IT Policies
November 27, 2000
IT Strategy Council

Basic IT Strategy

On the threshold of the 21st century, Japan must take revolutionary yet realistic actions@promptly, without being bound by existing systems, practices and interests, in order to create a gknowledge-emergent society,h where everyone can actively utilize information technology (IT) and fully enjoy its benefits. We will strive to establish an environment where the private sector, based on market forces, can exert its full potential and make Japan the worldfs most advanced IT nation within five years by: 1) building an ultra high-speed Internet network and providing constant Internet access at the earliest date possible, 2) establishing rules on electronic commerce, 3) realizing an electronic government and 4) nurturing high-quality human resources for the new era.

‡T. Philosophy

1. Historical significance of the IT revolution

(1) IT revolution and transformation to a gknowledge-emergent societyh
The IT revolution, now progressing on a global scale with the rapid advancement of computer and communications technologies, is beginning to bring about a historic transformation of society, much like the Industrial Revolution did from the 18th century in the United Kingdom. The Industrial Revolution transformed the world from an agricultural society to an industrial society with the advancement of power technologies starting from the invention of the steam engine, and it revolutionized socio-economic activities of individuals, businesses and governments.
Correspondingly, the advancement in information technologies, primarily the Internet, will enhance the quality of information exchanges and revolutionize relationships between individuals, between individuals and organizations, and between individuals and society, by drastically reducing the costs and time for information distribution. It is believed that this will result in the rapid transformation to a gknowledge-emergent society,h where the interaction of knowledge will evolve to create high added value.

(2) Necessity for a new national infrastructure
Japan started transforming from an agricultural society to an industrial society after the Meiji Restoration and succeeded in rapidly developing an industrial society based on standardized mass production after World War II. As a result, over about 100 years, our nation successfully caught up with Western industrial nations to become the greatest economic power after the United States. The benefits of economic development have spread widely among the Japanese people, and the standard of living has improved dramatically. Behind this success lies the fact that Japan quickly and accurately established a new social infrastructure suitable for the industrial society.
In order for Japan to continue its economic prosperity and raise the quality of life for all people, it is vital to promptly establish a national infrastructure, including legal frameworks and information infrastructures, suitable for a new society where information and knowledge are the sources of added value. However, as is always the case with a revolution, transformation from an industrial society to a gknowledge-emergent societyh will be discontinuous and we must prepare ourselves for the hardships that will accompany the process of realizing further prosperity. In the absence of a historical event that would trigger an end to a past era, such as the Meiji Restoration and the end of World War II, each Japanese person is urged to promptly carry out a drastic reform of the social structure on his or her own.

2. Actions of nations for IT revolution and Japanfs backwardness

(1) National IT strategies of other nations
Just as a nationfs response to the Industrial Revolution later determined its economic prosperity, the same will hold true with the IT revolution. Europe and Asia, not to mention the United States, are aggressively developing their IT infrastructures as part of their national strategies in recognition of the importance of creating a gknowledge-emergenth environment to secure world competitive leadership in the 21st century.

(2) Japanfs backwardness in embracing the IT revolution
Japan falls far behind other nations in embracing the IT revolution. The Internet usage in Japan is at the lowest level among major industrial nations and is by no means high even compared with other nations in the Asia-Pacific region. Japan lags behind others even in terms of how widely information technology is used in businesses and public administration. In an environment of rapid change, we must recognize that Japanfs current tardiness in embracing the IT revolution may result in an irreparable gap in competitive advantages in the future.
The fact that Japan lags behind other nations in the use of the Internet can primarily be attributed to high telecommunications fees and restrictions on the use of communications networks, stemming from what is in reality a monopoly of the local telecommunications market. Other reasons for high fees are that the Internet is built on low-speed, inefficient voice telephony networks and fees are based on linear pricing. The telecommunications market was liberalized in 1985, and restrictions on the market entry of foreign companies have recently been eased. However, there still remain many restrictions and cumbersome procedures that prevent fair and active competition among telecommunications carriers. Moreover, obsolete laws that require procedures in writing and in person are hindering the use of the Internet. All in all, it can be concluded that institutional problems have been the main cause for the delay in the popularization of the Internet.

3. Basic strategy

(1) The need for a national strategy
To make up for the delay until now, provide the worldfs most advanced IT environment to the citizens who need it and make real contributions to the world, Japan must quickly and steadfastly implement institutional reforms and measures. To that end, we must establish a national strategy with a concrete vision and steps for socio-economic structural reform and ensure its common and shared understanding among the nationfs citizens.
The government should eliminate vertically divided administrative functions, cooperate with local governments, and promptly establish an infrastructure that functions according to market forces, so that the private sector can engage in various original and creative activities through free and fair competition and become a driving force of the IT revolution.

(2) Our vision of the ideal IT society
Through our national strategy, we hope to create a gknowledge-emergent societyh that fosters diverse creativity through the exchange of knowledge among citizens. The first condition in creating such a society is to have all people information literate and able to exchange a wealth of knowledge and information freely and securely without being bound by geographical, physical, or economic constraints. The second condition is to have ongoing reform towards a diverse and efficient economic structure based on free and disciplined competition. The third is to attract knowledge and talents from around the world and accumulate and transmit the worldfs most advanced information, technologies and creativity to actively contribute to the progress and development of a gknowledge-emergent societyh on a global scale.
Specifically, our vision of an ideal society would have the following features;

(3) Four priority policy areas
In order for Japan to make itself a gknowledge-emergent societyh as described above, our nation is required to implement the following four priority policy areas intensively for the development of a new national IT infrastructure: 1) establishment of an ultra high-speed network infrastructure and competition policies, 2) facilitation of electronic commerce, 3) realization of an electronic government, and 4) nurturing high-quality human resources.
Our nation needs to rapidly develop hardware tools, software skills, and content simultaneously to promote the IT revolution. In particular, the establishment of an ultra high-speed network infrastructure and the nurturing of high-quality human resources, such as through the enhancement of information literacy, will form the essential foundation for the promotion of the IT revolution. To spur an increase in IT-driven transactions and activities on such a foundation, we must realize an electronic government and promote electronic commerce through deregulation and new rules. It is because of these reasons that the four priority policy areas have been chosen.

‡U. Priority policy areas

1. Establishment of the ultra high-speed network infrastructure and competition policies

(1) Basic idea
It is essential for the purpose of realization of the IT revolution that all people can utilize, at affordable rates, the network infrastructure that enables distribution of a huge amount of information, regardless of time and distance, among such actors as individuals, businesses and governments. The network infrastructure must be developed under the following basic conditions: 1) available at any time, anywhere and to anyone, 2) a great variety of choices and services, 3) safe, easy and secure, 4) affordable, high-speed and efficient, and 5) indiscriminate regardless of nationality and consistent with global standards.
The private sector should, in principle, play a leading role in the establishment of the network infrastructure, and the government, for its part, should establish an environment to allow the private sector to exert its full potential by promoting free and fair competition and supporting basic research. It is important that the government will implement competition policies based on the philosophies of gmaximizing the benefits of usersh and gpromoting fair competition,h and immediately make drastic revisions of any laws and systems that are inappropriate with such philosophies.
At the same time, the government should adopt a benchmark method, for instance, to maintain Japanfs Internet environment as one of the most advanced in the world in the process of its development.

(2) Targets

  1. Promote the establishment of one of the worldfs most advanced Internet networks within five years, and enable all the people who need it to have ultra high-speed access networks1 (30-100Mbps2 as a standard) at affordable rates. (Aim to provide high-speed constant access networks3 to at least 30million households and ultra high-speed constant access to 10million households)

  2. In the short-term, enable all the people to have constant access to the Internet at extremely low rates within one year through the use of fixed-line, wireless and other kinds of networks by promptly taking every necessary measure.

  3. Promote the shift to the Internet networks equipped with IPv64 that provides enough address space5 and stricter protection of privacy and network security, anticipating that various Internet access devices and digital home appliances will become popular and constantly connected to the Internet.

  4. Establish the most advanced high-speed wireless Internet environment in which wireless access networks are efficiently connected to the Internet networks(IPv6), and make seamless mobile communications services available. Spread and promote advanced transportation services connected with the intelligent transport system (ITS) and the geographic information system (GIS).

  5. Upgrade the speed of the international Internet access networks to ultra high-speed in parallel with the upgrade of the domestic networks.

(3) Government Actions
The government should take the following actions to achieve the above targets.

  1. Establishment of an ultra high-speed network infrastructure and promotion of competition
    a) Asymmetrical regulations based on the market control power should be introduced to promote competition in the telecommunications industry. At the same time, each regulation on telecommunications carriers should be reviewed drastically from a standpoint of promoting competition, and the government should, based on the philosophies of gmaximizing the benefits of usersh and gpromoting fair competition,h shift its administrative attitude from prior regulations-oriented to ex-post-facto check approach according to transparent rules. Moreover, the supervision over anti-competitive acts by dominant carriers6 should be strengthened, and a special organ should be established at the earliest date possible, which will quickly respond to complaints from users, conflicts among carriers and requests of reviewing present systems and their applications, and will establish arbitration schemes. Meanwhile, the function of the Fair Trade Commission should be strengthened under the anti-monopoly law to eliminate acts that hinder fair competition.
    b) Clear rules should be established, from a viewpoint of activating the private sector as much as possible, to promote just and fair use of optical fibers and such resources as conduits, ducts and poles for laying fibers.
    c) Prompt and fair allocation of radio frequency spectrum, including the regular review of it, should be implemented for the purpose of facilitating the development of an advanced information network environment. To that end, fair and transparent ways of allocation, including an auction system, should be examined and implemented.

  2. Improvement of digital divide
    Measures to diffuse the use of the high-speed Internet in such disadvantaged areas as underpopulated provinces and isolated islands should be examined.

  3. Promotion of R&D
    Research and development should be supported and promoted to acquire and maintain the worldfs most advanced level of technologies.

  4. Establishment of the international Internet networks
    Necessary actions should be taken to enable Japan to function as the hub of the international Internet networks.

2. Facilitation of electronic commerce

(1) Basic idea
Electronic commerce has the following characteristics originating from cyber space: 1) anyone can participate in it, 2) the private sector plays a major role in the market, 3) high-speed transactions can be realized, 4) borderless market can be formed. E-commerce is expected not just to digitize former paper-based transactions, but also to form new markets and new modes of transactions none of which has ever been imagined.
Electronic commerce, therefore, requires new systems and market rules that will enable everyone to securely participate in, activate and maintain the vitality of cyber space, and flexibly respond to changes in usersf demands. In order to develop and spread e-commerce in cyber space, a paradigm shift of the administrative supervision to gex-post-facto check approachh will be important. The number of prior regulations should be limited to a minimum, and a mechanism to settle disputes when they occur, gex-post-facto check,h should be established. Moreover, it is necessary to examine measures to win the confidence of market participants, for instance, consumers and businesses, by removing market entry barriers, ensuring transparency of transactions and dealing timely with any irregularities.
Since e-commerce makes cross-border transactions easier, it is important to establish a system to facilitate international business transactions and make e-commerce rules consistent with those of other nations so that Japanese firms and consumers would not be disadvantaged.

(2) Target
Business-to-business (B to B) and business-to-consumer (B to C) markets combined are estimated to expand about 10-fold from their 1998 level by 2003 (B-to-B by about 10-fold to about 70 trillion yen, and B-to-C by about 50-fold to about 3 trillion yen). Our target should drastically exceed this estimation.

(3) Government Actions
The government should take the following actions to achieve the above target.

  1. Measures for prompt actions
    a) The following measures should be implemented at the earliest date possible: Clarification of the interpretation of existing rules (introduction of gno-action lettersh 7), promotion of ADR (alternative dispute resolution), and making of anti-monopoly law guidelines concerning e-commerce and intellectual property.
    b) The regulation requiring written-document issuance at private transactions has been amended at the extraordinary session of the Diet in 2000. Other regulations that hinder e-commerce, such as the requirement of application in person and of building an office, should also be reformed.
    c) Necessary legislation should be submitted to the ordinary session of the Diet in 2001 with regard to the rules concerning electronic contracts and information property contracts, such as the clarification of the dates of contract conclusion, and rules concerning responsibilities of Internet service providers.
    d) Necessary legislative measures should be taken to win the confidence of consumers, including submission of a bill to protect personal data to the ordinary session of the Diet in 2001.
    e) Bills to revise the commercial law should be submitted to the Diet, so that the use of the Internet for the announcement of general shareholdersf meetings and the exercise of voting rights, etc., will be allowed starting with general shareholdersf meetings in 2002.

  2. Measures for actions by 2002
    a) The commercial law should be drastically revised, including reviews of distribution of powers between general shareholdersf meeting and board of directors, and of stock issuance restrictions on net worth and investment unit.
    b) The criminal law should be revised to cope with crimes committed through the use of computers.
    c) Japanfs obsolete contract and distribution practices should be corrected by such measures as stricter supervision under the anti-monopoly laws, and new rules should be established to ensure fair charges for digital content and appropriate compensation for creators, from the standpoint of making content transactions adequate and transparent.

3. Realization of electronic government

(1) Basic idea
An electronic government is a means to comprehensively reform public administration. Under an electronic government, administrative transactions among government offices or between governments and citizens/businesses that have been conducted on a document and/or meeting basis will be made available online, and information will be shared and utilized instantly across various central and local government offices through information networks. This, however, does not mean just putting the existing public administrative services online. Rather, it requires carefully planned investment from medium- and long-term viewpoints and involves essential reform of administrative works, streamlining of redundant works and projects undertaken by different ministries and agencies, and revisions of relevant systems and laws. Namely, it is necessary to make public administration simpler and more efficient, and lessen the burdens on citizens and businesses.
Such an electronic government will enable everyone to utilize all services provided by central and local governments without constraints of time and location, realize more comfortable and convenient life for everyone, and revitalize business activities. Namely, substantially all the administrative procedures will be accepted for 24 hours via the Internet, contributing to the dramatic improvement in convenience of the people and businesses.
Thus, an electronic government will form a social infrastructure on which the Japanese society as a whole can enjoy the benefits brought about by IT.

(2) Targets
The government is requested to realize an electronic government, which handles electronic information in the same manner as paper-based information, by fiscal 2003, and even expedite digitization of citizens and businesses widely. Public administration should be intensively reformed to digitize documents, promote paperless, and share and utilize information through information networks.

(3) Government Actions
The government should take the following actions to achieve the above targets, in the systematic collaboration among the Advanced Information and Telecommunications Network Society Promotion Strategic Headquarters(tentative), to be established in January, 2001, in its center, ministries and agencies concerned. The government is requested to establish an implementation plan of the below actions based on the three principles: 1) set clear targets, evaluate and disclose their results, and revise them flexibly, 2) reform administrative works and systems, and 3) promote outsourcing of administrative works to the private sector. In such a plan, investment budgets of major projects, including expenses of operation and development separately, and their effects should be clearly explained to the public and businesses. The actual state of implementation of the plan should be analyzed and evaluated in fiscal 2003, and a new plan will be proposed for further implementation.

  1. Digitization of public administration within central and local governments
    Administrative works should be reformed to eliminate paper, with due considerations given to avoid an alteration of original documents and ensure network security, and collection, transmission, sharing and processing of information should be digitized across administrative organs. The information literacy of government officials should be enhanced and their awareness should be raised. Risk management ability of the government in times of disaster should be strengthened, including the establishment of a backup system for important information on public administration. Moreover, local governments will be encouraged to share information systems depending upon the levels of prefectures and other municipalities, so that all the local governments will be connected to the local authoritiesf wide area network by fiscal 2003.

  2. Digitization of public services to the private sector
    The central government should make substantially all the administrative procedures available via the Internet by 2003. Such services should be provided by one-stop services through streamlining and systematizing of redundant works. Procedures for revenues and expenditures will be digitized at an early date. Besides, the local governments are requested to put their operations online systematically to meet the needs of the residents. In line with digitization of public services, secure administrative IC cards with a function of digital signature should be introduced promptly and made available across administrative organs. Development of their model system should start to ensure interoperability of the IC cards through networks.

  3. Publication and promotion of the use of administrative information via the Internet
    The central government should strengthen information exchanges with the public via the Internet. Local governments are requested to do the similar.

  4. Support for local governments
    The central government should decide on and propose a standard information system plan for local governments immediately. It should also support the establishment of the local information infrastructure connecting across local governments, while giving due respect to the principle of market mechanism. Besides, it should support advanced actions by some of local governments, examine the status of their administrative reforms and their effects to the activities of citizens and businesses, and encourage their expansion to other local governments. Moreover, prefectural governments are requested to support municipal governments in constructing and managing information systems, and further decentralization should be proceeded for more efficient administration as a whole, so that application and notification of administrative procedures can be transacted at a window nearby.

  5. Reform of regulations and systems
    Reduction and standardization of documents currently required for each procedure, and review of laws requiring submission or preservation of paper-documents should be proceeded within fiscal 2001, so that administrative procedures and management via the Internet will be possible. Besides, in order to promote the use of online procedures, incentive measures should be studied, including the reexamination of fees.

  6. Review of procurement methods
    Procurement for public works and other materials should be digitized via the Internet under the cooperation between the central and local governments to enhance transparency of the process and cut the costs. Evaluation indicators for information system development should be developed and introduced in the process of procurement to reflect the features of the software.

4. Nurturing high-quality human resources

(1) Basic idea
The 21st century will be an era when people compete for excellence of intellectual capital worldwide. We are required to form a solid foundation of human resources to strengthen our industrial competitiveness, enhance the convenience of national life, and establish a firm position in the world in the midst of on-going IT revolution. The following three aims must be achieved to make that happen. First, all citizens need to acquire IT knowledge and skills to enjoy its benefits, and peoplefs intellectual creativity and logical thinking power should be enhanced. Second, human resources who instruct IT to the public should be secured to improve peoplefs information literacy. Third, technical experts, researchers and digital content creators should be fostered to explore the frontiers of IT.

(2) Targets

  1. Improve the information literacy of all the public, with due considerations to seniors and the disabled, and drastically exceed the estimated Internet diffusion rate of 60% by 2005. (2000 White Paper Communications in Japan)

  2. Reinforce IT-driven education systems at elementary, junior and senior high schools and colleges and enrich the lifelong education on information for the whole adults.

  3. Increase masters and doctors in IT-related fields both in number and quality to secure advanced technical experts and researchers at colleges, national and private institutions. In addition, receive approximate 30,000 outstanding foreign IT experts by 2005. In total, exceed the level of human resources in the United States regarding those IT technical experts and researchers.

(3) Government Actions
The government should take the following actions to achieve the above targets.

  1. Improvement of information literacy
    a) gDigitization of educationh in the Millennium Project8 should be accomplished earlier than originally scheduled to facilitate the Internet access from elementary, junior and senior high schools and enable IT-driven education. Besides, the Internet access points should be prepared at public locations such as libraries and community centers, and digital content for educational purposes should be enriched.
    b) IT-driven lessons should be promoted, and instruction on IT-related ethics and manners should be introduced. English being the most important language in the Internet era, English education should be enriched. Besides, more importance should be placed on such subjects as mathematics and science to foster the ability of thinking logically, and power of self-expression and creativity will also be cultivated.
    c) Schools will be encouraged to interact with other schools both inside and outside Japan via the Internet to foster human resources who can collaborate even with those who have different cultures and viewpoints.

  2. Fostering of IT instructors
    School teachers should be given more opportunities of IT training, and a registration and dispatch system of IT instructors should be introduced, so that human resources in businesses and colleges can be utilized as IT instructors. Moreover, NPO activities based on volunteersf spirit will be supported in collaboration with the local governments and businesses to improve the information literacy of all the adults.

  3. Fostering of IT technical experts and researchers
    College systems should be reviewed and actively reformed. Concretely, market mechanism should be introduced, so that colleges can exercise more autonomous and agile management by themselves, including authorities over personnel and budgetary matters, establishment of faculties, departments and curriculum, and exchange of researchers with private businesses. Through these actions, colleges will be motivated to demonstrate originality in the enrichment of IT-related education.
    Besides, IT-related courses in vocational schools that are allowed to flexibly respond to changes in curriculum should be strengthened, so that, in addition with college graduates, our society would be able to produce many advanced IT technical experts and researchers in accordance with social needs.
    Furthermore, IT-related certification system should be standardized internationally and regulations on foreign residents, including conditions of resident permits for foreign IT experts, should be promptly revised to accept more human resources from abroad.

  4. Fostering of digital content creators
    In order to foster creators who can produce the world-best digital content and thus strengthen Japanfs ability to transmit it to the world, the best environment for those creators should be realized by the facilitation of incubation schemes.


1.Ultra high-speed access networks
The Internet networks through which even large volume picture data such as movies can be smoothly downloaded. At present, the Internet access networks by optical fiber is the major example.
2. Mbps
Mega bits per second. bps is a unit of data transmission indicating the volume of bit transmitted per second. Mbps is a million bits per second.
3.High-speed (constant) access networks
The Internet networks through which music data and others can be smoothly downloaded. At present, the Internet networks by such lines as xDSL, Cable TV and Subscribers' Wireless Access System are the major examples.
4. IPv6
Internet Protocol version 6 is the next version of Internet Protocol. Its major feature is that the length of address will be expanded from 32bits to 128bits.
5. Address Space
Virtual space where Internet Protocol addresses exist. Address Space of the present version of IP address, IPv4, is 32bits. It will increase to 128bits on IP version6. (IP address functions to identify counterparts of transmission on the Internet)
6. Dominant carriers
Carriers that have potential to exert tremendous impacts on conditions in market competition such as price and supply.
7. No Action Letter
A reply document from national agencies concerned, notifying the inquirer that the agencies will not take any administrative measure or punishment, "no action," to a specific trade or business which is inquired of its legality. Securities and Exchange Commission in the United States makes use of such a procedure.
8. Millennium Project
A national project determined by Prime Minister in December, 1999 to usher in the new millennium. "Digitization of education" in this project targets at providing Internet access to all the public elementary, junior and high schools, and schools for the blind, the deaf and handicapped children by fiscal 2001, and at preparing the environment in which computers are used at lessons in all those public schools by fiscal 2005.