics related technology.

Likewise, Western companies with huge funds engage in one after another growth investment (M&A, capital investment, R&D, etc.) to
acquire technology and leading edge human resource, etc. for the creation of innovation.
[Companies Google has Acquired]
Name of Company
Main Product
Date of MBO
SCHAFT (Japan)
Humanoid robots
December 2013
Industrial Perception
Robot arms
Meka Robotics(US)
Robotics
Holomni (US)
Robotics
Overview
First start-up at Tokyo University. Won first place prize at the DARPA
Robotics Challenge in 2013.
Industrial robot (for logistics, automatic unloading machine for trucks, etc.).
December 2013
A spin-off from Willow Garage, famous for its OS for robots
A spin-off start-up from the MIT Computer Science and Artificial Intelligence
December 2013
Laboratory. Bipedal robots, etc.
December 2013 Development of robotic vehicles capable of moving in various directions.
Advanced video filming device utilizing robot arms. Works together with
projection mapping.
Bot & Dolly (US)
Robot shaped
camera
Boston Dynamics(US)
Robotics
Nest (US)
Home automation
DeepMind Technologies (UK)
Artificial
intelligence
Jetpac (US)
Artificial
intelligence
August 2014
Travel guide application applying big data analysis, image processing and
machine learning.
Vision Factory (UK)
Artificial
intelligence
October 2014
Image recognition system using deep learning.
Revolv (US)
Home automation
October 2014
Timeful (US)
Artificial
intelligence
May 2015
December 2013 Spin-off from MIT. Creates humanoid and animal shaped robots.
Manufactures thermostats and fire alarms. Functions as the hub for smartJanuary 2014
homes. CEO is Tony Fadell, first developer of iPod.
Developed artificial intelligence that can learn how to play various video
January 2014
games through reinforcement learning.
…
Source: CrunchBase
December 2013
Manufactures hardware used as a hub for Connected Homes (links devices
in a household)
Utilizes machine learning to propose optimized behavior to users to deepen
learning experiences.
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(Reference)Size
of Suppliers of Capital (Flow)
我が国の資金供給構造

Indirect investment prevails in Japan and financial entities taking business risks do not play a large role.

On top of increasing the sizes of PEs and VCs, there may be needs for banks to supply risk money or for
complementation by government policy financing.
Direct Financing
Indirect Financing
Banks
23.7 Trillion Yen
Credit Unions
3.9 Trillion Yen
Government
Corporate Bonds
Affiliated
8.6 Trillion Yen
Financial
Institutions
3.0 Trillion Yen
(Source)
Banks/Credit unions/Government affiliated financial institutions: Bank of
Japan “Loans and Bills Discounted by Sector” 2014 Corporate
bonds/Equity: Japan Securities Dealers Association “FACT BOOK 2015”
PE: “Japan Buyout Market Review--First Half 2015”
Public-Private Investment Fund: "Verification Report on the Guideline for
Public-private Investment Fund Operations”
VC: Venture Enterprise Center “Venture Whitepaper 2015”
Business Investment
(Risk Money)
Equity
2.0 Trillion Yen
ＰＥ
656.9
Billion Yen
Public-Private
ＶＣ
Investment Funds 1,17.1
185.0 Billion Yen Billion Yen
Note:
Banks/Credit unions/Government affiliated financial institutions: New
loans as funding for equipment, less loans to local public bodies and
individuals as well as international yen loans
Corporate Bonds: Amount raised at listed companies.
Equity: Amount raised at listed and newly listed companies
PE: Total amount for Buyouts and PIPEs
Public-private fund: Actual investment amount for 2014
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(Reference)Exit strategies for start-ups(Japan/US)

Comparing exit strategies for start-ups, Japanese start-ups have a higher ratio of IPO and lower
ratio of M&A compared to the US
Change in breakdown of method of exit of companies
receiving VC investment in Japan (data for IPO & M&A only)
IPO
M&A
Change in breakdown of method of exit of companies
receiving VC investment in the US (data for IPO & M&A only)
IPO
M&A
(Source) Drafted by the Ministry of Economy, Trade and Industry based on the Venture Enterprise Center’s “Venture Whitepaper 2015”
(Note) For IPOs and M&As in Japan, when multiple VCs invest in the same company, each investment received count as an exit.
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(2)Vitalization of investment in intangible Assets toward
Fourth Industrial Revolution
Challenges
•
In order to create new innovations making full use of innovative technologies such as artificial intelligence, etc., drastic
increase needs to be made in investments for intangible assets such as R&D assets, information assets, intellectual
property, human resource, etc., on top of the current investment centering on tangible fixed assets such as production
facility, etc.
Basic Direction of Efforts
•
Consider the modality of investment in intangible assets to create sustainable corporate values as well as methods to
evaluate such values in order to lead to increasing effective and substantial intangible asset investment.
•
Promote the accumulation of intangible assets as a nationwide effort and increase political support to vitalize innovation at
companies.
Short Term Efforts
•
On top of capital investment catering to the needs of the forth industrial revolution, consider beefing up incentives for
investment in intangible assets which will become platforms for innovation as well as for mid to long term R&D investment,
etc.
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(Reference) Corporate investment in intangible assets

High percentage of corporate investment go to intangible assets (R&D, brand assets,
investment in human resource, etc.)
Corporate Investment and Capital Investment in the GDP
Investment recognized by the company
Investment that should be reflected in GDP
To be included in capital investment (R&D)
after the new standard is introduced in December 2016
Scope of investment currently reflected in GDP
(1) Approximately 6.8 trillion yen
･Copyrights, licenses
･Designs, etc.
Approximately
1.1 trillion yen
Innovative Assets
Approximately
1.9 trillion yen
･R&D
Approximately
5.8 trillion yen
･Software ← 0.9 trillion yen
･Plant engineering
･Mineral exploration
･Buildings,
structural objects
･Machinery,
facilities, etc.
Intangible Assets
1.0-1.5 trillion yen
(3) Approximately
1.5 to 2.0 trillion yen
Foreign direct investment
Information assets
･Databases
Approximately
100 billion yen
Economic competitivity
・Brand asset, etc.
・Human resource
assets unique
to companies
・Organizational
structures, etc.
Approximately
0.7 trillion yen
Equity as investment and loans
・Foreign direct investment portion
・M&As, etc.
Approximately
1.0 trillion yen
Tangible Fixed Assets
(2) Approximately 2.5 trillion yen
Approximately
1.4 trillion yen
Natural resources
・Land
・Underground resources
・Fishing grounds, etc.
Approximately
0.2 trillion yen
(net amount for land purchase)
Purchase of
used products
Approximately
0.1 trillion yen
*Used the latest data available for each item. Each number are rounded off, thus the sum total be different.
(Reference) Created with JIP database of RIETI by Mizuho Research Institute
(Reference material)”Are Companies Only Racking Up Cash? Deviations from GDP Statistics (February 22nd, 2016)” by Hajime Takata, Managing executive officer and chief economist of Mizuho Research Institute
http://www.mizuho-ri.co.jp/publication/research/pdf/today/rt160222.pdf?ad=ml
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(Reference) Investment in Intangible Assets and Innovation, a virtuous cycle
toward enhanced productivity
 Investment in intangible assets is important*１, as this investment supports innovation in companies,
such as catering to the needs of the forth industrial revolution, creation of innovative technology, etc.,
reform into a corporate organization that can utilize and apply new technologies, etc. In the US,
investment in intangible assets has already grown to a size larger than that of tangible assets.
US/Japan Comparison of Intangible Asset/Tangible Fixed Asset Investment
Investment Amount in Intangible Asset /
Investment Amount in Tangible Asset
1.8
1.6
Intangible Asset＞Tangible Asset
1.4
1.2
US
1.0
0.8
0.6
Japan
0.4
0.2
Tangible Asset＞Intangible Asset
0.0
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
*１：In Corrado’s research one third of the US’s increase in productivity from the 1990’s to early 2000’s is estimated to be a result of investment in
intangible assets. Corrado, Hulten, Sichel (2005), “Intangible Capital and U.S. Economic Growth.” Review of Income and Wealth 55, pp.658-660
(Source of chart)RIETI”JIP Database 2013”, INTAN Invest “intangible investment data website Aug.2014”, Cabinet Office “93ＳＮ”, US Department of
Commerce “National Income and Product Accounts Tables Jan.2016”
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(3) Further enhancing the functions of finance and settlement placing FinTech as the core
Challenges
•
FinTech brings hopes for possibilities of utilization in regional vitalization and making financial and
settlement services more convenient, efficient, and close to people. Centering around this trend,
advancements of financial and settlement services need to be promoted.
•
In doing so, it is important to design incentives such as creating an environment that makes it most
convenient and carefree for FinTech, providing the most advanced services, to operate successfully.
Basic Direction of Efforts
•
The effect of FinTech’s innovation of financial services doesn’t only effect the finance industry itself but is
extremely important from the aspects of advancement of management and improvement of productivity
at SMEs, etc. as well as smooth financing, etc. It can hugely contribute to asset building of individual
families, too.
•
With such understanding, there is a need to consider how to work on the institutional side and
information system side in a integrated manner to maximize the power of FinTech.
Short Term Efforts
•
Develop a FinTech “eco-system” (consider the modality of “Open API(note) ”, make financing of financing
related IT companies easier for financial groups, create systems to introduce voluntary registration system
to settlement business agencies, etc.)
•
Finance and settlement infrastructure reform (promotion changing all credit card authorizations to IC
equipped cards, etc.)
•
Work on user protection and the safety of systems, etc.
(Note)API(Application Programming Interface): a specification for connection for using functions such as apps.
By making this public (Open API), anybody can design and provide services.
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(Reference)FinTech services expanding across boarders of industries
Company
Private
home
budgets
Finance Industry
Crowdfunding
Crowdfunding / P2P Lending
Online / Short term small amount / Automatic Lending
Settlement by Dongle
Accounting
Banks
Settlement
Prevention of Fraudulent
Use of Credit Cards
Savings
Mobile transfer
Newcomers
Transfers
Settlement ＋ Operating Capital Loans
Corporate
accounting
Bitcoin Market Place
Loans
Securities Companies
Credit & Loans Utilizing Real Time Transaction
Information From SNS and e-commerce.
Investment
Asset
management
Home
budgets
Virtual currencies
Small-amount Periodic Investment
Data Aggregation
(Home budget information)
Newcomers
Investment
Crowd / Automatic accounting
Robo Advisor
Pay-for-use Automobile Insurance
Insurance
Insurance companies
Insurance
Telematics Information Service
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６．Japan’s specific strategy
ⅴ. Facilitating smooth conversion of
industrial and employment structures
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(1) Establishing a governance system in which business owners are able to swiftly and
boldly make decisions
Challenges
•
In Japan, shuffling and closing of business domains tend to happen after the business or the company’s
results fall in the red.
•
Japanese companies need to adapt to discontinuous and quick changes under the direction of a CEO.
The modality of corporate management, such as “setting a growth target”, “strategy and methodology to
attain goals”, “strong-willed decision making”, etc., need to be reviewed for change, keeping in mind that
the competition is with global corporations.
Basic Direction of Efforts
•
As a system of corporate decision making, it is important to develop a governance system that can
respond to changes in business environment, enabling quick and bold decisions, such as starting a new
business domain or selling / closing a business domain.
•
To do so, it is important to strengthen the monitoring function of the board, including a reform of the
appointment/dismissal procedures of the CEO. Specifically, board member’s meetings should take in
diverse knowledge including that from outside board directors, and center its activity on reviewing and
decision making on management and business strategies. At the same time, decisions regarding
business execution need to be made quickly through delegation of power to top management, including
the CEO. It is also important to enhance the clarity and objectivity of the polices and process regarding
the appointment / dismissal of CEOs, which is an important strategic decision for the company.
Short Term Efforts
•
Promote corporate governance reforms and strengthen its effectiveness
(compile and organize information on practices both domestic and from overseas regarding enhancement
of functions of the board, draft a business practice policy, etc. )
METI
103
(Reference) Shuffling of business domains at European & American companies
(1)Change of business domains at GE
 Shrunk finance businesses which GE had grown up to 2000 and other noncore businesses to strengthen energy, aero engine and other businesses.
$180,000m
Change in Sales by Division at GE
$160,000m
$140,000m
＄140B
＄130B
Other
Material
Material
$120,000m
Media
Media
Home electronics/ devices
＄150B
Other
2007
Sell plastic
business to
SABIC (Saudi
Arabia)
Media
Home electronics/ devices
Home electronics/ devices
$100,000m
Finance
$80,000m
Finance
$60,000m
2005
Sell most of
re-insurance
business to
Swiss-Re
Finance
Transportation
$20,000m
Healthcare
Transportation
Healthcare
Aviation
Aviation
Energy
2013
Buy energy
division of
Alstom
(France)
Energy
$m
2000
＄36B
2005
＄52B
(Source)GE Annual Report
2010
＄117B
Other
Home electronics/ devices
Finance
Transportation
2016
Sell
consumer
electronics
division to
Haier
(China).
Healthcare
Aviation
2013
Buy Avio’s
(Italy)
airplane
division.
Aviation
Energy
2015
Announce
closure of
GE Capital.
Subsequen
tly sells
other
finance
related
businesses.
Healthcare
Transportation
$40,000m
2011
Sell NBC
Universal
Comcast
(US)
＄72B
Energy
2015
＄92B
METI
104
Reference) Shuffling of business domains at European & American companies (1)Change
of business domains at Siemens
 Discontinued businesses with little future prospect or little synergy with main
businesses. Focused on profitable businesses.
€90,000m
€80,000m
€70,000m
€77B
Change in Sales by Division at Siemens
€75B
Others
Others
2006
Merge and spin out
communication
network business
with Nokia
Information and communication
€60,000m
2010
Lamp/LED
Finance
Information and communication
€50,000m
Transportation
Lamp/LED
€40,000m
Transportation
Healthcare
Healthcare
€30,000m
€20,000m
Un-consolidate
lighting company
Osram. Spin off in
2013.
Industrials
Transportation
Healthcare
Healthcare
2007
Sell car parts
business
2006
Buy Bayer’s
diagnostic
pharmaceutical
business.
Industrials
Industrials
Buy Date Behring
(US), testing
machinery company
€10,000m
€m
2000
Electric power
€36B
2005
Transportation
Finance
Electric power
Electric power
Others
Finance
€69B
2007
Industrials
€77B
€42B
(Source) Siemens Annual Report
2010
2011
Sell IT
service
division to
EtoS(France)
2011
Sell nuclear
power
division to
Areva
(France)アレ
バ(仏)に原子
力事業を売却
€61B
Electric power
2015
€66B
METI
105
(2)Development of systems and environments to enable quick and flexible revival and
shuffling of business domains
Challenges
•
Global companies need to engage in large scale M&As using a variety of methods and buy out
promising start-ups, actively spin-off business arms to elevate stockholder value, and strengthen the
power to promote the company’s business.
•
Same goes for domestic companies and each entity will need to create an environment where business
domains can be flexibly and quickly reshuffled according to each company’s situation.
Basic Direction of Efforts
•
All needed systems and environments need to be created so that diverse corporate needs can be met to
enable quick and flexible shuffling of business portfolios.
Short Term Efforts
•
Consider the creation of systems and environments to enable quick and flexible revival and shuffling of
business domains.
•
Promotion of early stage efforts for reviving businesses and succession of businesses at SMEs, promotion
of investment taking the timing of succession as an opportunity.
METI
106
(Reference) Create environment to enable speedy and flexible shuffling of
business domains

Looking at the top 10 M&As overseas in the last ten years, shuffling of business domains using
diverse tactics such as spin-offs and TOBs with treasury stocks as consideration.

For example, TOBs with treasury stocks as considerations are popular overseas while TOBs in Japan are typically by
cash.
Top 10 TOBs in the World by Transaction Amount
Transaction
Amount (million
dollars)
Percentage
acquired by TOB
(％)
Date
Complet
ed
Acquiring Company
(Country)
Acquired Company
(Country)
１
2007/11/
02
RFS
Holding(Netherlands)
ABN Amro
Holding(Netherlands)
98,189
98.80
２
2005/08/
09
Royal Dutch
Petroleum(Netherlands
)
Shell Transport & Trading(UK)
74,559
100
３
2009/3/2
6
Rosche
Holding(Switzerland)
Genentech(US)
46,695
４
2007/11/
14
Rio Tinto Canada
Holding (Canada
Alcan (Canada)
37,630
Friendly/Ho
stile
Cash：93
Equity：7
not friendly
Cash：0
Equity：100
friendly
47.82
Cash：100
Equity：0
hostile
100
Cash：100
Equity：0
friendly
Mittal
Steele(Netherlands)
Arcelore (Luxemburg)
2006/04/
19
Telefonica(Spain)
０２(UK)
2005/06/
30
Telecom Italia(Italy)
８
2007/10/
05
Group of
Investors(Italy)
Endesa (Spain)
26,438
45.62
９
2011/04/
08
Sanofi Aventis (France)
Genzyme(US)
23,898
10
2007/04/
23
Iberdrola (Spain)
Scottish Power(UK)
22,210
６
７
Telecom Italia Mobile(Italy)
32,240
Considerations
(%)
2006/08/
08
５
31,659
28,821
(Past 10 years)
93.70
Cash：29
Equity：71
friendly
Cash：100
Equity：0
friendly
Cash：66
Equity：34
friendly
Cash：100
Equity：0
hostile
100
Cash：84
Others: 16
friendly
100
Cash：53
Equity：47
friendly
100
44.65
Top 10 TOBs in Japan by Transaction Amount
(Past 10 years)
Considera
tions (%)
friendly
／
hostile
100
Cash：100
Equity：0
friendly
5,734
100
Cash：100
Equity：0
friendly
Bank of Ayudhya
(Thailand)
5,279
72.01
Cash：100
Equity：0
friendly
Dentsu
Aegis Group (UKI)
4,116
86.37
Cash：100
Equity：0
friendly
2010/0
6/08
Astellas Pharma
OSI Pharmaceuticals
(US)
4,031
100
Cash：100
Equity：0
friendly
６
2008/1
1/04
Bank of Tokyo-Mitsubishi UFJ
Union Bank of
California (US)
3,707
38.88
Cash：100
Equity：0
friendly
７
2008/0
1/28
Eisai
MGI Pharma (US)
3,557
100
Cash：100
Equity：0
friendly
８
2015/1
/13
Otsuka Pharmaceutical
Avanir
Pharmaceuticals(US)
3,427
100
Cash：100
Equity：0
friendly
９
2010/1
2/13
NTT
Dimension Data
(South Africa)
3,119
100
Cash：100
Equity：0
friendly
1
0
2010/1
0/06
Panasonic
Panasonic Electric
Works (Japan)
3,041
32.16
Cash：100
Equity：0
friendly
Date
Com
plet
ed
Acquiring Company
(Country)
Acquired
Company
(Country)
１
2007/0
4/16
Japan Tobacco
Gallaher Group(UK)
14,654
２
2008/0
5/14
Takeda Pharmaceutical
Millennium
Pharmaceuticals (US)
３
2013/1
2/18
Bank of Tokyo-Mitsubishi UFJ
４
2013/0
3/26
５
(Source) Drafted by the Ministry of Economy, Trade and Industry based on Thomson One and Press Releases from Companies
Transacti
on
Amount
(million
dollars)
Percent
age
acquire
d by
TOB
(％)
METI
107
６．Japan’s specific strategy
vi. Disseminating the outcomes of the
revolution to SMEs and local economies
METI
108
(1) Establishing bases on which IoT and other new technologies are
introduced into and utilized in SMEs and communities
Challenges
•
•
•
The fruits of the forth industrial revolution need to be delivered from large corporations to SMEs and from national government to local
municipalities. Such diffusion to SMEs and regional areas have been a challenge in other nations, including Germany.
At the actual business scene of SMEs, the development of basic platforms for the utilization of IT is a challenge. Support needs to start from the
development of basic capabilities.
In the actual working level of manufacturing, agriculture, construction, etc., aging and lack of successors are serious problems. Succession of
knowhow is an urgent issue.
Basic Direction of Efforts
•
•
•
•
Promote the trend of IT investment at SMEs, broadening from investing in internal control operations to business activities that produce actual
profit such as the manufacturing process, service, sales activity, etc.
Actively promote the introduction of robots, etc. to support automation at the working level.
In order to link the development of such basic platform systems with developing new business models, create support systems for international
standardization.
Increase the value added to services and products using new artificial intelligence (deep learning, etc.)
Short Term Efforts
•
•
•
•
•
•
•
Bill for Strengthening SME’s management. (in a “guideline by business area”, which will be drafted for each industry, sample cases of SMEs
increasing their earning power through IT investment in their business activity and SMEs making IT related facility investment a policy and
actively and boldly investing in IT will be supported)
In the next two years, support over 10,000 SMEs introduce IT to their company by specialists. Especially, for the manufacturing industry,
centers will be created where companies can receive consultation by “Smart Manufacturing Supporter’s Squad”, consisting of specialists in IT,
“Kaizen” activities, and introduction of robots.
Reduce the initial introduction cost of small-sized versatile robots by over 20%. Support the increase of human resource (system integrators)
that can assist in the introduction of robots.
In order to improve productivity at SMEs that do not have sufficient workforces, promote investment for labor savings and automation through
capital investment related to service robots and IoT.
Increase “Partnership organizations for the support of utilization of standardization” (regional banks, etc.) to 47 prefectures in order to support
standardization at SMEs.
Promote technological development and its introduction to the working level using deep learning in various areas as an integrated approach
and accelerate innovation and its implementation to actual society.
Development of a robot test field, etc. based on the Fukushima Innovation Coast Plan.
METI 109
Introducing robots/Promotion of adopting IT at SMEs
[PM's statement at the 5th Public-Private Dialogue]
１．Assist in the Introduction of Robots (Lower introduction cost, double supporting partners )
●Make the process more efficient through standardization of the robot introduction process and related skills.
●Develop a small-sized versatile robot (platform robot)
●Reduce the introduction cost of small-sized versatile robots by over 20% in the next 5 years
and double the number of supporting businesses (Sier) to 30,000 persons.
２．Support by Specialists (support by IT Specialists and the “Smart Manufacturing Supporters’ Squad
(Smart monodukuri ouentai)”)
(１) Support by IT specialists
●The most serious bottleneck in the adoption of IT is not being able to take the first step due to lack of IT
literacy.
●Increase the number and types of IT and other specialists at “General support centers (Yorozushien kyoten)”.
(２) Support by “Smart Manufacturing Supporter’s Squad”
●Many SMEs do not know how to improve their operations, and how to utilize new technologies such as IoT
robots, etc. in doing so.
●Provide one-on-one support for not only “kaizen” but for the introduction of IoT/robots by training and
dispatching human resource that can support the process.
●Specialists will support over 10,000 SMEs in the next two years to teach knowhow on IT adoption etc.
●As part of this effort, start creating locations where consultation by the “Smart Manufacturing Support Squad” is available.
Training at Schools
Former workers with
strong production
skills
＋
Human resource with
knowledge on
IoT/robots
＋
Knowhow on the
introduction of
IoT/robots
Knowhow on
“Kaizen” in the
field
Start Creating Centers Nationwide this Year
Smart Manufacturing Supporter’s Squad
・ “Kaizen”
activity at companies
・ Support introduction of IoT/ robots
Consultation at
centers
Dispatch to SMEs
METI
110
110
６．Japan’s specific strategy
vii. Further enhancing economic and social
systems to address the revolution
METI
111
(1) Ideal approaches to regulatory reform so as to address the revolution
Challenges
•
With the development of the forth industrial revolution, business activities with higher levels of uncertainties have become
important.
•
In new service areas such as the sharing economy, services not expected under conventional regulations are appearing one
after another, resulting in the government measures falling behind.
•
For this reason, it is difficult to sufficiently react to the new needs in the private sector by reforming existing regulations
and systems.
Basic Direction of Efforts
•
Firstly, a “future vision” needs to be shared, and a concrete goal to be met within a mid-term timeframe is to be set.
•
Then, create a road map including all elements needed to attain the goal (reform of regulations, business promotion ideas,
business development in the private sector, self-regulations, etc.), followed by the development of a mechanism where the
roadmap is altered as the situation changes while carrying out short term measures.
Short Term Efforts
Introduction of a regulation reform mechanism whose goal is to create the world’s most advanced business environment
through a new form of public-private collaboration.
ex) Autonomous driving cars on local roads, drone operation management system, negawatt marketplace, sharing
economy, etc.
•
Creation of a regulation system integrated with hard infrastructure platforms (5G, creation of data center, etc.)
For the development of the sharing economy from which various businesses are born, support the private sector create
self-regulatory standards such as user protection.
•
[PM’s statement at the 26th Council for Industrial Competitiveness]
•
A “roadmap method” where actual reform of systems are planned backward from by when what technology is to be
available in society.
METI
112
“Backward planning roadmap method” to conquer Forth Industrial Revolution
○ Under the forth industrial revolution, drastic and unforeseeable innovation and changes in business models may occur.
○ In order to meet the needs of an uncertain future and to conquer international competition, regulation planning backward
from the long term future vision and a mechanism to review administrative procedures need to be introduced.
Backward Counting
Goal Roadmap Method
１. Share a long term vision of the future
Future Vision of Autonomous Driving
・Reduce traffic accidents, alleviate traffic congestion, reduce environmental load.
・Utilization of autonomous driving technology in various industries (logistics,
mobile service, etc.)
・Reduce driver’s load and secures free time
PM’s Statement at the Public-private Dialogue on Future Investment (November 5th, 2015)
２．Set concrete goals with a
mid-term deadline.
We will make mobility service by autonomous driving and autonomous cruising on
highways possible at the 2020 Olympic & Paralympic Games. In order to do so,
needed verification will be available, and systems and infrastructure will be created
by 2017.
Roadmap Example for Collaboration Area
2016
Area of Cooperation
Ⅴ. Functional
Safety, etc.
Ⅵ. Security
Ⅶ. Recognition
Technology
Ⅷ. Judgement
Technology
Business Model
((3) )Business
Model
３．
(1) Create a roadmap of all elements
needed to achieve the goal (regulation
reform, business promotion policies,
private business developments, etc.)
(2)Carry out concrete short term reforms
Ⅳ. Ergonomics
Clarify
purpose
Clarify spec of
Platform map
International Standardization
Clarify business model
(Subjects of the business, etc.)
3
Measurements
* Keep in mind
the possibility
to use as a data Creation of platform map
platform in later (complete highways)
Creation of map system
phases of the
(incl. updates)
project (phased
increase in map
Verification testing
area, etc.)
utilizing map system
2019
2020
Phased increase in map area
(Source) Autonomous cruising business review meeting “Future approaches” (March 23rd, 2016)
METI
Start autonomous driving on local roads around
2020 at the earliest. (level 2)
Ⅲ. Social Receptivity
1
2018
Start autonomous driving on highways around
2018 at the earliest (level2)
Ⅱ. Communication
( Purpose
)Purpose
(1)
(2)
Spec
()Spec
Ⅰ. Map
2017
113
(2) Improving administrative services through the utilization of data
Challenges
•
Given the existing functions of the government, it is difficult for the government to respond to society’s needs due to
financial and staffing constraints and improved productivity (enhanced added value and efficiency) of the government itself
is needed.
•
Disclosure and utilization of data held by government organs need to be further promoted as well.
Basic Direction of Efforts
•
The government, before the private sector, will utilize innovative technology to fundamentally change its operation
processes for enhanced efficiency and the drastic improvement in the convenience of services they provide.
•
Disclose data held by the government for active and thorough utilization.
Short Term Efforts
•
Take an integrated approach on the promotion of regulation reforms, simplification of administrative procedures, and
adoption of IT, and work on reducing regulation and administrative costs, using a business operator’s point of view, with
a target value and deadline.
•
Work quickly on enhancing productivity of administrative services and the creation of new services.
ex.) Simplification of personal and corporate authentication, enhanced efficiency of administrative work by the
utilization of AI (more advanced and efficient patent administration), new services utilizing the public
personal authentication system (My Number), etc.
•
Conduct a meticulous research on the data held by government organizations (central and municipal). Actively disclose
such data and promote utilization in the private sector (ensure administrative systems use API)
[PM’s statement at the 26th Council for Industrial Competitiveness]
•
Drastically reduce administrative costs using a business operator’s perspective. In order to do so, reform of regulations,
simplification of administrative procedures and adoption of IT will be carried out as an integrated effort.
METI
114
Further utilization of government held data expected
 Although currently undergoing work for further utilization, government held
data have issues such as quantity and user friendliness, and hasn’t been able to
sufficiently meet needs.
Issues on the utilization of public data (multiple choice)
Problems with official statistics
(units: number of companies)
(total number of answers)
Doubts on accuracy
公表時期が遅い
インターネット上の
Not readily usable
on the Internet
データの使い勝手が悪い
213
Doubts on accuracy
精度に疑問がある
154
Insufficient
guides & comments,
手引・解説が不十分、
can’t
understand
how to use
利用方法が分からない
151
Interested in the surveyed area
対象分野に関心はあるが、
but 調査の存在を知らない
don’t know what surveys exist
135
Not enough questions
項目が少なすぎる
(insufficient content)
(内容が充実していない)
42
Inappropriate processing of data
加工方法(実質化、
(conversion to real value,
季節調整等)が不適切
season adjustment, etc. )
データがすぐに活用できる
Data isn’t provided in
a readily usable format
形式で提供されていない
273
提供されているデータの
Content of the data is not detailed
内容が詳細ではない
データを提供する
Data format differs by organization
機関毎にフォーマットが異なる
必要なデータをどこで
Difficult to find where the data is available
入手できるかがわかりにくい
提供されている
Low data update frequency
データの更新頻度が低い
データの検索や
Limit to search and processing
加工に制限がある
関連データとの
Cannot link with related data
リンクができていない
39
Low publication frequency
公表される頻度が低い
データの著作権の
Rules regarding copyright
of data is not clear
取扱ルールが不明確である
50
30
29
25
23
21
15
14
利用に際して費用が発生する
Cost is incurred for use
8
0
47
利用の用途が制限されている
Purpose of use is limited
21
項目が多すぎる
Too many questions
(too detailed)
(内容が細かすぎる)
49
100
150
200
250
300
Source: “Toward an accurate understanding on the current situation
regarding official statistics and policymaking” (May 17th, 2011, Japan
Federation of Economic Organizations)
Others
その他
9
20
0
10
20
30
40
50
60
Source: “Infrastructure development for Japan’s society in the era of informational
economy” (March 2014, Japan Users Association of Information Science/project
commissioned by the Ministry of Economy Trade and Industry)
METI 115
Utilization of AI for advanced and efficient patent administration

List up each and all work from application to examination and research and analyze whether AI
can be applied or not.

Collaborate with intellectual property related agencies of other nations with high interest in AI
such the US and Australia, etc.
Patent Administration Work and the Application of AI
Approximately 6,000 out
of the approximately
300,000 applications are
brought to the counter.
Submit
Application
While 70% of the process is
machine processed,
complicated procedures such
as fee exemptions are handled
by hand by staff.
Formality Examination
(Documentation, fee payment, etc.)
Grant patent
Substantive
Examination
Reject
Organize
patent information
Create search index for
applications and organize
as patent information.
Research related technology from
the 100 million patent documents
worldwide and other academic
documents.
Understand content
of invention
Carefully read the application
document, understand the
content of invention, and grasp
the scope the application wishes
to get patented.
Conventional art
research
Decision on
Patentability
Decision on whether patent requirements are met
(Main samples of requirements)
● Whether there has been a same invention in the past.
(Novelty)
● Whether it is not easily invented. (Inventiveness)
● Whether the content of documentation is clear.
(Written description)
Create a more advanced and efficient work process for patent administration
METI
116
(3) Enhancing the development of business overseas
through strategic collaboration and cooperation among industries
Challenges
•
For Japan to ensure it obtains the fruits of the forth industrial revolution, it is important to actively promote stronger
international collaboration, further international harmonization of related systems and connect such efforts to vitalizing
innovation and gaining new overseas markets.
Basic Direction of Efforts
•
In order to develop a global digital market toward the forth industrial revolution, promote the organization of basic concepts
surrounding the utilization of data and the creation of an internationally harmonious regulation system.
•
Efforts to support the internationalization of infrastructure systems that cater to the needs of the forth industrial revolution
will be promoted through strategic efforts under public-private collaboration, including the upgrade financing functions as
needed.
•
Strategic efforts will also be made on the development of open innovation and international standardization.
Short Term Efforts
•
Confirmation of the “free flow of data” rule, international survey on regulation systems regarding the utilization of data
•
Speedy and steady implementation of expansion measures for a “high quality infrastructure partnership” and further
reinforcement of related efforts (promote the international standardization of “high quality infrastructure”, infrastructure
planning and development of human resource capable of its evaluation, strengthen collaboration with the Asia Development
Bank, faster and broader yen overseas loans, etc.). Support production at optimal locations corresponding to corporate
strategies.
•
Consider reinforcing systems and functions of organizations that contribute to increasing the supply of risk money to
support internationalizing companies.
•
Support the large area expansion of contents asset capitalizing on characteristics of a local area.
METI
117
(4) Permeating the outcomes of the revolution throughout society
Challenges
•
Although the forth industrial revolution has the potential of bringing huge benefits to individuals, the
economy , and to society, naturally, the diffusion of new assets and services would be inhibited unless
recognition and understanding of the innovative technology is gained by individuals and society.
•
Meanwhile, the Japanese are yet to understand these innovative technologies nor the merits they will
bring.
Basic Direction of Efforts
•
In order to gain social acceptance of the changes brought about by the forth industrial revolution, it is
integral to create an environment for secure data utilization as well as attend to ethical issues the new
technological revolution may present.
•
On top of all that, it is important to put in efforts for international collaboration as needed, and to
specifically and directly communicate with society how they are integral and their merits through social
verification and through dialogues.
METI
118
Word version
METI
119
1. Global economy in need of new growth engine

There seems to be no driving force for the world economy as suggested that economy in
developed countries remain stagnant for a long period after the failure of Lehman Brothers.
Furthermore concerns about the future arise now that emerging economies such as China
which was once boomed have weakened in recent years.

Despite this global economic situation, Japan has maintained almost full employment
supported by Abenomics. In addition many companies reported high profit, and succeeded in
resolving most of issues of corporate excessive capital investment.

However Japan to experience all-out economy based on population decrease will be faced
with structurally suppressed growth both in supply and in demand. The failure to resolve
such constrained growth might cause distinct stagnancy of economic growth, giving serious
impact of long stagnancy on Japan.

To grow out of this stagnancy to shift to the new phase of growth, it is crucial to concurrently
to realize :(1) improved potential growth rate through productivity revolution based on new
innovation (supply side), (2) exploration of potential demand by designing new
products/services that respond to social needs with innovation results (demand side).

The key to successful shift to the phase of growth is to aggressively reform economic and
social system that properly identify and drive technological innovation such as IoT, big data,
AI etc. which represent the Fourth Industrial Revolution regardless of developed or
developing countries.
METI
METI
120
2. What is happening now? - Impact of the fourth industrial revolution 
Competition is becoming fierce for the connection or use with data while a source of newly
generated value is shifting to "data." In this competitive situation, persons able to create
opportunities for business expansion in the years ahead can attract vast fund globally and
swiftly and aspire for further growth by M&A etc., which eventually accelerates scale and
speed of the competition. Thus we have already plunged into the word of competition of
speed where "Winner takes All" is dominant.

Large scale competition involving a wide range of companies arises to all types of industries
beyond their traditional boundaries. Therefore there is a possibility of drastic reform where it
would be extremely difficult to predict the future for industrial/employment structure
themselves. In this sort of reform its "light" and "shadow" exist with regard to smooth shift
to new employment etc. while new opportunities are spreading globally. Ahead of occurrence
of this reform redesigning efforts will be required for the entire system of economy and
society including various legal systems.

In European countries and USA, especially global companies that are pursuing global
strategies are sharply increasing in the number. In respect of global strategies USA is
pursuing "from network to the real" using its strength in information domain for the
utilization of "real data" at production sites whereas European countries are deploying "from
the real to network" using their strength of manufacturing. However they have just begun to
review economic and social system.

In order for Japan to quickly respond to these trends and to globally lead the world, it needs
"compass" to show the way to overcome "market failure" coming from uncertainty of
information and the way to how the public and the private can collaborate.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(1) Promising areas as new growth frontier

Newly generated goods and services with the Fourth Industrial Revolution will create possibility of acquiring
new markets in developed countries as well as in emerging countries (China, Next China countries etc.)
expected to grow in the future.

Presently Japan less reliant on overseas demand has more potential for growth in overseas demand than
any other developed economies (export dependency rate for Japan: 18%, 32% for world average, 28% for
UK, 46% for Germany). It is crucial to acquire new markets by utilizing TPP which allows for giant free
trade area.

Moreover we see possibility of resolving global issues with technological innovation in the Fourth Industrial
Revolution To follow up on this, new markets will emerge to respond to "needs for resolution of issues" that
spread worldwide.

Virtually global economy will hereafter experience the economy with decreasing population (majority of
countries worldwide will be faced with the issue of decreasing population). Additionally we see the surfaced
challenges of improving levels of medical/health and education, restrained energy/environment due to rise
of developing countries.

Japan is supposed to be one of the developed counties faced with these challenges. In this respect we see
possibility of Japan's securing competitive advantage in world market by realizing advanced reform for
individual/company basis as well as social system ahead of any other countries in the world.

Responding to the Fourth Industrial Revolution is indispensable for both aspects of strengthening
competiveness of Japan's economy for acquiring overseas demand on global basis and of resolving
social/structural issues.

On the other hand these approaches are subject to competition of speed with other countries, and losing
competition leads to no chance to utilize Japan's advantageous position that Japan has endeavored to
secure.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(2) Directions of reform of industrial/employment structure (1) Shift to new industrial structure
through facilitating needs (1/2)

Social/structural issues (i.e. customer's true needs) which go beyond our capabilities can be
essentially dealt with by utilizing innovative technology/data such as AI for the Fourth
Industrial Revolution. Competition will be conducted as to who will discover or acquire this
new frontier expected to be spread globally. ("Move," "Live smartly," "Keep healthy, support
the elderlies, "Get smartly" etc.)

To this end source of new added value should be directed to "data." The key to secure
competitive advantage relies on how speedily we can produce innovative products/services
that can respond to true needs while functioning a cycle of collecting data, ensuring shift
such data to big data and analyzing and utilizing them.

Some companies or industries can grow by exploring and acquiring new markets using deftly
these data, but others cannot, which puts us in harsh situations.

Hereafter competition will become fiercer for such promising industrial sectors. We see
possibility of totally new value to be generated where there is integration among data,
technology, human resource, fund which exist within their traditional boundaries as per
industry type, companies and business. So we might see reorganization between totally
different industries or mutual entry instead of traditional reorganization between the same
industry. As a result major changes of industrial structure will occur.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(2) Directions of reform of industrial/employment structure (1) Shift to new industrial structure
through facilitating needs (2/2)
 Specifically,

(1) New value chain and new industries will emerge beyond traditional boundaries of
industry types in response to "customer's true needs (e.g. move conveniently)."

(2) In this trend we see significant growth in information service sector playing focal
role in data utilization and customization service using customers' data. On the other
hand the sectors of raw materials and intermediate input will be put into harsh
situations.
 Japan is required to realize swift and flexible change in industrial structure to quickly
respond to these reforms continuing globally.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(2) Directions of reform of industrial/employment structure (2) Shift to new industrial structure

We see progress of labor saving in non-regular workers besides regular workers with
emergence of robot etc. This is generally expected to lead to the resolution of manpower
shortage facing Japan to experience real population decline.

Additionally major reform of business processes themselves may bring about new needs of
employment including jobs that create workplace where workers with good command of AI
and robot etc. work together with them or jobs to focus on more value through more human
communication/interaction than before.

On the other hand we see possibility of change in skills required for middle class workers who
occupy core group in the entire employment. For example it is highly probable that jobs for
traditional back office etc. will decrease on a large scale.

Changes in business process in line with the Fourth Industrial Revolution will bring about new
needs of employment including middle skill workers. Therefore it is necessary to develop
human resource in response to change in employment structure and to smooth switch over
labor force to growth areas.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(2) Directions of reform of industrial/employment structure (3) Specific "Vision" of reform

As mentioned before the trend of the Fourth Industrial Revolution swiftly spreads to various
fields, affecting an optimal economic/social system.

Thus it is extremely difficult to envision decisive scenario for actions for strategies in each
field based on correct understanding of such reform as a whole.

Rather in this situation it is effective (1) to identify key domains in response to "global
customers' true needs," (2) to envision multiple, long term scenarios as to who and how they
envision new business models using technological reform, (3) to analyze impact ("light" and
"shadow") on industry, employment and economy/society, (4) set specific med-term goals by
identifying key turning-points, and (5) to develop road maps that describe tasks (regulatory
reform, business promotion etc.) required for the public/private, going backward in time of
such goals, and to perform short-term specific reforms based on road maps.

Besides it is crucial to follow up on such "Vision" in dynamic way as it is subject to change as
per time goes on.

Hereafter we need to perform deep study on various fields including "Move," "Live smartly,"
"Keep healthy, support the elderlies, "Get smartly" etc.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(2) Directions of reform of industrial/employment structure (4) Estimates involving industrial
and employment structures

We projected possibility as to what industries and occupations will grow or decline with
economic model, making this projection help with identifying future direction of reform.

The projection was conducted for two scenarios: "As-is scenario" where reforms in line with
the Fourth Industrial Reform are not mutualized continuing a state of low economic growth,
and "Reform scenario" where there are dramatic improvement of productivity triggered by
the Fourth Industrial Revolution, smooth transfer of economic resource to growth industries,
jobs conversion as per change in business process. (For details on two scenarios see 4．
described later.

＜Entire vision /Macro economy＞

"Reform scenario" reveals that high value/high growth sectors will be generated by providing
new services and products that help resolve social challenges, responding to customers' true
needs. Additionally it says that workforce's shift to jobs which require solely human element
in harmony with machine/software will let workers enjoy high wage/salary.
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3. New growth with Fourth Industrial Revolution and reform of
industrial/employment structure
(2) Directions of reform of industrial/employment structure (4) Estimates involving industrial
and employment structures

<Industrial structure envisioned with reform scenario>

The scenario reveals significant increase in added value and number of workers in such fields as "Customer
response type manufacture sector (production of final goods)" where enhanced value is expected by
realizing customization to respond individual need based on customer data, and shift to new services etc.,
and "Information service sector" that plays core part in the Fourth Industrial Revolution and expands
demand on the whole industry basis.

In addition to these, higher growth rates than average one will be expected in such sectors as "Hospitality
type service (e.g. tourism)" expected to expand market by making potential demand etc. surface using
customer data, and "Infrastructure network (e.g. transportation, telecommunication) " which creates new
value by entering into different sectors through integration with other service industries.

<Employment structure envisioned with reform scenario>

The scenario reveals increase of workers in such occupations as "Upstream jobs (e.g. management strategy
staff, R&D staff), "Sales" of product/service with sophisticated consulting capability which becomes source
of competitive advantage, and with low possibility of replacement with AI/robot etc., "Services (e.g.
attendant with exclusive restaurant) with high added value and low possibility of replacement where direct
human interaction leads to enhanced quality/value, and "IT" which creates more demand on the whole
industry basis.

On the other hand the scenario indicates further replacement with AI/ big data/IoT/robot and decrease of
workers in such occupations as workers production line, corporate procurement management staff,
salesperson with high possibility of replacement including cashier with supermarket, clerk at bank counter
with high possibility of replacement and back office staff including staff of accounting/salary management.
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