Provisional

Japan Revitalization Strategy
Revised in 2014

-Japan’s challenge for the future -June 24th, 20141

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Section1
Ⅰ．Basic Concept of Revising Japan Revitalization Strategy ........................ 1
II.

Key Policy Measures in the Revised Strategy ............................................ 5

1. Restoring Japan’s Earning Power ................................................................... 5(1) Companies to change ................................................................................. 5(2) Changing the Country ................................................................................ 7
2. Cultivating Human Resources -- Promoting women's social participation andreforming working styles .................................................................................... 9(1) Promoting women’s further active social participation ........................... 9(2) Reforming working styles ........................................................................ 10(3) Utilizing foreign human resources ........................................................... 10
3. Nurturing industries to become new growth engines and support regional
communities ...................................................................................................... 11(1) Developing aggressive agriculture, forestry and fisheries ..................... 11(2) Vitalizing the health industry and providing high-quality healthcare
services ........................................................................................................ 12
4. Regional Revitalization and Innovation of Small and Medium-sizedEnterprises/Regional Economic Structure Reform ......................................... 13(1) Regional revitalization and innovation of small and medium-sizedenterprises .................................................................................................... 13(2) Regional economic structure reform ...................................................... 14

Ⅲ．Future Measures for Further Growth ...................................................... 15
1. Continuing initiatives for a virtuous economic cycle ................................... 15
2. “Target-realizing and evolving Growth Strategy” ........................................ 16
3. Intensive Reform Efforts ............................................................................... 18(1) Enhancing National Strategic Special Economic Zones ........................ 18(2) Accelerating reforms towards 2020 ....................................................... 18
IV. Major Policy Measures in the Revised Strategy ....................................... 20
1. Restoring Japan’s Earning Power ................................................................. 20(1) Companies to Change .............................................................................. 20(2) Changing the Country ............................................................................ 22
2. Cultivating Human Resources -- Promoting women's social participation andreforming working styles .................................................................................. 23
3. Nurturing industries to become new growth engines and support regional
communities .................................................................................................... 26

4. Regional Revitalization and Innovation of Small and Medium-sizedEnterprises/Regional Economic Structure Reform ......................................... 29

Section2 Three Action Plans…………………………………………...32
I. Industry Revitalization Plan………………………………………………..33
1. Accelerating structural reform program (Vitalizing industries)..……….33(1) Progress in achieving KPIs
(2) Progress made in implementing measures(3) Specific new measures to be takeni)Enhancing corporate governance, promoting the supply of risk money

and improving the investment chainii) Support for ventures businessesiii) Improving the productivity of service industries
2. Reforming the employment system and reinforcing human resources
capabilities…………………….……………………………………………….42
2-1. Labor movement without unemployment / Enhancing matching function /Realizing various ways of working………………………………………..42(1) Progress in achieving KPIs
(2) Progress made in implementing measures(3) Specific new measures to be takeni) Reforming ways of workingii) Creating a highly foreseeable labor dispute resolution systemiii) Achieving labor movement without unemployment by revitalizing theexternal labor market
2-2. Promoting active social participation by women / Promoting active social
participation by the young and the elderly / Utilizing foreign humanresources……………………………………………………………………50(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni)Promoting active social participation by womenii)Promoting active social participation by the young and the elderlyiii) Utilizing foreign human resources

2-3. University reforms / Strengthening human resources capabilities to meet theneeds of globalization………………………………………………………68(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
3. Promoting innovation in science and technology / Becoming the world’s
leading intellectual property-based nation………………………………...74(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Development of an environment that generates innovationii) Promotion of intellectual property and standardization strategiesiii) Achievement of a new Industrial Revolution driven by robots
4. Becoming the world’s leading IT society…………………………………82(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
5. Further strengthening Japan’s international competitiveness as a businesshub………………………….………………………………………………….87
5-1. Realizing National Strategic Special Zones / Opening up rights to operate
public facilities, etc. to the private sector (expanding utilization of PPP/PFI) /Improving infrastructure such as airports, ports and harbors / Improving
competitiveness of cities…………………………………………………..87(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Corporation tax reformii) Accelerated promotion of National Strategic Special Zonesiii) Utilization of PPP/PFIiv) Improvement of the competitiveness of cities and strengthening ofindustrial infrastructure functions

5-2.Stimulating financial and capital markets / Management of public andquasi-public funds, etc……………………………………………..………102(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Vitalizing financial and capital marketsii) Reviewing management of public and quasi-public funds, etc.
5-3. Overcoming constraints of environmental/energy ………………………109(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
6. Achieving regional revitalization and regional structural reform /Achieving reform among mid-ranking companies, SMEs and microenterprises…………………………………………………………………115(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
Ⅱ. Strategic Market Creation Plan ………………………………………...123
Theme 1: Extending the nation’s healthy life expectancy…………………123(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Establishing systems for providing efficient, high-quality servicesii) Creating a thriving industry for services not covered by public insuranceiii) Consolidating and considering the scope of services subject to insurance
benefitsiv) Accelerating ICT use in healthcare and nursing carev) Others

Theme 2: Realizing clean and economical energy supply and demand…...137(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
Theme 3:Building safe, convenient, and economical next-generation
Infrastructure…….………………………………………………...142(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
Theme 4:Building regional communities that use their unique local
resources to appeal to the world………..…………………………146
Theme 4-1)
A rich rural society which produces the world’s highest-quality
agricultural, forestry and fishery products and food produce……..146(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Strengthening production sitesii) Linking domestic value chainsiii) Promoting exports, etc.
iv) Transforming forestry and fishery into growth industries
Theme 4-2) A society which makes use of potential such as tourism resources toinvite many tourists from around the world to regional
communities………………………………………………………160(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken
III. Strategy of Global Outreach………………………………….…………166(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

Ⅰ．Basic Concept of Revising Japan Revitalization Strategy(Past achievements)
The Japanese economy has achieved great, clear change over the past year.
When the Abe administration was inaugurated, the Japanese economy wasobsessed with a chronic deflationary mindset after an economic slump that lasted
for more than 20 years. It was in a grave situation in which corporate managers
and individual citizens had lost self-confidence and hopes for the future.
Corporate managers had lost their spirits to take on challenges. Opportunities
were limited for skilled people to demonstrate their performance. Excellent
technologies or ideas had nowhere to go. Household financial assets andcompanies' internal reserves failed to be utilized in Japan. Human talents, goods
and funds were structurally left idle.
In response, the Abe administration launched the first arrow of boldmonetary policy aimed at eliminating the deflationary mindset and the second arrowof flexible fiscal policy aimed at igniting the dampened economy. It has also
formulated “Japan Revitalization Strategy” as the third arrow, implementing its bold,
speedy Growth Strategy.
The administration has fundamentally revised Japan's electric power
policy that had remained unchanged for 60 years, paving the way for the electric
power market to be fully deregulated. It has also decided on an agricultural policy
reform including a revision to the rice production regulations that had lasted formore than 40 years. The administration has thus implemented bold reforms that
had been described as impossible so far. It has had close to 40 laws enacted topromote the Growth Strategy, including the Industrial Competitiveness
Enhancement Act and the National Strategic Special Economic Zone Act. In thisway, the administration has carried out structural reforms at an unprecedented
speed.
As a result, the strength of the Japanese economy is being restored, as
shown in real GDP growth, the employment situation, capital investment and1other economic indicators. Price trends show the economy is making steady steps
forward to break free from deflation.
Corporate profits have recovered to pre-Lehman Shock levels, leading towage hikes and expanded employment that result in expanded consumption andfurther investment. A “virtuous economic cycle” has begun to work. Under suchenvironment, the administration raised the consumption tax rate in April this year
for the first time in 17 years, making the first step towards achieving both
economic growth and fiscal consolidation. As people have begun to hold hopes
for the future, human talents, goods and funds have begun to move for growth
after remaining idle for a long time.
(On revision)
However, it is not easy to put the Japanese economy back onto a fullgrowth path at a time when Japan's economy and society face the advent of a
population fall through declining birthrate and aging population.
In order to prevent the past year's changes from ending up as temporary
phenomena and to keep the positive economic cycle rotating, we must awaken
Japanese people's and companies' original potential to improve the entire Japanese
economy's productivity and its “earning power”. Now that the economy is about
to break free from protracted deflation, we should be determined that this is agolden opportunity and the last chance to gear up the Growth Strategy and takebold measures to restore Japan's “earning power” with a spirit to turn around
Japanese companies' characteristics, institutions and practices drastically.
The key point is whether corporate managers and individual citizens canrestore their self-confidence, believe in their future and take specific actions totackle innovation. However hard the government may break through bedrock
regulations to pave the way for companies and individuals to act more easily, it
will never bring about progress in business restructuring and real productivity
improvements beyond mere cost conservation to the Japanese economy, unlesscorporate managers boldly tackle business realignment and new businessexploration in a bid to upgrade their companies' earning power.

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Individual citizens including corporate managers will restore their“challenging spirit” to tackle the promotion of business restructuring andinnovation for “reviving a vigorous Japan,” while the government will realize aworld-leading business environment to support their efforts. This is the first stepfor the Japanese economy to break away from deflation, to expand the positive
economic cycle that has begun to work, and to secure an average annual economic
growth rate of around a nominal 3% or a real 2% over a “decade of revitalization”(FY 2013-2022).
The Japan Revitalization Strategy, complied last year, provided three plans-- the Industry Revitalization Plan, the Strategic Market Creation Plan and theStrategy of Global Outreach -- and established key performance indicators (KPI)
for each policy measure to check progress through the PDCA (plan-do-check-act)
cycle.
This revision shows how much progress there has been over the past year
towards achieving the KPI by providing concrete figures and what additional
policy measures will be adopted to ensure achieving the KPI.
Particularly, as a result of accumulating vigorous discussions over the past
year, we have seen great progress towards solving the following three challenges
which were left as remaining issues in last year’s Growth Strategy:1) How to realize a “world-leading employment environment” including further
increased opportunities for women’s labor participation and expanding theacceptance of foreign labor2) How to enhance productivity to achieve the goal of doubling the income of
farmers and farming communities
3) How to transform the health-related area including healthcare and nursing
care into a growth market
As soon as the Growth Strategy is revised, renewed challenges to tackle
various issues will be launched. It is important to reflect the fruits of growth topeople’s livings as early as possible. Particularly, people living in the regional
communities, and small and medium-sized enterprises are still left in severe
conditions. We must overcome the severity of the declining population as well.
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We must structurally and boldly reform regional economies and takecomprehensive measures to nurture unique industries that contribute toenhancing the sustainability of regional communities. Needless to say, the Growth
Strategy aims not only to secure Japan’s medium to long-term growth in the
global community but also to restore vigor in regional communities and allow
individual citizens to feel affluent through local-Abenomics, so to speak, which
spreads the effects of Abenomics nationwide and brings about positive cycles inregional economies.
Until the Japanese economy gets on a secure growth path, there will be noend to the Growth Strategy and it has to keep evolving in line with economic andsocial changes.

4II. Key Policy Measures in the Revised Strategy
1. Restoring Japan’s Earning Power(1) Companies to change(Improving productivity)
Japanese companies have lower productivity than their Westerncounterparts. Particularly, the productivity of the nonmanufacturing sector
including the services industry is seriously low, dragging down the Japanese
economy. Many globally operating industries and companies are struggling due totheir failure to quickly respond to market environment changes. While Japanesecompanies’ earnings are recovering thanks to improvements in themacroeconomic environment after the inauguration of the Abe administration,
they still have lower productivity than their global rivals. In order to raise
productivity in all industries including services and win amid severe international
competition, Japanese companies must achieve global-level earnings andproductivity through carrying out business selection and concentration throughbold business realignment, exploring promising new businesses, promoting
overseas expansion and management reform by using information technology. A
critical stage has come for companies to improve their earning power.
(Enhancing corporate governance)
What should be done to increase Japanese companies' earning power, inother words, medium to long-term profitability and productivity and to pass thefruits of such increase on to the people (households) evenly? First, it is important
to strengthen the mechanism to enhance corporate governance and reform
corporate managers' mindset so that they will make proactive business decisions
to win in global competition for the purpose of attaining targets including
globally-compatible level in return on equity. Particularly, companies that haveachieved the highest earnings in several years should be encouraged toproactively use their earnings for new capital investment, bold businessrealignment, mergers and acquisitions, and other deals, instead of accumulatinginternal reserves.
In response to last year's Growth Strategy, investors and companies havelaunched efforts to deepen their talks towards sustainably improving profitability
5and capital efficiency and enhancing corporate governance through the creation ofa Japanese-version Stewardship Code, revision of the Companies Act to impose
accountability on companies having no outside directors, and discussions ondesirable investment of public and quasi-public funds. Under such circumstances,institutional investors have offered to participate in the Stewardship Code one
after another. Companies have introduced outside directors one after another.
Early this year, the JPX Nikkei Index 400 was launched as a new stock index
covering companies that have higher profitability and are highly attractive forinvestors. Positive developments towards improving "earning power" are gaining
momentum.
The time has come to further advance the environment for companies'
demonstration of corporate governance and implement specific measures toimprove companies' “earning power”. Based on the efforts so far, companies mustlink their proactive utilization of outside directors to the evolution of theirbusiness strategies, specify what values they would create in the long term andhow they would enhance their earning capacity to win in global competition, andactivate their communication with investors.
At the same time, banks, institutional investors and other financial players
must maintain healthy tension with companies and play positive roles in creating
values in the long term and improving their "earning power." Among them, banks
and trading houses must promote return-oriented risk money provision, including
contributions to private-sector equity and mezzanine finance investment throughfunds, and offer good judgments and advice with a view to supporting companies'business restructuring. Institutional investors, including those managing public
and quasi-public funds, are called on to appropriately manage their investment
portfolios and proactively perform their governance functions as investors.
Such series of initiatives will allow corporate earnings to expand further,bringing about a true virtuous cycle where the fruits of the breakaway fromdeflation will be returned finally to the people through various channels including
increases in employment opportunities, wages and dividends.
(Accelerating industrial restructuring and venture businesses)
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Urging existing companies to reform themselves alone would beinsufficient for promoting business restructuring to shift investment andemployment to more profitable and productive areas. It is very important todevelop an environment where venture businesses are launched one after anotherto drive growth areas. Comprehensive measures will be taken to eliminate
institutional, human and financial obstacles to business launches, spin-offs andcarve-outs from large companies, and mergers and acquisitions so that venturebusinesses will be able to become active.
<Key measures>
1) Enhancing corporate governance2) Reforming investment of public and quasi-public funds
3) Accelerating industrial restructuring and venture businesses, promoting
provision of funds for growth(2) Changing the Country(Strengthening competitiveness of Japan as a business hub)
However, even if called on to maximize their profitability, it will only urge
them to locate themselves overseas, if the domestic business environment falls
behind international levels. In order to link a proactive management mindset todomestic business operations, thereby actually improving earnings, thegovernment must responsibly develop a world-leading business environment.
In order to strengthen the competitiveness of Japan as a business hub topromote the investment in Japan, we must further reinforce macroeconomic andinstitutional approaches for improving the business environment through:breaking through the so-called “bed-rock” regulations; accelerating theTrans-Pacific Partnership (TPP) and other economic partnership negotiations toremove obstacles to the cross-border movement of goods, services andinvestment; reforming energy policy fundamentally to prevent energy costs
including electricity rates from rising; carrying out a pro-growth corporate tax
reform and so on.
By strengthening the competitiveness of Japan as a business hub to makeits investment environment more lucrative, Japan can be expected to attract global
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human talents, goods and funds. Taking also hosting the 2020 Olympics andParalympics into consideration, we will establish a nation-wide structure to ensure
achieving the target of doubling inward foreign direct investment stocks while
taking maximum advantage of the national special economic zones that has
started its operation.
(Realizing a national system of innovation and the world’s most excellent
intellectual property-based nation)
Japanese companies have led the world by manufacturing and selling
products with the world’s most excellent quality. Over recent years, however,some companies in other industrial countries have differentiated themselves fromothers and secured high profit by quickly commercializing innovative technology
seeds to create new markets themselves. In order that Japan can continuously leadthe world with advanced technologies, leaving it to the efforts of the private sector
alone will face limits. We must build a “national system of innovation” to create
innovative technology seeds continuously and bridge them directly to new
products or business models by combining research, human resources and funds
beyond borders between the industry, academia and public sectors.
We will continuously try to make Japan the world’s most excellent
intellectual property-based nation by appropriately addressing the current
situation in which international disputes over intellectual property including trade
secrets and competition for acquisition of international standards are growing
fiercer in line with the globalization of corporate operations and the deepening of
open innovation.
(Realizing a robot revolution to solve social challenges)
Robot technology is a symbol of innovation for which Japan has led theworld and will be able to create new markets in the future. Dramatic technologicalprogress and its combination with information technology over recent years haveenabled robots to support human work and relieve humans of manual labor or
oppressive work not only for plant manufacturing lines but also for healthcare,nursing care, farming, transportation and other areas close to human lives. Robots
are no longer cutting-edge machines. They can be used in areas with which we arefamiliar in our daily lives. In the near future, robots could revolutionarily change
8our lives and industries.
The government will promptly launch a robot revolution realization
council to work out a strategy for using robots as the key means to solve labor
shortages amid the declining birthrate and aging population, low productivity ofthe services sector and other challenges plaguing Japan and for developing therobot industry into a growth sector to explore global markets. The government
will seek to make Japan a showcase for robots in service for various areas aheadof other countries by 2020.
<Key measures>
1) Pro-growth corporate tax reform
2) Promotion of innovation and a robot revolution to solve social challenges

2. Cultivating Human Resources -- Promoting women's social
participation and reforming working styles
Facing a population-declining society, whether Japan can sustain growth
will depend on whether it can maintain its working population and raise its laborproductivity before entering into a population-declining society by improving theworking environment for women and elderly people and ambitious, capable
youths who are hopeful about their future.
(1) Promoting women’s further active social participation
Particularly, unleashing the “power of women”, Japan’s greatest potential,
will lead Japan not only to secure human resources but also to bring various
values and creativity to the company, the government and regional communities
and to vitalize society while cherishing the values of families and regional
communities.
Last year’s Growth Strategy proposed solutions to the problem ofchildcare waiting lists, including childcare center shortages, which was hindering
women from participating in society. This revised Growth Strategy gives solutions
to the problem of the so-called “1st Grade Barrier” against children’s entrance intoelementary schools, which is another major obstacle to women’s participation.
Also, in order to change companies’ mindsets, the revised strategy also decides to9encourage them to proactively disclose the number of women in executive andmanagement positions, the women recruitment policy and other relevant
information. Under the revised strategy, the government will embark on a
discussion to make tax and social security systems neutral with regard to how
women choose to work and a preparation for submitting a bill that aims topromote women’s social participation by stipulating the roles that national andlocal governments and companies should play in attaining “women’s share ofleading positions at 30% in 2020.”(2) Reforming working styles
Under last year’s Growth Strategy, the government shifted from an
excessive employment stability policy to a labor movement-supporting policy toenable individuals to smoothly change jobs, fulfill their potential and play activeroles for economic growth.
Under the revised strategy, the government will diffuse and expand
various systems for regular employees, reform the flex time system and create a
new working hour system that will meet the needs of workers who hope to be
rewarded for their performance instead of the length of time spent on their work,
while securing health and achieving their work-life balance .
The government will also attempt to create a more predictable labor dispute
resolution system to respond to views by the part of foreign countries’ thatJapanese employment practices are not transparent, to protect workers at small
and medium-sized enterprises and to promote foreign direct investment inJapan.
(3) Utilizing foreign human resources
It is important to let foreign human resources fulfill their potential in Japan,
who have various values, experiences and skills. For the immediate future, thegovernment will expand Technical Intern Training Systems while strengthening
management and supervision schemes, and also develop urgent measures tofacilitate the employment of skilled workers for the construction and shipbuilding
industry. The government will also comprehensively consider measures, including
the utilization of the national strategic special economic zones, to make it easier10

for foreign students in Japan and excellent overseas human resources to work andlive in Japan.
<Key measures>
1) Paving the way for women to participate in society (expanding after-school
childcare services/programs, etc.)
2) Realizing flexible and diversified ways of working (creating aperformance-based working hour system, etc.)
3) Developing a Japanese society where foreigners can perform well
(expanding Technical Intern Training Systems, etc.)

3. Nurturing industries to become new growth engines and support
regional communities(1) Developing aggressive agriculture, forestry and fisheries
Agriculture should become a competitive, attractive industry to play a rolein driving regional economies’ autonomous development. To this end, anenvironment should be developed to allow farmers with ambitions and a businessmindset to take advantage of various companies’ knowledge to perform well. It is
important for this environment to be combined with the so-called “farmland
consolidation bank” to make maximum use of farmland in Japan for triggering
youths’ return to rural regions and developing a powerful agriculture.
Last November, the government decided on the direction of an agriculture
policy reform including a revision of rice production adjustment. Treating thedecision as the first step in a major policy shift to an agriculture policy for farmers
to be hopeful about their future and feel secure, the government will multilaterally
implement structural reforms to develop aggressive agriculture, forestry andfisheries.
Under the revised strategy, the government will 1) reform agriculturalcommittees, agricultural production corporations and agricultural cooperatives
integrally to enable independent decisions and speedy farm management infarming communities, 2) rebuild the domestic value chain including distribution,marketing and collaboration among primary, secondary and tertiary industries,and 3) make comprehensive efforts to link the value chain firmly to international
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markets and explore new domestic markets. These measures are designed todevelop aggressive agriculture, forestry and fisheries that can have high added
value and a strong brand power and drive regional economies.
(2) Vitalizing the health industry and providing high-quality healthcare
services
Last year’s Growth Strategy came up with the goal of extending thepeople’s healthy life expectancy and decided on many specific measures including
the creation of a headquarters for medical research and development tocommercialize innovative healthcare technologies ahead of the rest of the world,
and the development of healthy life expectancy extending industries to realize
self-medication.
Meanwhile, Japan facing an ultra-aging society must solve difficult
challenges including how to secure sustainability of the public health and nursing
care insurance system while maintaining the universal health insurance system, as
well as how to sustainably and efficiently provide health and nursing care services
in rural regions facing a rapid population decline. At the same time, taking thediversification of people’s values and needs and their aging as a chance, Japan
must realize innovation of high-quality health and nursing care services suitable
for such circumstances and vitalize the health industry. Japan is thus required toperform a two-front operation.
Therefore, the revised strategy aims to simultaneously implement the
securement of social security sustainability, the provision of high-quality
healthcare services and the vitalization of the health industry, giving priority to 1)
achieving both sustainability and improved quality of health and nursing careservices by creating a system for new corporations for integrated health andnursing care services to improve the efficiency and quality of health and nursing
care services and to realize comprehensive regional care, 2) achieving both
reduction of public spending and the creation of various healthcare industries left
out of public insurance by increasing incentives for health promotion and disease
prevention, and 3) achieving both the satisfaction of patients’ various needs andthe provision of cutting-edge technologies and services by substantiallyexpanding the system for combining insured and uninsured medical services.
12<Key measures>
1) Developing aggressive agriculture, forestry and fisheries (integrated
reform of agricultural committee, agricultural production corporation andagricultures cooperatives, etc.)
2) Vitalizing the health industry and providing high-quality healthcare
services (creation of a nonprofit holding company-type corporation system(as tentatively called), substantial expansion of the system for combining
insured and uninsured medical services, etc.)

4. Regional Revitalization and Innovation of Small andMedium-sized Enterprises/Regional Economic Structure Reform(1) Regional revitalization and innovation of small and medium-sizedenterprises
Regional revitalization depends on whether attractive employment
opportunities including those for youths can be realized. To this end, companies
supporting regional economies should be realigned and restructured to improve
profitability and productivity and stabilize regional employment and wages. In
this respect, it is important for regional financial institutions and the like toexercise their ability to assess business performance accurately and consulting
functions and use experts for providing fine-tuned support for small andmedium-sized enterprises. Regional funds should be reinvested in relevant regions
to realize a virtuous regional economic cycle.
Unique regional resources can be utilized for high value-added business.
In various regions of Japan, there are an inestimable number of high-quality
agriculture, forestry and fishery goods and food products featuring regional
traditions and characteristics. These various regional resources can be used for
promoting collaboration among primary, secondary and tertiary industries,
business operations based on dairy farmers’ creativity and exports fortransforming agriculture, forestry and fisheries into growth industries to create
attractive employment opportunities in each region.
Japan’s rich nature and unique local cultures as excellent tourism
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resources should be not left untapped but rather should be communicated topeople at home and abroad with their stories and themes enhanced. At the sametime, Japan should further ease visa issuance requirements, accelerate andfacilitate immigration procedures and expand services meeting various foreign
languages and cultures to develop world-class attractive tourism areas to explore
robust tourism demand in Asia and other regions in the world.
Meanwhile, the national government’s unilateral uniform support forregional efforts alone cannot be expected to produce effects. Such support would
be unsuccessful unless regional communities take advantage of their originality
and ingenuity to revitalize tourism in cooperation with neighboring communities.
National government support should accompany the initiatives of motivatedregional communities.
The Councils on Regional Industrial Competitiveness, which were createdafter the release of last year’s Growth Strategy, present the overall directions ofstrategies taking advantage of regional strengths for economic growth.
Discussions at these regional councils are expected to provide the base for future
regional initiatives.
New players are required to revitalize regional economies. Private financeinitiatives in which private entities are given infrastructure concessions andpublic-private partnerships can contribute to creating private sector business
opportunities and improving the public sector’s efficiency in each region. Private
sector players in PFI and PPP initiatives can cover multiple regions, leading towider-area cooperation. Therefore, it is important to dramatically expand PFI and
PPP initiatives.
(2) Regional economic structure reform
Under the severe reality of declining population, regions must commonly
acknowledge the demographic situation. Under the declining population, regional
strategies from the past period of robust economic expansion would be ineffective
and could lead multiple regions to fall together. Under a specific strategy for thepresent situation, health and nursing care and other public services, urban
functions or industries led by globally competitive regional companies should be
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accumulated in provincial core cities, which should expand human andinformation exchange and cooperation with metropolitan regions, other center
cities and their vicinities to pursue the survival of wide-area regions throughnetwork-based complementation of functions. Then, regional small andmedium-sized enterprises should take on challenges and make efforts to develop
unique industries including agriculture and tourism in various regions to drive
regional economies.
The Growth Strategy will not be successful unless vigorous ruralcommunities are realized. Therefore, it is important to promote a comprehensive
policy to maintain regional vitality, prevent excessive concentration in Tokyo andovercome the declining birthrate and population. A headquarters for thepromotion will be created to develop government-wide arrangements.
<Key measures>
1) Building a support platform to realize regional revitalization measures in
one package2) “Hometown specialty support” led by regional small and medium-sizedenterprises and nurturing strategic industries led by regional medium-sizedenterprises.
3) Regional collaboration among primary, secondary and tertiary industries
and dairy farmers’ creativity
4) Developing world-class attractive tourism areas
5) Realizing private sector players’ infrastructure management using PFI
and PPP initiatives6) Developing comprehensive policy promotion arrangements for regional
economic structure reform

Ⅲ．Future Measures for Further Growth
1. Continuing initiatives for a virtuous economic cycle
In order for a full economic recovery to lead to sustainable economic
growth, corporate earnings improvements brought about by the Growth Strategy
should be used for expanding income through higher wages and dividends and15increasing employment to further enhance the “virtuous cycle of the economy” inwhich income and employment expansion can lead to consumption expansion andfurther investment to increase corporate earnings.
At the Government-Labor-Management Meeting for Realizing a Positive
Cycle of the Economy, which was created in response to last year’s Basic Policies
for Economic and Fiscal Management and Reform and the Japan Revitalization
Strategy, the government, labor and management representatives accumulated
constructive discussions through direct talks before compiling a common
recognition last December, which cited linking corporate earnings expansion to
wage hikes, improving the careers and treatment of non-regular workers,
improving productivity, and developing human resources as measures forrealizing a positive cycle of the economy.
In this year’s spring labor offensive, wage hikes spread among companies
after a long interval. But some problems are left for the future, including howlabor and management will address their common challenge of productivity
improvement, how the environment will be developed for individual workers tobalance their health, work and lives and work satisfactorily, and how the fruits ofgrowth should be distributed to people working in rural regions and at small andmedium-sized enterprises.
On the basis of the common recognition compiled by theGovernment-Labor-Management
Meeting
lastyear,
government-labor-management talks will be continued to provide overall
directions for solving these problems.
2. “Target-realizing and evolving Growth Strategy”
As one year has passed since the formulation of the Japan Revitalization
Strategy, we have reached a critical stage where the strategy is expected to make adifference indeed.
(Target-realizing strategy)
The Japan Revitalization Strategy is designed not only for implementing
policy measures but also for “realizing” policy targets. To this end, the strategy
16

sets many KPIs to check whether any achievements are made or not. As only one
year has passed since the strategy’s formulation, sufficient data are not available
at present. As soon as achievement measurement and assessment data are madeavailable in the future, we will promptly review achievements (KPI review). As
for measures failing to make sufficient achievements, we will constantly review
and assess why they fail and what additional measures should be taken to realize
policy targets.
(Evolving strategy)
Last year’s Growth Strategy and this revision indicate specific directions
for reforms in areas where solutions to problems had been postponed for years,
allowing us to see a path to break away from “the lost two decades.” But many
challenges are left to be tackled to achieve the targets assumed in the Japan
Revitalization Strategy.
As globalization makes rapid progress, Japan must attract excellent humanresources and investment from throughout the world in order to maintainworld-class competitiveness. This revised strategy positions the Council for
Promotion of Foreign Direct Investment in Japan as a control tower to enhancearrangements for the promotion of foreign direct investment in Japan. In order tocreate “the world’s best environment for business activities,” the government
must specify relevant challenges such as a study on regulatory reforms for
improving the investment climate and effective support measures for investment
expansion and take comprehensive measures.
Advancement of information society has dramatically changed human lifeand has the potential to reform ways of working, industries and state management.
While it is not easy for Japan to narrow gaps with advanced IT countries in theworld, the government must open-mindedly learn from the present world situationand consider and implement measures it should take with a sense of speed inorder to realize “the world’s leading IT society.”
Human resources and technologies are the greatest treasure left in Japan.
In order to realize a “world-leading employment environment,” we must linkeducation and labor area reforms and enhance career and professional education17

to create a system to turn out human resources who can win in competition withforeign countries. In order to allow new technologies and ideas to becommercialized instead of being left untouched, we must create an environment
where all people willing to start up business, including from students tobusinesspersons, can take on the challenges to do so.
Structural reforms will be endless and the Growth Strategy will always
evolve.

3. Intensive Reform Efforts
In order to more powerfully proceed with reforms given in the revised
Growth Strategy and produce effects as soon as possible, the government must
proactively use an approach to narrow down priorities, time and agenda andconcentrate policy resources on priorities in close cooperation with the Council
for Regulatory Reform and the Council on National Strategic Special Economic
Zones to achieve effects. Therefore, the government will realize the revitalizationof the Japanese economy based on two points -- 1) taking advantage of National
Strategic Special Economic Zones to implement speedy, impactful reforms and 2)
accelerating reforms towards 2020 for the Tokyo Olympics and Paralympics.
(1) Enhancing National Strategic Special Economic Zones
In order to promote reforms with a sense of speed, national and local
governments and the private sector must be united to implement bold, impactful
regulatory reforms to attract investment from throughout the world. To this end, it
is important for the Prime Minister to proceed with the National Strategic Special
Zone initiative under a top-down approach to create reform models for the wholeof Japan. The government has designated six areas as National Strategic Special
Economic Zones. Based on these zones as the core, the government will strongly
demonstrate Japan’s attitude on reforms.
(2) Accelerating reforms towards 2020
Tokyo was chosen as the host of the 2020 Olympics and Paralympics after
the creation of the Japan Revitalization Strategy last year, setting a new
momentum for reforms. It is important to interpret this development as anopportunity to accelerate reforms and recover a full-fledged growth path towards
18

2020 for the purpose of vitalizing not only Tokyo but also the whole of Japan.
Towards the previous Tokyo Olympics (in 1964), Japan accelerated public
infrastructure development to restructure Tokyo and other locations, bringing
about the so-called “Tokyo Olympic boom” and demonstrating vividly to theworld that postwar Japan had returned to the international community.
This time, Japan, tackling those globally common issues causes by the
declining birthrate and aging population, environmental problems, divides
between rural and urban regions that are globally common, is expected to becomea model for the rest of the world.
Given that these problems are structural ones that cannot be solved in one
day, Japan is required to assimilate various cultures for its integration into global
society and tackle thorough economic and social restructuring, instead of pursuinga temporary boom.

19IV. Major Policy Measures in the Revised Strategy
This revised strategy, as indicated by the next chapter, reviews the
progress of the Japan Revitalization Strategy created last year, flexibly modifies
policy measures, adds specific measures to be taken, revises the progress scheduleand comes up with a policy of implementing the revised schedule anew.
Of the measures, representative ones discussed at the Council for
Industrial Competitiveness and other panels are excerpted as follows from thethree basic viewpoints for this revision -- “enhancing Japan’s earning power,”“addressing challenges left for the future” and “diffusing the fruits of growththroughout the country.” (Note: The following exemplifies specific measures
without indicating their importance or priority rankings.)
1. Restoring Japan’s Earning Power(1) Companies to Change
1) Enhancing corporate governance○ Drafting the Corporate Governance Code・The Tokyo Stock Exchange will draft the Corporate Governance Codeto encourage companies’ initiatives to attain sustainable growth.
Publicly listed companies are asked either to comply with theprinciples or explain why they are not complied with.
[Drafting in time for the season of general shareholders’ meetings
next year]○ Enhancing financial institutions’ functions for supporting businesses
・ In order to promote improvements in business quality andbusiness/corporate restructuring, financial institutions are expected toprovide financing taking well into considerations the growth potentialof the debtor’s business, as well as to cooperate with relevant
stakeholders to improve the performance, productivity, andsustainability of businesses. Financial institutions are encouraged to20

strengthen their functions and capacities to support this, and thegovernment will appropriately supervise and support financial
institutions pursuant to supervisory guidelines from such
perspectives.
2) Reforming management of public and quasi-public funds
・To respond to the long-term changes in the economic and investment
environment and secure sound pension finance over an extended
period of time, the Government Pension Investment Fund (GPIF) willappropriately revise its policy asset mix as quickly as possible, basedon this year’s revaluation of pension finance.
・Along with the above-mentioned revision, initiatives for strengthening
the governance structure of the GPIF will be immediately promoted,
including the improvement of the investment committee structure andsecurement of investment professionals. In addition, other necessary
measures including proceeding with discussions on the possible
future law amendments will be accelerated.
3) Accelerating industrial restructuring and ventures and promoting
provision of funds for growth・A “Venture Creation Council,” consisting mainly of large companies
cooperative in supporting ventures, will be established to build aplatform to promote matching between venture businesses and large
companies.
[Establishment by this autumn]
・The government will also implement fine-tuned measures including
the promotion of venture companies’ participation in government
procurement and the provision of employment insurance benefits topeople who prepare for or consider starting up new businesses during
their job-seeking periods.
[Establishing relevant systems within this fiscal year]21

・A forum will be created for relevant government ministries andagencies to discuss how to promote the provision of funds for growth
including equity and mezzanine finance and medium to long-termloans to enhance growth-oriented business innovation and othermedium to long-term measures for improving productivity.
[Establishing the forum this autumn](2) Changing the Country
1) Pro-growth Corporate Tax Reform
We will strengthen Japan’s locational attractiveness and enhancecompetitiveness of Japanese companies. In this context, we aim to
reducetheeffective
corporate
tax
rate
to
the
internationally-comparable level and embark on corporate tax reform
to be more growth-oriented.
To that end, we aim to reduce the percentage level of the effective
corporate tax rate down to the twenties in several years. We will start
the first phase reduction from the next fiscal year.
As regards the revenue sources to fund such rate reduction,
including the fact that the Japanese economy is pulling out of thedeflation and showing structural improvements, in order to beconsistent with the FY2020 target to achieve primary surplus,
permanent revenues will be secured through such measures as
broadening the tax base and so forth. We will continue to discuss thisissue towards the end of this year when we will reach conclusions on
the specifics.
In light of the need to achieve primary surplus in FY 2020 at thenational and local level, we will proceed with the implementation of
the tax reform while checking the progress towards the fiscal
consolidation target.

222) Robot revolution to promote innovation and solve social challenges○ Creating a mechanism to produce business with innovative technologies
・Advanced public research institutes will be reorganized to enhance thesystem to bridge technology seeds at universities and other institutes
to private sector companies. Specifically, the government willdevelop a mechanism or target giving priority to obtaining funds
from contract research companies and introduce and utilize across-appointment system that will allow people to take positions andwork at both universities and other entities.
[Designing a specific system for forerunning research institutes
within this fiscal year]○ Robot revolution to solve social challenges
・The government will launch a Council for Realizing Robot Revolution
and promote technology development and deregulation to expand therobot market two-fold from the present size in the manufacturing areaand 20-fold in the nonmanufacturing area including services by 2020.
[Launching the council by this summer]

2. Cultivating Human Resources -- Promoting women's social
participation and reforming working styles
1) Promoting women’s further active social participation○ Expanding after-school childcare services/programs, etc.
・In order to break through the problem of the so-called “1st Grade
Barrier” against children’s entrance into elementary schools andnurture human resources for coming generations, the government will
create a “Comprehensive After-School Childcare Plan” in addition to“Plan to Accelerate the Elimination of Childcare Waiting Lists”, tosecure the capacity of after-school childcare centers for about
300,000 children by the end of March 2020. At the same time,
23

after-school childcare services will be integrated with after-school
childcare programs at more than 10,000 locations. To this end, thecentral government will request the local governments to create
municipal action plans based on the Act on Advancement of
Measures to Support Raising Next-Generation Children, within thecurrent fiscal year.
[Implementing institutional measures within the current fiscal year]○ Reviewing tax, social security systems to be neutral with regard to how
women choose to work・In order to realize social systems that are more neutral to the selectionof ways of working, the Council on Economic and Fiscal Policy willcomprehensively consider issues relating to tax, social security
systems, spouse allowance and the like.
[Considering the issues by the end of this year]○ Enacting a new law to accelerate women’s active roles
・Towards attaining “women’s share of leading positions at 30% in
2020,” a new law will be enacted for leading national and local
governments and companies to set women recruitment goals andaction plans and for providing incentives to companies thatproactively recruit women.
[Seeking to reach a conclusion within the current fiscal year andsubmitting a relevant bill to the Diet]
2) Realizing flexible and diversified ways of working○ Enhancing measures to prevent overwork
・In order to correct long working hours, the government will enhance
Labor Standards Inspection Offices’ inspection and instructions forcompanies suspected of illegal practices and will diffuse themorning-oriented work style and will consider measures to restrain
long working hours.
○ Introducing a system to reward workers for performance instead of time24

spent on work・In order to meet the needs of workers who hope to be rewarded fortheir performance instead of the length of time spent on their work, a
new working hour system will be created to break the link between
the length of time spent on work and wages while achieving healthand harmonizing work-life balance of workers who have specific job
scopes and advanced vocational skills and meet a certain annual
income requirement (e.g., no less than 10 million yen). After the
Labor Policy Council studies and reaches a conclusion on the system,
the government will take a necessary legislative action during thenext ordinary Diet session.
[Taking a necessary legislative action during the next ordinary Diet
session]○ Creating a more predictable labor dispute resolution system
・Given that major industrial countries have developed mechanisms forpecuniary remedies provided to workers through court decisions inline with their respective employment systems, the government willsurvey relevant systems and their operation at home and abroad.
Based on the findings of the survey, the government will widely
study the shape of globally accepted, transparent, fair and objective
labor dispute resolution systems.
[To be discussed in 2015]
3. Developing a society where foreigners can fulfill their potential○ Review current Technical Intern Training Systems for foreign nationals
・While drastically strengthening the management and supervision
schemes, the government will expand Technical Intern Training
systems including job categories covered by the system, training
period (from 3 years to 5 years at most), and admission quota on
trainees.
[Implementation within FY 2015]○ Utilizing foreign human resources in construction and shipbuilding25

・As an fixed-term urgent measure towards the 2020 Olympics andParalympics and the like, the government will introduce a new
system to promote the utilization of foreign human resources
work-ready for the construction sector while making maximum
efforts to secure domestic human resources by improving working
conditions and workplace efficiency. Also, a similar measure will betaken for the shipbuilding sector.
[Launching the action at the beginning of FY 2015]○ Accepting housekeeping support workers in National Strategic Special
Economic Zones
・Foreign housekeeping support workers will be accepted in National
Strategic Special Economic Zones to help reduce the housekeeping
burden.
[Proceeding with a study for a quick relevant action]○ Foreign students working well in nursing care
・The government will design a system to enable foreign nationals who
have obtained the national nursing qualifications by learning at
Japanese schools to work in the field of nursing care after graduation.
[Designing a relevant system by the end of the year]

3. Nurturing industries to become new growth engines and support
regional communities
1) Developing aggressive agriculture, forestry and fisheries○ Reforming rice production adjustment
・ Government promote improvement of the environment so that
producers, etc. can undertake rice production in response to demand,
based on their own management decisions without relying on
production volume targets set by the government from 2018.
○ Integrated reform of agricultural committee, agricultural production
corporation and agricultures cooperatives
26

・An environment will be developed to allow farmers with ambitions
and a business mindset to take advantage of various companies’
knowledge to conduct powerful farming operations and perform well.
In line with a regulatory reform implementation plan (Cabinet
Decision on June 24th, 2014), the integrated reform will be
implemented to revise the method for electing agricultural committee
members and requirements for board members and voting rights at
agricultural production corporations, to secure the independence andvitalization of local agricultural cooperatives and to shift from theCentral Union of Agricultural Cooperatives system to a newautonomous system.
[Seeking to submit relevant bills during the next ordinary Diet
session]○ Diversifying distribution channels for dairy products・Institutional reforms for dairy farmers will be implemented, including
a measure allowing dairy farmers to sell unique raw milk directly tomilk companies in addition to organizations designated for present
sales from the viewpoint of promoting ingenuity of dairy farmers..
[Implementing the measure from FY 2015]○ Domestic and overseas value chains (※AFFrinnovation(sixth industry)and promoting exports)※AFFrinnovation(sixth industry) is based on collaboration between people in
the Agriculture, Forestry, and Fisheries and diverse business operators.

・In order to accelerate collaboration between people in the Agriculture,
Forestry, and Fisheries and diverse business operators through theAgriculture, forestry and fisheries Fund corporation for Innovation,
Value-chain and Expansion in Japan (A-FIVE), the government willcomprehensively study legislative and other actions for measures
including a revision of agriculture, forestry and fisheries workers’
capital contribution percentage to A-FIVE recipients.
[Completing the study in December 2015]
・ In order to promote all-Japan efforts to promote exports, the27government will create export promotion groups respectively for suchproducts as beef, Japanese tea and fishery products under an export
strategy implementation committee created in June as a control tower
for the export promotion.
[Creating these groups from FY 2015]

2. Vitalizing the health industry and providing high-quality healthcare
services○ Creating a nonprofit holding company-type corporation system (astentatively called)
・A nonprofit holding company-type corporation system (as tentatively
called) will be created, allowing such corporation to integrally
manage multiple medical and social welfare corporations.
[Seeking to take relevant institutional actions within CY 2015]
・Necessary institutional arrangements will be formulated to allow auniversity hospital to be separated from its affiliated university forthe integrated management of the hospital and others under theabove-mentioned new corporation system.
[Seeking to take relevant institutional actions within FY 2015]○ Providing individuals with incentives for health promotion and disease
prevention
・Conditions will be specified and diffused for providing individuals
with healthcare points and cash benefits under the public healthinsurance system, to increase incentives for health promotion anddisease prevention. It will also be considered to set different healthinsurance premiums based on individuals’ health promotion anddisease prevention efforts in a manner neutral to public finance, withdue consideration given to the objectives of the public healthinsurance system.
[Taking necessary measures within FY 2015]28

○ Substantial expansion of the system for combining insured anduninsured medical services
・Measures will be implemented to appropriately satisfy various patientneeds, enhance the healthcare industry’s competitiveness and maintainthe sustainability of the health insurance system－ Creating a new system for combining insured and uninsured
medical services (“patient-requested cure system” astentatively called)－ Improving access to cutting-edge medical services (setting-up
institutional arrangements specialized in evaluating regenerative
medicine and medical devices)－ Tentatively introducing the viewpoint of cost-benefit
performance into the assessment of the scope of insured medical
services by FY 2016 and considering measures to makemedical services with lower cost-benefit performancecontinuously available for the combination of insured anduninsured medical services.
－ Introducing a system (Japanese-version compassionate use
system) in FY 2015 to expand access to investigational new
drugs for patients who cannot participate in clinical trials

4. Regional Revitalization and Innovation of Small andMedium-sized Enterprises/Regional Economic Structure Reform
1) Regional Revitalization and Innovation of Small andMedium-sized Enterprises○ Building a support platform to realize regional revitalization measures in
one package
・The Local Revitalization Act will be revised to integrally operatevarious regional revitalization measures of various government
ministries and agencies and concentrate policy resources in motivatedregional communities.
[Seeking to submit relevant bills during the next ordinary Diet session]○ “Hometown specialty support” led by regional small and medium-sized29enterprises and nurturing strategic industries led by regional
medium-sized enterprises.
・The development and commercialization of “hometown specialties”
using regional resources including tourism resources andagriculture-forestry-fishery goods will be promoted withconsideration given to the viewpoint of consumers.
・Industrial, academic, government and financial sectors will cooperate
to support research and development, commercialization, sales
channel development and overseas expansion to nurture regional
strategic industries.
○ Regional collaboration among primary, secondary and tertiary industries
and dairy farmers’ creativity
・ Regional collaboration among primary, secondary and tertiaryindustries using regional resources involving various business
operators will be promoted. The Agriculture, Forestry and Fisheries
Fund Corporation for Innovation, Value-chain and Expansion in
Japan (A-FIVE) will be proactively used as the core for thepromotion.
・As for livestock and dairy farming, arrangements will be developed
for supply, processing and distribution of regional feed resources
including feed rice to promote the differentiation and branding ofproducts. At the same time, livestock clusters will be created forregional efforts to improve earnings.
○ Developing world-class attractive tourism areas
・Visa issuance requirements will be eased in line with an “Action
Program toward the Realization of Japan as a Tourism-Oriented
Country 2014”
・ Wider-area cooperation between regions will be enhanced tostrengthen the communication capacity. Various wider-area tourism
routes rich with stories and themes appealing to target markets will30

be developed and provided and proactively communicated to foreigncountries.
・Multi-language services will be promoted in art galleries, museums, naturalparks, tourist spots, roads and public transportation systems.
・ Under the consumption tax-free system for foreign tourists, the number oftax-free shops in Japan will be doubled to 10,000 towards 2020.
○ Realizing private sector players’ infrastructure management using PFI
and PPP initiatives
・Three years to the end of FY 2016 will be designated for intensive
efforts to implement PFI projects for private entities given
infrastructure concessions. Numerical targets (six airport, six water
system, six sewage and one road projects) will be set for the period.
The target of implementing 2 trillion to 3 trillion yen worth ofprojects over 10 years to 2022 will be achieved over three years to
the end of FY 2016.
2) Promoting regional economic structure reform○ Developing comprehensive policy promotion arrangements
・It is important to promote a comprehensive policy to maintain regional
vitality, prevent excessive concentration in Tokyo and overcome thedeclining birthrate and population while attempting to intensify andaccumulate urban functions, industries and employment. A
headquarters for such promotion will be created to develop
government-wide arrangements.

31II. Three Action Plans
The Japan Revitalization Strategy sets forth Key Performance Indicators (KPIs)
regarding each set of policy measures. In order to ensure that it is a “constantly evolving
growth strategy,” progress in implementation of individual measures is checked througha bottom-up process. Meanwhile, progress in achieving KPIs is reviewed through a
top-down process, and based on the review results, the measures may be revised.
Accordingly, we have decided to check on progress in the implementation ofindividual measures presented in the Japan Revitalization Strategy and review the
progress in achieving KPIs at the time of this revision of the growth strategy,
strengthening existing measures or adopting additional measures if necessary.
The Japan Revitalization Strategy comprises three plans: the Industry Revitalization
Plan, the Strategic Market Creation Plan and the Strategy of Global Outreach. Below,
we will provide an overview of progress in achieving KPIs and in implementing
individual measures under these plans and describe specific new measures to be taken.

32

I. Industry Revitalization Plan
1. Accelerating structural reform program (Vitalizing industries)(1) Progress in achieving KPIs
<KPI> Bring private capital investment back to the pre-global financial crisis
level (¥70 trillion/year) over the next three years⇒ FY2013: ¥66.9 trillion (FY2012: ¥64.6 trillion)<KPI> Ensure that the business startup rate exceeds business closure rate, andraise the current business startup and closure rates to the 10% range (upfrom the current rates of around 5%), on a par with the US and UK⇒ In the third quarter of FY2013 (April–December 2013), 17,304 companies(up 14% from the same period of the previous year) received loans forbusiness startup totaling ¥134.3 billion (up 33% from the same period of theprevious year) from Japan Finance Corporation’s Micro Business andIndividual Unit. Both figures were the highest in seven years.
(2) Progress made in implementing measures(The Industrial Competitiveness Enhancement Act was enacted, followed by
the introduction of various new programs)
・ The Industrial Competitiveness Enhancement Act was enacted in December
2013 and entered into force in January 2014. Under this law, the Special System
for Corporate Field Tests and the System to Eliminate Regulatory Gray Zones,
among other programs, have been established in order to encourage companies
to take on the challenge of venturing into new frontiers of business. New
business models taking advantage of these programs are already starting toemerge. In addition, following the FY2014 tax reform, tax measures that
promote investment in highly productive facilities, business realignment
intended to improve profitability, and investment in venture business by private
sector companies have been introduced. In particular, the number of capital
investment projects implemented under the tax measures for promoting
investment in facilities expects to reach 10,000 as of the end of May.
(The revised Companies Act was enacted in June and the Japan’s Stewardship33

Code was formulated)
・ In order to enhance corporate governance, the revised Companies Act wasenacted in June 2014. Under the revised Act, listed companies are required to“comply or explain” (comply with the principles of corporate governance or,when not complying, explain the reason for non-compliance) with regard to theprinciple of appointing outside directors. In February 2014, the Japan’s
Stewardship Code was formulated. To promote greater awareness of the Code,the Government decided to periodically publish the names of institutional
investors who announced their acceptance of the Code, and began to publish thelist in June 2014.
(A legislative revision intended to promote the use of crowdfunding was enacted
and the angel taxation scheme was improved)
・ In order to promote investment in venture business, the amendments to the
Financial Instruments and Exchange Act for promoting the use of security-based
crowdfunding were enacted in the ordinary session of Diet in 2014 and measures
to improve the angel taxation scheme were implemented.
(3) Specific new measures to be taken
As a result of initiatives conducted so far, companies are increasing moves to start
new businesses and take steps to enhance profitability and productivity. From now
on, in order to further encourage such moves, the Government will further
strengthen measures using new approaches.
i) Enhancing corporate governance, promoting the supply of risk money andimproving the investment chain
In order to increase corporate profits through improvement of productivity andensure that the increased profits lead to increase of wages , reinvestment and thereturn of profits to shareholders, it is important – primarily for global companies– to achieve sustainable increases in corporate value by giving consideration to
the cost of capital and enhancing corporate governance.
To that end, it is necessary not only to encourage companies themselves to act
proactively but also to implement initiatives to improve corporate profitability
and productivity in a comprehensive manner. These initiatives will be

34

implemented

throughthe efforts of various investors to improve theinvestment chain ― the series of investment processes leading up to the return ofprofits earned from investment to households ― in a way that leads to thecreation of value in the long term and support extended by financial institutionsas providers of funds to improve and strengthen

the quality and sustainabilityof the borrower’s businesses.
It is important to strengthen the favorable economic cycle by returningthe
benefits of economic growth achieved through these initiatives throughout theeconomy via the expansion of employment opportunities, wage increases, andincreases in capital expenditures and distribution of dividends.
To that end, the following measures will be implemented:1) Drafting the Corporate Governance Code, etc.
Corporate governance is the system which supports companies making
timely entrepreneurial decisions with transparency and integrity and with due
regards to the views of shareholders as well as customers, employees, local
communities and other stakeholders. Principles outlining key elements ofgood governance should help companies’ initiatives towards sustainablegrowth of their corporate values and would thereby contribute to theprosperity of the companies themselves, investors and, ultimately, the whole
economy.
The “Corporate Governance Code” will be drafted, specifying theprinciples of corporate governance to be applied by listed companies. The
Code will be drafted by referring to, among other rules, the Tokyo Stock
Exchange’s existing rules and guidelines regarding corporate governance,
and the OECD Principles of Corporate Governance. The Code will, whilereflecting the circumstances of Japanese companies, aim to attaininternational reputation. To that end, a council of experts of which the Tokyo
Stock Exchange and the Financial Services Agency will jointly act as asecretariat, will aim to prepare key elements of the Code by around thisautumn so that the Tokyo Stock Exchange can newly draft the Code in time
for the season of general shareholders’ meetings in (June,) 2015.
Effectiveness of the new Code shall be ensured through “comply or explain”
approach. The listing rules of Tokyo Stock Exchange will require listed35

companies to either comply with the principles contained in the Code or
explain the reason why they did not comply with such principles.
Moreover, as well as examining approaches to exercising the voting rights
attached to shares held under cross-shareholding arrangements, efforts will
be made to ensure that the purpose of holding shares owned for policy
reasons is specifically indicated and explained. In addition, each listed bankor bank holding company will be encouraged to introduce at least one, andpreferably two or more, independent outside directors. Banking subsidiaries
wholly owned by listed bank holding companies will also be encouraged toconsider introducing independent outside directors.
2) Support by financial institutions for business management andpromotion of business restructuring to achieve the renovation ofindustries
In

order

to

promoteimprovementsinbusinessqualityandbusiness/corporate restructuring, financial institutions are expected toprovide financing taking well into considerations not only the financial
condition of debtor companies, but also the growth potential of the debtor’sbusiness, including their sustainability, as well as to cooperate with relevant
stakeholders to improve the performance, productivity, and sustainability ofbusinesses. Financial institutions are encouraged to strengthen their functions
and capacities to support this, and the Government will appropriately
supervise and support financial institutions pursuant to the Supervisory
Policies and the Financial Monitoring Policy from such perspectives.
With the objective of achieving prompt business restructuring,in order to further promote the renovation of businesses and industries, theGovernment will reassess the legal systems and practice related to businessrestructuring. In particular, when revising the Act on Special Measures
Concerning Claim Management and Collection Businesses (Servicer Act),
the Government will provide the necessary cooperation. Furthermore, theGovernment will reassess the rules related to business restructuring,
including out-of-court debt restructuring, so as to ensure that businessrestructuring is not hindered by unreasonable opposition from a minority ofcreditors.

363) Promoting medium- to long-term funds for growthusing private

financing
In order to realize sustainable growth by improving companies’ mediumto long-term profitability and productivity and promoting industrial
restructuring, enhancing the provision of private financing , including
long-term financing is necessary, especially as there is shortage of suchfinancing by banks and provisionally-established public-private sector funds.
Financing should target fields as growth-oriented business innovation,
investment in and startup of venture businesses, and infrastructuredevelopment. Therefore, the Government will improve the environment topromote the supply of medium- to long-term funds for growth using private
financing, including (i) equity, (ii) mezzanine finance (preferred shares, andsubordinated loans) and (iii) medium- to long-term loans. These tools will
make use of the knowledge and expertise of the private sector while taking
into consideration the view that various investors should seek returns, keeping
in mind to create values in the long term. To that end, relevant ministries andagencies will cooperate in establishing a forum for discussion and examine
specific topics.
4) Supporting overseas business deployment to improve companies’
profitability
The Japan Bank for International Cooperation (JBIC) will focus more on
projects that contribute to improving the profitability of Japanese companies
through its Loan Facility to Enhance Global Business Development and will
introduce (i) subordinated loans, and (ii) financing for Leveraged Buyout(LBO), as new means of providing funds that supplement financing for theprivate sector.
5) Setting global benchmarks to promote initiatives to improve profitability
and restructuring
In order to encourage companies to improve profitability and rebuild
business models, the Government will conduct a comparative study on thegrowth potential of the business models of global leading companies andJapanese companies, and conduct a wide-ranging study on global
benchmarks that may serve as a reference for business decisions and business37

support. In addition, while taking into consideration the results of the study,
the Government will promote initiatives to improve profitability andrestructuring under Article 50 of the Industrial Competitiveness Enhancement
Act, etc. (market structure surveys and disclosure) as necessary.
6) Promoting dialogue between companies and investors for sustainablecorporate value creation
In order to promote dialogue between companies and investors, theGovernment will conduct a study how the date of general shareholders’meetings and the dates of record should be established within an international
context, and industry groups will be asked to study guidelines for these.
Regarding companies’ information disclosure to investors, in order tostudy the practice of holistic and comprehensive disclosure by companies,
study group comprising relevant government ministries/agencies and otherorganizations will be established without delay.
At the same time, in order to promote the building of sound relationships
between companies and investors from the perspective of the sustainable
creation of corporate value, the Government will promote the establishmentof a platform for discussion involving the business and investmentcommunities and relevant organizations, to study how mid/long-term
information and integrated reporting should be disclosed, and how topromote constructive dialogue between companies and investors.
ii) Support for ventures businesses
It is necessary to implement more effective, unconventional measures tosupport venture businesses.
1) Involving large companies through a Venture Business Creation Council(tentative name)
The following measures will be implemented in order to promote not only
conventional measures, such as those focusing on venture businesses
themselves and support for university-launched ventures, but also measures
to encourage the Japanese economy as a whole, including existing businesses,
to take on bold challenges:
・ Establish a Venture Business Creation Council (tentative name),38consisting of large companies willing to cooperate in supporting venturebusinesses, as a platform for facilitating matching between venturebusinesses and large companies and for supporting commercialization ofbusiness seeds while taking into consideration the possibility of
temporarily accepting aspiring entrepreneurs working for large
companies, in order to promote partnership between venture businesses
and large companies and create large company-launched ventures.
・ Establish an information hub as a meeting place for individuals andorganizations involved in venture business activities across Japan.
・ Expand the range of exit strategy options for venture businesses throughM&As with large companies, by further promoting the adoption ofInternational Financial Reporting Standards (IFRS).
・ Promote engagement in multiple businesses and side businesses andprovide support for a second chance to start businesses, including theprovision of funds necessary for business closure through theenhancement of low-interest loans from Japan Finance Corporation andother financial institutions.
・ Open a Successor Talent Supply Agency as a pool of would-beentrepreneurs.
・ Study models of supporting the startup of venture businesses, etc. using
local resources which utilize crowdfunding.
・ Study how to promote the use of class shares.
2) Improving the support environment by promoting participation ingovernment procurement and other means
The Government will study support measures, including revising Act on
Ensuring the Receipt of Orders from the Government and Other Public
Agencies by Small and Medium-sized Enterprise (Public Agency Order Act),
promoting participation by young companies (small and medium-sized
venture businesses) in government procurement, setting targets for the
allocation of research funds by public organizations to venture businesses,
etc. and clarifying the handling of employment insurance benefits for people
preparing for or considering business startup while engaged in job-seeking.

393) Changing attitudes among citizens and conducting entrepreneurshipeducation
In order to change attitudes among citizens to encourage a more favorable
view of venture businesses, the following measures will be implemented:
・ Prepare and disseminate a collection of case studies that can be used byteachers.
・ Support the local high schools to be “glocal leader” training centers under
the cooperation with companies.
・ Promote entrepreneurship education format at the elementary andsecondary education level using entrepreneur training programs based oncross-sectoral curricula designed at specialized upper secondary schools.
・ Promote the enhancement and internationalization of a network ofteachers giving entrepreneurship education lessons at universities andgraduate schools.
・ Dispatch people involved in venture business activity to Silicon Valley
and establish a network of top-class venture business support personnel.
・ Strengthen efforts to identify innovative IT ventures and encourage
successful entrepreneurs to support business startup.
・ Create an award program (Prime Minister’s Awards) to publicly
commend venture business activity.
・ Study the possibility of enhancing the low-interest loan program toencourage the creation of venture businesses using a wide variety ofhuman resources.
iii) Improving the productivity of service industries
In order to improve the productivity of service industries, which account foraround 70% of Japan’s GDP, it is important to promote innovative businessapproaches, such as marketing using big data. To that end, the following
measures will be implemented:
・ Analyze best practices related to high-value-added service business models
through an organization called Service Productivity & Innovation for Growth(SPRING) and disseminate these best practices by creating a Japan Service
Business Award (tentative name) (to be launched in FY2015).
・ Develop and popularize practical business management programs focused on

40

service industries, to be adopted by graduate schools and universities aiming
to nurture innovative service business managers, and practical education
programs to be adopted by professional training colleges, etc.
・ Establish a system to certify the quality of business support services by theend of FY2015.
・ Formulate guidelines for specific methods and procedures that will enable
small and medium-sized service businesses to improve productivity.

41

2. Reforming the employment system and reinforcing human resources capabilities
2-1. Labor movement without unemployment / Enhancing matching function /Realizing various ways of working(1) Progress in achieving KPIs
<KPI> Decrease by 20% people who have been unemployed for more than six
months in the next five years (2012 figure: 1.51 million)⇒ 2013 figure: 1.42 million<KPI> Raise the hiring rate for general workers (excluding part-time workers)
who changed their job within a year to 9% in the next five years (2011rate: 7.4%)⇒ (2012 rate: 7.7%)(2) Progress made in implementing measures(Fundamental shift from the Employment Adjustment Subsidies to the Labor
Movement Support Subsidies)
・ Under the FY2014 budget, ¥30.1 billion was allocated to the Labor Movement
Support Subsidies, to raise its budget above that of the Employment Adjustment
Subsidies by FY2015. In March 2014, the Employment Insurance Act wasrevised to strengthen support measures to promote medium- and long-term
career development for working people.
(Disclosing information on job vacancies and job-seekers held by Hello Workpublic employment support offices)
・ Regarding information on job offers held by Hello Work public employment
support offices, preparations are underway to start online disclosure to
private-sector human resource businesses, etc. in September 2014. The
Government is studying specific means of disclosing information on job-seekers,
taking into account the results of a needs survey conducted in 2013.
(Deliberations on achieving diverse ways of working)・ Regarding the achievement of diverse ways of working, the Government beganconsidering how to popularize and expand diversified regular workers. In
42addition, the Government implemented institutional reforms that facilitate
flexible, diverse ways of working, including the adoption of special provision
under the Labor Contract Act (enacted in December 2013), targeting university
researchers, etc.
(3) Specific new measures to be taken
Under the growth strategy set forth in 2013, in order to achieve labor movement
without unemployment, the Government made a bold policy shift from maintaining
existing jobs to supporting moves into growth sectors. At the same time, in order toachieve a world-class employment environment and ways of working, it is necessary
to establish a new system that facilitates job-specific and creative ways of working
that evaluate workers based on performance rather than the time spent on work,
standing alongside the membership-type ways of working typified by such practices
as lifetime employment and frequent transfer between various job positions. It isalso necessary to establish a transparent dispute resolution system that is globally
accepted. To that end, designating the next three years as a period for intensive
reform to improve the employment environment, the Government will implement
the following measures:i) Reforming ways of working
1) Enhancing measures to prevent overwork
As the prerequisite for achieving a world-class employment environment,
every possible effort will be made to prevent overwork. To that end, theGovernment will implement specific measures, such as strengthening
systems of inspection and guidance to rectify the culture of long working
hours at companies, etc., and enhancing Labor Standards Inspection Officeinspections and guidance targeting companies suspected of engaging inillegal practices. In addition, in order to promote ways of working thatencourage a good work-life balance, the Government will popularize amorning-oriented working style, in which workers go to the workplace earlyin the morning and leave in the late afternoon. Moreover, in order toimprove Japan’s culture of overwork, the Labor Policy Council will consider
measures to curb long working hours and to promote the use of annual paid
leave.

43

2) Introducing a system to evaluate not based on working hours but on
performance
・ In order to meet the needs of workers who would like be evaluated notbased on working hours but on performance, a new working hour system
to break the link between wages and the length of time spent at work
will be created, while protecting workers’ health and achieving a better
work-life balance for workers who have a specific scope of duties andadvanced professional skills, and meet a certain annual income
requirement (e.g., a minimum of ¥10 million). After the Labor Policy
Council has completed its deliberations and reached a conclusion on thesystem, the Government will take the necessary legislative measuresduring the next ordinary Diet session.
3) Establishing a new framework for the discretionary work system
A new framework for the discretionary work system will be established byrevising the scope of workers eligible for the system and amending therelevant procedures, with a view to improving productivity, achieving abetter work-life balance, and protecting workers’ health so that workers
involved in companies’ core operations and R&D activities under the system
can exercise their creativity, leading to improved corporate competitiveness.
After the Labor Policy Council has completed its deliberations and reached aconclusion on the system, the Government will take the necessary legislative
measures during the next ordinary Diet session.
In doing so, the Government will reform the discretionary work system inaccordance with its primary purpose so that workers can actually work attheir own discretion, taking into consideration the view that the existing
discretionary work system does not diffuse enough and allow workers towork autonomously.
4) Reforming the flextime system
In order to further facilitate flexible and various ways of working in lightof the needs of workers caring for children and elderly relatives, the Labor
Policy Council will examine reforms of the flextime system, such as
extending the settlement period for working hours so as to enable flexible
allocation of working time across two or more months and the use of annual

44

paid leave to avoid pay being reduced when leaving the workplace earlier
than the prescribed time. After the Council has reached a conclusion, theGovernment will take the necessary legislative measures during the next
ordinary Diet session.
5) Diffusion and expansion of job-specific diversified regular workers
There is a move to introduce diversified regular workers arrangements, such as
employing region-specific regular workers. In order to meet the needs ofworkers pursuing a professional career, the introduction and popularization ofjob-specific regular workers are expected. By July 2014, the Government will
put together the Points to Remember Regarding Employment Management,
which will prescribe the statement of working conditions, among other matters,
and will also publish it as model cases of diversified regular workers to ensure
widespread awareness of such employment arrangements among companies. By
the end of 2014, the Government will announce and raise awareness about theinterpretation of the Labor Contract Act, with reference to such matters as thestatement of working conditions (including the specific details of jobs) at thetime of the conclusion or modification of labor contracts, as well as
status-switching and equal treatment between diversified regular workers andordinary regular workers. At the same time, the Government will establish
several best practices of diversified regular workers involving workers withadvanced professional expertise that may serve as models, as well as gathering awide range of examples of employment rules, and disseminating relevant
information. The Government will also conclude a study by the end of FY2014
on support to expand the introduction of diversified regular workers
arrangements that give consideration to the Points to Remember Regarding
Employment Management and will start implementing them in FY2015.
6) Improving the environment to raise the minimum wage to facilitatesustainable economic growth
In order to maintain and expand a virtuous cycle of wage growth in all
income groups and increased corporate earnings, the Government will seek
to raise the minimum wage while supporting improved productivity amongsmall and medium-sized enterprises (SMEs) and micro enterprises.

45ii) Creating a highly foreseeable labor dispute resolution system
The Government will attempt to create a highly foreseeable labor dispute
resolution system in order to resolve the problem that Japanese employment
practices are less transparent especially for foreign countries, protect workers at
SMEs, and promote foreign direct investment in Japan.
1) Analysis of cases dealt with via mediation, labor tribunal decision, andconciliation
Regarding the analysis and classification of cases of mediation, labor
tribunal decision, and conciliation, which are used to resolve labor disputes,
the Government will clarify as far as possible the relationship between theamount of money paid to resolve disputes and various factors, such as
workers’ attributes in terms of employment, their wage levels, and company
size. Based on the results of this analysis, the Government will develop a
usable tool within one year.
2) Establishing a transparent and objective labor dispute resolution system
Given that major industrial countries have developed mechanisms forproviding workers with pecuniary remedies through judgments in line with
their respective employment systems, the Government will analyze cases of
mediation, etc. and conduct surveys and studies concerning relevant systems
and their management in other countries by the end of FY2014. Taking into
account the findings of these surveys and studies, the Government willpromptly establish a forum for discussion of specific approaches toglobally-accepted, transparent, fair and objective labor dispute resolution
systems and conduct wide-ranging deliberations by the end of 2015.
iii) Achieving labor movement without unemployment by revitalizing theexternal labor market
In order to create a society in which workers can enhance their skills outside
their companies and switch to suitable jobs, the Government will drasticallystrengthen measures to achieve smooth movement of labor via a nationwide
initiative involving the national government and local governments, as well as

46

the private sector. To that end, it will enhance various measures, as described
below.
1) Fundamental reform of the Job Card system (from the Job Card to acareer passport system (tentative name))
Based on a rigorous review of the current situation in light of the failure of
the Job Card system to become widely used, the Government will
fundamentally reform the concept and format by the end of FY2014,
re-launching it as a career passport which people can begin using whenworking during their student years and which specifies their duties,
achievements, experience, and skills. At the same time, the Government will
examine measures to popularize the career passport, reaching a conclusion by
the end of FY2014. In particular, regarding measures to provide incentives to
use the career passport system within the system of subsidies for skills
development, the Government will conduct a study and reach a conclusion by
the end of August 2014.
2) Reform of vocational ability evaluation system
To maximize the function of the labor market in matching workers withjobs, it is necessary to facilitate objective comparison of the vocational skills
required by industries and those possessed by individual workers. To that end,in addition to reforming technical skills tests and promoting the use of suchtests, the Government will promote the systematic improvement andexpansion of practical tests organized by industry groups in the service sector
and the integrated management of these tests and education and training
programs by providing support to the groups concerned. The Government
will also study approaches to policy on performance evaluation, including the
Human Resources Development Promotion Act. This study will include a
review of vocational ability evaluation system as a whole. The Labor Policy
Council will hold discussions and reach a prompt conclusion, taking into
account the results of this study, after which the Government will submit any
bills required and take any other measures deemed necessary.
3) Improving the system of career consulting

47

Career consultants need to be easily accessible by workers who arereviewing their vocational experience and skills, and seeking opportunities toadvance up the career ladder or change careers. Therefore, the Government
will formulate a career consultant training plan by the summer of 2014 inorder to steadily cultivate career consultants. In addition, by the end of
August 2014, the Government will study and reach a conclusion on theprovision of incentives to use career consultants.
The Government will conduct a study and reach a conclusion by the
middle of 2015, concerning specific measures to ensure that steady progress
is made in putting in place a career consulting system at most companies.
4) Enhancing the matching function of the external labor market throughcooperation between the public and private sectors
In order to enhance the functions of Hello Work public employment
support offices, the Government will conduct a study by the end of FY2014
concerning specific measures to establish a mechanism that rewards
highly-motivated Hello Work employees by comparing and disclosing theperformance of individual offices, and will start implementing thesemeasures in FY2015. In addition, in order to promote appropriate evaluation
and active use of private-sector human resource businesses, the system forcertifying high-caliber private-sector businesses will begin operating in thelatter half of FY2014. The Government will also identify and disseminate
best practices so as to extend enhanced partnerships between Hello Work
offices and local governments nationwide.
5) Promoting the best mix of vocational training that meets the needs ofindustry
The Government will conduct rigorous checks of the usefulness ofvocational training programs in each region, taking into account the needs ofindustry. Through these checks, it will promote efforts to improve the content
of education and training and achieve the best mix of vocational training,taking advantage of the merits of various types of training, including
employment-type training. At the same time, in order to ensure that all
education and training organizations commissioned or certified by48

administrative organizations establish systems to improve the quality of
training tailored to the needs of companies, etc. through the PDCA cycle, theGovernment will hold seminars nationwide concerning guidelines forvocational training services that meet international standards. Moreover, theGovernment will conduct surveys and research concerning the objective
analysis of the effects of training and will reform vocational training in lightof the results. Through these measures, the Government will drasticallystrengthen evaluation of the outcomes of training.

49

2-2. Promoting active social participation by women / Promoting active social
participation by the young and the elderly / Utilizing foreign human resources(1) Progress in achieving KPIs
(Promoting active social participation by women)<KPI> Aim for the elimination of childcare waiting lists by securing childcarearrangements for about another 200,000 children by the end of FY2014
and about another 400,000 children by the end of FY2017 (Plan to
Accelerate the Elimination of Childcare Waiting Lists)⇒ 2013: Number of local authorities participating in the Plan to Accelerate theElimination of Childcare Waiting Lists – 351 municipalities (as of August)<KPI> Boost the employment rate of women (aged 25–44) to 73% by 2020
(currently 68%)
⇒ FY2013: 69.5%<KPI> 30% of leadership positions held by women in 2020
⇒ Proportion of managerial posts held by women in 2013: 7.5% (6.9% in 2012)(Promoting active social participation by the young and the elderly)<KPI> 2020: 78% employment rate among those aged 20–34 (2012: 74%)
⇒ 2013: 75%<KPI> 2020: 65% employment rate among those aged 60–64 (2012: 58%)
⇒ 2013: 59%<KPI> 2020: 2.0% actual employment rate among people with disabilities (2012:
1.69%)⇒ 2013: 1.76%(Utilizing highly skilled foreign professionals)<KPI> Achieve a significant increase in the number of foreign nationals
recognized as highly skilled professionals from the baseline figure 11
months after the introduction of the points system (about 430 people)⇒ A total of 995 foreign nationals were recognized as highly skilled
professionals between the introduction of the points system (May 2012) andFebruary 201450

(2) Progress made in implementing measures(Steadily implementing the Accelerate the Zero Childcare Waiting List Project)
・ A total of 351 municipalities were participating in the Plan to Accelerate theElimination of Childcare Waiting Lists by August 2013 and the Government isproviding powerful support for initiatives by local authorities aimed ateliminating childcare waiting lists, such as supplementing the operating expenses
of nurseries while securing stable sources of revenue.
(Promoting

disclosureofinformationonappointment

of

women

/

Strengthening support for balancing work and family life)
・ The Government has established a website for promoting disclosure of
information on active social participation by women, providing details of the
proportion of women in managerial posts and other data for 1,154 companies(equivalent to about 30% of all listed companies). Moreover, it has sought todevelop an environment conducive to promoting active social participation by
women. For example, in April 2014, the reform bill to extend the effective periodof the Act on Advancement of Measures to Support Raising Next-Generation
Children was passed.
(Putting in place an environment conducive to active social participation by theyoung and the elderly)・ As well as improving employment support functions to promote active social
participation by young people, the Government is undertaking initiatives aimed
at achieving a smooth changeover in the timing of the start ofrecruitment/job-seeking activities. In addition, in March 2014 it revised the
Employment Insurance Act, strengthening support measures to promote themedium- to long-term career development of working members of society.
・ During the 2014 ordinary Diet session, the Government submitted a bill aimed atpromoting active social participation by elderly people. This covered suchmatters as the establishment of a special provision exempting employers fromthe obligation to grant workers on fixed-term employment contracts open-ended
employment if they apply for it after the statutory period has elapsed, to be
applied in the case of elderly people past the mandatory retirement age.

51

(Easing requirements for the acceptance of highly skilled foreign professionals)
・ In 2013, the Government implemented measures aimed at increasing theconvenience of preferential measures to promote the utilization of highly skilled
foreign professionals. More specifically, these related to the relaxing of
requirements for recognition as a highly skilled foreign professional, such asrevising the minimum annual income criterion, as well as eligibility to beaccompanied by parents or domestic workers. Furthermore, in June 2014, theAct to Amend the Immigration Control and Refugee Recognition Act wasenacted to establish a new status of residence with an indefinite period of staytargeting highly skilled foreign professionals.
(Utilizing foreign human resources in the field of construction andshipbuilding)・ The Government has decided to promote the utilization of work-ready foreign
human resources on condition that employers do their utmost to secure humanresources within Japan by such means as improving treatment and the structureof multi-layer subcontracting, and increasing on-site efficiency. This will be a
fixed-term and urgent measure (ending in FY2020) aiming at further acceleratingreconstruction projects, while meeting the temporary expansion of construction
demand from developing facilities for the 2020 Tokyo Olympics andParalympics. The Government will make the necessary preparations and aim tostart accepting foreign human resources under this system at the beginning of
FY2015. There is considerable mobility of labor between the construction andshipbuilding industries; thus, the aforementioned measures in the constructionindustry are likely to have a significant impact on the shipbuilding industry. In
addition, the shipbuilding industry makes a substantial contribution to regional
economies, as well as supporting Japanese exports through its high domestic
production rates. Accordingly, the Government will also take similar fixed-termand urgent measures in this industry and make the requisite preparations toensure that there is no loss of production opportunities recovered rapidly as aresult of Abenomics.
(3) Specific new measures to be taken

52

The Government will make further progress with the initiatives that it has been
undertaking since 2013 to promote the social participation of women, young people,
elderly people, and foreign human resources, thereby building a society in which
motivated and capable people can work with vitality.
i) Promoting active social participation by women(Enhancing the environment to support childcare and housework)
It is necessary to consider measures aimed at developing environments thatoffer parents reassurance that their children will be safely looked after, andmeasures to alleviate the financial burden of housework, so that the power ofwomen – Japan’s greatest potential – can be fully utilized, allowing the creationof a society in which women shine. Accordingly, as well as undertaking
initiatives to eliminate childcare waiting lists in accordance with the Plan to
Accelerate the Elimination of Childcare Waiting Lists, comprehensive
after-school measures will be required for elementary school children, to deal
with the problem of what has been dubbed the “first-grade barrier.” Inconjunction with these initiatives, the Government will develop an environmentthat enables housekeeping support services to be used cheaply and with peace ofmind.
1) The Comprehensive After-school Program for Children
To conquer the so-called “first-grade barrier” (the situation in which
women find themselves compelled to quit their jobs once their child enterselementary school) and nurture the next generation of workers, the Ministryof Health, Labour and Welfare and the Ministry of Education, Culture, Sports,
Science and Technology will jointly formulate the Comprehensive
After-school Program for Children mid-year and systematically develop
after-school clubs and classes for children, with a primary focus on an
integrated approach. As part of this initiative, they will implement therequisite institutional measures within the FY2014, such as revising the
Guidelines on Preparing Action Plans in accordance with the Act on
Advancement of Measures to Support Raising Next-Generation Children,
and asking local authorities to formulate such plans. This will ensure that fulluse can be made of school facilities (such as spare classrooms and53

classrooms that are temporarily unused out of school hours), that after-school
club opening hours can be extended, and that after-school clubs and classes
for children based on an integrated or collaborative approach can be steadily
implemented in all elementary school districts. As well as making
after-school club places available for about another 300,000 children by theend of FY2019, the Government will establish integrated after-school clubs
and classes for children in at least 10,000 locations.
2) Steady implementation of measures to secure nursery teachers
To ensure that the Plan to Accelerate the Elimination of Childcare Waiting
Lists is implemented without fail, the Government will prepare the Plan for
Securing Nursery Teachers, aiming to publish it within 2014. Having
identified how many nursery teachers are needed nationwide, based on theplans of local governments under the Comprehensive Support System forChildren and Child-rearing, this will stipulate numerical targets and timeframes for the hiring of such teachers, and will also provide a roadmap for
promoting human resource development and support for re-employment. In
conjunction with this, the Government will make any revisions that are
required, depending on the progress status of the Plan to Accelerate theElimination of Childcare Waiting Lists at the end of FY2014.
3) Creation of childcare support workers (tentative name)In the field of wide-ranging childcare support tailored to local needs, suchas small-scale childcare, in conjunction with the entry into force of theComprehensive Support System for Children and Child-rearing, theGovernment will create a mechanism to enable those who have undergone
the requisite training to be certified as childcare support workers (tentativename). This will allow homemakers and others with ample experience ofchild-rearing to play an active role in society. At the same time, theGovernment will also consider mechanisms for making it easier for thesechildcare support workers (tentative name) to develop their skills with a view
to becoming nursery teachers, domestic child-minders, and after-school childsupport workers.

544) Realization of reasonable and reliable housekeeping support services
The Government will support voluntary initiatives by the industry toensure the quality of housekeeping support services, to reduce the burden on
users and build a mechanism for the supply of reliable services. To this end,
it will establish a committee composed of major business operators, which
will consider specific measures and reach a certain conclusion within
FY2014.
5) Utilization of foreign housekeeping support workers to promote active
social participation by women and meet the need for housekeeping
support [described below](Described in “ii) Accelerated promotion of National Strategic Special Zones,”in “5. Further strengthening Japan’s international competitiveness as abusiness hub,” “5-1. Realizing National Strategic Special Zones / Opening up
rights to operate public facilities, etc. to the private sector (expanding
utilization of PPP/PFI) / Improving infrastructure such as airports, ports andharbors / Improving competitiveness of cities.”)(Developing an environment that encourages the appointment of women to
posts at companies, etc.)
As well as developing a women-friendly workplace environment, it isnecessary to conduct intensive, comprehensive initiatives aimed at increasing the
proportion of women in leadership positions. In conjunction with this, theGovernment will provide support to ensure that the abilities of women are fully
utilized, so that their potential can be realized.
6) Construction of a new legal framework for promoting active social
participation by womenWith a view to achieving the goal of 30% of leadership positions held by
women in 2020, the Government will consider a new comprehensive
framework for achieving steady advances, to ensure sustained initiatives topromote active social participation by women.
More specifically, the Government will consider how actors in the public
and private sectors should respond, including ascertaining the current

55

situation regarding the appointment of women by the national government,
local governments, and private sector business operators, as well as setting
targets for their appointment, formulating voluntary action plans forachieving those targets, and disclosing information about these. Furthermore,
to encourage initiatives by the various actors, the Government will consider
measures aimed at ensuring their effectiveness, such as accreditation
mechanisms and the granting of incentives. The Government will aim tosubmit a bill to the Diet, after reaching a conclusion on these during FY2014.
The Government will require counterparts in public procurement andsubsidized projects to submit reports concerning their initiatives focused onsuch issues as work-life balance and the appointment of women, while giving
due consideration to the burden on business operators and contract bidders.
In addition, it will facilitate the disclosure of information about company
initiatives and formulate guidelines for initiatives that incorporate appropriate
evaluations of companies which are making positive efforts to promote active
social participation by women, with a view to expanding opportunities forsuch companies to win government contracts and subsidies.
Furthermore, the Government will enhance initiatives in areas such as thedevelopment of an environment that facilitates women’s return to theworkplace, for example, securing replacement personnel during childcare
leave and formulating plans to support women when returning to theworkplace after childcare leave; consideration of grants for employers thatprovide training to increase women’s skills after they return to the workplaceand incentives to be granted to employers accredited under special measuresin the revised Act on Advancement of Measures to Support Raising
Next-Generation Children; and support for employers that proactively
support their staff members in balancing work and family life, such asencouraging men to play an active role in childcare.
In conjunction with this, comprehensive health support that meets the
specific needs of women is required in order to promote their active social
participation. Accordingly, the Government will formulate the requisite
measures from a comprehensive perspective, taking into account proposals
from the ruling party, among others.

567) Encouragementofcompanies

todisclose

information

on

the

appointment of women and rethink ways of working to support efforts
to balance work and family life
As well as obliging companies to specify the proportion of women in
executive posts in Annual Securities Report, the Government will require
financial instruments exchanges to include information concerning theappointment of women to executive and managerial posts and initiatives
being taken to promote their appointment in Report Concerning Corporate
Governance.
Moreover, the Government will collate information about the appointment
status of women at companies to compile a comprehensive database and will
promote initiatives aimed at facilitating women’s active participation incorporate management.
Furthermore, to ensure that both men and women can balance work withfamily life, the Government will encourage efforts to upgrade the workplaceenvironment via the revised Act on Advancement of Measures to Support
Raising Next-Generation Children, among other measures. Through this, itwill encourage efforts to reduce long working hours and promote the takingof annual paid leave. In conjunction with this, the Government will consider
how to promote diverse, flexible ways of working, such as the popularizationof a morning-oriented work style, in which workers arrive at work early inthe morning and leave in the late afternoon, and revising the flextime system.
In addition, in order to promote telework, the Government establishes newmodels to put it into practice and provides information on how to introduce it.
In addition, it will seek to promote teleworking by building new models andoffering know-how concerning its introduction.
8) Expansion of the employment and appointment of female staff in thenational civil service
With a view to increasing women’s participation in policy- anddecision-making processes, the Government will take the lead in efforts to
expand the employment and appointment of female staff. In tandem with this,it will promote a good work-life balance for all staff.
Accordingly, the new Cabinet Bureau of Personnel Affairs will be at the57

heart of these efforts, putting in place the framework (e.g., establishing acommittee consisting of vice-ministerial level officials from each ministry
and agency) that will enable the whole government to take responsibility for
endeavors in this area, and will move forward with comprehensive, focused
initiatives.
It will also put in place an environment conducive to using systems to
support efforts to balance work with family life and promote flexible ways ofworking tailored to each employee’s situation, such as the popularization andexpansion of teleworking. In addition, with the understanding andcooperation of relevant organizations, it will undertake more effective
initiatives aimed at reducing the amount of overtime worked.
9) Implementation of the Plan for Supporting Active Social Participation
by Women (tentative name)
The Government will put together the Plan for Supporting Active Social
Participation by Women (tentative name), which will cover initiatives
including the establishment of a system of childcare support workers(tentative name), to enable homemakers, etc. to make use of their experienceof childcare and other areas by allowing society to fully utilize the abilities
that they have developed. In addition, the Government will set up a newcommittee consisting of representatives from relevant ministries and agencies,
and put in place a comprehensive framework for promoting endeavors in thisarea, including opening the Plan for Supporting Active Social Participation
by Women Website (tentative name) and creating regional relearning
networks. More specifically, it will undertake initiatives such as Mothers’
Hello Work, support for relearning, trial employment, and entrepreneur
schools, targeting (1) those who wish to contribute to the community in thefields of housekeeping, childcare, and nursing care; (2) those who wish toseek re-employment as permanent employees and nursery teachers; and (3)those who wish to establish companies or NPOs, etc.
Moreover, as well as promoting efforts to change the mindset among
CEOs and managers, the Government will hold women’s support conferencesin each region, develop platforms for collaboration involving economic
organizations, and build frameworks for promoting the appointment of58

women, offering support for initiatives being undertaken by individualcompanies.
10) Promotion of careers education and support for female researchers andengineers, etc.
With a view to active social participation by the next generation of women,
the Government will collate and disseminate information for careers
education programs, including the provision of role models and lessonsdelivered by visiting speakers. In addition, it will support universities that are
actively seeking to appoint women; reform the research system to promote a
better work-life balance, with a view to enabling female researchers to
successfully combine research with motherhood; nurture female engineers;and improve the working environment. Moreover, it will make strategic use
of JICA volunteer programs as a means of helping women to move up the
career ladder.
(Reviewing tax, social security systems to be neutral with regard to how
woman choose to work)
While undertaking these initiatives in an integrated manner, it will benecessary to eliminate all barriers impeding active social participation by women.
Accordingly, the Government will review systems that inhibit labor participation
by women.
11) Reviewing tax, social security systems to be neutral with regard to how
woman choose to work
“Promoting active participation by women” section of the Japan Revitalization
Strategy states that the Government will consider tax and social security systems
that are neutral to the selection of ways of working. Accordingly, since March
2014, the Government Tax Commission has been considering tax systems thatare neutral to the selection of women’s ways of working.
Wide-ranging, comprehensive initiatives are essential to the constructionof social systems that are more neutral regarding choices about ways ofworking. Accordingly, amid changes in the socioeconomic situation,
including a declining birthrate and aging population, as well as the increase59

in double-income households, the Council on Economic and Fiscal Policy
will conduct comprehensive deliberations by the end of 2014, concerning
such matters as the tax system, the social security system, and the spouseallowance, with a view to further promoting active social participation by
women.
・ Tax system
Regarding the tax system, the Government Tax Commission willcontinue to conduct wide-ranging deliberations in partnership with theCouncil on Economic and Fiscal Policy, examining measures fordeveloping tax systems that are more neutral to selection of women’s
ways of working, taking into account proposals by the Liberal
Democratic Party and the Headquarters for Japan’s Economic
Revitalization, as well as previous discussions by the Government Tax
Commission.
・ Social security system
Regarding the social security system, steady progress will be madewith comprehensive deliberations on such subjects as expanding theapplication of employees’ insurance and approaches to benefits andburdens, expressly taking into account the need to increase thesustainability of the social security system and the need to build systems
that are more neutral concerning women’s lifestyles and ways of working.
These deliberations will also take into account discussions conducted by
the Council on Economic and Fiscal Policy, in light of the fact that it haspointed out that (1) when the income of a woman whose husband is apermanent employee, etc. exceeds ¥1.3 million, she loses her status as a
Category 3 insured person, causing her to incur the burden of social
insurance premiums and actually reducing her residual income, so wives
tend to curb their working hours because of this reversal phenomenon;(2) when working hours exceed a certain level, employers become liable
to pay social insurance premiums, so they tend to adjust working hours
accordingly; and (3) the Category 3 insured person system is unfair to thewives of self-employed men, etc. and also to unmarried women.

60

・ Review of the spouse allowance
There are cases in which employees with a spouse are granted a spouseallowance. As it has been pointed out that this sometimes results inwomen’s participation in the labor force being curbed, the Council on
Economic and Fiscal Policy will seek information and other assistancefrom the National Personnel Authority and other relevant organizations,
to allow it to conduct more in-depth discussions on this topic and thereby
further consideration of approaches to the provision of allowances for the
spouses of private sector employees and civil servants.
ii) Promoting active social participation by the young and the elderly
Further efforts are required to promote active social participation by not only
women, but also young people and elderly people, in order to achieve growth ina society facing population decline. Accordingly, the Government will conduct
the following initiatives, in addition to the measures included in the Japan
Revitalization Strategy.
1) Promotion of comprehensive measures aimed at the employment andnurturing of the young people who will shape the future
To ensure that youth employment measures covering the preparatory
stages of finding employment, job-seeking activities, and career development
after being hired are promoted throughout society, the Government willconsider comprehensive measures including those outlined below. Where
legislation needs to be established to achieve this, the Government will aim
to submit the relevant bills during the next ordinary Diet session.
・ Enhancing careers education and promoting other measures to foster
vocational awareness at the school education stage.
・ Ensuring that information about conditions of job offers and the status ofyouth employment and retention is displayed appropriately.
・ Fundamentally strengthening the ‘Announcement of Corporations
Supporting the Youth’on project, thereby supporting efforts by superior
SMEs to disseminate information and hire young people.
・ Supporting entrepreneurship and relocation to hometowns or other61

regional cities (U-I-J turn), thereby allowing young people to contributeto regional revitalization.
・ Promoting

initiatives

toimprove

employment

managementbycompanies.
・ Enhancing and strengthening countermeasures targeting companies
suspected of hiring young people as “disposable” workers.
・ Enhancing efforts to support casual employees and those classed as not in
education, employment or training to start working and shift to regular
employment through comprehensive revision of how the collaboration of
Hello Work for Young People and Regional Youth Support Stations with
regional areas and the private sector should be, among others.
・ Helping young people to move up the career ladder by enhancing
vocational education and training opportunities.
2) Promotion of active social participation by elderly people to achieve anageless society
To build a society in which anyone can play an active, meaningful role
regardless of age, the Government will promote efforts to increase theprevalence of companies where people can work even after the age of 65. In
addition, it will put in place an environment in which elderly people canwork in their local area or other areas in need of personnel, and can take partin volunteer activities or other activities in the community.
3) Comprehensive promotion of measures to secure and nurture humanresources in areas of labor shortage
The Government will comprehensively promote measures to secure andnurture young people and other human resources, including improvements toemployment management, as well as measures focused on matching
personnel with suitable jobs, and human resource development in the medicalcare and welfare, construction, manufacturing, and transport sectors.
iii) Utilizing foreign human resources(Utilizing highly skilled foreign professionals)
1) Developing an environment conducive to the acceptance of highly skilled62foreign professionals
Amid intensifying competition to acquire personnel, it is vital to attract
high-caliber human resources to Japan and ensure they remain in the country
to further revitalize the Japanese economy and increase its competitiveness.
Accordingly, the Government will consider, within FY2014, specificmeasures aimed at fostering greater understanding of Japan to foreign
nationals; expanding the acceptance of international students and supportingthem in finding employment at Japanese companies; promoting efforts forformer participants of the JET Programme to play an active role within
Japan; expanding the acceptance of international researchers; promoting the
globalization of companies; and identifying and resolving the problems
ranging from the acceptance of highly skilled foreign professionals to theimprovement of their working and living environments. These initiatives areto be implemented from FY2015, with the involvement of relevant ministries
and agencies. In the process of deliberations, where there are issues thatcannot be tackled immediately via nationwide initiatives, the Government
will consider launching pilot initiatives in the National Strategic Special
Zones, among other areas, to verify needs and effects.
Above all, to expand the employment of international students expected tobe the highly skilled foreign professionals at Japanese companies(particularly SMEs), relevant ministries and agencies will collaborate insharing information and seeking to enhance job-matching functions, as wellas creating opportunities for leading companies to disseminate information.
Moreover, to encourage acceptance of more international researchers, theGovernment will strengthen international networks through the strategic
dispatch overseas and invitation from abroad of excellent young researchers,
and the development of research centers both in Japan and abroad.

As well as taking effective steps to ensure thorough awareness (both athome and abroad) of the points system for highly skilled professionals, theGovernment will promote the retention of highly skilled foreign
professionals by reviewing procedures to make them more user-friendly forthe foreign personnel who actually use them.

63

(Revision of the Technical Intern Training Program for foreign
nationals)
Moreover, as well as improving the operation of the Technical Intern
Training Program, the Government will carry out the following revisions inlight of for the actual needs for human resources in overseas.
2) Fundamental revision of the Technical Intern Training Program
To ensure complete adherence to the program which aims at making aninternational contribution, the Government will not only make improvements
to the program, but will also carry out fundamental revisions of the TechnicalIntern Training Program, including expanding the covered range ofoccupations, extending the internship periods, and increasing the number ofadmitted interns. In addition, bills required to comply with this objective will
be submitted.
・ Fundamental strengthening of the management and supervision system of
the Technical Intern Training Program
In light of non-payment of wages, long working hours, and othermisconduct under the TechnicalInternTraining Program, theGovernment will conduct a fundamental revision of approaches to thesupervision and the management of the program by the end of 2014, andwill aim to complete the transition to the new program during FY2015.
The revision includes the establishment of an integrated system regarding
the domestic management and operation of the program throughcollaboration of relevant ministries and agencies, as well as creatinginter-governmental agreements with the interns’ countries of origin,bringing external directors into the supervising organizations or making it
obligatory to undergo external auditing, and establishing an organizationof management and operation of the program based on new legislations.
Also, as well as seeking to enhance guidance and supervision by therespective ministries in charge of industries concerned, the Government
will develop a system to facilitate the information sharing regarding
problems, through establishing regional councils (tentative) consisting of64

representatives of relevant organizations.
・ Expansion of the range of occupations covered
Fields and occupations that are not currently covered by the TechnicalIntern Training Program, but expected to be the subject of increasing
demand for human resources both in Japan and abroad, will be added tothe program, if the skills that can be transferred are deemed to beappropriate in light of the purpose of the program. In the case of thenursing care field, the Government will seek to examine the relationshipamong the program, the acceptance of candidates to become certifiedcare workers under existing economic partnership agreements, and the
granting of work permits to international students who have qualified as
certified care workers, regarding which deliberations are alreadyunderway. In this regard, the Government will also take into accountperspectives characteristic of the service industry, such as the need toguarantee quality via Japanese language requirements, etc., and will seek
to complete deliberations and reach a conclusion by the end of 2014.
Moreover, as well as occupations regarding which a uniform nationwide
response is required, the Government will consider adding occupations
based on an assessment of the industrial characteristics of each region.
・ Extension of the internship period (three years → five years)
The Technical Intern Training Program currently permits interns to stayin Japan for a maximum of three years, but where the supervisingorganization and the accepting company are recognized as legitimate
organizations due to satisfying certain clear conditions, the Government
will permit highly-skilled interns to extend their training period for a
maximum of two years, after returning home temporarily. Accordingly,
the Government will put in place the requisite institutional measures,with a view to enforce them during FY2015.
・ Increasing the admission quota
Under the Technical Intern Training Program in which the accepting
companies are basically under surveillance of supervising organizations,65

accepting companies with no more than 50 regular employees are
permitted to accept three interns, while those with no more than 100 are
permitted to accept six, and the like. However, in the case where thesupervising organization and the accepting company are recognized as
legitimate, due to satisfying certain clear conditions, the Government will
permit the expansion of the admission quota, as an incentive aimed at
improving oversight of accepting companies by supervising organizations.
Accordingly, the Government will put in place the requisite institutional
measures, with a view to enforce them during FY2015.

(Consideration of new employment systems in fields where an urgent
response is required to ensure sustainable growth)
In addition, as well as implementing measures to promote active social
participation by women and ensure that Japan has the human resources it
needs, the Government will conduct the following initiatives in fields wherelabor shortages are already beginning to become apparent in Japan.
3) Acceptance to Japan of employees from overseas subsidiaries ofJapanese manufacturers
In light of fears about de-industrialization within Japan due to accelerating
overseas expansion by Japanese manufacturing industry, the Government
will consider developing systems that will enable domestic bases to function
as mother plants, carrying out production activities based on a division ofroles with overseas bases, and which will also facilitate research anddevelopment and capital investment based on this premise.
Therefore, with the involvement of the competent minister, theGovernment will allow greater flexibility in the acceptance to Japan offoreign employees on short-term transfers within the enterprise group inquestion for the purpose of acquiring skills, etc., where the employee inquestion needs to learn a specific professional skill such as new productdevelopment, as long as the company in question and its subsidiary will pay
said employee a wage equivalent to that paid to a Japanese national with thesame level of skill. Accordingly, the Government will design the specific66

institutional arrangements within FY2014.
4) Utilization of foreign housekeeping support workers to promote active
social participation by women and meet the need for housekeeping
support [described below](Described in “ii) Accelerated promotion of National Strategic Special Zones,”in “5. Further strengthening Japan’s international competitiveness as abusiness hub,” “5-1. Realizing National Strategic Special Zones / Opening up
rights to operate public facilities, etc. to the private sector (expanding
utilization of PPP/PFI) / Improving infrastructure such as airports, ports andharbors / Improving competitiveness of cities.”)5) Support for active participation by international students who haveobtained national qualifications in the field of nursing care
To enable international students studying in Japan to continue to play anactive role within the country after graduating from a Japanese higher
education institution and obtaining a specific national qualification such as
the certified care worker qualification, the Government will aim to design
within 2014 the institutional arrangements for permitting them to work,
including augmenting the status of residence categories.
(Medium- to long-term considerations, etc.)
Furthermore, the Government will undertake comprehensive deliberations
regarding approaches to the acceptance of foreign human resources in themedium- to long-term, while seeking to shape the national consensus, taking
care to ensure that this is not misconstrued as an immigration policy.
As it moves forward with initiatives aimed at utilizing foreign humanresources, the Government will also seek to strengthen partnerships withcountries that share the same basic values.

672-3. University reforms / Strengthening human resources capabilities to meet theneeds of globalization(1) Progress in achieving KPIs
<KPI> At least 10 Japanese universities in the top 100 of world university
rankings in the next 10 years⇒ Of the five Japanese universities (within the top 200) in the Times Higher
Education World University Rankings 2013–2014 (published in October2013), four were ranked higher than the previous year.
<KPI> Offer full-time faculty positions to around 1,500 young and international
faculty members over the next three years⇒ Establishment of a new grant providing support for improvements to theeducation and research environment (start-up support).
<KPI> Double the number of Japanese students who study abroad from 60,000(2010) to 120,000 by 2020
⇒ The number of students dispatched overseas via the Government-sponsoredscholarship and grant system has doubled from around 10,000 to 20,000. In
addition,

1,700

students

from

221

universities

appliedforthenewly-established “TOBITATE! Young Ambassador Program” scholarshipand grant system funded by the private sector, with students due to begin theirperiod of study abroad in and after August 2014.
<KPI> Double the number of international students by 2020 (achieve the goal of
the 300,000 International Students Plan)⇒ Number of international students at Japanese universities, etc.: 135,519 (as of
May 2013)<KPI> 200 schools accredited to offer the International Baccalaureate (16schools accredited as of June 2013)⇒ The number of schools accredited to offer the International Baccalaureate has
increased to 19 (as of April 2014).
(2) Progress made in implementing measures(Steadily implementing university reforms based on the National University

68

Reform Plan)
・ University reform measures carried out on the basis of the National University
Reform Plan, which was put together in November 2013, include developingworld-class education and research, strengthening innovation functions,
expanding strategic and focused allocation of management expenses grants(allocation for reform initiatives at each university and sums dependent on this to
be increased by 30–40% by the end of FY2015), promoting the introduction ofannual salary and mixed-salary systems to increase the scope for active
participation by young and international researchers (expanded to cover 6,000
people in FY2014 and around 10,000 people in FY2015), enhancing the National
University Evaluation Committee system, and strengthening governancefunctions.
(Strengthening university innovation creation functions)・ The enactment of the Industry Competitiveness Enhancement Act in December
2013 has made it possible for national university corporations to invest in
university venture support funds and the like, and has established systems forstrengthening the innovation functions of national universities.
(Reforming university governance)
・ Regarding university governance reform, revisions to the School Education Act
and the National University Corporation Act were enacted in June 2014. These
revisions included measures strengthening the role of advisor to the president, tohelp to establish leadership by university presidents, as well as clarifying the roleof Faculty Councils and increasing the proportion of external members on theManagement Councils of National University Corporations.
(Improving the environment for significant increase of Japanese students
studying abroad / international students studying in Japan)
・ As well as endeavoring to cultivate opportunities for young generation to study
abroad via the “TOBITATE!”, Leap for Tomorrow! Study Abroad campaign,with a vision to double the number of Japanese students studying abroad by
2020, the Government has launched a new program for supporting overseas
study based on public-private collaboration, aimed at reducing the financial

69

burden on Japanese students who study abroad. In conjunction with this, in April
2014, relevant ministries and agencies finalized the “Action Plan for
Encouraging Young Generation to Study Abroad”, which aims for the creation ofsystematic, high-quality study abroad programs in the future. Moreover, with avision to double the number of international students studying in Japan by 2020
(to achieve the goal of the 300,000 International Students Plan), the Government
compiled the “Strategy on Accepting International Students to Take Advantage
of Global Growth” in December 2013, and decided on the priority regions andareas of the world in strategic efforts to host promising international students.
(Cultivating human resources that can meet the needs of globalization)
・ To strengthen the international competitiveness of universities, the Government
has established the Top Global University Project, which offers targeted support
to universities that compete in the world. In addition, to bolster English language
education in elementary and secondary education, the Government has begun toprovide support for the establishment of bases for introducing English language
education at an earlier stage in elementary schools and has launched initiatives toimprove the English-teaching skills of teaching staff. Furthermore, as well as
starting to develop educational programs for the International Baccalaureate
partially taught in Japanese (Dual Language IB Diploma Programme: English –Japanese), to cultivate the knowledge and abilities required for globalization, theGovernment has sought to expand the range of subjects in which these programs
are available. They are already beginning to be utilized, with some universities
having announced the introduction or enhancement of entrance examinations
based on the International Baccalaureate. The Government has also establishedSuper Global High School Program, which aims to cultivate global leaders whowill be able to play an active role on the international stage. In addition, in
January 2014, the Government put in place special provisions enabling such
schools to design distinctive academic programs that are not bound by theexisting criteria for academic programs.
(3) Specific new measures to be taken
To cultivate the human resources that will support the future of this nation, it isnecessary to further strengthen the university reform initiatives that have been
underway since 2013, as well as initiatives aimed at cultivating personnel with a70

global outlook. In conjunction with this, Japanese universities must be brought up to
the standard of the world’s best universities, in terms of both education and research,so that they can secure highly skilled foreign professionals.
Accordingly, as well as continuing to steadily implement university reforms, theGovernment will move forward with deliberations focused on the third mid-term
objective period (FY2016 onward). Moreover, while supporting Japanese nationals
in seeking posts with international organizations, the Government will put in place
initiatives aimed at strengthening the cultivation of human resources that can meetthe needs of globalization.
1) Steady implementation of university reforms and initiatives aimed atfurther reforms
While steadily implementing initiatives aimed at achieving the targets in the
National University Reform Plan, the Government will begin deliberations
within 2014, with a view to the fundamental review of approaches tomanagement expenses grants and evaluation during the third mid-term objective
period (FY2016 onward), and will reach a conclusion by the middle of 2015. In
doing so, the Government will flesh out the rules concerning focused andstrategic allocation of funds based on new indicators, with a view tostrengthening the functions of universities as bases for the development ofworld-class education and research, bases for nationwide education and research,and key bases for regional revitalization, taking into account the needs of bothindustry and individual regions. In conjunction with this, the Government will
promote reforms of personnel and salary systems, such as the introduction ofannual salary and mixed-salary systems. Moreover, now that a decade has passed
since the National University Corporation Act entered into force, theGovernment will consider the composition of president nomination committees
and other systems associated with the organization and running of national
university corporations, and will take the requisite steps if action is deemednecessary. In doing so, in light of the School Education Act and paragraph (2) of
the Supplementary Provisions Partially Revising the National University
Corporation Act, which were enacted this June, the Government will take into
account the status of the entry into force of the laws in question and changes inthe socioeconomic situation facing national university corporations.

71

In moving forward with the National University Reform Plan, the Government
will seek to strengthen the research capabilities of universities and develop
outstanding, internationally-competitive graduate schools. Accordingly, ahead of
FY2016, when the third mid-term objective period is due to begin, theGovernment will press on with efforts to strengthen governance functions andcultivate an environment conducive to constant reviews of the allocation of
resources within universities, as well as considering new mechanisms forbacking initiatives based on bold ideas from universities.
In conjunction with this, the Government will promote initiatives to ensurethat universities become hubs for their regions (and for knowledge), contributing
to efforts to resolve local problems, developing the human resources to support
the local community and feeding back research outcomes into that community. It
will also promote the development and implementation of professional programs
based on mutual commitment between universities, etc. and industry, whilemoving forward with the appointment of and collaboration with personnel
well-versed in management practices, such as business proprietors, and will seek
to popularize and firmly establish corporate internships, including those at
SMEs.
2) Strengthening human resources capabilities to meet the needs ofglobalization
Aiming to revise the Courses of Study in FY2016, with a view to earlier
English language education in elementary schools, the Government will consider
approaches to the teaching of English in elementary and secondary education,
including strengthening leadership and promoting the use of external personnel,
and will aim to compile its recommendations this autumn. The Government willseek to radically enhance the use of foreign nationals in the classroom, tofacilitate practical English language education. In addition, it will put in place anenvironment conducive to the provision of high-quality education at educational
institutions abroad and the acceptance of children who have returned home fromoverseas.
Moreover, through the Top Global University Project, which begins during
FY2014, the Government will support universities seeking to bolster theirinternational competitiveness via measures such as thorough internationalization72

of their personnel and academic systems, and will publish information about thestatus of initiatives. In conjunction with this, with a view to the introduction of
joint degrees offered by Japanese universities in partnership with foreign
universities, the Government will make the requisite institutional reforms within
2014, to facilitate the development of joint educational programs by such
universities. Furthermore, with the aim of doubling the number of Japanese
students who study abroad, the Government will promote efforts to develop an
environment that allows those students who so wish to participate in diverse,
long-term, experience-based activities within Japan and overseas, making use ofgap years and similar initiatives.
To enhance the appeal of studying in Japan and to host promising international
students, with a vision to achieve the goal of the 300,000 International Students
Plan, the Government will provide support for the student residences and social
facilities where Japanese and international students can interact. In addition, it
will boost its support for improving the host environment, including the creationof opportunities for exchange between Japanese and international students, theconstruction of common basis for establishing overseas offices and supporting
job placement, and the promotion of Japanese language education.

73

3. Promoting innovation in science and technology / Becoming the world’s leading
intellectual property-based nation(1) Progress in achieving KPIs
<KPI> Become the No. 1 global innovator within the next five years: No. 5 in the
2012-2013 ranking⇒ 2013-2014: No. 5* The Government amended laws and took other steps to reinforce theheadquarter functions on science and technology, and will also establish a new
Research and Development Corporation system. The Government is currently
undertaking initiatives to strengthen the “bridging” functions of innovativetechnology seeds to commercialization.
<KPI> Reduce the time required to acquire patent rights to no more than 36
months by the end of FY2015⇒ Proportion of rights acquired within 36 months in 2013: 92.4%(Proportion as of December 2012: 80.9%)<KPI> Increase the number of chair/secretariat posts held by Japan withininternational standardization organizations so that it is No. 3 worldwide(95 posts) by the end of 2015
⇒ Figure as of the end of FY2013: 94 posts(2) Progress made in implementing measures(Reinforcing headquarterfunctions of the Council for Science and Technology
Policy)・ As well as establishing the Science, Technology and Innovation Budget Strategy
Committee,theGovernment

has

createdCross-ministerial

Strategic

Innovation-Promotion Program (SIP) worth a total of ¥50 billion, and has
allocated budget funds to the Cabinet Office, to facilitate the practical realizationof research and development outcomes and ensure the allocation of resources
across ministerial boundaries, based on the growth strategy. Furthermore,
following the enactment of the amendment bill of the Act for Establishment of
the Cabinet Office in April 2014, the Council has been reorganized into theCouncil for Science, Technology and Innovation (CSTI).
(Founding of the Impulsing PAradigm Change through Disruptive Technologies
74

program)・ The Government has founded the Impulsing PAradigm Change throughDisruptive Technologies (ImPACT) program, which seeks to create theinnovation that will bring about major changes in the state of industry andsociety, and the necessary legal amendment (Amendment of the Act on theJapan Science and Technology Agency, Independent Administrative Agency)
was enacted in February 2014.
(Establishing a new, world top-level Research and Development Corporation
system )・ In December 2013, to enhance the functions of Research and Development
Corporation, the Cabinet approved the establishment of a new, world top-level
Research and Development Corporation system with the primary objective of
maximizing research and development outcomes. Accordingly, the amendment
bills of the Act on General Rules for Incorporated Administrative Agency andthe Act for making the necessary arrangements therefor were enacted this June.
(Bringing the patent examination waiting time down to no more than 11 months
and developing internationally-compatible authentication infrastructure)
・ As a means of strengthening the nation’s intellectual property andstandardization strategies, the Government has sought to enhance and strengthen
the examination system by such means as securing fixed-term examiners.
Through these efforts, it succeeded in bringing down the patent examination
waiting time to no more than 11 months by the end of FY2013. Moreover,amendment bills of the Patent Act and other legislation were enacted this April,to facilitate the revision of the design rights system in accordance with the
Hague

Agreement.

Furthermore,theGovernment

began

developing

internationally-compatible authentication infrastructure in strategically importantfields such as smart grids.
(3) Specific new measures to be taken
Under the initiatives launched to date, the Government has already started toenhance systems, includingreinforcing the headquarter functions on science andtechnology , as well as boosting functions that will help to create the innovation thatwill transform industry and society, and putting in place environments conductive to75this. However, it is still necessary to develop mechanisms for generating a constantstream of innovative technological seeds and facilitating the commercialization of
those seeds.
Creating an environment that ensures that Japan constantly generates innovation
is essential to ensure that our nation will still be a leader in the global economy 30 oreven 50 years from now, despite the aging of our population and the declining
birthrate. To make Japan the world’s most innovation-friendly country, theGovernment will strengthen the following measures as a priority, promoting theComprehensive Strategy on Science, Technology and Innovation 2014 (approved by
the Cabinet on June 24, 2014) and giving particularly strong backing to the content
of the Strategy for Reforming Japan’s System of National Innovation, which wascompiled this April. Moreover, the Government will promote research anddevelopment investment consistent with these strategies and based on the Japan
Revitalization Strategy, which sets a target for total research and development
investment by the public and private sectors (at least 4% of GDP) and the target
level of government research and development investment (1% of GDP). It will also
continue to promote the SIP and ImPACT, which are the focus of efforts by theGovernment as a whole from FY2014, aiming to achieve outcomes that will bringabout a transformation in society.
In addition, based on the national strategy, it will build collaborative frameworks
that cut through vertical administrative hierarchies and organizational boundaries,
and will create centers for innovation that bring together and circulate personnel
from the worlds of industry, academia, and government, as well as developing
global-top class, cutting-edge complexes for industry-academia-government
collaboration.
Furthermore, in creating innovation, it is essential to engage in strategic
consideration of the handling of intellectual property and efforts to promote
standardization, such as appropriately tailoring the use of patent rights, trade andtechnology secrets, and international standardization, and seeking to maximize
business value and improve Japan’s international advantage, with the aim ofestablishing Japan as the world’s leading intellectual property-based country. The
Government will strengthen intellectual property and standardization initiatives
focused on maximizing national wealth, making effective use of research anddevelopment outcomes so that they do not simply lie idle or dormant.

76i) Development of an environment that generates innovation
The National Institute of Advanced Industrial Science and Technology (AIST)
and the New Energy and Industrial Technology Development Organization(NEDO) are expected to serve as pioneers, so they will be at the forefront ofefforts to strengthen “bridging” functions of innovative technological seeds tocommercialization. The Government will appropriately ascertain and evaluate
the progress of these pioneering initiatives and, based on the results, will rollthem out to other Research and Development Corporations deemed suitable totake on “bridging” functions, taking into account the fields on which they focus
and the nature of the operations of each corporation. In doing so, theGovernment will emphasize the acquisition of private sector funds. It will aim toachieve a 30% increase within five years in the number of large-scale joint
research projects (those in which the university, etc. receives at least ¥10
million) undertaken by universities or Research and Development Corporations
in partnership with companies.
In addition, the Government will seek to create an environment that willstrongly promote open innovation, aiming to facilitate agile innovation that willallow companies to break free of their overemphasis on self-sufficiency andself-containment in technology.
Furthermore, in promoting the National University Reform Plan, theGovernment will seek to shape develop outstanding graduate schools, taking into
account each university’s strengths and focusing on both those fields and new
realms that combine those fields.
1) Strengthening of “bridging” functions and other reforms of national
research institutes
Reforms focused on AIST will include making funding from companies a
basic element, such as commissioned research in the latter stages of research,setting research themes that reflect future needs of enterprises and enhancing
marketing functions to this end, establishing the basic principle of intellectual
property management by AIST, and prioritizing the acquisition of funds fromprivate sector companies. As part of these reforms, to facilitate a greater
emphasis on the acquisition of funds from private sector companies, the77Government will consider setting numerical targets for AIST’s commissioned
research and other income from companies, with a view to tripling or
quadrupling it from the current figure. Germany’s Fraunhofer Institutes willserve as a point of reference in these deliberations.
Moreover, at NEDO, the Government will promote reforms to encourage
the rapid commercialization of technology seeds. These reforms will include
strengthening project management by granting substantial authority to project
managers and introducing an award-based mechanism, as well as bolstering
support for the venture companies, medium enterprises and SMEs that are
expected to become the new leaders of innovation. In doing so, theGovernment will consider setting numerical targets for the proportion of
NEDO’s funds allocated to newly-adopted projects that is offered to support
venture companies, medium enterprises and SMEs, with a view to bringing
this ratio up to around 20%, in line with major European nations.
2) Fusion of knowledge through use of the cross-appointment system, etc.
The Government will actively seek to introduce and utilize thecross-appointment system (a system that allows researchers to carry out
researches under the responsibility of both universities and other institutes bysigning employment contracts with both of the entities respectively) acrossuniversities and Research and Development Corporations. This will help toenhance the mobility of personnel and technology between industry,
academia, and government, and ensure Research and Development
Corporations smoothly bridge the technology seeds created at universities tocommercialization. Accordingly, the Government will make the necessary
upgrades to the environment within FY2014, focusing on efforts to promote
the introduction of the annual salary system, the handling of medical
insurance, pensions, and lump-sum retirement allowances, and the
management of trade secrets and intellectual property.
3) Restructuring of the research funding system
To create innovation, it is necessary to promote creative, diverse researchby researchers and research and development focused on core technology,
thereby strengthening the ability to create technological seeds. The

78

Government will embark on reforms of the research funding system,
including the Grants-in-Aid for Scientific Research (KAKENHI), to expand
opportunities for young researchers and female researchers to tackle research,and put in place a competitive research and development environment.
Moreover, the Council for Science, Technology and Innovation will play acentral role in deliberations concerning research funding, including suchmatters as approaches to competitive funds that enable researchers to devote
themselves to research activities and conduct seamless research from thebasic stage right through to the practical application stage. The outcomes ofthese deliberations will be reflected in the next Science and Technology
Basic Plan.
4) Establishment of a new Research and Development Corporation system
With a view to implementation of the new Research and Development
Corporation system from FY2015, in accordance with the Basic Policy on
Incorporated Administrative Agency Reform, etc., the Government will
formulate concrete measures aimed at achieving operational improvements asquickly as possible in such areas as the handling of remuneration and salaries,
procurement, and self-generated income. In addition, it will endeavor to
submit to the Diet as quickly as possible a bill aimed at instituting a system
of Special National Research and Development Corporation (tentative name),
which are expected to create outcomes of world top-level.
5) Strengthening of research promotion systems
Fund allocation organizations will be at the heart of deliberations
concerning a mechanism for the stable, ongoing acquisition and cultivation
nationwide of personnel who are capable of managing and supporting
research, and for providing them with places where they can make full use of
their abilities. The Government will launch this mechanism in FY2015.
ii) Promotion of intellectual property and standardization strategies
In terms of promoting intellectual property and standardization strategies, theGovernment will accelerate deliberations aimed at establishing the world’s
fastest, highest-quality intellectual property system, including the revision of the79

employee invention system, the strengthening of protection for trade secrets, andthe cultivation of personnel with an in-depth knowledge of intellectual property.
1) Strengthening of the employee invention system and protection for trade
secrets
As well as aiming for prompt submission to the Diet of bills concerning
improvements to the employee invention system (for example, attributing
patent rights to companies), with a view to combining advantages forcompanies with incentives for inventors, the Government will consider
highly-effective measures to prevent the leakage of trade secrets, based on
initiatives undertaken via collaboration between the public and private
sectors. Endeavoring to give concrete shape to these measures as soon as
possible, it will aim to submit relevant bills to the next ordinary Diet session
and to revise Trade Secret Management Guidelines within 2014.
2) Achievement of high-quality examination at speeds comparable to othercountries
Over the next 10 years, the Government will aim to halve the time it takes
to acquire patent rights to no more than 14 months, on average. In addition, it
will aim to realize the world’s fastest, highest-quality patent examination via
initiatives such as the introduction of a system with objective quality control
by external experts. Moreover, to achieve international standardization andsimplification of application procedures, the Government will consider sometime around FY2015 accession to the Patent Law Treaty and the Singapore
Treaty

on

the

Law

of

Trademarks.

It

will

also

promotetheinternationalization of Japan’s intellectual property system through initiatives
such as the development of a scheme for cooperation in the building andrunning of intellectual property systems in the countries of Asia. In
conjunction with this, to facilitate internationalization, the Government willconsider efforts to strengthen functions to revitalize trade involving thepatents owned by universities and companies, and promote their utilizationand commercialization by SMEs, etc.
3) Construction of a standardization system tailored to new market

80

creation
Based on the Public-Private Strategy for Standardization, the Government
will develop within FY2014 a standardization system tailored to new market
creation. This will be a mechanism for integrated standardization that cuts
across the boundaries between ministries and agencies, and those between
industrial fields, focusing on areas in which existing industry groups havefound standardization difficult to achieve, such as fusion technologies thatspan multiple fields and the advanced technologies of medium enterprises
and SMEs that will lead to the acquisition of global markets.
iii) Achievement of a new Industrial Revolution driven by robots
Issues that Japanese companies need to resolve as a matter of urgency include
strengthening competitiveness in the fields of manufacturing and service, where
they are exposed to cost competition on a global scale; securing workers in small
and medium-sized manufacturing industry, where the average age of workers isincreasing, and in areas of personnel shortage, such as the medical and nursing
care service industry, agriculture, and construction; and achieving greater
logistical efficiency. The Government will therefore seek to improve
productivity through the utilization of robot technology, thereby improving the
profitability of companies and helping to raise wages.
Accordingly, mobilizing this country’s wisdom, the Government will set up a
Robot Revolution Realization Council to consider specific measures in light ofneeds on the ground and formulate a five-year action plan. Moreover, theGovernment will seek to expand the robot market two-fold from the present sizein the manufacturing area and 20-fold in the non-manufacturing area including
services by 2020, via technology development, deregulation, and standardization.
Furthermore, throughout these initiatives, the Government will aim to improve
productivity in various fields; for example, it will aim for annual laborproductivity increases of at least 2% in the manufacturing sector.
In addition, it will promote Japan’s cutting-edge technology worldwide,
including universal design and robots in various fields, such as robot suits anddisaster response robots, with a view to holding a Robot Olympics (tentativename) in conjunction with the 2020 Tokyo Olympics and Paralympics.

81

4. Becoming the world’s leading IT society(1) Progress in achieving KPIs
<KPI> Achieve the world’s highest level of public data disclosure in amachine-readable way (with a dataset totaling over 10,000) by the end of2015⇒ The trial version of the data catalog site has achieved a dataset in excess of
10,000.
(2) Progress made in implementing measures(Deciding policy concerning the reform of regulations/systems and theutilization of personal data)
・ In December 2013, the IT Strategic Headquarters approved the Intensive Action
Plan for Regulatory and Institutional Reforms to Expand Utilization of IT, aimed
at the reform of regulations and systems impeding efforts to expand IT
utilization. In addition, the Headquarters also approved the Directions on
Institutional Revision for Protection and Utilization of Personal Data that samemonth, with the aim of improving the environment for the utilization of open
data and big data.
(Launching a trial data catalog site)
・ With regard to public data disclosure, the trial version of the data catalog site(data.go.jp) was launched in December 2013 and has already met its KPI of adataset in excess of 10,000.
(Promoting reform of government information systems, etc.)
・ Other measures underway include the approval of the Roadmap for Reform ofgovernment Information Systems (December 2013), aimed at consolidating
overlapping government information systems and moving them into the cloud;the compilation of the Measures concerningthe Roadmap of the Declaration to
be the World’s Most Advanced IT Nation (October 2013), which identify theissues to be tackled with a view to comprehensive measures that cut across a
range of fields; and the formulation of the International Strategy on
Cybersecurity Cooperation (October 2013).
(3) Specific new measures to be taken

82

Most of the initiatives implemented to date could be described as preparatory
measures laying the ground for fully-fledged reforms, but initiatives in this area are
now moving into the implementation stage of fully-fledged reforms aimed at turning
Japan into the world’s leading IT society. Accordingly, the Government will carryout the following measures, sparing no effort in promoting the Declaration to be theWorld’s Most Advanced IT Nation.
1) Formulation of the Guidelines on Introducing IT Communication (tentative
name)
The Government will steadily implement its action plan for the reform of
regulations and systems impeding efforts to expand IT utilization. Moreover, by
next summer, based on changes of social environment with evolution of IT, it
will formulate guidelines (the Guidelines on Introducing IT Communication(tentative name)) for marshaling basic ways of thinking concerning the potential
for the utilization of IT and necessary measures at the time about procedures forwhich the use of IT has not hitherto been considered. In addition, by moving
forward with verification of conventional procedures using the Guidelines as ayardstick, it will accelerate revisions of relevant systems including services andprocedures which are based on face-to-face meeting or the exchange of hard
copy documents.
2) Development of systems aimed at appropriate utilization of personal data
To promote the utilization of personal data while protecting personal
information and privacy in the era of big data, the Government will put together
policy outline concerning the content of legal reforms, concerning such mattersas the development of an independent third-party authority system and thehandling of data with reduced possibility of certain individuals being identified,based on the Directions on Institutional Revision for Protection and Utilizationof Personal Data. Once this has been done, the Government will aim to take thenecessary legal measures by the next ordinary Diet session.
.
3) Proactive use of the My Number system
The Government will accelerate initiatives focused on the use of the My
Number system, which is scheduled to begin operating in January 2016, and thedevelopment of a system for disclosure of information access logs (dubbed “MyPortal”), which is expected to launch in January 2017 or thereabouts.
83

The Government will consider initiatives aimed at ensuring widespread use by
citizens of the My Number cards to be introduced in conjunction with the My
Number system, by such means as integrating these cards with cards used toaccess public services or as proof of a qualification and will clarify the approach
it intends to take by January 2016, when the My Number cards will begin to beissued.
Moreover, it will consider the approaches to the use of My Number in fields ofa highly public nature, such as finance, health and medical and nursing care,family registers, passports, and vehicle registration, taking into account the needto protect personal information. In doing so, it will consider both the advantagesof using My Number and the challenges posed by its use, and will clarify its
approach to expanding the scope of use of My Number within FY2014.
Furthermore, the Government will make progress with efforts to enable thecorporate ID numbers that will begin operating in 2016 to be used atadministrative bodies, and will also begin operating a Corporate Portal in
January 2017, which will enable a company to search for and view the
information held by administrative bodies, etc. concerning the company inquestion, as well as allowing companies to carry out various procedures online.
Regarding the reform of government information systems, under theleadership of the Government CIO, the Government will actively promote
radical reductions in costs including the reform of legacy systems, BPR(business process re-engineering) with a view of users, proactive use of the cloudand increasing the convenience of online procedures. It will accelerate efforts tointroduce cloud-based local authority information systems and will aim to double
the number of municipalities in which the cloud has been introduced (to around
1,000) by FY2017. Moreover, within FY2014, the Government will encourage
innovative change in the work styles of government employees by developing
integrated remote access functions based on a common government platform andsimilar infrastructure, allowing government employees to access LANs withingovernment buildings from outside those buildings.
The Government will facilitate the online statistical surveys. In particular, forthe 2015 national census, it will introduce the nationwide internet response
system for computers and smartphones, for improving the convenience of the
respondents to complete the questionnaires and the quality of the census data bychecking automatically.
4) Preparing of the free public wireless LAN environment as infrastructure for
new innovations
84

With the 2020 Tokyo Olympics and Paralympics in mind, the Government will
promote the preparing of the free public wireless LAN environments at tourist
attractions and disaster prevention bases, to provide generous hospitality services
to foreign tourists visiting Japan and promote the creation of new innovations.
Accordingly, by this summer, the Government will establish a framework for
promoting such efforts with the participation of relevant business operators andgroups. In addition, the following measures will be promoted by the framework:
to encourage area owners to prepare the environment, consider ways to simplify
and standardize authentication procedures, disseminate information overseas,
and the national government will support local governments, etc. that are
preparing the environment.
Moreover, to ensure diverse means of communication tailored to people’s needs, theGovernment will move forward with deliberations concerning the improvementof procedures for the usage of domestic SIM cards, efforts to reduce internationalroaming service charges, and other measures to facilitate use of terminals
brought into the country temporarily by foreign tourists visiting Japan, and willtake the necessary steps including legislative measures during the next ordinary
Diet session.
5) Strengthening cyber-security promotion systems, etc.
In order to ensure the free flow of information, safety and reliability in IT
usage for that purpose, and to ascertain Growth Strategy, the Government shallfundamentally strengthen the system and its function so that it can take strong
leadership in promoting cyber-security. Accordingly, the Government will
deepen the consideration including legal framework, and take necessary
legislative and other measures by FY 2015.
Moreover, in order to solve the shortage of cyber-security human resources
and to secure outstandingly skilled engineers, the Government shall takenecessary steps by FY2016 based on the New information Security Human
Resource Development Program (approved by the Information Security Policy
Council in May 2014) such as reviewing the Information Technology Engineer
Examination.
6) Development of an environment in which the utilization of big data will
generate value
To further encourage the creation of business and resolution of social issues

85through proactive use of big data, the Government will put in place anenvironment conducive to the creation of new value via the sharing andcollaboration of data held by administrative bodies and private sector companies
across organizational boundaries.
Accordingly, the Government will establish rules concerning the use of the
G-space platform. The G-space platform, the operation will launch in FY2016,
will be consolidated data from space infrastructure such as quasi-zenith satellites
and geospatial information held by individual operators, such as the positional
information held by mobile phone operators, etc. and users will be able to searchand use this information.
Moreover, within FY2014, the Government will put in place a public cloudthat consolidates and discloses the data held by all 1,788 local governments, andwill promote private sector access to these public data.

865. Further strengthening Japan’s international competitiveness as a business hub
5-1. Realizing National Strategic Special Zones / Opening up rights to operate
public facilities, etc. to the private sector (expanding utilization of PPP/PFI) /Improving infrastructure such as airports, ports and harbors / Improving
competitiveness of cities(1) Progress in achieving KPIs
<KPI> Japan in the top three OECD member countries in the World Bank’s
Ease of Doing Business ranking by 2020 (15th in 2013)⇒ 2014: 15th (same as the previous year)*Although there were decreases in the time required for procedures in the“starting a business” and “registering property” topics, these were quite small;in addition, there were no improvements in the “getting electricity,” “dealing
with construction permits,” “getting credit,” “protecting investors,” “paying
taxes,” “enforcing contracts,” and “resolving insolvency” topics, so Japan held
the same position as the previous year.
*The 2014 rankings were published in October 2013.
<KPI> Tokyo in the top three of Global Power Inner City Index by 2020 (4th in2012)⇒ 2013: Tokyo was 4th (same as the previous year)*Tokyo maintained good ratings in such categories as “punctuality of public
transportation” (1st → 1st) and “number of registered industrial property rights”(2nd → 1st). It improved from 17th to 10th in the “wage level” category.
Tokyo continued to rank poorly in categories such as “corporate tax rate” (32nd→ 32nd) and “travel time between inner-city areas and international airports”(31st → 31st).
<KPI> Expand PPP/PFI programs to ¥12 trillion over the next 10 years(2013–2022) (¥4.1 trillion by FY2012)⇒
In June 2014, the Government formulated a policy on initiatives to be
implemented over the next three years. This brought forward to the intensive
implementation period designated to run until the end of FY2016 the target of
implementing over the 10 years to 2022 ¥2–3 trillion worth of concession PFI
projects. In addition, it specified priority initiatives.

<KPI> Double foreign companies’ direct investment in Japan to ¥35 trillion by2020 (¥17.8 trillion as of the end of 2012)⇒ As of the end of 2013: ¥18.0 trillion87

(2) Progress made in implementing measures(Progress and current status of the National Strategic Special Zones)
・ In December 2013, the Act on National Strategic Special Zones was passed,
concerning the National Strategic Special Zones that are to serve as the gateway
for bold regulatory reforms. Moreover, six specific National Strategic Special
Zones were identified in March, in accordance with the Basic Policy on National
Strategic Special Zones (approved by the Cabinet in February 2014), namely:-

The Tokyo zone (nine wards in the Tokyo metropolitan area, Kanagawa
Prefecture, and Narita City in Chiba Prefecture) and the Kansai zone (Osaka
Prefecture, Hyogo Prefecture, Kyoto Prefecture), where comprehensive
regulatory reform will be carried out to establish the zones as bases forinternational business and innovation;-

The Niigata City zone in Niigata Prefecture, the Yabu City zone in Hyogo
Prefecture, and the Fukuoka City zone in Fukuoka Prefecture, which will
become bases for the reform of the bedrock of Japan’s regulatory regime in
the areas of agriculture and employment; and-The Okinawa Prefecture zone, which will become a base for tourism-focusedbusiness that makes use of the region’s strengths.
(The Cabinet Order concerning the zones themselves and the policy on the zones
was promulgated and entered into force on May 1, 2014 and was approved by
the Prime Minister the same day.)・ Zone Councils consisting of representatives of the national government, local
authorities, and the private sector have been set up in the Kansai zone and the
Fukuoka City zone and are preparing Zone Plans detailing the specific areas forregulatory reform and projects, etc. to be implemented.
Zone Councils are due to be established swiftly in a number of the other zones
as well.
・ As well as promptly seeking the expansion of the Tokyo zone within the Tokyo
metropolitan area, the Government will further enhance the content of areas forregulatory reform in the Okinawa Prefecture zone, seeking to promote
tourism-focused business and form a base for innovation.
・ In addition, in April, the Government formulated the Employment Guideline,
which offers analyses and classifications of judicial precedents regarding labor
relations, explanations of relevant legal systems, and advice to prevent disputes,

88

in accordance with the Act on National Strategic Special Zones. The aim of the
Guideline is to help global companies and newly-established enterprises gain aproper understanding of the rules of employment in Japan and increase
predictability, as well as facilitating business development without causing
labor-related disputes.
(Enacting laws aimed at promoting PPP/PFI and approving the Policy on
Initiatives)・ Regarding the use of PPP/PFI, the Private Finance Initiative Promotion
Corporation of Japan (PFI Promotion Corporation) was established in October
2013 to promote PFI projects which collect user fees from users in Japan. In
addition, the first steps are being taken toward implementation atgovernment-managed airports, as well as Kansai Airport and Itami Airport, in
accordance

with

the

Act

on

the

PrivateSectorOperationofgovernment-managed Airports, etc., which was enacted in June 2013. These
steps include the publication this April of the Implementation Policy on the
Qualified Project Etc. for Sendai Airport Operation. Moreover, in June 2014, theCouncil for the Promotion of Private Finance Initiatives approved the Policy on
Initiatives During the Intensive Implementation Period of the Action Plan
Toward the Fundamental Reform of PPP/PFI (hereinafter referred to as the“Policy on Initiatives”).
・ The revisions to the Road Act aimed at integrated regeneration of cities andexpressways were enacted in May 2014 and the Government is considering
matters including collaboration with urban regeneration projects, by such means
as relaxing floor-area ratios in order to attract private sector investment.
(Establishing the Basic Plan on Transport Policy to enhance international
competitiveness)
・ The Basic Act on Transport Policy, which prescribes the basic framework forcomprehensive transport policy, was enacted in November 2013 and the Cabinet
will establish the Basic Plan on Transport Policy based on the Act within 2014.
Various measures will be implemented in accordance with this plan, with theaim of enhancing Japan’s international competitiveness.

89

(Enhancing the functions of airports in the Tokyo Metropolitan area andInternational Container Hub, and promoting upgrades to the Ken-O
Expressway)
・ During the past fiscal year, with the objective of enhancing the functions of
airports in the Tokyo metropolitan area, the Government has promoted the
expansion of the air route network, by increasing the number of international
flights at Haneda Airport by 30,000 landing slots and also by increasing thenumber of the domestic services connecting the three metropolitan areas andlocal cities by getting LCC (low-cost carriers) into the market. To enhance thefunctions of International Container Hub, revisions to the Port and Harbor Act
permitting state investment in port operation company were enacted in April
2014. In addition, the Ken-O Expressway (Metropolitan Inter-City Expressway)
link between the Tomei Expressway, Chuo Expressway, and the Kan-Etsu
Expressway will be completed this June.
・(Promoting the formation of compact cities with public transport networks)
・ Regarding efforts to improve the competitiveness of cities, revisions to the Act
on Special Measures concerning Urban Reconstruction and the Act on
Revitalization and Rehabilitation of Local Public Transportation Systems wereenacted in May 2014. The Government is building systems to provide
comprehensive support to the local governments preparing siting adjustment
plans and local public transport network development plans based on these laws.
In addition, it is promoting the formation of compact cities with public transport
networks in tandem with the city center revitalization basic plans that are being
formulated on the basis of the revisions to the Act on Vitalization in City Center,
which were enacted in April 2014.
(3) Specific new measures to be taken
Regarding the National Strategic Special Zones, which will be at the heart ofmeasures aimed at strengthening Japan’s competitiveness as a business hub, theGovernment will complete its efforts to put in place the basic systems via theinitiatives introduced to date, and the implementation phase of projects in eachspecial zone will soon begin. The Government will embark upon fully-fledged
initiatives to promote further utilization of PPP/PFI, including setting targets for theintensive implementation period and resolving issues. Moreover, with a view to90

creating some of the best cities in the world in which to do business, theGovernment will enhance industrial infrastructure functions through efforts tofurther improve the competitiveness of Japan’s cities and the prompt development
and utilization of high-speed transport networks, including arterial high-standard
highways, new shinkansen high-speed train lines, and the Chuo Shinkansen maglev
line.
i) Corporation tax reform
The Government will seek both to strengthen Japan’s own competitiveness asa business hub and to enhance the competitiveness of Japanese companies. As
part of these endeavors, it will embark on growth-oriented reforms of thecorporation tax system, with the aim of bringing the effective corporation tax
rate down to a level comparable with that of other countries.
Accordingly, it will aim to bring the effective corporation tax rate down to the
20% range over a number of years. These reductions will begin in FY2015.
The Government will secure permanent revenues to fund this reduction
through the broadening of the tax base, to ensure consistency with the target ofachieving a surplus in the primary balance in FY2020, taking into account suchmatters as the fact that Abenomics is promoting structural improvements andenabling the Japanese economy to overcome deflation. As such, the Government
will conduct discussions on this subject over the remainder of 2014 and will
formulate a concrete plan of action.
As it implements this plan, the Government will check on progress toward theachievement of targets, in light of the need to bring the primary balances of boththe national government and local governments back into the black in FY2020.
ii) Accelerated promotion of National Strategic Special Zones
The two years to the end of FY2015 have been designated as the period of
intensive initiatives relating to the National Strategic Special Zones, which will
open the way to reform of the bedrock of Japan’s regulatory regime in general.
In order to achieve this within what remains of this period, it is necessary tocompile the Priority Issues and Schedule for Reforms of the Bedrock of Japan’s
Regulatory Regime without delay and accelerate various initiatives concerning
the National Strategic Special Zones, including the following measures, ensuring
a flexible and speedy response to the need for specific projects and proposals.
91a) Fleshing out and implementing projects without delay
To ensure that initiatives in the National Strategic Special Zones begin todemonstrate results without delay, it is necessary to implement specified
projects involving regulatory reforms in each zone without delay. To this end,
Zone Plans detailing the specified projects and special measures concerning
regulations must be prepared swiftly by the Zone Council in each zone, on
the basis of cooperation and consensus between the national government,
local authorities, and the private sector. Prompt authorization by the Prime
Minister will then be required.
Accordingly, following on from the Kansai zone and the Fukuoka City
zone, Zone Councils will be set up without delay in the other zones andefforts made to ensure their smooth operation, so that work on preparing theplans can begin in each zone. Moreover, the Government will conduct
authorization procedures promptly, so that the earliest specified projects can
get underway this autumn.
b) Implementing further regulatory reforms
In terms of the areas requiring regulatory reform specified in the Policy on
Deliberations Concerning Areas for Regulatory Reform in the National
Strategic Special Zones, the Government will use all available measuresthroughout the six zones to steadily implement powerful regulatory reforms
in the areas of medical care, employment, education, urban regeneration anddevelopment, agriculture, and utilization of historic buildings.
Moreover, taking into account proposals from local authorities and theprivate sector, including those not adopted to date, the National StrategicSpecial Zone Advisory Council and the National Strategic Special Zone
Working Group will consider the following regulatory reforms to be tackled
in the National Strategic Special Zones, examining which should be added to
the Act on National Strategic Special Zones, etc. Based on these deliberations,the relevant legislative measures will be taken without delay, including in thenext Diet session.
Furthermore, the Government will combine these with special measures tobe introduced within the special zones, as well as regulatory and institutional
reforms to be applied nationwide, with a view to achieving reforms either
nationwide or at least within the special zones.

92

At the same time, the Government will, where necessary, proactively
consider regions not designated as National Strategic Special Zones andregulatory reforms that have not yet been included, with a view toimplementing them as regulatory reforms in Comprehensive Special Zones
or Special Zones for Structural Reform, or as nationwide reforms.
Moreover, given that the Basic Policy on National Strategic Special Zones
requires that proposals be solicited at least twice a year, the Government will
solicit proposals from local authorities and private sector bodies nationwide
this summer.

(Improving access to diverse human resources, trade, and investment)
1) Simplifying and expediting of procedures for establishing a
corporation
・ To encourage entrepreneurship and business startups – including byforeign nationals – in the National Strategic Special Zones, the Zone
Councils, etc. will establish “one-stop centers” without delay, to serve
as a single point of contact for all of the procedures required inrelation to such matters as business registration, tax administration,andpensions,

offering

relevant

consultation

services,andcomprehensive support concerning the various procedures that
foreign nationals need to complete when living in Japan.
・ As well as ensuring that applicants themselves are aware that they cancomplete these procedures at said centers, the Zone Councils will takethe necessary steps, including publicizing through manuals andpublicity matter explaining how to go about the procedures inquestion.
・ In conjunction with this, to alleviate the burden on business foundersof having to go to a notary public’s office to certify the articles ofincorporation in person, the Government will consider the requisite
measures – including the necessity of legal measures – for enablingnotaries public in National Strategic Special Zones to carry out
notarization in person not only at their own office, but also at the
aforementioned one-stop centers, where certification of electronic
articles of incorporation has been commissioned online. The
93

Government will consider the requisite measures, including
considering the necessity of legislative actions, and reach aconclusion on this matter without delay.
2) Strengthening of global financial supervisory functions
・ To turn Japan’s financial and capital markets into a true global center,
while tapping into Asian growth, the Government will, without delay,
publish English-language versions of finance-related legislation andguidelines, as well as offering one-stop administrative services(responding to inquiries about legislation, etc.) in English. Moreover,the Government will support initiatives in the National StrategicSpecial Zones aimed at improving their appeal as financial centers,such as establishing a Japanese version of the Lord Mayor of London,
who can conduct PR activities targeting other countries.
・ To encourage financial institutions to offer loans with a high regard
for feasibility, without an unnecessarily high reliance on guarantees orcollateral, etc., the Government will aim to ensure appropriate
operation of the Supervisory Policies and Basic Policy for Financial
Monitoring. In addition, it will continue to consider approaches toappropriate inspection techniques and will encourage the utilizationof the Guidelines on Proprietor Guarantees by financial institutions.
[Described below] (Described in “6. Achieving regional economic
revitalization and regional structural reform / Achieving reform
among mid-ranking companies, SMEs and micro enterprises”)
3) Deregulation in the bus sector to improve airport access・ In the case of access buses departing from or destined for airports
within National Strategic Special Zones, the Government will switch
bus fares from an upper limit approval system to a prior notification
system, if a competitive environment between operators is guaranteed.
In addition, as well as giving operators greater flexibility in setting
fares, including those for daytime operation and surcharges forlate-night operation, the Government will, without delay, take therequisite steps to make procedures more flexible, by such means as94

reducing the operating plan (timetable) submission period.
4) Promotion of the establishment of integrated bonded areas
・ The Government will consider the possibility of realizing, and reach aconclusion without delay on, operations between facilities in bonded
areas of different land owners (or management companies) as anintegrated bonded area in order to establish a system to carry out not
only the collection of domestic and international cargo but also
development and processing, business discussions as well as transport
and trade among manufacturing plans and other facilities locatedsome distance away in seamless ways through making seaports andairports with international logistic functions into integrated importand export bases, when approving bonded areas in National StrategicSpecial Zones.
5) Expediting of immigration procedures・ To expedite and facilitate immigration procedures, the Government
will consider measures based on cooperation with the private sector
and local governments aimed at enhancing outsourcing of services
relating to immigration screening to the private sector in National
Strategic Special Zones and will begin implementing any feasible
measures.
(Development of an environment conducive to meaningful and active
participation in society by women and young people, including support
for founding businesses)
6) Utilization of foreign housekeeping support workers to promote
active social participation by women and meet the need forhousekeeping support
・ Foreign housekeeping support workers are currently only permitted toenter and remain in the country if they are employed by foreign
nationals such as diplomats and highly skilled professionals. However,the Government will conduct deliberations focused on enabling
foreign housekeeping support workers employed by a company
providing housekeeping support services to enter and remain in the95country even in cases in which the purpose is to provide
housekeeping support to Japanese nationals. Such initiatives would beundertaken in National Strategic Special Zones on a trial basis, within
the framework of a system managed by local authorities, with a viewto promoting active social participation by women, meeting their needfor assistance with housework, and encouraging medium- tolong-term economic growth. To this end, the Government will
implement the requisite measures without delay.
・ In conjunction with this, the Government will include specificprograms in the National Strategic Special Zone Plans for the
aforementioned Kansai and other zones, which are due to be
formulated without delay, and will seek to implement these regulatory
reforms promptly.
7) New mechanisms for accepting entrepreneurs and diverse foreign
nationals in the National Strategic Special Zones
・ To encourage the acceptance of foreign entrepreneurs and staff inJapan, the Government will review the current requirement for theInvestor / Business Manager visa category (namely the need to either
employ at least two full-time employees or to invest a minimum
amount (¥5 million) from the outset) in the National Strategic Special
Zones, within the framework of a system managed by local
authorities. After ensuring the transparency of the system, theGovernment will permit entrepreneurs and others involved inbusiness startups to enter and remain in the country on condition thatthey meet these requirements within a certain period, and will
implement the requisite measures without delay.
・ Moreover, to encourage even greater acceptance of diverse foreign
nationals, including those involved with Cool Japan, as well as
entrepreneurs, etc., the Government will consider new mechanisms in
the National Strategic Special Zones and any legislative measuresrequired, reaching a conclusion without delay.
8) Reforms aimed at a system to reward workers for performance
rather than the time spent at work [described above]969) Enabling the private sector to run public schools (outsourcing therunning of publicly-built schools to the private sector)
・ Under the Act on National Strategic Special Zones, it has alreadybeen determined that “Taking into account the status of discussions
with relevant local governments, the Government shall engage indeliberations focused on outsourcing the management of publicschools to the private sector, with a view to implementing specificmeasures within a year of this act’s entry into force, and shall
implement the necessary measures based on the outcomes of thesedeliberations.” As such, the Government will deal with this matter
promptly, in accordance with this act.
10) Bolstering of efforts to eliminate the shortage of nursery teachers
・ Taking into account the supply of and demand for nursery teachers in
National Strategic Special Zones, the Government will ask the
prefectures in which these zones are established to consider
increasing the number of times each year that the examination for
nursery teachers is held from once to twice a year.
・ Under the supervision standards for non-registered day-care facilities,
nursery teachers must account for at least one-third of all employees
at such facilities. In the case of non-registered day-care facilities in
National Strategic Special Zones in which all or most of the children
enrolled are foreign nationals, the Government will promptly consider
including foreign nationals with nursery teacher qualifications
obtained overseas in this one-third minimum threshold, taking into
account the need to communicate in other languages and the need toprovide appropriate childcare that ensures each child’s safety. Basedon these deliberations, it will seek to reach a conclusion without
delay.
11) Consideration of new mechanisms for further promoting university
governance reforms
・ Taking into account the entry into force of revised acts alreadyenactedconcerningreforms
97

ofuniversity

governance,theGovernment will conduct ongoing deliberations regarding approaches
to new mechanisms – including the potential for utilizing the National
Strategic Special Zones system – aimed at backing university
initiatives focused on achieving further governance reforms,
including reform of the process for selecting university presidents.
(Putting innovative agriculture into practice and building advanced
models developed by Japan’s regions)
12) Further promotion of industrialization based on the sixth industry(innovation focused on agriculture, etc.) and exports
・ To further promote industrialization based on the sixth industry(innovation focused on agriculture and related business) and exports,
the National Strategic Special Zone Councils will seek opinions fromprivate sector business operators concerning additional regulatory andinstitutional reforms as needed, and will steadily implement thenecessary reforms.
iii) Utilization of PPP/PFI
Positioning the three years to the end of FY2016 as the intensive
implementation period, in accordance with the Policy on Initiatives, theGovernment will implement the following initiatives focused on the concession
system with a view to offering private sector companies the opportunity toaccess a substantial market and enhance their international competitiveness, aswell as facilitating effective, efficient development and operation of
infrastructure in severe financial situation. The Government will also follow up
on the progress status of these initiatives.
1) Disclosure of numerical targets concerning priority fields and thenumber of projects to be implemented during the intensive
implementation period・ The Government will set numerical targets for each priority field,
concerning the number of concession PFI projects to be implemented
during the intensive implementation period (six airport projects, six watersupply projects, six sewerage system projects, and one road project).
Moreover, the Government will bring forward to the intensive
implementation period the target of implementing over the 10 years to98

2022 ¥2–3 trillion worth of concession PFI projects.
2) Enhancement of the business environment, etc.
・ The Government will make arrangements concerning the legal basis forthe dispatch of civil servants to concessionaires, private sector companies,
as well as verifying pioneering initiatives at Sendai Airport and otherfacilities and identifying private sector needs, and will take the requisite
measures, as necessary.
・ Regarding the handling of accounting in concession PFI projects, theGovernment will adopt a practical approach to the handling of expenses
such as the depreciation of replacement investment, and taxes.
・ With a view to the implementation of local government projects, theGovernment will issue notices and revise guidelines and manuals
concerning such matters as the designated administrator system and thesystem’s handling under the Local Public Enterprise Act in case ofutilizingthe concession system.
・ In the field of water supply, the Government will consider mechanisms
for applying the existing system to the concession system to ensure that itis placed on an equal footing with existing projects.
・ With a view to introducing the concession system to toll road businesses
owned by local road public corporations, the Government will takeprompt legislative measures in accordance with the Guideline for theGovernment’s Response to the 24th Set of Proposals for Special Zones
for Structural Reform (approved by the Headquarters for the Promotionof Special Zones for Structural Reform on May 19, 2014).
・
3) Granting of incentives to utilize systems
・ The Government will consider approaches to national and local
government support focused on the burden involved in preparatory work
carried out by local government ahead of concession projects.
・ Regarding the public facilities managed by local governments, theGovernment will consider setting achievement targets and formulating
support measures concerning the establishment of property ledgers and99the development of asset management mechanisms based on standard
development procedures.
4) Strengthening of systems for promoting concession projects Relevant
ministries and agencies will seek to enhance their capabilities by promoting
the appointment of legal and accounting experts from the private sector.
iv) Improvement of the competitiveness of cities and strengthening of industrial
infrastructure functions
The Government will promote infrastructure development and utilization
focused on enhancing international competitiveness, including airports in theTokyo Metropolitan area, International Container Hub, and ring roads
surrounding the three major metropolitan areas, such as the three ring roads in
the Tokyo Metropolitan area. In addition, it will implement the following newmeasures.
1) Improvement of the competitiveness of cities
To improve the competitiveness of cities, the Government will eliminate
issues hindering urban regeneration and disaster prevention, and will upgrade
urban environments to attract foreign companies and visitors. Making use of
new techniques such as the development of densely built-up areas that utilize
public real estate and the establishment of a one-stop service for obtaining
permits and approvals in accordance with the Act on National StrategicSpecial Zones, the Government will promote large-scale private sector urban
development projects in around 40 locations by FY2020.
2) Strengthening of industrial infrastructure functions
The Government aims to implement appropriate measures, including theone to increase the number of landing slots at airports in the Tokyo
metropolitan area by 80,000 slots over the current approx. 750,000 slots intime for the 2020 Tokyo Olympics and Paralympics, after having
consultations and deliberations with the local governments and the likeinvolved in such measures to further enhance functions of the airports.
Moreover, to enhance the international competitiveness of the Port of
Yokohama, which is a strategic international container port, the Government
will engage in deliberations focused on such matters as safety measures inTokyo Bay, with a view to relaxing compulsory pilotage, and will reach a100

conclusion by this August.

101

5-2. Stimulating financial and capital markets / Management of public andquasi-public funds, etc.
(1) Progress in achieving KPIs
<KPI> Japan in the top three OECD member countries in the World Bank’s
Ease of Doing Business ranking by 2020 (15th in 2013)⇒ 2014: 15th (same as the previous year)*Although there were decreases in the time required for procedures in the“starting a business” and “registering property” topics, these were quite small;in addition, there were no improvements in the “getting electricity,” “dealing
with construction permits,” “getting credit,” “protecting investors,” “paying
taxes,” “enforcing contracts,” and “resolving insolvency” topics, so Japan held
the same position as the previous year.
*The 2014 rankings were published in October 2013.
<KPI> Tokyo in the top three of the Global Cities Index by 2020 (4th in 2012)⇒ 2013: Tokyo was 4th (same as the previous year)*Tokyo maintained good ratings in such categories as “availability andreliability of public transportation” (1st → 1st) and “number of patents
registered” (2nd → 1st). It improved from 17th to 10th in the “wage level”
category. Tokyo continued to rank poorly in categories such as “corporation tax
rate” (32nd → 32nd) and “time taken to access an international airport from thecenter of the capital” (31st → 31st).
<KPI> Double foreign companies’ direct investment in Japan to ¥35 trillion by2020 (¥17.8 trillion as of the end of 2012)⇒ As of the end of 2013: ¥18.0 trillion(2) Progress made in implementing measures(Recommendations by the Panel for Vitalizing Financial and Capital Markets)
・ In 2013, the Government established the Panel for Vitalizing Financial andCapital Markets, which examined examines measures to vitalize financial andcapital markets and compiled its recommendations in December 2013.
Furthermore, this June, the Panel compiled the document entitled Follow-up andFurther Recommendations for Vitalizing Financial and Capital Markets, which
reported on the progress of the original recommendations and offered additional
proposals.
(Recommendations by the Panel for Sophisticating the Management of
Public/Quasi-public Funds and steady implementation of revisions to the102management of such funds based on these)・ In June 2013, the Government established the Panel for Sophisticating theManagement of Public/Quasi-public Funds to examine approaches to the
management of public and quasi-public funds. In November 2013, the Panelcompiled its recommendations regarding such matters as revising investment inlight of the post-deflationary economy and improving governance including therisk management structure. In reference to the recommendations by the Panel,
the Action Plan for Strengthening Industrial Competitiveness (approved by the
Cabinet on January 24, 2014) states that “The Government shall take therequisite steps to ensure that the necessary measures are implemented swiftlyand steadily, taking into account the need to ensure long-term soundness,according to the scale and nature of the funds in question.” As for The
Government Pension Investment Fund (GPIF) is steadily acting , taking theserecommendations into account, through such measures as the investment ininfrastructure assets under co-investment agreement with Development Bank ofJapan and a Canadian public pension fund, the employment of new indices forpassive investments and the acceptance of the Japan’s Stewardship Code..
(3) Specific new measures to be taken
The Government will steadily implement reforms to vitalize financial and capital
markets and to manage public and quasi-public funds based on theserecommendations, which indicate the approach to be taken in future reforms.
i) Vitalizing financial and capital markets
In light of the recommendations by the aforementioned Panel, the Government
will aim to build the best financial and capital market in Asia by revitalizing
securities market and strengthening asset management market, as well as making
the most of Asia’s growth potential.

1) Securing Japan’s status as an international financial center and realizing
Asia’s growth potential
・ To secure Japan’s status as an international financial center by improving
the environment of the Tokyo market in obtaining other Asian currency
funding and enhancing cross-border transactions, the Government will103

improve financial infrastructure such as securities settlement systems andother infrastructure, and promote the standardization of bond issuance
documentation and procedures with ASEAN countries. Also, in order tomake Japan’s financial and capital markets more accessible, theGovernment will introduce more convenient information services inEnglish regarding financial administration.
・ To secure stable financing of local currencies and smooth payment
settlement for Japanese companies that are extending their businesses toAsia, the Government will promote cross-border collateral arrangements
and cross currency repos using Japanese Government Securities as
collateral, and interconnection of ATM systems within Asia by private
sector companies. In addition, to develop the business environment forJapanese companies and financial institutions operating in other Asian
countries, the Government will strengthen its support for their activities inAsia.
・ To strengthen the resilience of financial markets in Asia, the Government
will renew and/or expand bilateral swap arrangements with Asian countries
・ To meet diverse needs for funding and management both within Japan andoverseas, the Government will implement the institutional measuresrequired to establish a listed infrastructure fund market on the Tokyo Stock
Exchange by the end of 2014, and will also promote environmental
enhancements aimed at the origination of infrastructure funds and healthcare
REITs.
・ With the formation of business alliances progressing in overseas financial
centers, amid fierce competition between stock exchanges, finance andsecurities derivatives markets and product derivatives markets are
increasingly becoming integrated. In light of this fact, the Government will
create a comprehensive exchange at the first possible opportunity, and will
actively endeavor to ensure that the listing of electricity and LNG futures
proceeds smoothly.
2) Enhancing settlement systems.
・ Making use of the extended operating hours of the Bank of Japan
Financial Network System (BOJ-NET), the Government will promote toenhance payment, fund, and securities settlement systems by financial
104

institutions and companies. As to enhancing settlement systems, such as
real-time bank transfers, the Japanese Bankers Association has stated that
it would consider the improvements to be made to the current fundsettlement system, and the schedule to make the improvements in detail,and reach a conclusion by the end of the year, bearing in mind the need toensure the safety and reliability of settlement systems, in reference to thetrends in foreign countries. The Government will promote initiatives tofacilitate such enhancements. Moreover, in order to increase the amountof EDI (Electronic Data Interchange) information attached to domestic
retail fund transfers, the Government will enhance the cooperation
between the industrial sector and financial institutions in view of theresult of the joint experiment carried out by the retail industry andfinancial institutions to ensure this issue dealt with as soon as possible.

The Bank of Japan will also seek to enhance settlement services in Japan,
including the aforementioned measures.
・ The Government will seek to improve the convenience and efficiency of
payment by making cashless payment more prevalent, in light of theforthcoming 2020 Tokyo Olympics and Paralympics. Accordingly, therelevant ministries and agencies will, within 2014, compile a number ofcounter measures concerning such matters as measures to improve theconvenience of credit cards issued overseas, with a view of an increase
the number of foreigners visiting Japan, as well as the development of anenvironment conducive to the safe use of credit cards, etc. by consumers
and the expansion of the use in electronic payment, including efforts topopularize electronic payment in the public sector.
3) Establishment of a cycle in which abundant household assets flow
toward growth money
・ To establish a cycle in which abundant financial assets held byindividuals flow toward growth money, the Government will:- Promote the use of NISAs by expanding the range of investors
through implementing policies that reflect the purpose of the schemeand the needs of investors, and improving financial education.
- Promote efforts to increase transparency in the management of105

investment funds and to offer investment products that reflect theneeds of the investor first. In addition, the Government will continue
to consider it in order to reach a conclusion within 2014 regarding
comprehensive enhancements of the environment in which trustees
fulfill their duty and truly manage the funds by reflecting theinvestor’s interests. Based on the conclusions reached, theGovernment will take the necessary steps and seek to achieve an
overall improvement in the standard of investment management.
・ To further popularize defined contribution pension plans, the Government
will consider improvements in the investment options throughout defined
contribution pensions as a whole, with a view to helping citizens tobecome self-supporting, as well as examining how to ensure flexibility
regarding lifestyles (for example, the handling of limits less than theamount of the employer contribution in matching contribution schemes,
and the popularization of defined contribution pension plans amongSMEs). The Government will conduct these deliberations in conjunction
with a review of the public pension system as a whole, including
third-tier pensions.
4) Promotion of an increase in the number of companies voluntarily
adopting the IFRS
・ With a view to achieving “a single set of high-quality accounting
standards”, which was prescribed in the G20 Leaders’ declaration in 2008,
the Government will strive to increase the number of companies
voluntarily adopting the IFRS.
・ In addition to the measures already taken, the Government will conduct afact-finding survey and interviews to ascertain how companies that havevoluntarily adopted the IFRS overcame any challenges they faced during
the transition to the IFRS and what advantages their shift to the IFRS has
had. It will then publish its findings from the above in the form of “theIFRS Adoption Report (tentative name)”, to serve as a useful reference
for companies considering adopting the IFRS.
・ The Tokyo Stock Exchange will encourage listed companies to explain to
investors their basic views on the selection of accounting standards (for106

example, whether they are considering adopting the IFRS).
5) Initiatives aimed at enhancing the competitiveness of companies
・ As a means of enhancing the environment with a view to encouraging
better corporate governance, the Government will encourage morewidespread use of the JPX-Nikkei Index 400 (which consists ofcompanies selected with a focus on profitability and corporate
governance) and seek to ensure that it becomes firmly established.
Proactive initiatives to be taken in this area will include support for the
prompt listing of futures.
・ The Japan Bank for International Cooperation (JBIC) will
projects

focus onthat contribute to improving the profitability of Japanesecompanies through its Loan Facility to Enhance Global Business
Development and will introduce (i) subordinated loans, and (ii) financing
for Leverages Buyout (LBO), as new means of providing funds that
supplement financing for the private sector. [Described above]
・ The Government will reassess the legal systems and practice related tobusiness

restructuring,

includingout-of-court

debt

restructuring.

[Described above]
・ The Government will improve the audit quality and promote measures toenhance the attractiveness of qualified CPAs.
ii) Reviewing management of public and quasi-public funds, etc.
In terms of approaches to the management of public and quasi-public funds,
including the GPIF, in light of the recommendations by the Panel, theGovernment will continue to take the requisite steps to ensure that the necessary
measures are implemented swiftly and steadily, taking into account the need toensure long-term soundness, according to the scale and nature of the funds inquestion.
As for the GPIF, it appropriately revise its policy asset mix as soon as possible
to ensure the long-term soundness of pension finances, in line with the changes
in the long-term economic and investment climate, including Japan’s success inovercoming deflation and in transitioning to an environment with moderate
inflation, based on the 2014 Actuarial Valuation of the Employees’ Pension

107Insurance and the National Pension. In addition, the GPIF will, without delay,
adopt a response based on the Japan’s Stewardship Code, which the GPIF has
accepted (*).
Moreover, in addition to the revisions of its policy asset mix, it is necessary toenhancegovernance system of the GPIF, so it will aim for more agile

managementbyrestructuring

its

risk

management

systemwithaforward-looking view at first. Furthermore, in accordance with the Basic Policy
on Incorporated Administrative Agency Reform, etc. (approved by the Cabinet
on December 24, 2013), the Government will implement without delay suchinitiatives as assigning some permanent members to the GPIF’s Investment
Committee and developing systems that will actually enable the Committee tomake decisions about key policies on fund management, as well as securinghighly skilled experts through the revisions of the remuneration system. In
addition, in light of the Basic Policy and the recommendations made by the
Panel regarding the management of funds, the Ministry of Health, Labour andWelfare will accelerate efforts to implement the necessary measures, taking into
account the need to ensure long-term soundness of the fund according to its scaleand nature. For example, the MHLW will hold discussions on the location of themain office of the GPIF, and the future legal reforms if it is necessary from theviewpoint of the whole pension system and its organizational structure.
*Management reforms are solely for the benefits of those insured on the national
pension system. Such management reforms of the GPIF will consequently leadto investments in growth, benefiting the Japanese economy, contributing to theformation of a virtuous economic circle.

108

5-3. Overcoming constraints of environmental/energy(1) Progress in achieving KPIs
<KPI> Complete the Electricity System Reform by 2020 at the latest⇒ Amendment bills of the Electricity Business Act were passed in the 2013
extraordinary Diet session and the 2014 ordinary Diet session.
<KPI> Aim for practical use of 1500°C-class IGCC during the 2020s⇒ The construction of a large-scale 500,000kW-class IGCC (1500°C-class)demonstration facility has been announced and coordination is underway,
with a view to starting construction.
<KPI> Sign bilateral documents for the Joint Crediting Mechanism(JCM) with
Mongolia, Bangladesh, Ethiopia, etc. by the end of FY2013⇒ Bilateral documents were signed with Mongolia, Bangladesh, Ethiopia, andseven other countries by the end of FY2013, and with one more country in
April 2014 (11 countries in total).
(2) Progress made in implementing measures(Cabinet approval of the Fourth Strategic Energy Plan)
・ In April 2014, the Cabinet approved the Fourth Strategic Energy Plan, which set
out the direction of the Government’s new energy policy, taking into accountchanges in the environment around energy, including the Great East Japan
Earthquake and the accident at TEPCO’s Fukushima Daiichi Nuclear Power
Station.
(Registration of Japan’s greenhouse gas emission reduction target for FY2020)
・ At the Climate Change Conference (COP19) in November 2013, theGovernment put forward a new 2020 greenhouse gas reduction target of 3.8%
compared to the 2005 level as a target at this point, not including the emissions
reduction effect resulting from nuclear power (this was subsequently registeredwith the United Nations Framework Convention on Climate Change Secretariat).
In addition, the Government announced a proactive diplomatic strategy forcountering global warming, entitled “ACE: Actions for Cool Earth”, focusing on
three key actions (1) innovation of low carbon technologies; (2) the global
application of Japan’s
stakeholders

existing technologies; and (3) partnership with various

including ¥1,600 billion (approx. USD 16 billion) assistance to109

developing countries. The Government is currently working steadily on efforts toimplement the actions in this strategy..
(Decision on the implementation of first- and second-phase the Electricity
System Reforms)
・ Regarding the Electricity System Reform, the supplementary provision to thefirst-phase amendment bill of the Electricity Business Act enacted in November
2013 set forth the program for completing reforms by 2020 at the latest.
Moreover, in light of the passing of the second-phase amendment bill of theElectricity Business Act in June 2014, the Government is steadily implementing
first-phase (establishment of the Organization for Nationwide Coordination ofTransmission Operators) and second-phase (full-scale deregulation of entry into
the retail sector) reforms in conjunction with each other.
・ .
(Implementing strict reviews based on applications from nuclear operators)
・ Regarding the use of nuclear power plants whose safety has been confirmed, theNuclear Regulation Authority’s new regulatory requirements came into force inJuly 2013 and it is systematically carrying out reviews of compliance with the
new requirements, in response to applications from nuclear operators.
(Launching the world’s most advanced high-efficiency thermal power
generation)
・ In the field of high-efficiency thermal power generation, the first 1600°C-class
LNG thermal power plant in the area served by the Kansai Electric Power
Company began operating in August 2013, while in December, a
600,000kW-class and a 1 million kW-class coal thermal power plant (USC)
began operating in the area served by Tokyo Electric Power Company.
Furthermore, following on from this, environmental impact assessment
procedures for a large-scale integrated gasification combined cycle (IGCC)
demonstration facility in Fukushima Prefecture commenced this May. Thus, theintroduction of some of the world’s most advanced high-efficiency thermal
power generation facilities are progressing steadily.

110

(Active resource diplomacy for the early realization of LNG supply from theUSA)・ To reduce LNG procurement costs, the Government has engaged in active
resource diplomacy aimed for the early export approval of US LNG projects inwhich Japanese companies are involved, with a view to realize the supply of
LNG from the USA as soon as possible. It has succeeded in obtaining export
approvals for all four projects. Moreover, it participated in Africa’s largest
mining investment conference (Mining Indaba 2014), strengthening relationships
with Africa’s resource-rich countries.
(Strengthening the ability to respond to risks at oil refineries, etc.)
・ The Government has strengthened the ability to respond to risks at oil refineries
through such initiatives as promoting the introduction of the “Three Essential
Emergency

Tools”(emergency

generator,

emergency

information

andcommunications system (satellite communications, etc.), and oil drum filling andshipment facilities), designating core gas stations nationwide in accordance withthe revised Oil Stockpiling Act, and developing core LPG filling stations. In
addition, it has implemented collaborative projects such as providing support for
the laying of pipes between business establishments, to encourage facility
optimization at petrochemical complexes.
(3) Specific new measures to be taken
Since the disaster, the value of Japan’s fuel imports has increased by ¥10 trillion
and it has been estimated that the outflow of money overseas arising from the importof fuel in FY2013 rose by about ¥3.6 trillion, compared with the situation if nuclear
power generation had been used as baseload power source in line with the situation
before the Great East Japan Earthquake (average for FY2008–FY2010).
The Government has already implemented a number of measures aimed at
overcoming environmental and energy constraints, and it will continue to reinforce
systems for a stable supply of energy, both under normal circumstances and in theevent of a crisis, while curbing energy costs and greenhouse gas emissions as muchas possible. It will achieve this by implementing various measures based on the
Fourth Strategic Energy Plan and seeking improvements in the businessenvironment via the stable supply of energy and reductions in energy costs.
More specifically, it will seek further improvements in energy efficiency by111

promoting thorough efforts to save energy, while on the supply side it will aim tocomplete the Electricity System Reform by 2020 at the latest, as well as undertaking
gas system reforms, among other measures. In addition, the Government will makeswift, steady progress with initiatives including the restart of nuclear power stations
whose safety has been confirmed, the utilization of high-efficiency thermal power
generation (coal/LNG) when updating thermal power stations that have become
dilapidated, reducing procurement costs for LNG, etc., and developing the market
for energy futures.
1) Promotion of thorough energy-saving
The Government will develop systems for encouraging business operators to
implement thorough energy-saving, including the utilization of energy
management and energy-saving diagnosis services offered by experts inenergy-saving, the introduction of advanced energy-saving equipment, theconsolidation of production lines spanning multiple plants, and the utilization ofco-generation and unused thermal energy. These systems will enable Japan toachieve the world’s highest level of energy efficiency. Moreover, theGovernment will formulate guidelines concerning such matters as ways ofmeasuring demand restraint, to encourage negawatt transactions (focused on thequantity of electricity conserved) among consumers.
2) Pushing through the Electricity System Reforms
The Government will continue to make preparations for the first-phasereforms, with the aim of establishing the Organization for Nationwide
Coordination of Transmission Operators in 2015.
Regarding the second-phase reforms, the Government will put in place anenvironment conducive to full-scale deregulation of entry into the retailelectricity sector.
The Government will move forward with preparations aimed at submitting thebill concerning the third-phase reforms (further securing the neutrality of thetransmission and distribution sector through legal unbundling) during the next
ordinary Diet session.
3) Promotion of gas and heat supply system reforms
The Government will conduct deliberations focused on building a gas systemthat ensures a cheap, safe, stable supply of town gas and offers consumers

112

diverse options including new services. It will aim to conclude thesedeliberations promptly and move into the implementation phase without delay.
Moreover, in conjunction with reforms of the electricity and gas systems, theGovernment will consider revising approaches to heat supply businesses, tofacilitate the efficient supply of energy, including the integrated supply of heatand electricity. Moreover, with the additional objective of creating employment
in Japan’s regions, including at local authorities, the Government will focus
efforts on the effective use of thermal energy, including unused thermal energy.
4) Utilization of nuclear power stations once their safety has been confirmed
Based on the premise of prioritizing safety above all other considerations andsparing no effort to eliminate the concerns of citizens, the Government will leave
matters concerning the safety of nuclear power stations to the judgment of the
Nuclear Regulation Authority (NRA), so if the NRA accepts that a nuclear power
station complies with the world’s most stringent regulatory requirements, theGovernment will respect its judgment and move forward with the restart of that
nuclear power station. In doing so, the national government will be at theforefront of efforts to secure the understanding and cooperation of interested
parties, including the local authorities of the areas in which they are sited.
Moreover, as well as engaging in international cooperation focused on thedevelopment of technology to reduce the volume and toxicity of radioactive
waste, nuclear nonproliferation initiatives, and the development of nuclear
technologies that serve the safety improvement of nuclear use, such as
high-temperature gas-cooled reactors, the Government will implement humanresource development in these fields.
5) Promotion of the introduction and international roll-out of high-efficiency
thermal power generation (coal/LNG)
In light of the fact that combined cycle and other new state-of-the-art
technologies are now available, the Government will further promote theintroduction of high-efficiency thermal power generation as a point of referencein the procedures of environmental impact assessments. Moreover, to curb CO2
emissions on a global scale using Japan’s world-class technology, theGovernment will use public financial support and top-level diplomacy topromote the dissemination of such technology to emerging nations in regions
including Asia and Eastern Europe.

1136) Reduction of LNG procurement costs
As well as promoting greater flexibility in the LNG market by such means as
relaxing the destination clause, the Government will move forward withimprovements to the resource procurement environment, such as promoting thestrategic utilization of new joint procurement initiatives, diversifying supply
sources through the realization of LNG supply from North America, etc., andobtainment of upstream asset, and diversifying resource shipment routes.
7) Consideration of approaches to a feed-in tariff system
The Government will conduct comprehensive deliberations focused onbuilding the optimum configuration of measures that introduce thegreatest-possible quantity of renewable energy sources, while minimizing theburden on citizens. Based on the outcome of these deliberations, it will take thenecessary steps.
8) Maintenance and improvement of supply chains for oil and LPG
Regarding public notice of the Act for Upgrading the Energy Supply Structure,
the Government will encourage efforts to optimize facilities and restructure
operations at petrochemical complexes, promoting a radical rethinking of theapproach by encouraging joint responses by multiple companies. Throughinitiatives to strengthen collaboration between relevant central government
bodies and local authorities, such as including measures for securing a stablesupply of oil and LPG in municipal plans for the first time, the Government willreinforce the infrastructure required for industry and daily life in Japan’s regions.
Furthermore, the Government will seek to strengthen the ability of oil companies
to provide a coherent response to disasters through integrated BCP covering
everything from oil refineries to gas stations (measures to promote earthquake
resistance, counter liquefaction and facilitate logistics, undertaken in partnershipwith relevant ministries and agencies). In light of the damage that is expected toresult from a natural disaster, which has been re-evaluated substantially in recent
years, the Government will prepare new plans, to promote measures to expedite
the restoration of electricity and gas supplies that will be capable of responding
even to a natural disaster on a hitherto-unprecedented scale.

114

6. Achieving regional revitalization and regional structural reform / Achieving
reform among mid-ranking companies, SMEs and micro enterprises(1) Progress in achieving KPIs
<KPI> Ensure that the business startup rate exceeds the business closure rate,
and raise the business startup and closure rate to the 10% range, on apar with the rates in the USA and the UK (from the current rate ofaround 5%)⇒ In the first three quarters of FY2013 (April–December), the Japan FinanceCorporation’s Micro Business and Individual Unit offered business startup
loans worth a total of ¥134.3 billion (up 133% on the same period of theprevious year) to 17,304 companies (up 114% on the same period of theprevious year), the highest level for seven years<KPI> Increase the number of profit-making SMEs and micro enterprises from
0.7 million to 1.4 million by 2020.
⇒ The business performance of SMEs is demonstrating an upward trend, as canbe seen from the fact that the diffusion index for profits has risen for threeconsecutive quarters since the 3rd quarter of 2013(2013 figures for profit-making SMEs and micro enterprises have not yet
been published)(2) Progress made in implementing measures(Constructing a system to support business startups in Japan’s regions)・ The Industry Competitiveness Enhancement Act was enacted in December 2013and municipalities have worked in partnership with private sector startup support
businesses on initiatives aimed at building a system to support startups. A total of
168 startup support business plans from 177 municipalities have been approved
to date.
(Enhancing the scope of those protected by regional brands)
・ A bill to revise the Patent Act and other legislation was passed in April 2014 andthe scope of entities eligible to register regional collective trademarks was
expanded to include commercial and industrial associations, and chambers ofcommerce and industry, to facilitate the protection of regional brands of highutility value.
・ In June 2014, a system was put in place to protect geographical indications that115

constitute the names of agricultural, forestry, and fisheries produce and foods
with traditions and attributes cultivated in Japan’s regions. Under this protection,such indications are treated as intellectual property.
(Compilation of regional
Competitiveness Councils)

growthstrategies

byRegional

Industrial

・ To reflect local opinions from across all of Japan’s regions, Regional Industrial
Competitiveness Councils have been established in each regional block andregional growth strategies focused on identifying strategic industries and local
resources have been formulated. Moreover, the Regional Revitalization Platform
established in January 2014 solicited model cases for comprehensive reforms ofurban and regional structures and local industry. Submissions were received
from across the country and 33 were selected.
(Promoting initiatives to encourage entry into growth fields and international
expansion)・ In relation to the expansion of SMEs and micro enterprises into growth fields,
the Government revised the technology fields covered by the Small and Medium
Sized Enterprise Manufacturing Enhancement Act in February 2014, thereby
putting in place an environment that encourages entry into growth fields.
Moreover, by April 2014, the Government had established platforms offering
local support for overseas expansion in 11 locations, as a means of supportinginternational expansion. The number of such platforms is expected to increase to
17 before the end of FY2014.
(3) Specific new measures to be taken
The Regional Industrial Competitiveness Councils established in each region overthe course of the last year have identified the direction of their strategies and are
now about to enter the implementation phase. Accordingly, as highly-motivatedregions implement their strategies by formulating action plans, the Government will
provide accompanying support and back up the creativity of each region, as well as
implementing initiatives to create sustainable regional economic structures.
More specifically, the Government will consider from a medium- to long-term
perspective a comprehensive vision and policy devices involving all ministries andagencies, demonstrating an awareness of the harsh reality of population decline and116

focused on the keywords of consolidation and revitalization. In addition, it will
immediately devise concrete measures for implementing feasible policies via what
can be dubbed “Local Abenomics,” such as promoting business startups by young
people and women, and utilizing distinctive local resources in each area. In doing so,
it will seek to make support measures targeting SMEs and micro enterprises evenmore user-friendly, starting with the streamlining of the METI inspection process
and the enhancement of PR.
Moreover, regional financial institutions have a vital role to play in increasing the
profitability and productivity of companies, while encouraging the self-sustaining
development of Japan’s regions. Accordingly, the Government will encourage
initiatives by regional financial institutions to improve the performance, productivity,and sustainability of the companies to which they provide loans.
(Regional revitalization / Reform among mid-ranking companies, SMEs andmicro enterprises)
1) Construction of a support platform for bringing regional revitalization
measures together as a single package
The Government will pursue integrated management of the various regional
revitalization measures being implemented by each ministry and agency, and willconcentrate policy resources in highly-motivated regions to maximize the policy
effect. Accordingly, the Government will aim to submit a bill for the reform of
the Local Revitalization Act during the next ordinary Diet session. The objectiveof this will be to build regional rebirth mechanisms that bring together thevarious regional revitalization measures as a single package, including
implementing a one-stop service in conjunction with both the new Grand Design
for Japan’s Land and plans for regional revitalization, and offering new support
measures that regions will find more user-friendly. The Government will also
implement various other initiatives, including efforts to strengthen the sharing of
information across the boundaries between ministries and agencies, to contributeto the regional revitalization initiatives of people and companies in each region
and ensure efficient utilization of policy resources for such revitalization.
Moreover, based on the idea of consolidation and networkings, the Government
will offer proactive support for such measures as the nationwide roll-out from
FY2015 of a regional hub of urban areas and self-reliant areas in conjunction
with the establishment of platforms for these, as well as the formation of
Settlement Network Areas.

1172) Cultivation of strategic industries centered on medium-sized companies inJapan’s regions
The question of how to achieve innovation, including in one’s business model,
is of the utmost importance to enable companies to be victorious in competition,
raising their sights to global markets as well. Accordingly, the Government will
implement the following measures, while verifying the effects of the measures
implemented to date.
・ With a view to creating and cultivating strategic local industries, theGovernment will promote initiatives focused on open innovation, such assupport for the formation of places where research institutes, local
universities, local government, financial institutions, and other bodies fromthe worlds of industry, academia, government, and finance can work in
partnership, centered on local medium-sized companies. In doing so, the role
played by Germany’s Fraunhofer Institutes will serve as a point of reference.
As part of these endeavors, the Government will create projects that cut
across municipal and prefectural boundaries, through the formation of
networks by these actors and the development of systems for promoting
innovative research and development, as well as commercialization of theresultant outcomes.
・ In conjunction with this, the Government will revise support systems by suchmeans as adding design to the technologies targeted by the Small andMedium Sized Enterprise Manufacturing Enhancement Act, to encourage
product development via collaboration between industry, academia andgovernment, based on a market-oriented approach.
・ Moreover, with the collaboration of representatives of industry, academia, theregional financial sector, and local government, local government will play
the central role in establishing regional companies with a high employment
capacity, via support offered by Regional Economic Innovation Cycles andthe utilization of schemes for supporting SME startups based on the Industry
Competitiveness Enhancement Act.
・ The Government will seek to encourage the Regional Economy Vitalization
Corporation of Japan to establish a fund and supply money to support coreregional companies in achieving management improvements without delay.
In addition, it will extend the eligibility criteria for the fund investment
118

projects undertaken by the Organization for Small & Medium Enterprises
and Regional Innovation, Japan, to encourage enterprises to expand into thefields of health and medical care, which are growth fields for middle-ranking
SMEs, etc.
・ To help personnel who will support strategic industries to put down roots ineach region, the Government will create regional talent banks to offer
integrated support for everything from securing personnel for SMEs andmicro enterprises through to ensuring their retention. This will include older
personnel relocating back to their hometowns or to other regional cities(U-I-J turn), such as former employees of those enterprises.
・ With a view to promoting overseas expansion by medium-sized companies,
the Government will utilize JETRO and other relevant organizations to offer
support packages, such as assisting Japanese companies in cultivating
markets at their overseas bases of operation.
3) Backing for hometown specialties
The Government will revise the Small and Medium Sized Enterprise Local
Resource Utilization Act and promote efforts to develop and cultivate markets
for hometown specialties that utilize local resources, as well as incorporating
mechanisms such as thorough quality control, which will increase the inclinationof consumers to purchase such products. In addition, the Government willencourage tourism initiatives that utilize local sights (nature, culture, industrial
heritage, etc.), agricultural, forestry, and fisheries produce, and other local
resources to attract consumers to each region. In doing so, the Government willseek to promote the revitalization of the whole of each region through theutilization of local resources, by using initiatives such as thecommunity-reactivating cooperator squad to identify, dispatch, and cultivate
personnel who can use local resources to establish brands, and developing
systems for undertaking strategic tourism promotion.
4) Promotion of loans based on feasibility assessments by regional financial
institutions, etc.
In order to promote improvements in business quality and business/corporate
restructuring, financial institutions are expected to provide financing taking wellinto considerations not only the financial condition of debtor companies, but also119the growth potential of the debtor’s business, without placing an unnecessarily
high reliance on guarantees or collateral, as well as to cooperate with relevant
stakeholders to improve the performance, productivity, and sustainability ofbusinesses. Financial institutions are encouraged to offer support for
management improvements to companies that have received loans withguarantees or collateral attached, and the Government will appropriately
supervise and support financial institutions pursuant to the Supervisory Policies
and the Financial Monitoring Policy from such perspectives. [Partially describedabove]
With a view to contributing to such initiatives focused on the growth potentialof businesses, the Government will build mechanisms for evaluating techniquesthat regional financial institutions and other bodies can utilize when making
decisions on loans.
In light of this perspective, the Government will continue to examine
approaches to appropriate inspection techniques and their utilization, including
the approach outlined in the Financial Monitoring Policy, which states that “lessattention will be paid to small and low risk exposures pertaining to safety andsoundness, and banks’ asset classification, subject to effective credit risk
management with appropriate provisions, will be accepted by on-site inspections.”
In addition, the Government will encourage regional financial institutions tomake use of the “Guidelines for personal Guarantee Provided by Business
Owners”. Moreover, the Government will constantly review credit guarantees inlight of the progress of responses by financial institutions via these initiatives.
Furthermore, as well as selectively pursuing the utilization by regional
financial institutions, etc. of specialist personnel in the management of regional
companies via the Regional Economy Vitalization Corporation of Japan(REVIC), the Government will encourage REVIC to establish a fund and supply
money to support core regional companies in achieving management
improvements without delay. [Partially described above]
In addition, in light of the fact that the business activities of regional
companies are spread over an increasingly extensive area, the Government willencourage regional financial institutions to enhance the functions and systems
that they will require in future to support the core business of companies andassist in industrial regeneration, as well as boosting their own corporate strength.
[Partially described above]1205) Restructuring of SMEs and micro enterprises, including efforts to promotebusiness startups by young people and women
It is vital to put in place an environment conducive to the startup of businesses
by young people and women, in order to restore vitality to Japan’s local
communities. Accordingly, support organizations such as the Japan FinanceCorporation, comprehensive local support hubs, commercial and industrial
associations, chambers of commerce and industry, and the Organization for
Small & Medium Enterprises and Regional Innovation, Japan will join forces ina full-scale effort to (1) promote more entrepreneurial thinking (via the BusinessGrand Prix, etc.); (2) encourage the development of consultation systems in eacharea; and (3) facilitate the smooth supply of funds to those starting up businesses.
In conjunction with this, the Government will strengthen the support forbusinesses started by NPOs, which are growing in number, particularly those run
by women. In doing so, the Government will seek to meet new needs in fields
related to medical care, childcare, and education, among others.
To eliminate concerns about destabilization of one’s livelihood when starting
up a business, the Government will clarify the handling of employment
insurance benefits for people preparing for or considering business startup while
engaged in job-seeking. In addition, it will encourage subsidiary businesses, side
jobs, and startup sabbaticals, which will enable workers to start a business, whilestill working as an employee. Moreover, the Government will revise the Public
Agency Order Act and encourage young companies (small and medium-sized
venture companies) to participate in government procurement, thereby
supporting their management and improving their credibility. [Partially describedabove]
Given the rising average age of proprietors of SMEs and micro enterprises, theGovernment will encourage business proprietors to pass on the baton to the next
generation. To this end, it will move forward with such initiatives as encouraging
enterprises to use business succession as an opportunity to withdraw fromexisting areas of business and engage in new business development (“second
startup”), compiling guidelines for facilitating the sale of the businesses ofcompanies with no successor (M&A), upgrading the network of BusinessSuccession Support Centers, utilizing vacant premises in shopping districts, anddownsizing. Moreover, the Government will revise the small-scale enterprisemutual aid system run by the Organization for Small & Medium Enterprises andRegional Innovation, Japan, to enhance financial support for micro enterprises

121and augment its functions as a safety net in the event of business closure and asource of support for business succession. In addition, the Government will
strengthen the support functions of SME support organizations.
(Reform of the economic structures of Japan’s regions)6) Establishment of comprehensive policy promotion arrangements
To overcome rapid population decline and the unprecedented aging of the
population, and build dynamic economic structures in Japan’s regions, it is vitalto consolidate administrative services and revitalize economic activities. As such,
the Government will promote regional strategies that take advantage of eacharea’s individuality through the utilization of local resources, among othermeasures, while also embarking on bold reforms of policy devices so that they
better reflect the creativity and endeavors of individual local authorities and theregions in which they are located. In addition, the Government will seek the
consolidation of urban functions based on local consensus building and will aim
to form Regional Core Metropolitan Areas, etc. As such, it is necessary to set out
a comprehensive long-term vision for the economic structure of Japan’s regions.
In light of this fact, it is vital to seek the intensiveness and accumulation ofurban functions, industries, and employment, and the development of networks
between them. In addition, it is important to promote comprehensive policy
aimed at maintaining the dynamism of Japan’s regions, while preventing
excessive concentration in Tokyo, as well as overcoming the declining birthrate
and population. Accordingly, the Government will establish headquarters toserve as a form of control tower for such promotion and establish
government-wide arrangements.

122

Ⅱ. Strategic Market Creation Plan
Theme 1: Extending the nation’s healthy life expectancy(1) Progress in achieving KPIs
<KPI> Extend the nation's healthy life expectancy by one year or more by 2020
[70.42 years for males and 73.62 years for females (2010)]⇒ Average life expectancy in 2012: 74.94 years for males and 86.41 years forfemales [79.55 for males and 86.30 for females (2010)]<KPI> By 2020, reduce the number of citizens with metabolic syndrome by 25%
from FY2008 [14 million (FY2008)]⇒ FY2011: Down 9.7% from FY2008<KPI> By 2020, aim that medical examine rate (for the 40-74 age range) will be
80% (including specified health check-ups) [67.7% (2010)]⇒ Proportion of citizens receiving specified health checkups in FY2011: 44.7%[43.2% (FY2010)](2) Progress made in implementing measures(Removing “gray zone areas” regarding the health industry)・ In response to an application by a business operator utilizing the system toremove the gray zone areas

created under the Industrial Competitiveness

Enhancement Act enacted in December 2013, the Government confirmed thatprivate sector service providers would not be subject to regulation in relation to
the provision of guidance concerning exercise to prevent lifestyle diseases,
including the maintenance of motor functions, as well as the provision of simple
blood tests and health information based on such tests. The Government has alsosought to eliminate gray zones regarding the industry focused on extending
healthy life expectancy, creating a guideline for new business operations in this
sector, which offered a number of other examples as well.
(Internet sales of over-the-counter drugs)
・ The Pharmaceutical Affairs Act was revised in December 2013 to facilitate safe
Internet sales of all over-the-counter (OTC) drugs, in principle. The revision
paved the way for Internet sales of more than 10,000 OTC drugs, excluding five
powerful drugs. (Former prescription drugs that have recently been granted OTC
123

status will be made available for Internet sales once their safety has been
confirmed during the verification period, which will last up to three years inprinciple.)(Creating a control tower for medical R&D)
・ A bill establishing the Promotion Headquarters for Healthcare Policy as a control
tower for medical research and development was passed in May 2014, alongwith another establishing the Japan Agency for Medical Research andDevelopment. Systems have thus been put in place for promoting research anddevelopment in the medical field, including drugs and medical devices, based oncooperation between government ministries. In addition, a bill to revise thePharmaceutical Affairs Act, in order to accelerate the approval of medical
devices and regenerative medicine products, was enacted in November 2013,
along with the Act on the Safety of Regenerative Medicine, which promotes
swift, safe commercialization of regenerative medicine technologies, thereby
putting in place a framework for accelerating the research, development, andcommercialization of medical technologies.
(Accelerating assessments of the advanced medical services)・ Other measures implemented include the acceleration and streamlining of theevaluation of advanced medical services (anticancer drugs) through the creationof a new external agency; clarification of rules regarding investment in foreign
corporations by medical corporations with a view to the international expansionof medical services; and the imposition on social welfare corporations of arequirement to publish financial statements, to ensure the transparency of theiroperations.
(3) Specific new measures to be taken
The Japan Revitalization Strategy identified the health and longevity industry as
one of the strategic sectors and cited various measures, including those aimed at thedevelopment of an industry focused on extending healthy life expectancy, as well as
the pharmaceuticals and medical devices industries. However, unresolved challenges
to the achievement of medium- to long-term growth remain, including such issues as
how to develop the healthcare and nursing care field into a growth market, how to124

provide high-quality services, and how to ensure the sustainability of the relevant
systems.
To address these challenges, the Government will implement such measures as (1)establishing systems for providing efficient, high-quality services; (2) creating a
thriving industry for services that are not covered by social health insurance; (3)consolidating and considering the scope of services subject to insurance benefits;and (4) accelerating ICT use in healthcare and nursing care.
i) Establishing systems for providing efficient, high-quality services
1) Creating a non-profit holding company system (tentative name)Institutional reforms to promote the division of functions among regional
healthcare and nursing care service providers and to encourage cooperation
among them will be implemented to improve the efficiency and quality ofhealthcare and nursing care services, thereby providing an integrated
community care system.
To this end, the Government will clarify that corporations can become
members of a medical corporation under the medical corporation system, andthen will create a non-profit holding company system (tentative name) thatwould allow a holding company to control multiple medical, social welfare
and other corporations via a general meeting of members.
In designing the system, the Government will refer to the key points of aninterim report (December 26, 2013) by the Healthcare and Nursing Care
Subcommittee of the Industrial Competitiveness Council. It will also
consider relaxing regulations on medical corporations, and other measuresthat would allow participation in the non-profit holding companies (tentativename) by various non-profit corporations (including local governments,
independent administrative agencies and national university corporations), as
well as enabling these holding companies to decide the ratio of voting rights
on making decisions among participants in the non-profit holding companies(tentative name) at will and facilitating group-wide funding procurement, theefficient use of surplus funds, and close cooperation with for-profit
corporations offering healthcare and nursing care services as part ofcomprehensive community care services as part of integrated community
care system. The Government will seek to reach a conclusion on these125

measures by the end of 2014 and take relevant institutional measures in 2015.
In addition, the Government will consider utilizing the non-profit holding
company system (tentative name) to allow university hospitals to become
separate corporations from the university to which they are affiliated, tofacilitate integrated management with other hospitals using the same system,
on condition that steps are taken to maintain and improve the educational,
research and clinical functions of university hospitals. Accordingly, theGovernment will formulate specific measures for securing the educational,
research and clinical functions of university hospitals and design the systems
required to establish these hospitals as separate corporate entities from theuniversities in question, taking into account deliberations on the non-profit
holding company system (tentative name). The Government will seek toreach a conclusion on these measures and the system design by the end of
FY2014 and implement the relevant institutional measures in FY2015.
The Government will also consider institutional measures for allowing
publichospitals

established

by

local

governments,

independentadministrative agencies and the like to participate in the non-profit holding
company system (tentative name).
2) Revising regulations regarding the medical corporation system
The Government will consider the following matters within 2014 andpromptly take the relevant institutional measures based on its conclusions:・ Dividing up medical corporations
Medical corporations will be permitted to use the same kind of schemeas the company split system under the Companies Act.
・ Expanding the subsidiary operations of medical corporations
The scope of subsidiary operations of medical corporations will be
expanded to include leasing idle space for nursing care facilities or
housing for elderly people.
・ Revising requirements for social medical corporations
Requirements for social medical corporations will be revised to reflect
local conditions, as a means of making such corporations morewidespread.

126

3) Promoting further disclosure of information on the quality of medical
services and improving the quality of nursing care services
The following measures will be implemented to contribute to improving
the quality of healthcare and nursing care services:・ The Medical Care Quality Assessment and Disclosure Program will be
used to promote the disclosure of data to facilitate comparisons between
public hospitals, including those established by local governments.
・ A trial of DPC (Diagnosis Procedure Combination) data (summary data)services offered by third parties will begin during FY2014, with a view tofull-scale operation in the future.
・ The Government will consider the creation of a quality assessment
system for nursing care services and release the outcomes of its
deliberations by the end of FY2014.
4) Building an appropriate system for the provision of nursing care services
to eliminate waiting lists for admission to residential care facilities
Municipalities need to make appropriate estimates of the volume ofnursing care services required, including those at residential care facilities, sothat they can develop Municipal Insured Long-Term Care Service Plans andPrefectural Insured Long-Term Care Service Plans settled in FY2015.
Accordingly, the Government will provide support tools for identifying andanalyzing local challenges and needs, as well as developing a system forcomparing and analyzing statistical data from other prefectural and municipal
governments.
5) Addressing healthcare and nursing care demand arising from the aging
population in metropolitan areas
In order to build an urban model (including wider-area cooperation and thepromotion of home healthcare and nursing care) in response to an increase inhealthcare and nursing care demand arising from a rapid rise in the elderly
population in metropolitan areas, the Government will consider demand
estimates and relevant measures, and take the requisite action in partnershipwith local governments in the Tokyo Metropolitan area by the end of
FY2015.

1276) Expanding the roles of nurses, pharmacists and other non-physician
medical professionals
The Government will consider approaches to services that can be offeredby nurses, nursing care workers, pharmacists and other non-physician
medical professionals, reaching a conclusion and taking the requisite
measures as needed within 2014.
ii) Creating a thriving industry for services not covered by public insurance
1) Providing individuals, insurers and business managers with incentives topromote health and prevent disease
To increase incentives for individuals and insured persons to promotehealth and prevent disease, the Government will take the requisite measures,
including the insurance system measures listed below, within FY2014:
・ Incentives for individuals
The Government will explicitly state that, under the health insurance
laws, insurers can offer health services in which they selectively award
healthcare points or cash benefits to insured individuals who meet certain
standards, taking into account the results of a large-scale trial of a healthpromotion model using ICT. The Government will thus encourage morewidespread provision of such services. In addition, the Government willconsider introducing health promotion incentives, including the fiscallyneutral differentiation of premiums according to individuals’ efforts topromote their own health and prevent disease, while taking into accountthe purposes of the public health insurance system.
・ Incentives for insurers
Regarding the system for increasing or reducing funding for healthcare
for elderly people aged 75 and over, the Government will consider
specific measures to make the system an effective incentive for insurers
to work on health promotion services, based on the opinions ofstakeholders and verification of the effects of specified medical
examinations and health guidance.
The Government will conduct deliberations based on the results of its

128verification of scientific knowledge and data concerning approaches tospecified health checkups and specified health guidance.
In addition, the Government will attempt to encourage investment bycompanies in health promotion by building a framework for winning social
approval

for

their

health-management

effortsandassessingtheirachievements through the following initiatives. In this respect, the relevant
government agencies will take the requisite measures within FY2014.
・ In order to make health management more widespread, the Government
will develop assessment benchmarks to compare companies’ healthmanagement efforts and will consider specific measures to allow thesebenchmarks to be used for data health projects created and implemented
by insurers.
・ The Tokyo Stock Exchange will consider designating a new brand ofstocks (tentatively named “health management stocks”).
・ Corporate governance reports, corporate social responsibility reports andother company reports will include initiatives for employee healthmanagement and disease prevention.
・ Enterprises will be selected and commended for excellent efforts topromote better health among their employees.
2) Developing market environments for private healthcare business
operators to demonstrate their originality and ingenuity
・ To provide the healthcare industry with funds and business management
know-how and promote the development and popularization of new
business models in the industry, the Regional Economy Vitalization
Corporation of Japan (REVIC) will create the Regional Healthcare
Industry Support Fund (tentative name) within FY2014 to support thecreation and expansion of the healthcare industry in Japan’s regions.
・ To afford companies and individuals peace of mind in the use of healthpromotion and disease prevention services, the Government will run atrial of third-party accreditation by private sector entities of exercise
guidance services, for which there is a great need, and develop systems toenable academic societies, industry groups and other specialist

129

organizations and experts to support this endeavor. The Government will
also consider utilizing the third-party certification system to provide
policy-based finance tailored to the specific characteristics of business
operators.
・ The Government will attempt to create regional Next-generation
Healthcare Industry Councils nationwide, to nurture the healthcare
industry using local resources, including collaboration among the medical,
agricultural, commercial and manufacturing sectors.
・ In order to make effective use of public health nurses and other experts,
as well as utilizing active senior human resources on a region-by-regionbasis, the Government will support efforts to match them with private
sector business operators involved in the healthcare industry.
・ The Government will develop a new health guidance camp program(tentative name) within FY2014, targeting those suspected to havediabetes and using hotels, inns and other regional tourism resources. The
Government will run a pilot program before seeking its more widespread
introduction.
・ A mechanism will be developed within FY2015 for the designation of“WAC WAC Place” (tentative name) multi-function bases for healthpromotion, support for daily life, nursing care and disease prevention
services (comprehensive advice, home-visit services, parcel and fooddelivery services, care services, etc.) offered by private-sector companies(including convenience stores and restaurants). Information about “WAC
WAC Places” will be collated by municipal governments for provision to
local residents.
3) Promoting the switching of drugs from prescription to over-the-counter
status (switched OTC drugs)
The following measures will be implemented to accelerate efforts toswitch drugs from prescription to OTC status (switched OTC drugs) topromote self-medication.
・ In response to applications by relevant enterprises, the Government willpromptly screen the drugs for suitability for switching, including in its
deliberations data obtained from overseas.

130

To this end, measures will be implemented gradually from FY2014,
aimed at setting and shortening the target periods for screening for
approval and enhancing systems for responding to inquiries fromenterprises, with the aim of enhancing the predictability of screening by
the Pharmaceuticals and Medical Devices Agency, as well as encouraging
enterprises to develop new drugs.
・ Using examples from the USA and other countries as a point of reference,
the Government will build a mechanism to reflect the opinions of a morediverse range of parties, including industry representatives andconsumers.
4) Promoting inbound and outbound healthcare and nursing care services
The Government will seek to enhance systems for the acceptance of
foreign patients by medical institutions through such measures as thedevelopment of model bases with medical interpreters so that foreign patients
can use medical services in Japan safely and with peace of mind. The
Government will also create a system for enabling foreign travelers to easily
obtain information on medical institutions.
Regarding the international expansion of medical services, theGovernment will implement medical projects in other countries, including
human resource development focused on physicians and nurses among others,
as well as supporting the development of public health insurance systems andthe utilization of private insurance, and the creation of medical technology
and service bases using Medical Excellence JAPAN (MEJ). At the same time,
the Government will promote international joint clinical research and trials
and the simplification of licensing procedures in other countries for drugs
and medical devices approved in Japan.
The Government will also take steps to support the overseas expansion ofnursing care service providers through policy discussions with foreign
governments regarding measures to address the issue of aging populations.
iii) Consolidating and considering the scope of services subject to insurance
benefits
1) Securing prompt access to cutting-edge medical technologies and drugs(substantially expanding the combination of insured and uninsured131

healthcare services)
While taking into account the universal health insurance system’s
fundamental

principleofensuring

insurancecoveragefornecessary/appropriate healthcare services, the Government will implement
measures to facilitate a more appropriate response to such demands as thenecessity of meeting various patient needs, the need to bolster the healthcare
industry’s competitiveness, and the need to maintain the sustainability ofhealth insurance.
・ Improving access to advanced healthcare services (healthcare services tobe assessed)
Following the launch of an organization to assess anti-cancer drugs, theGovernment will launch a special organization within FY2014 to assess
whether to offer insurance coverage for regenerative medicine therapies
and medical devices, in an effort to accelerate and streamline theassessment of advanced healthcare services with a view to their coverage
by insurance.
・ Improving amenity during healthcare services (selected healthcare
services)
The Government will create a mechanism for constant revisions of theselected healthcare service system, including the expansion of services
subject to the system. Specifically, within FY2014, the Government willrevise the method for collecting information on actual use of the system
to accurately identify and analyze the actual situation, as well as promptly
surveying current use of the system and creating a mechanism via
academic societies, etc. for regularly identifying examples of selected
healthcare services that should be introduced. In this process, theGovernment will differentiate between selected healthcare services andservices having no direct connection with provision of health insurance,
offering clarification as needed.
・ Introducing cost-benefit analysis for assessing whether to offer insurance
coverage for innovative medical technologies
To simultaneously satisfy patient needs to enjoy the benefits of medical132

innovations and the requirement to ensure the sustainability of healthinsurance, the Government will trial cost-benefit analysis in theassessment of innovative medical technologies for insurance coverage by
FY2016. The Government will also consider a mechanism for offeringongoing access to a system combining insured and uninsured healthcare
services for use in the case of medical technologies assessed as lesscost-effective. Regarding the combination of insured and uninsured
healthcare services, the Government will consider how to deal withmedical technologies that are assessed as effective but are unlikely to becovered by insurance due to the failure of clinical trials to progress, as aresult of difficulties in recovering development costs.
・ Introducing a Japanese version of the compassionate use system
While promoting the development and approval of unapproved or
off-label drugs that are highly necessary for medical purposes, theGovernment will consider introducing a Japanese version of thecompassionate use system to expand access to investigational new drugs
for patients failing to meet eligibility requirements for participation inclinical trials. The system will begin operating in FY2015.
・ Creating a new combination of insured and uninsured healthcare services(tentatively named “patient-proposed healthcare services”)
Under the system for combining insured and uninsured healthcare
services, the Government will create “patient-proposed healthcare
services” (tentative name) to increase alternative healthcare services forpatients by promptly enabling drugs awaiting approval in Japan oroff-label use of drugs approved in Japan to be used in such a combination,
in response to proposals from patients battling intractable diseases, while
the safety and effectiveness of such drugs is being confirmed. At the sametime, the Government will seek the preparation of implementation plans
and reports aimed at offering insurance coverage for these drugs. To thisend, the Government will seek to submit relevant legislation during thenext ordinary Diet session.

1332) Using generic drugs proactively
The Government will steadily implement measures to promote morewidespread use of generic drugs, based on a specific work schedule, and willcontinuously improve these measures through the PDCA cycle, in order toachieve its targets.
iv) Accelerating ICT use in healthcare and nursing care1) Developing ICT infrastructure in the fields of healthcare, nursing careand health promotion
The Government will implement the following initiatives to improve thequality of healthcare and nursing care services, revitalize the industries inquestion, promote medical innovation, and link up information spanning thefields of healthcare, nursing care and health promotion.
・ A study panel on the utilization of the national identification number
system in the fields of healthcare will consider the necessity of numbers
and specific situations in which numbers could be used in the field ofhealthcare, and will reach a conclusion within 2014.
・ The Promotion Headquarters for Healthcare Policy will take the lead indeveloping digital infrastructure for the fields of healthcare, nursing careand health promotion, in partnership with the Strategic Headquarters for
the Promotion of an Advanced Information and Telecommunications
Network Society and relevant government agencies. Specifically, theheadquarters will ensure the interoperability and portability of ICT
infrastructure for government-related projects, consider using a
numbering system in healthcare-related areas, clarify social rules
regarding the utilization of healthcare information, design a newmechanism for the smooth and affordable utilization of data using private
sectorresources,andpromoteresearch,development

andcommercialization of next-generation medical devices and hospitalsystems using ICT.
2) Introducing electronic prescriptions
The Government will consider introducing electronic prescriptions by
FY2015 in a manner that will help to improve convenience for patients,

134streamline the work involved in dispensing, and ensure safety, based on the
results of a trial project.
3) Promoting more widespread introduction of health information
collaboration

networks;

promotinginformation

sharingandcollaboration by various bodies in offering integrated community caresystem・ To promote more widespread introduction of healthcare information
collaboration networks, the Government will establish standard models
showing the standards to be met in terms of sustainability,interoperability and minimum items for information sharing. In addition,
it will create and diffuse standards on information sharing in the fields ofhome healthcare and nursing care, and promote services for providing
vaccination schedules and other healthcare information.
・ The Government will promote the collection, analysis and utilization of
information on various aspects of healthcare-related areas.
・ To promote the spread of healthcare information collaboration networks,
the Government will collect specific sample cases including thosedemonstrating approaches to obtaining patients’ consent for the handlingof personal information, analyzing successful cases and taking therequisite steps within FY2014.
・ To develop healthcare ICT utilization infrastructure, the Government will
promote cloud computing at the National Hospital Organization and otherorganizations.
4) Improving simulation technologies contributing to innovative drug
development
In order to enhance infrastructure for advancing healthcare and drug
development processes through simulations using supercomputers and for
promoting pharmaceutical companies’ use of these processes, theGovernment will work on the development of state-of-the-art supercomputers
contributing to efficient drug development.

135v) Others
1) Developing a pleasant working environment for female physicians
The Government will set up a panel of female physicians and, in
conjunction with the panel’s report, will implement specific integrated
measures for supporting female physicians in terms of childcare andreturning to work, as well as improving their working environment.
2) Promoting world-leading commercialization of innovative drugs andmedical devices (“Strategy of SAKIGAKE as a Package”)
The Government will promote a package of measures, including thecreation of a priority examination designation system that would halve theapproval examination period before commercialization (from 12 months to 6
months) for drugs identified in the early clinical trial phase as being likely tobe remarkably effective. Through these measures, the Government will aim
to ensure that Japan leads the world in commercializing innovative drugs,
medical devices, regenerative medicine products, and other items targeting
fatal diseases (including orphan cancers, intractable diseases, and otherserious conditions) for which effective remedies do not exist.

136

Theme 2: Realizing clean and economical energy supply and demand(1) Progress in achieving KPIs
<KPI> (Offshore floating wind power generation) Be the first in the world toachieve commercialization of offshore floating wind power generation byaround 2018
⇒ One facility has been installed off the coast of Fukushima Prefecture, andanother off the coast of Nagasaki Prefecture.
<KPI> (Storage batteries) Capture 50% of the global market for storage
batteries by 2020
⇒ Estimated share in 2013: Approximately 10%
The number of lithium-ion batteries for stationary storage in use stood at
17,000 as of March 2014
(June 2013: 3,400)<KPI> (Smart meters) Complete introduction of smart meters, including inhouseholds, in the early 2020s⇒ Four electric power companies have completed the introduction of smart
meters for factories and other users in the high-voltage sector. Other electric
power companies are scheduled to complete introduction by the end of
FY2016. Their progressive introduction for households and other users in the
low-voltage sector is due to begin in FY2014 and to be completed by the endof FY2024.
<KPI> (Next-generation automobiles) Aim to increase the share of new
automobiles accounted for by next-generation automobiles to between
50% and 70% by 2030
⇒ 2013 (preliminary figure): 23.2% (2012: 21.2%)<KPI> Introduce the top-runner systemto building materials by the end of
FY2013⇒ Insulation materials have been added to the scope of products covered by thethe top-runner system.
(2) Progress made in implementing measures137

(Implementing regulatory and institutional reforms to introduce renewableenergy)・ Regarding renewable energy, the Government achieved steady, stable operationof the feed-in tariff system, expedited the procedures of environmental impact
assessments, rationalized safety regulations, and undertook technical verification
to promote introduction, including carrying out a demonstration project for
improving power transmission networks and starting up an offshore floating
wind power generation facility.
(Conducting surveys, etc. in preparation for commercialization of methane
hydrate)・ Regarding the development of domestic maritime resources, such as methane
hydrate, the Government intends to develop technologies by FY2018 with aview to achieving commercialization. In March 2013, Japan became the first
country in the world to use the depressurization method to conduct a gas
production test in an offshore area, focusing on the deep methane hydrate, and is
now analyzing the test results. In addition, the Government conducted its first
fully-fledged extensive geological survey in FY2013 for identifying the volumeof shallow methane hydrate reserves, and plans to conduct a survey of reserves
over the next three years or so. Moreover, in January 2014, the Government
became the first in the world to acquire interests in a cobalt-rich crusts
exploration area. Through these activities, the Government is proceeding with
exploration and development of production technologies in preparation for thecommercialization of maritime mineral resources.
(Promoting technological development of storage batteries and international
standardization)
・ Japan is developing large-scale storage batteries used to stabilize power grids
and technologies to improve the cruising range of electric vehicles, etc. In
addition, Japan and France are working together to develop international
standards for the safety and performance of lithium secondary batteries forstationary energy storage.
(Promoting more widespread use of energy management systems and138

next-generation automobiles)
・ In order to create a society based on smart consumption of energy, theGovernment conducted demonstration projects to establish an energy
management system, including one focused on a demand response scheme,
which was carried out in four smart community areas. In addition, theGovernment implemented measures to improve the environment with a view tophased introduction of the requirement for new houses and building by 2020 tocomply with the energy-saving standards, including the revision ofenergy-saving standards and promotion of more widespread use of the standards.
To popularize next-generation automobiles, the Government also supported theintroduction of electric vehicles and recharging equipment and installedhydrogen stations, revised regulations related to hydrogen infrastructure, andpromoted international harmonization of standards for fuel cell vehicles.
(Promoting measures to deal with peak power demand)・ In response to the amendment of the Energy Saving Act in May 2013, theGovernment has, since April 2014, been promoting measures to deal with peak
power demand by formulating benchmarks for evaluating measures in this area
taken by business operators. Moreover, the Government added insulationmaterials, self-ballasted LED lamps, etc. to the scope of products covered by the
top-runner system.
(3) Specific new measures to be taken
Due to the implementation of various institutional reforms in the energy sector,
private-sector energy-related investments have increased significantly, creating newjobs. The Government will continue to implement measures to achieve clean andeconomical energy supply and demand.
In particular, the Government will accelerate the introduction of renewable energy
as much as possible over a period of around three years from 2013 and will continue
to promote introduction thereafter, with a view to its becoming self-sustaining in themedium to long term, thereby removing the need for governmental support. To that
end, the Government will operate the feed-in tariff system in a stable andappropriate manner and strengthen its own headquarters functions through a
newly-established Cabinet council focused on renewable energy, etc. Through these139

measures, the Government aims to achieve a higher level of renewable energy
introduction than the level indicated in the Strategic Energy Plans to date.
The Government will also promote measures to create a hydrogen-based society,as well as encouraging the use of woody biomass energy and development ofmaritime resources.
1) Enhancing measures to accelerate introduction of wind power generation
To meet the need to expand the introduction of renewable energy, including
making maximum possible use of wind power generation in Hokkaido, Tohoku,
and other suitable areas, power transmission infrastructure, includinginter-regional tie lines, will be strengthened based on a plan to be formulated by
the Organization for Nationwide Coordination of Transmission Operators, which
will be established by the end of 2015. In addition, work will begin to install theworld’s largest wind turbine in order to accelerate the spread of offshore wind
power generation. These measures will be coordinated with research anddevelopment and demonstration projects aimed at cost reduction, as well as
harbor and fishery policies geared toward promoting development of wind
power.
2) Implementing a roadmap with a view to creating a hydrogen-based society
Based on the roadmap toward realizing a hydrogen-based society, theGovernment will steadily implement measures necessary for the production,transport and storage of hydrogen and its use of residential fuel cells(ENE-FARM), fuel cell vehicles, etc. It will also keep track of progress in
implementation via a consultative council consisting of representatives fromindustry, academia and government.
3) Promoting development of maritime resources and fostering relatedindustries
Regarding the deep hydrate, a long-term offshore production test will be
conducted and technologies will be developed by FY2018 with a view toachieving commercialization. In addition, surveys on shallow methane hydrate
resource recovery technology will start. The first exploration of maritime mineral
resources in an extended shelf recognized by the UN Commission on the Limitsof the Continental Shelf will be launched during FY2014. In addition, in order to140foster industries related to development of maritime resources, the Government
will support development of technologies related to maritime resource
development and will begin during FY2014 a study on the establishment of asystem to train engineers who will constitute the foundation of maritime
development. The Government will also formulate an action plan for improving
the environment to promote participation by private-sector business operators infields related to maritime resource development. The plan will include theformulation of common rules concerning the collection, management anddisclosure of maritime survey data.

141

Theme 3: Building safe, convenient, and economical next-generation

Infrastructure(1) Progress in achieving KPIs
<KPI> By 2030, achieve efficient inspection and repair of all important and aged
domestic infrastructure using advanced technologies, including sensors
and robots⇒ The Government determined the priority fields for development andintroduction of robots for next-generation social infrastructure in December
2013 and started publicly soliciting proposals regarding such robots during
FY2014.
<KPI> By 2030, ensure safety driving support equipment and systems are
installed in all new automobiles sold in Japan, as well as in most existingones⇒ Development of the market for driving safety support equipment and systems
that automatically control acceleration, steering or braking is progressing.
(Reference)
Number of passenger cars sold in Japan in which automatic braking
equipment* is installed: Approximately 185,000 units in 2012.
Automatic braking equipment: braking equipment which mitigates damage
from a collision with an obstacle in front of the vehicle or which mitigates suchdamage at low speeds*(2) Progress made in implementing measures(Formulation of the Basic Plan for Life Extension of Infrastructure)・ In November 2013, the Government formulated the Basic Plan for Life
Extension of Infrastructure, which set out the direction to be taken inestablishing an infrastructure maintenance cycle, reducing and leveling total
government expenditure for infrastructure, developing new technologies, andcultivating a infrastructure maintenance industry. In accordance with the Basic
Plan, the national provides technical findings and accumulated technologies tolocal governments, etc. And the national and local governments, etc. in charge ofmanaging and overseeing infrastructure are formulating the Action Plans for Life
Extension of Infrastructure.

142

(Promoting the establishment of infrastructure inspection and diagnosis
systems using IT, etc.)
・ The Government has established a system that constitutes the foundations of aplatform for updated information on infrastructure maintenance and management,
which centrally handles such data as information on the current status ofindividual facilities. In February 2014, the Government also established amaintenance and management support site, which publicly discloses informationon technologies useful for inspection and diagnosis which have been proposed in
response to a call for public submissions. Regarding robots for next-generationsocial infrastructure, relevant ministries and agencies cooperated in establishing
the Study Group on the Development and Introduction of Robots for
Next-generation Social Infrastructure in July 2013 and determined the “priority
fields for development and introduction of robots for next-generation social
infrastructure in December, taking into consideration both needs and seeds.
Moreover, in October 2013, the Government established the Study Committee
on Promoting the Use of Technology to Monitor Social Infrastructure, whichbegan deliberations with a view to publicly soliciting proposals for suchtechnology.
(Decision on the Public-Private ITS Initiative/Roadmaps)
・ Based on the Plan to Upgrade Driving Support Systems, which was finalized in
October 2013, the IT Strategic Headquarters decided on the Public-Private ITS*
Initiative/Roadmaps and formulated goals and strategies for the use of automateddriving systems and road transport data.
*

ITS: Intelligent Transport Systems(3) Specific new measures to be taken
Regarding efforts to extend the life of infrastructure, to follow up on existingmeasures, the national and local governments, etc. in charge of managing andoverseeing infrastructure will formulate the Action Plans for Life Extension
Infrastructure by the end of FY2016, as well as drawing up the Individual FacilityLife Extension Programs, and will promote a maintenance cycle. The following
measures will also be taken in order to develop and put into practice newtechnologies that support new infrastructure businesses and translate into reality the143vision for a society in which people and goods can move safely and smoothly.
1) Conducting research and development and introducing robots fornext-generationsocialinfrastructure

andinfrastructure-monitoring

technology
Regarding robots for next-generation social infrastructure, the Government
will start publicly soliciting proposals during FY2014 and will promote
development and modification by conducting on-site reviews and evaluation innationalprojects. The Government will seek to introduce such robots andtechnology in earnest after a trial introduction, starting in FY2016. Regarding
technology to monitor social infrastructure, the Government will start soliciting
public submission of proposals during FY2014 and will then conduct on-site
reviews and evaluation. Based on the results, such technology will be introduced
for practical use.
2) Executing a strategy for world-leading ITS
Based on the Public-Private ITS Initiative/Roadmaps, an organization
responsible for promoting public-private collaboration will be established, with aview to establishing world-leading ITS with the involvement of not only the
public sector but also the private sector. The Government will execute its
strategy for establishing world-leading ITS in coordination with the Strategic
Innovation Promotion Program (SIP) under the Council for Science, Technology
and Innovation. Under the strategy, the Government will promote thedevelopment of technologies and institutional improvements with a view tostarting trial use of fully automated driving systems in the latter half of the 2020s.
The Government will also achieve optimum use of road networks using big data,
and will ensure appropriate traffic of large vehicles through the utilization ofroad transport data, as well as promoting the creation of new services using
automobile-related information.
3) Deliberations on the medium- to long-term vision for space infrastructure,including satellites
In order to contribute to expansion of the use of outer space, the Government
will consider a medium- to long-term vision for efficient and effective

144

development, arrangement, and operation of satellites and other space
infrastructure, based on the division of roles between the public and private
sectors. The vision will cover such matters as priorities in satellite development
and how to plow back into society related profits earned by private companies.

145

Theme 4: Building regional communities that use their unique local resources toappeal to the world
Theme 4-1) A rich rural society which produces the world’s highest-quality
agricultural, forestry and fishery products and food produce(1) Progress in achieving KPIs
<KPI> Increase the ratio of farmland used by leading farmers to 80% in thenext 10 years⇒ Public Intermediate Organization for Farmland Consolidation began
operating during FY2014 and had been designated in 43 prefectures by June 1.
The increase in the ratio of farmland used by leading farmers will be
disclosed every year. (2010 ratio: 49%)
<KPI> Reduce the cost of rice production by leading farmers by 40% in the next
10 years compared with the current national average cost, including
through efforts by industry⇒ National average cost of rice production in 2011: ¥16,001/60kg→ National average cost of rice production in 2012: ¥15,957/60kg(The cost of rice production by leading farmers, which has not yet been
disclosed, will be disclosed every year in future.)<KPI> Increase the number of corporate farmers four-fold from the 2010 levelto 50,000 in the next 10 years
2010: 12,511 ⇒ 2013 : 14,600<KPI> Expand the market size of agriculture based on collaboration among the
primary, secondary and tertiary industries (sixth industry) from thecurrent ¥1 trillion to ¥10 trillion in 2020
FY2010: ¥1.2 trillion ⇒ FY2012: ¥1.9 trillion**This figure is an estimate arrived at by adding the market sizes of agriculture
and fishery based on collaboration among the primary, secondary andtertiary industries.
<KPI> Increase the value of exports of agricultural, forestry and fisheryproducts and foods to ¥1 trillion by 2020 (2012: approximately ¥450
billion)⇒ 2013: ¥550.5 billion146

(2) Progress made in implementing measures(Creation of Public Intermediate Organization for Farmland Consolidation
responsible for consolidating farmland)
・ A law to create Public Intermediate Organization for Farmland Consolidation
responsible for consolidating farmland into the hands of leading farmers at theprefectural level was enacted in December 2013, and such institutions were
designated in 43 prefectures by June 1, 2014. In the same month, the revision of
the Act on Promotion of Improvement of Agricultural Management Foundation
was enacted to promote the incorporation of farms and strengthen measures toencourage young people to engage in agriculture.
(Decision on reforms, including the reform of production adjustment)・ “The Plan to Create Vitality for Agricultural, Forestry and Fishery Industries andLocal Communities” was formulated in December 2013. Regarding the Farm
Income Stabilization Program, the Government decided to halve the unit amountof the direct payment for table rice in FY2014 and the following years, and to
end the program entirely from production in FY2018, while creating a Japaneseversion of the direct payment program in FY2014. The Government also set out
a policy of seeking to enable rice to be produced according to demand, without
relying on government quota allocation, with a view to putting this into practicein five years’ time (regarding production in FY2018). Accordingly, laws related
to the reform of the Farm Income Stabilization Program and the creation of theJapanese version of the direct payment program was enacted in June 2014. In
addition, laws related to the promotion of ornamental plants, pig farming andinland fishery were legislated to reinforce front-line production in the
agricultural, forestry and fishery industries.
(Promoting collaboration among the primary, secondary and tertiary industries
through the Agriculture, Forestry and Fisheries Fund for Innovation,
Value-chain and Expansion Japan)
・ Regarding the Agriculture, Forestry and Fisheries Fund for Innovation,
Value-chain and Expansion Japan (A-FIVE), which is responsible for promoting
collaboration among the primary, secondary and tertiary industries (dubbed‘Sixth Industrialization’), 43 sub-funds were established, which had invested in
23 projects by May 2014. In November 2013, the Rural Renewable Energy Act
147

was enacted to promote renewable energy power generation in harmony with thesound development of the agricultural, forestry and fishery industries. In
addition, in June 2014, a system was put in place to protect geographicalindications that constitute the names of agricultural, forestry, and fisheries
produce and foods with traditions and attributes cultivated in Japan's regions.
Under this protection, such indications are treated as intellectual property.
(3) Specific new measures to be taken
The Government will steadily implement reforms that represent an innovative
step toward improving agricultural productivity, including the enactment of laws
related to Public Intermediate Organization for Farmland Consolidation and thereform of production adjustment, in accordance with the actual circumstances facedby farms. The Government will also carry out systematic reforms to transform
agriculture into a growth industry under the revised growth strategy.
In order to transform agriculture into a growth industry by dramatically improving
its productivity, the Government will make use of the vitality and knowhow ofcompanies and encourage companies to enter the agricultural and related industries,
to create a mechanism which ensures both that market needs are reflected in farming
and the standards of quality in front-line farming are conveyed consumers bothwithin and outside Japan. To that end, the Government will promote exports by (1)further strengthening production capabilities; (2) increasing added value byorganically linking domestic value chains; and (3) linking domestic value chainswith foreign ones. Efforts will also be made to develop new domestic markets.
Specifically, the measures listed below will be taken. At the same time, theGovernment will (4) strive to transform forestry and fishery into growth industries.
The Government will aim to double the income of farmers and farming villages,
as well as contributing to the preservation of beautiful, traditional rural villages, andmaintaining and improving the food self-sufficiency rate and self-sufficiency
capabilities. It will achieve this by transforming agriculture, forestry and fisheries
into growth industries through integrated implementation of these measures with themeasures included in the revised Plan to Create Vitality for Agricultural, Forestry
and Fishery Industries and Local Communities.
i) Strengthening production sites

148

The Government will improve productivity by using Public Intermediate
Organization for Farmland Consolidation to consolidate farmland into large
blocks and improve production and distribution systems.
1) Fostering leading farmers
Public Intermediate Organization for Farmland Consolidation will start
operating in earnest, with a view to consolidating farmland into the hands ofleading farmers, with the involvement of people wishing to engage in
agriculture

anew.

The

Government

will

monitorhow

prefectural

governments exercise governance over Public Intermediate Organization for
Farmland Consolidation and appropriately operate the system to ensure thatthese institutions succeed in consolidating farmland in such a way. In
addition, the Headquarters on Creating Dynamism through Agriculture,
Forestry and Fishery Industries and Local Communities will evaluate the
Public Intermediate Organization for Farmland Consolidation.
Regarding the reform of rice production adjustment program, theGovernment will create an environment that encourages farmers to choose
their production based on the market demand and will strive to make itpossible to produce agricultural products without relying on government
quota allocation, with a view to putting into practice in five years’ time(regarding production in FY2018). To that end, the Government will create
an environment conducive to agricultural production that takes into
consideration demand trends through such measures as providing detailed
rice-related information, including market prices and information concerning
supply and demand.
Regarding the introduction of income insurance for agricultural producers,
the Government will consider relevant systems (e.g. an agricultural mutual
aid system) and take the necessary legislative action.
2) Integrated reform of agricultural committees, agricultural production
corporations and agriculture cooperatives
The Government will implement the following reform measures inaccordance with the Regulatory Reform Implementation Plan (Cabinet
Decision on June 24, 2014).

149A) Reforming agricultural committees
Agricultural committees will prioritize efforts to optimize the use of
farmland, including the use of idle farmland, and will actively conduct
relevant activities.
To establish a transparent process that ensures that only persons suited
to carrying out the proper mission of an agricultural committee become
committee members, the existing systems of election via voting, andappointment based on recommendation from local assemblies andorganizations will be abolished in favor of a new unified system:
appointment by the heads of municipalities subject to consent frommunicipal assemblies.
At the same time, the Government will make it possible for local
communities to recommend candidates and publicly recruit candidates,
and will require that a majority of a committee are certified farmers.
Moreover, a law will be enacted to provide a legal basis for theestablishment

ofFarmlandUtilization

Optimization

Promotion

Committees (tentative name), which will be responsible for implementing– under the supervision of agricultural committees – regional measures tooptimize utilization of farmland, including consolidating farmland into
the hands of leading farmers, preventing farmland from being abandoned,
reducing abandoned farmland and promoting new entry to the sector, as
well as for supporting training of skilled and diverse responsible farmers.

B) Reforming corporations permitted to own farmland (agricultural
production corporations)
The Government will revise the requirements for corporations
permitted to own farmland (agricultural production corporations) as
follows, with a view to supporting corporations seeking to achieve
successful agricultural production through collaboration among the
primary, secondary and tertiary industries:
1) Regarding the requirements concerning executives, at least one
executive must be involved in agricultural work.

1502) In terms of the requirements concerning members, a majority ofinvestors with voting rights must be persons involved in agriculture,
while no restrictions will be imposed with regard to the minority ofinvestors.
In addition, the Government will consider further relaxation of therequirements for agricultural production corporations and reform of the
farmland system at the time of the five-year review of the Act on
Promoting Intermediate Management of Farmland as a Business (asprescribed in the supplementary provision to the Act), taking into accountthe situation faced by companies which entered the agricultural market
through lease arrangements.
In light of the fact that the restoration of leased farmland to the original
condition is guaranteed through the cancellation of lease contracts if theland has been effectively deserted or converted into an industrial waste
disposal site, the Government will seek to establish an equally secure
method of restoring it to its original condition (e.g. confiscation by theGovernment) as a prerequisite when it considers liberalizing companies’
entry into agriculture through the ownership method.
C) Reforming agricultural cooperatives
In order to enable regional agricultural cooperatives to play a leadingrole in converting agriculture into a growth industry through creative
initiatives, the Government will encourage voluntary reform bydesignating the next five years as a period of intensive agricultural reform
and will aim to submit relevant bills during the next ordinary Diet session,
to facilitate smooth voluntary reform.
The Government will promote a shift from the Central Union ofAgricultural Cooperatives system to a new autonomous system and will
make it possible for the agricultural cooperative associations andagricultural economic federations to be converted into stock companies
invested in by agricultural cooperatives.
Regarding municipal agricultural cooperatives, the Government will
make it clear that they should seek to earn profits through proactive
economic activities and return some of their profits to members while151setting aside another portion for future investment. At the same time, theGovernment will promote business methods that reduce risks and theburden of paperwork related to financing businesses (credit provision andmutual insurance). A majority of board members will be required to becertified farmers and persons with professional expertise in the sale ofagricultural products and management of farms.
Moreover, the Government will make it possible for municipal
agricultural cooperatives and federations to be divided up or converted
into stock companies and consumers’ cooperatives, etc.
ii) Linking domestic value chains
In order to make enable those in the agriculture, forestry and fishery industries
to incorporate added value created by those in the food industry by organicallylinking domestic and foreign value chains, the Government will promote
regional collaboration among the primary, secondary and tertiary industries
using local resources involving various business operators. The Agriculture,
Forestry and Fisheries Fund for Innovation, Value-chain and Expansion Japan(A-FIVE) will be actively used as the core of this initiative.
In addition, the Government will develop the strengths of Japan’s agriculturalindustry based on a market-oriented approach that responds appropriately tomarket needs. It will also secure stable sources of demand for rice used aslivestock feed.
1) Promotion of collaboration among the primary, secondary and tertiaryindustries
Regarding A-FIVE, although the number of investment projects has
recently increased, investment is not yet adequate. A lack of capacity toformulate investment projects on the part of those in the agricultural, forestry
and fishery industries has been pointed out as a major challenge to adequate
implementationofinvestment,

so

the

Government

will

conduct

comprehensive deliberations regarding the handling of investment ratios forsuch people, as well as the possible revision of relevant laws, as part of areview of the law to be conducted three years after its entry into force(December 2015). Based on the results of these deliberations, the152Government will take the necessary measures.
In the meantime, the Government will (1) formulate guidelines forpromoting the use of A-FIVE by companies that have entered the agricultural,
forestry and fishery industries and will clearly recognize such companies’
status as actors in the industries concerned; and (2) take steps within FY2014
to allow the investment ratio of sub-funds to be raised if the situation requires.
The Government will also add to the scope of projects eligible for investment(1) active use of capital-like subordinated loans; and (2) agricultural
production by joint ventures, including plant factories, required for
promoting collaboration among the primary, secondary and tertiary industries.
In addition, it will facilitate cooperation with Agribusiness Investment &Consultation Co., Ltd. Through these measures, the Government will
promote the use of A-FIVE.
2) Converting livestock and dairy farming into growth industries throughcollaboration among the primary, secondary and tertiary industries
The Government will promote differentiation and branding of livestockand dairy products through the use of domestic feed crops and rice. Systems
for supply, processing and distribution of regional feed resources, including
feed rice, will be improved. At the same time, new technologies will be
developed and popularized, and livestock clusters will be created to promote
regional efforts to improve earnings and strengthen the foundation of
production. In addition, in order to support collaboration among the primary,secondary and tertiary industries and exports by dairy farmers using
innovative ideas, the Government will conduct the following initiatives
starting in FY2015:
A) Improve fresh milk transactions with designated organizations throughthe following measures, while giving consideration to the functions ofsuch organizations:・ Double the daily domestic production quota to 3.0 tons.
・ Enable dairy farmers to simultaneously commission sales todesignated organizations and sell distinctive fresh milk directly tomilk producers (with a daily processing capacity of 3.0 tons).
・ Allow dairy farmers to conduct price negotiations regarding153

distinctive fresh milk directly with milk producers so that its
distinctive nature can be reflected in the price.
B) Ease regulations on the establishment of small milk production facilities
for promoting collaboration among the primary, secondary and tertiaryindustries, as well as regulations on milk facilities for export.
・ Through these initiatives, the number of projects to promotecollaboration among the primary, secondary and tertiary industries
with regard to dairy farming will be doubled to 500 by 2020.
iii) Promoting exports, etc.
In order to encourage bold expansion into foreign markets, where populationand market growth is expected, the Government will improve the export
environment by implementing domestic reforms in line with foreign markets andpromote a shift to products that are actively selected by consumers in foreign
markets. Through these initiatives, the Government will aim to raise the annual
export value of Japanese agricultural, forestry and fishery products and foods,
first to ¥1 trillion by 2020 and then to ¥5 trillion by 2030, and will study specificmeasures to achieve the target figures. Efforts will also be made to develop new
domestic markets.
1) Improving the export environment
First, the Government will review domestic and foreign regulations that
may impede exports from Japan and strengthen the system for authorizing
the standards required by export destination countries. At the same time, theGovernment will improve the export environment through the measureslisted below, including the creation of cold chains through overseas
expansion of the Japanese food industry. In addition, the Government will
establish a one-stop consultation service for business operators seeking
information concerning exports of Japanese agricultural, forestry and fisheryproducts and foods.
・ Regarding the HACCP approved of fishery processing establishments
required for exports of fishery products to the EU, the Ministry of Health,Labour and Welfare and the Ministry of Agriculture, Forestry and
Fisheries will cooperate in ensuring that approved154

is appropriately

implemented. As well as in setting, a 90-day standard processing period
improving, the approved system to allow certification of around 100
establishments over the next five years, and handing applications forcertification will be appropriately processed. In the area of applications
for registration of farming sites, the Ministry of Agriculture, Forestry and
Fisheries will cooperate with prefectural governments in managing
progress in processing applications, to allow completion of registration
within the 30-day standard processing period.
・ (gardenia, monacus, and safflower pigments)Food additives approved asexisting additives are widely used in domestic processed foods, but theiruse is not permitted in the United States and European countries. In orderto promote exports of Japanese processed foods, the Ministry ofAgriculture, Forestry and Fisheries, together with business operators, will
finalize a prioritized list of the food additives within FY2014 and will
support data collection by business operators starting in FY2015, working
in partnership with the Ministry of Health, Labour and Welfare as
required, to enable those food additives to be used in major countries. In
addition, in order to enable Japan to export processed foods containing
domestically produced meat extract to the United States, the Ministry ofAgriculture, Forestry and Fisheries will identify challenges related tosuch exports and, in light of the results, will conduct a survey on theintentions of companies hoping to export such foods. If there arecompanies hoping to export such products, the relevant ministries willconduct the necessary intergovernmental consultations with foreigncounterparts, starting in FY2015.
・ In order to enhance the food safety of Japanese agricultural products andstrengthen the competitiveness of the Japanese food industry, theGovernment will formulate internationally acceptable standards and willseek to establish international standards under Japan’s leadership. For
example, there is no unified standard for production process managementof agricultural products in Japan. In addition, in some cases, Japanesestandards are not accepted under international business practices. In order
to bolster the domestic production base and strengthen the appeal ofJapanese products to foreign buyers, the Government will set up a155

consultative body involving the relevant parties during FY2014 andreview GAP (good agricultural practices) with a view to promoting
exports. In light of the expected increase in entry into agriculture bycorporations, the Government will seek to ensure adequate education of
employees, as well as appropriate installation of bathrooms and provisionof facilities such as resting places.
・ Based on the Strategy for the Global Food Value Chain, which wasformulated in June 2014, industry, academia and government will
cooperate in improving the export environment, including the creation ofcold chains and distribution and sales networks through overseas
expansion of the Japanese food industry, as well as promoting theestablishment of an export system based on a market-oriented approach,while making strategic use of economic partnerships, primarily thosewith emerging countries in Asia, which are promising markets. In
addition, the Government will promote exports of Japanese agricultural,
forestry and fishery products and foods by local companies by
establishing production, processing and distribution systems using
advanced technologies.
2) Promoting the Japan Brand
The Government will bring export promotion initiatives, which are
currently conducted by individual prefectures, under the umbrella of theJapan Brand initiative. To that end, the Government will nurture and support
organizations responsible for exercising headquarters and marketing
functions on an item-by-item basis. Starting in FY2015, the Government will
forward the establishment of organizations of exporters that handle specificproducts, especially for beef, Japanese tea, and fishery products. Moreover,the Export Strategy Executive Committee established in June 2014 will
promote exports, serving as the headquarters for export strategies throughout
Japan.
In order to promote exports of Japanese food ingredients and overseas
expansion of Japanese food companies, the Government will create apublic-private consortium as the headquarters for strategically promoting the
spread of Japanese culinary culture, including authentic Japanese foods,

156

following the addition of Japanese cuisine to UNESCO's Intangible Cultural
Heritage list. It will also unify the Japan Brand and support overseas
expansion of Japanese foods via the Cool Japan Fund. The consortium will
promote branding of Japanese foods by disseminating information on
Japanese culinary culture, including local cuisine and ingredients, improvethe environment for promoting exports and overseas expansion, and support
training of chefs and other personnel responsible for promoting the spread ofJapanese culinary culture and opening Japanese restaurants overseas. In
conducting the above initiatives, the consortium will cooperate with JETRO
and make use of its knowledge concerning support for overseas expansion
and promotion of exports.
3) Creating examples of success cases through the establishment of model
export zones and model items
The Government will offer support for model export zones in regions
which strive to improve the export environment through implementation of
HACCP authorization, halal certification and acquisition of GLOBAL G.A.P.,
and which utilize wholesale markets. The Government will also strive tocreate examples of success cases by establishing item-by-item export
promotion organizations focused on beef, tea, and fishery products, ahead ofother items.
4) Developing new domestic markets
The Government will expand the share of domestic agricultural products
for which demand is growing, such as vegetable for processing and/or
industrial use, organic agricultural products and medicinal plants. In addition,
it will develop new domestic markets through collaboration between the
medical care, welfare, food and agricultural sectors, and between the
agricultural and tourism sectors.
iv) Transforming forestry and fishery into growth industries
1) Transforming forestry into a growth industry
The Government will convert forestry into a growth industry by utilizing
Japan’s abundant forest resources while maintaining and enhancing the157multifunctional role of forests.
・ To create new demand for wood products, the Government will accelerate
efforts to popularize domestic CLT (Cross Laminated Timber). In light of
the results of a demonstration project, the Government will establish ageneral method of designing buildings using CLT early in FY2016 andpromote comprehensive initiatives to establish a production system fordomestic CLT.
・ The Government will promote the use of wood biomass energy using a
combination of small-scale regional power generation and heat utilization,
as well as promoting use of new materials through research anddevelopment focused on cellulose nano-fiber.
・ The Government will establish a stable and efficient system to supply
domestic wood by consolidating forestry practices.
2) Transforming fishery into a growth industry
The Government will strengthen initiatives in each of the production,
processing, distribution, sales and export stages, while taking into
consideration the situation facing the fishery industry, including soaring fuelprices.
・ The Government will promote the formulation of fishing village
revitalization plans, under which fishing regions themselves aim toachieve structural reform of the fishery industry and fishing villages withthe support of companies, NPOs, etc. By increasing the income of regionsthat have formulated the plans by more than 10% within five years offormulation, the Government will lay the foundations for a sustainable
and highly profitable fishery and fish farming industry. In the case ofmarine fishery (using fishing boats), the Government will promote
structural reform by strengthening the international competitiveness offishing and production systems.
・ The Ministry of Health, Labour and Welfare and the Ministry ofAgriculture, Forestry and Fisheries will cooperate in accelerating HACCP
authorization of fishery processing establishments for export to the EU.
[Described above]. The Ministry of Agriculture, Forestry and Fisheries
will promote exports of fishery products by enabling the Fisheries

158

Agency to carry out HACCP authorization, a procedure until now
undertaken only by the Ministry of Health, Labour and Welfare, thereby
further promoting the acquisition of authorization.
・3) Recovery of evacuation order zones
In areas where evacuation orders have been issued due to the nuclear
accident, the Government will take the necessary measures to facilitate andaccelerate use of farmland for non-agricultural purposes, such as theinstallation of renewable energy facilities. These measures will include
simplifying procedures for local governments to prepare recovery anddevelopment plans.

159

Theme 4-2) A society which makes use of potential such as tourism resources toinvite many tourists from around the world to regional communities(1) Progress in achieving KPIs
<KPI> Increase the annual number of foreign visitors to Japan to over 30
million by 2030
⇒ 2013: 10.36 million (2012: 8.36 million)(2) Progress made in implementing measures(Relaxing visa requirements, primarily for visitors from ASEAN countries)
・ Visa requirements have been relaxed, primarily for visitors from ASEAN
countries. Specifically, visitors from Thailand and Malaysia are now exempt
from visa requirements, visitors from Vietnam, the Philippines, Cambodia, Laosand Myanmar can now be provided multiple-entry visas, and the period of stayon multiple-entry visas for visitors from Indonesia has been extended. As a resultof a combination of the effects of strategic promotion of visits to Japan,
expansion of airline networks, and exchange rate movements, the number ofvisitors from the ASEAN region has increased significantly. Japan has thus
attained its goal of increasing the number of foreign visitors to the country to 10
million as the first step toward achieving the KPI of increasing the annual
number of foreign visitors to Japan to over 30 million by 2030.
(Expanding the scope of the tax exemption system for foreign visitors fromconsumption tax)
・ As part of the initiative to improve the environment of foreign visitors enjoy
during their stay, in the FY2014 tax reform, regarding the tax exemption system
for foreign visitors from consumption tax, the Government has decided to
expand the scope of tax exempt items to all items, and to simplify its procedures(the measure shall come into effect in October 2014).
(3) Specific new measures to be taken
Now that the goal of increasing the annual number of foreign visitors to Japan to
10 million by 2013 under the Japan Revitalization Strategy has been achieved, theGovernment aims to increase the number to 20 million by 2020 as a KPI, by taking
advantage of the golden opportunity presented by the Games of the XXXII
Olympiad and Tokyo 2020 Paralympic Games.
To that end, the following measures will be taken, based on the Action Program160

toward the Realization of Japan as a Tourism-Oriented Country 2014, which wasapproved at a meeting of the Ministerial Council on the Promotion of Japan as a
Tourism-Oriented Country in June 2014.
・ Promote tourism with an eye to the Games of the XXXII Olympiad and Tokyo
2020 Paralympic Games.
・ Implement initiatives to drastically expand inbound tourism (increase thenumber of foreign visitors to Japan).
・ Facilitate to visit Japan through such measures as relaxing visa requirements.
・ Develop world-class attractive tourism areas.
・ Improve preparedness to accept foreign visitors.
・ Promote the invitation and holding of international conferences, etc. (MICE) andattract foreign business visitors.
In relation to the above measures, the following additional specific measures will
be taken in order to achieve the KPIs.
1) Promoting tourism and drastically expanding inbound tourism (increasing
the number of foreign visitors to Japan) with an eye to the Games of the
XXXII Olympiad and Tokyo 2020 Paralympic Games・ In order to spread the effects of holding the Games of the XXXII Olympiad
and Tokyo 2020 Paralympic Games 2020 beyond the host city to otherregions, the Government will take such opportunities as cultural programs todisseminate information about cultural attractions in Japan’s regions andorganize hands-on experience programs nationwide, based on appropriate
cooperation with local governments, artists, etc.
・ Efforts will be made to attract visitors to regions from within and outside
Japan through the hosting of international events, including the Rugby World
Cup 2019 in Japan, as well as through Pre-Games Training Camps for the
Games of the XXXII Olympiad and Tokyo 2020 Paralympic Games.
・ With a view to striving to make Japan a Sport Nation, the Government will
promote the enhancement of international competitiveness, the realization ofa life-long sport society, and the improvement of health through sports.
・ The Government will make steady efforts to achieve the development target
prescribed by the “Basic Policy on Accessibility” based on the “Act on
Promotion of Smooth Transportation, etc. of Elderly Parsons, Disabled161

Parsons, etc.”(attaining a accessible rate of 100% by FY2020 at all passenger
facilities used by 3,000 or more passengers per day, etc.) With an eye to theGames of the XXXII Olympiad and Tokyo 2020 Paralympic Games, theGovernment will promote further efforts to make passenger facilities,
vehicles, etc. accessible, including the creation of two or more accessible
routes at each railway station and airport, and creating barrier-free zones inareas around railway stations in tourist spots. At the same time, theGovernment will promote efforts to improve accessibility by non-physicalmeasures.
・ In order to create new initiatives by expanding the range of people involvedin promoting inbound tourism (increasing the number of foreign visitors toJapan), the Government will establish a platform for encouraging
collaboration using advanced technologies and innovative ideas in various
fields.
・ Aiming to achieve the goal of increasing the number of foreign visitors toJapan to 20 million, the Government will implement more scientificmarketing by establishing a marketing strategy headquarters involving
external marketing experts, etc. at the Japan Tourism Agency.
・ Starting in FY2015, the Japan National Tourism Organization (JNTO) will be
the implementing agency for projects focused on promoting visits to Japan,
making prompt decisions locally and expanding the scope of target markets
in a strategic manner, strengthening promotion efforts aimed at the coastal
and inland regions of China, Southeast Asia, India, Russia, etc.
2) Further relaxing visa requirements, creating a strategy to facilitate longer
stays of foreign visitors in Japan, and accelerating and facilitating
immigration procedures・ As part of efforts to increase the annual number of foreign visitors to 20
million, toward the realization of Japan as a tourism-oriented country full of
attractions with the emphasis of ensuring national security, the Government
will endeavor to realize visa exemptions as soon as possible to visitors fromIndonesia, the Philippines and Vietnam, where the measure is expected to beeffective in increasing visitors to Japan, with the cooperation from thosecountries on condition that due consideration be paid to security. As the first162

step, the Government will relax visa requirements as follows from a strategic
viewpoint. The Government will also study an electronic system for travelauthorization— Introduce visa exemption to visitors from Indonesia (prior registration
bye passports with Japanese diplomatic missions in Indonesia).
— Further relax visa requirements for visitors from the Philippines andVietnam (applied only to the purpose of tourism, tours organized bydesignated travel agencies), relaxing requirements for multiple-entry
visas, extending the effective period of visas to a maximum of five years,etc.).
— Start issuing multiple-entry visas for visitors from India by this summer,in addition to the above measures.
・ Regarding a program to grant wealthy foreign visitors the permission for along period of stay, relevant ministries and agencies will hold consultations
on a draft program with a view to permitting a stay of up to one year forsightseeing purposes. After finalizing the program by this summer, theGovernment will take the necessary measures, aiming to start the program in
FY2015.
・ In order to increase the annual number of foreign visitors to Japan to 20
million by 2020, it is imperative to significantly increase flights by low-costcarriers to regional airports. In addition, it is necessary to expedite andfacilitate foreign visitors’ entry into and exit from Japan and make it possible
to deal with an increase in foreign visitors to Japan in preparation for the
Games of the XXXII Olympiad and Tokyo 2020 Paralympic Games. In orderto overcome these challenges, the Government will systematically develop
the physical and human resources necessary for operating CIQ (customs,
immigration and quarantine) systems, including at regional airports and sea
ports, and for gathering and analyzing information essential to ensuringsafety for the Games of the XXXII Olympiad and Tokyo 2020 Paralympic
Games .
・ The Government will implement measures to further facilitate immigration
procedures for cruise ships through the amendment of the Immigration
Control and Refugee Recognition Act in 2014.
・ In order to expedite airport immigration procedures for participants in163

international conferences and VIPs, the Government will study appropriate
ways of managing the fast lane program. The first step will be to create fastlanes for such visitors at the Narita and Kansai international airports in
FY2015, on condition that the requisite number of immigration personnel, etc.
be secured.
3) Developing world-class attractive tourism areas, improving the environment
to accept foreign visitors, promoting invitation and holding of international
conferences, etc. (MICE), and attracting foreign business visitors
・ Wider-area cooperation between regions will be enhanced to strengthen theircommunication capabilities. Various wider-area tourism routes with a richarray of stories and themes appealing to target markets will be developed andoffered, and will be proactively publicized to other countries.
・ In order to enable regions to attract visitors from both within Japan andoverseas through their own strategies, taking advantage of their strengths, theGovernment will improve the quality of regional initiatives by enhancing theprovision of information on examples of advanced practice in the
management of organizations responsible for developing tourism areas.
・ The Japan Tourism Agency and the Regional Economy Vitalization
Corporation of Japan will cooperate with each other in creating models fortourism-based regional revitalization by using regional revitalization funds
for tourism.
・ In order to enhance the appeal of tourist spots, the Government will
cooperate with local governments, power cable managers, etc. in promoting
full-scale removal of utility poles.
・ The Government will create a program to designate Japan Heritage sites. The
regions in question will take the lead in strategically publicizing information
on cultural assets of historic value, targeting both Japanese and foreignaudiences.
・ The national government, local governments, tourism associations, chambersof commerce and industry, and other organizations will cooperate inpromoting industrial site tourism using such industrial heritage as Tomioka
Silk Mill and Related Sites and Sites of Japan's Meiji Industrial Revolution.
・ Regarding the introduction of multilingual services for art , museums, natural

164

parks, tourist areas, roads, public transportations, etc., the Government will
improve and enhance efforts to introduce such services across Japan in line
with

the

Guidelines

for

Improvement

andEnhancementofMultilingualization toward the Realization of Japan as a Tourism-Oriented
Country (March 2014). The Government will also promote the provision ofmultilingual information and advances in navigation systems using
high-precision positioning and other forms of ICT.
・ The Government will promote the development of the free public wireless
LAN environment to attract tourists [described above]. At the same time, theGovernment will promote the provision of information at post offices,
roadside stations, etc. and consider a program to promote tours using such
facilities as bases.
・ The Government will promote the expansion of cashless payment to realize
further convenient and efficient of payment system. [Described above]
・ The Government will seek to enhance systems for foreign patients so thatsafe and reassuring medical services of Japan can be provided to them. The
Government will also create a framework for enabling foreign tourists toeasily obtain information on medical institutions. [Described above]・ Regarding the tax exemption system for foreign visitors from consumption
tax, the Government will seek to double the number of tax-free shops acrossJapan to 10,000 towards 2020 through enhancing prior consultation services
at Regional Transport Bureaus and Regional Bureaus of Economy, Trade andIndustry, and improving the training in tax exemption procedures provided
for tax--free shop operators and staff. The Government will also study waysof further convenience regarding tax- exempt sales procedures.
・ Integrated resorts (IR) are expected to contribute to the promotion of tourism,
regional prosperity and industrial development. Meanwhile, as a precondition,
it is necessary to study institutional measures to prevent problems from theperspective of preventing crime, maintaining security, ensuring the sounddevelopment of youth, and preventing pathological gambling. Therefore,
relevant ministries and agencies will study this matter in light of the status of
the IR promotion bill (*) and public debate on IR.
*IR promotion bill: The Bill on Promotion of Development of Specified
Complex Tourism Facility Areas.

165III. Strategy of Global Outreach(1) Progress in achieving KPIs
<KPI> Aim to raise the FTA ratio to 70% (2012: 18.9%) by 2018
⇒ 2013: 18.2％*The 2013 FTA ratio comes to 22.6%, including the value of trade with
Australia, with which Japan has reached the substantive agreement ineconomic partnership agreement (EPA) negotiations.
*Negotiations on nine EPAs in process with a view to an early conclusion.
<KPI> Double inward foreign direct investment (FDI) stocks to ¥35 trillion (asof the end of 2012: ¥17.8 trillion)⇒ As of the end of 2013: ¥18.0 trillion<KPI> Double the value of exports by SMEs by 2020 compared with the 2010level
⇒ The value of exports by SMEs owning overseas subsidiaries increased bymore than 30%, from approximately ¥3.7 trillion in FY2010 to approximately¥5 trillion in FY2012.
<KPI> Raise overseas infrastructure project orders received from the current¥10 trillion to ¥30 trillion by 2020
⇒ The value of overseas infrastructure project orders received in 2013 only interms of major projects grasped by the ministries concerned increased toapproximately ¥9.3 trillion, up sharply from approximately ¥3.2 trillion in
2012.
*KPI figures were calculated comprehensively using various statistics. They
include income from business investments on overseas infrastructure, etc.
<KPI> Triple overseas sales of broadcast contents by FY2018 from the FY2010
level⇒ Overseas sales of broadcast contents (in terms of exports of TV programs) in
FY2010: ¥6.25 billion → FY2012: ¥6.22 billion

166

(2) Progress made in implementing measures(Progress made in EPA negotiations with various countries, including thesubstantive agreement on the Japan-Australia EPA)
・ In terms of economic partnerships, Japan agreed with Turkey in January 2014 tostart EPA negotiations and reached a substantive agreement on theJapan-Australia EPA in April. When the Prime Minister visited Europe in April
and May, he expressed that the Government of Japan aims to reach agreement inprinciple on the Japan-EU EPA in 2015 and concurred with leaders of European
countries and the EU on the importance of the early conclusion of the EPA.
Regarding TPP (Trans-Pacific Partnership) negotiations, Japan and the UnitedStates identified a path forward on important bilateral TPP issues in April. At
TPP Ministerial Meeting held in May, ministers reviewed the progress in overall
negotiations and accelerated bilateral negotiations among each country.
(Actively implementing the Infrastructure Export Strategy through sales
pitches by the Prime Minister and Cabinet Ministers)
・ Regarding infrastructure exports, the Prime Minister and Cabinet Ministers madea total of 67 sales pitches in 2013 (including 25 made by the Prime Minister), farsurpassing the KPI of at least 10 sales pitches each year. The Government
promoted strategic implementation of ODA through the improvement of various
measures for strategic use of ODA loans and JICA’s Private Sector Investment
Finance, as well as through active use of grant aid and technical cooperation. In
addition, the revised Trade and Investment Insurance Act, which reforms thefunctions of trade insurance, and the Act on the Japan Overseas Infrastructure
Investment Corporation for Transport & Urban Development, which supports
overseas transport and urban development projects, were enacted in April 2014.
In June 2014, the Infrastructure Export Strategy of May 2013 was revised.
(Multifaceted support for overseas expansion by SMEs)
・ Regarding support for overseas expansion by SMEs (including service
businesses), the Government opened a support portal site called “Mirasapo”,
created the “SMEs' Overseas Development Fastpass” program, and established167

one-stop overseas consultation offices (a platform for local support for overseas
expansion by SMEs) by which the KPI of establishing 10 such offices by thesummer of 2013 was achieved. The Government is also implementing suchmeasures as promoting cross-border internship programs for young Japanese
workers, cultivating local core personnel, and dispatching experienced elderly
workers to companies eager to achieve overseas expansion.
(Establishing the Cool Japan Fund, etc.)
・ As part of the Cool Japan Initiative, the Cool Japan Fund was established in
November 2013. The Cool Japan Fund aims to strengthen cooperation with
relevant organizations. In August 2013, a cross-industrial organization to support
overseas sales of broadcast contents was established. Efforts are underway torealize continuous broadcasting of appealing Japanese contents, in major
ASEAN countries as the main targeted markets for the moment.
(Working out the specifics of National Strategic Special Zones and establishing
the Council for Promotion of Foreign Direct Investment in Japan)
・ Regarding inward FDI, the Government is working out the specifics of the
National Strategic Special Zones. It has already designated six National StrategicSpecial Zones; these include the Tokyo and Kansai zones. In addition, in April
2014, the Expert Group Meeting on Foreign Direct Investment in Japan was held
to hear opinions from the top management of foreign companies and others andto specify the issues which should be addressed in order to promote foreign
direct investment in Japan. In the same month, the Government established theCouncil for Promotion of Foreign Direct Investment in Japan as new
headquarters for cross-ministerial promotion of inward FDI.
(3)Specific new measures to be taken
Regarding EPA negotiations, the Government will push forward to achieve earlyconclusion on TPP negotiations in a way that maximizes Japan’s national interests.
At the same time, the Government will promote strategic and prompt negotiations
on other EPAs including RCEP, the Japan-China-Republic of Korea FTA and theJapan-EU EPA, in order to enhance Japan’s external economic relations and topromote domestic structural reforms through progress in global rule-making

168concerning trade and investment. The Government will also encourage more active
overseas business activities by private sectors through promoting their utilization of
the existing EPAs.
In terms of infrastructure exports, the Government will pursue its order target byquickly and steadily implementing the revised Infrastructure Export Strategy.
At the same time, in order to promote inward FDI and capture foreign markets ina strategic manner, the following measures will be taken.
1) Strengthening the system to facilitate doubling inward FDI stocks
In order to achieve the ambitious goal of doubling inward FDI stocks to ¥35
trillion by 2020, it is essential for the Government to develop the investment
promotion system, including the establishment of the system required to improve
the investment environment in Japan, taking foreign companies’ needs into
consideration. Therefore, with the Council for Promotion of Foreign Direct
Investment in Japan as the headquarters, cross-ministerial efforts will be made to
conduct activities focused on identifying and attracting investment projects, andcarrying out the necessary institutional reforms.
Japan’s diplomatic missions abroad and JETRO overseas offices will
cooperate in strengthening overseas activities focused on attracting investment
projects, such as encouraging the top management of foreign companies to invest
in Japan, conducting public relations campaigns, and disseminating information.
Regarding promotion of individual projects, JETRO will work with relevant
ministries and agencies to strengthen its one-stop support functions, to create
opportunities for Japanese SMEs to form investment partnerships with foreigncompanies, and so on. Moreover, the Government, in cooperation with JETRO,
will provide full-scale support for active local government efforts to attract
foreign companies. Strategic sales pitches will be conducted by the Prime
Minister and Cabinet Ministers, in coordination with advanced initiatives by
local governments (at least 10 sales pitches per year).
The Council for Promotion of Foreign Direct Investment in Japan will
promote activities to identify and attract investment projects by monitoring
progress. It will also seek opinions from the top management of foreigncompanies and cooperate with bodies such as the Council on Economic andFiscal Policy, the Council for Industrial Competitiveness, the Council for
Regulatory Reform, and the Council on National Strategic Special Zones incontinuously implementing additional measures, such as regulatory system169

reforms that contribute to the improvement of the investment environment andsupport measures effective in expanding investment. At the same time, theGovernment will promote translation of Japanese laws and regulations into
foreign languages as part of an effort to improve the information infrastructure
for promoting inward FDI.
2) Establishing a new cross-ministerial framework to promote the Cool Japan
initiative
It is important that Japan effectively transmits the attractions of Japan to theworld such as contents, culture and arts through an all-out effort involving boththe public and private sectors, thereby creating new industries. To this end, theGovernment will use the Inter-Ministerial Cool Japan Liaison Council as aplatform to identify themes and fields of high strategic priority. This includes
dissemination of information through large-scale international events, promotionof Japanese foods and liquors overseas, as well as creation and dissemination ofmedia arts and modern arts. After identifying priority themes and fields, theGovernment will come up with new inter-ministerial partnership projects. In
addition, the Government will strengthen dissemination of information using
Japan’s diplomatic missions overseas, while promoting Japanese-language
education. Moreover, providing risk money by the Cool Japan Fund as a catalyst,
the Government will promote cross-sectoral and cross-industrial collaboration inbuilding commercial facilities abroad and distributing contents, and will link
such activities with continuous broadcasting of contents to achieve overseas
expansion of peripheral industries. Through these initiatives, successful businessmodels will be developed. At the same time, the Government will invite
personnel who are trend setters or who have influence abroad while building andexpanding exhibition halls in order to enhance international communication
capabilities.
3) Deepening strategy toward emerging countries
In order to improve the institutional infrastructure that supports the overseas
business operations of Japanese companies, the Government will provide further
technical assistance in the area of legislative system primarily to China and theASEAN region. In addition, making effective use of the Economic ResearchInstitute for ASEAN and East Asia (ERIA), the Government will implement theStandards-Regulations Strategy, which seeks to link international standards with170

regulations in individual countries. Moreover, the Government will strengthen
sectoral strategies in such fields as medical care, distribution, and foods, where
the combination of strategies and institutional improvements is expected to
produce spillover effects. In Africa, the Government will encourage initiatives byregional economic communities (RECs) that will lead to the creation of broader
markets.
In order to capture emerging markets by promoting whole-of-Japan approach,the Government will provide increased support for efforts to gather local
information, to search for local partners, and to overcome challenges related tolegal, labor and intellectual property issues. It will do this by strengthening
cooperation between organizations offering consistent support for overseas
expansion through enhancing the “SMEs' Overseas Development Fastpass”
program, while strengthening the functions of JETRO. The Government will also
promote collaboration activities by building and strengthening its network ofconnections with foreign nationals familiar with Japan, such as international
students with experience studying in Japan and former trainees at HIDA (TheOverseas Human Resources and Industry Development Association).
In order to support legal problems of Japanese companies expanding into
foreign markets, the Government will strengthen such functions as cultivating
highly capable legal professionals with international expertise.

171