Provisional Translation

New Economic Policy Package

December 8, 2017
Cabinet Decision“New Economic Policy Package” is as described in the Attachment.

(Attachment)

New Economic Policy Package

December 8, 2017

New Economic Policy Package(Table of Contents)

Chapter 1 Introduction

1-1

Chapter 2 Human Resources Development Revolution

2-1

1.
2.
3.
4.
5.
6.
7.
8.
9.

Free early childhood education
Elimination of childcare placement waiting lists
Free higher education
Substantive free education at private high schools
Improvement of compensation for long-term care workers
Stable financial resources to realize these measures
Relevance to the fiscal consolidation
Items to be discussed continually towards next summer
Regulatory and institutional reforms, etc.

Chapter 3 Supply System Innovation

3-1

1.

Supply System Innovation of SMEs and small-scale entrepreneurs
 Investment promotion by SMEs and small-scale entrepreneurs andimprovement of environments to facilitate wage increases
 Intensive support for business succession
etc.

2.

Supply System Innovation through improved profitability and investment
promotion of corporations
 Acceleration of wage increases, and capital/human resources investment
 Corporate governance revolution
etc.

3.

Supply System Innovation through societal implementation of Society 5.0 and
disruptive innovation
 Institutionalization of regulatory “sandbox”
 Societal implementation of the Fourth Industrial Revolution and the system
reforms in the areas experiencing sluggish productivity
 Radical strengthening of the foundation for the innovation promotion
 Infrastructure development for Society 5.0
etc.

Chapter 4 Response to current additional fiscal demand

4-1Chapter 1

Introduction

By continuously shooting three “arrows of reform” under Abenomics for the past five
years, Japan has managed to break through the stagnant economy. Amid a situation where
Japan has got “no longer in a period of deflation” in a short period of time since the changeof government, the nominal GDP has registered a record high with the real GDP
continuing to show positive growth and the corporate profits marking a record high level.
The employment conditions, which are most important for people’s lives, havesignificantly improved as well. The number of employed people has risen by 1.85 million.
The active job openings-to-applicant ratio stands above 1.0 times in all 47 prefectures forthe first time in history and the active job openings-to-applicant ratio for regular
employees stands above 1.0 times for the first time since the investigation started.
The key to ensure this economic growth path and achieve a sustainable economic growthis to cope with the falling birthrate and aging population.
In order to tackle the biggest challenge of falling birthrate and aging population, thegovernment will promote both supply system innovation and human resources
development revolution as the two wheels on an axle towards 2020. The government will
regard leading the “Supply System Innovation” which is gaining momentum in the world
and realizing this initiative first in the world as the medium-term challenge by FY2020,and making up a period of three years as intensive investment period, will work on its
realization. Although the “Human Resources Development Revolution” is a long-term
challenge, the government will lay the foundation for creating a new mechanism beyond
the confines of the conventional institutions or practices by FY2020. The financial
resources to support the initiative will be secured by the increased revenue from theconsumption tax rate hike scheduled for October 2019 and it is possible to use theincreased revenue generated throughout a year as its financial resources from FY2020.
The government will make use of the fruits of the economic growth, enhance the social
security and build secure social infrastructures by promoting the supply systeminnovation and human resources development revolution. Under this infrastructure, thegovernment will achieve further economic growth. It is essential to strengthen such
virtuous cycle of growth and distribution and build a society in which all citizens
including the youth and the elderly, women and men, people with disabilities and people
with intractable diseases can lead their fulfilling lives and demonstrate their abilities tothe full, that is, a society in which all citizens are dynamically engaged.
Under the determination that the challenge of falling birthrate and aging population canbe overcome by blazing a trail for the future of the society in which all citizens are
dynamically engaged, the government will remove various obstacles blocking our pathone by one.
Pushing through the human resources development revolution and injecting the policy
resources boldly into the child-rearing generation and children, the government will workto establish a social security system that accommodates the needs of all generations
including the elderly and the youth, eliminate the concerns of the working-age generation
about child-rearing and nursing care, and aim to realize the desirable birthrate of 1.8 andremoving turnover for nursing care.
The government will attain the supply system innovation and realize innovations that will
1－1

dramatically push up productivity through the use of technologies such as artificial
intelligence, robots, IoT, and so forth. The capital investment and human resources
investment by corporations will be vigorously promoted, including the SMEs and smallscale entrepreneurs facing with the issues of labor shortages. By generally mobilizing allmeasures and pushing up the robust wage increases and investment, the government will
endeavor to ensure the exit from deflation and aim to realize the nominal GDP of 600
trillion yen.
The government will establish the virtuous cycle of growth and distribution, where wealthgenerated by growth is widely and equally shared by the citizens and the growth is enjoyedby many people, and will achieve strong growth.

1－2Chapter 2

Human Resources Development Revolution

Japan has been building a society of longevity with the longest healthy life expectancy inthe world which is expected to be further extended. A study shows that half of the children
born 10 years ago will live to 107 years old. In such coming 100-year life era, to build asociety where all citizens from the youth to the seniors are dynamically engaged and play
active roles, it is necessary to seamlessly provide high-quality education for citizens
throughout their lives from the early childhood education to the school education(elementary, junior-high, and high school) at all three levels, higher education, and the reeducation for working people and provide the recurrent learning opportunities foracquiring useful skills at any time while ensuring stable financial resources and make amajor shift in the social security system from the present system that focuses on benefits
to the elderly to the “social security that accommodates the needs of all generations” fromchildren/youth to the elderly.
The key to make this happen is the Human Resources Development Revolution, that is,investment in human resources. The government has been working on the realization ofa society in which all citizens are dynamically engaged and on the work style reforms,
and has paid efforts on the “investment in human resources”. Revolution in humanresources development towards the 100-year life era is vital part of the society in which
all citizens are dynamically engaged, and such society can’t be built without the humanresources development revolution.
The human resources development is the very driving force for opening the next era. The
government will endeavor to push through the human resources development not
restricted to the uniform concept in the past and transform Japan into a country filled with
opportunities for everyone. In doing so, it is necessary to reach out to people who can’t
stand at the start line due to various reasons.
1. Free early childhood education(Role of early childhood education/nurseries)
The primary reason 1 why the younger generations in her 20’s and 30’s don’t have ideal
number of children is that “it costs too much to raise children and give them education”
and there is a great demand for monetary support for education 2. Difficulty in balancing
child-rearing and work and the high child-rearing/education costs place a burden on thechild-rearing generation, which contributes to the falling birthrate in Japan. For this1

2

The National Institute of Population and Social Security Research “The 15th Basic Survey on Birth
Trends (survey of couples)” (2015) asked the married couples whose intended number of children areless than their ideal number among the first-marriage couples with wives under 50 years old (response
made by wives) the reasons why they don’t have an ideal number of children (multiple responses
allowed) and 76.5% of wives under 30 years old and 81.1% of wives between the ages of 30 and 34
responded that “it costs too much to raise children and give them education”.
According to the Cabinet Office Survey on Attitude towards Marriage and the Family (FY2014), as the
response to the question: “What do you think will encourage you to have more children?” (multiple
responses allowed), “Subsidy for future education cost” comprises 68.6%, the largest proportion
followed by “subsidy for kindergarten/nurseries” comprising 59.4%.

2－1

reason, it is important as a countermeasure for falling birth rate to expand the child-care
support and take measures for the reduction of the burden including the provision of freeearly childhood education.
Moreover, the early childhood is an extremely important period for ability development,
physical growth, character formation, cultivation of sentiments and morality and as withthe primary role played by family and parents, the role of early childhood
education/childcare is important. The early childhood education/childcare play animportant role, not only development of cognitive abilities including knowledge and IQ,
but also for cultivation of non-cognitive abilities including perseverance, carefulness,motivation, etc. In addition, at a time when the good communication skills and problemsolving abilities are increasingly important in today’s society where technologicalinnovations such as artificial intelligence proceed and new industries and employment
are created, the early childhood education is extremely important to acquire these skills
and it is indispensable to improve the quality of the early childhood education andchildcare.
Furthermore, some results of the world-renowned studies show that the preschool
education offers significant benefits such as in the increase of future income and thedecrease in ratio of people living on social welfare, and in many countries the initiative
to provide free preschool education without income restrictions is being promoted. 3
The Abe administration has been making efforts to promote phased-in free earlychildhood education since FY2014. It has realised free tuition at kindergartens andnurseries for children in households on social welfare and expanded the scope of the free
day-care plan for the third and subsequent children has been expanded. From FY2017, inthe households with exemptions from municipal residence tax, in addition to the third andsubsequent children, the second child becomes eligible for free early childhood education
program.
(Details)
In order to support the child-rearing generation and change the social security system
dynamically into the one that accommodates the needs of all generations, the government
will accelerate the provision of free early childhood education. Specifically, thegovernment provide free early childhood education with all children between the ages of
3 and 5 who attend kindergartens and nurseries that are widely used. Regarding thekindergartens that are not under the Comprehensive Support System for Children andChild-rearing, from the standpoint of fairness, the fees up to the user burden under thissystem will be covered.
Regarding the scope of coverage for the free fees measure other than kindergartens andnurseries, the review committee will be set up to reflect the voices of professionals andthe conclusions will be drawn by next summer carefully listening to the voices from thefields and the concerned parties from the stand point of child-care needs and the fairness.
3

For example, in United Kingdom, France and South Korea, free early childhood education is provided
without income restrictions. (In United Kingdom, the compulsory education is offered from 5 years
old.)

2－2

As for childcare placement waiting lists, 90% of which are children under the age of 2,
the immediate top priority is to eliminate the waiting lists of them including children
between ages 3 and 5. To eliminate the childcare waiting list, the government will
accelerate implementation of the Plan for Raising Children in Peace of Mind and steadily
move forward with the provision of childcare for 320 thousand children by FY2020
aiming to eliminate the waiting lists as soon as possible while accurately grasping thecurrent situation. Along with the efforts, provision of childcare will be taken forward forchildren under the age of 2 of households with exemptions from municipal residence tax
and the scope of the coverage will be expanded to all children from the current eligibil ity
limited to the second and subsequent children of the households with exemptions frommunicipal residence tax.
In addition, for households with children under the age of 1, the government will be
engaged in various initiatives in a multi-layered way including improvement of theenvironment for a variety of working styles such as reduced work hours, efforts toencourage both female and male workers to take the childcare leave while encouraging
companies to ensure smooth return to work, smooth ensuring of childcare services after
the child-care leave, and promotion of the care of children with disease by continuously
grasping the various voices of citizens and the institutional bottlenecks in an accurate
manner to ensure work/life balance.
(Implementation schedule)
The provision of free early childhood education will be partially started from April 2019in accordance with increase in revenue from the increased consumption tax rate and fully
implemented from April 2020.
Also, regarding the support for development of early childhood children with disabilit ies(so-called daycare institutions for children with disabilities), provision of free education
will be promoted. For children in need of medical care 4 who require management ofartificial respirators etc., the implementation of the model businesses that support
acceptance is currently being promoted through relocation/dispatching of nurses. The
government will further enhance these projects and deepen discussions on the method toprovide medical care to make improvements. As for the kindergarten divisions of theJapanese schools overseas, the government will grasp their situation.
Continuously, from the viewpoint of coping with the falling birthrate and early childhood
growth, the government will review further support for childcare for children under theage of 2 and early childhood education by extensively studying the instances of loweringof the compulsory education age and the provision of free early childhood education inforeign countries along with securing of the stable financial resources.
2. Elimination of childcare placement waiting lists(Elimination of childcare placement waiting lists)
4Children with disabilities such as those with artificial respirators attached who need medical care forleading an ordinary life

2－3

Elimination of childcare placement waiting lists is the imminent issue.
The government has just formulated the “Plan for Raising Children in Peace of Mind” tooffer additional 320 thousand child care places that can respond to the female worker
employment rate of 80% during the next five years from FY2018 to the end of FY2022.
In order to realize the plan as quickly as possible, the government will bring forward theimplementation of above said plan and offer 320 thousand places by the end of FY2020.
There are opinions that the elimination of childcare placement waiting lists should beprioritized over the provision of free early childhood education. While efforts for theprovision of free early childhood education will be made in phases from FY2019 onwards
in accordance with the increase in revenue from the increased consumption tax rate, thePlan for Raising Children in Peace of Mind will be immediately conducted from FY2018(next fiscal year). Together with this, further efforts will be made for the securing ofchildcare personnel and the improvement of the working conditions based on the wage
gap compared to other industries. In addition to the wage increases on recommendationfrom the National Personnel Authority this year, further wage increase by 1% (equivalent
to 3,000 yen per month) will be made from April 2019.
(After-school Child Comprehensive Plan)
The government will move forward the securing of about 300 thousand childcare places
based on the After-school Child Comprehensive Plan by the end of next fiscal year, a year
ahead of the initially planned schedule (end of FY2019). Furthermore, the government
will consider the future direction based on the circumstance.
3. Free higher education(Efforts in the past and basic concepts)
The higher education lays the foundations of knowledge of citizens and acts as the driving
force for creating innovations and boosting national competitiveness. It is necessary to
promote university reforms, equal access to education, improvement of the quality ofeducation and research in an integrated manner and move forward with the enhancementof higher education.
As for the alleviation of the financial burden of higher education, the government haspromoted the improvement of measures such as expanding the scope of tuition fee
exemption, accelerating the shift for the student financial support system from theinterest-bearing student loans to the interest-free loans so that all students in need canreceive the interest-free loans and enhancing the relief measures when loan repayment
becomes difficult by the expansion of the system of deferral of payment. Also, from thisyear, new grant-type scholarship has been established so that students with motivation
and abilities don’t need to give up advancing to higher-level schools due to financial
reasons and along with the newly introduced system of student loans repayable in linewith income where monthly loan payments are determined in line with the borrower’s
income after graduation which allows the borrower to make repayment at a reasonable
pace. Moreover, as for the interest-free student loans, the government has effectively
abolished the performance standard regarding the students in low-income households and2－4

solved the problem of the students who are eligible but can’t get financing.
It is a proven fact that the final academic background causes a gap between people’s
average wages 5. It is also a fact that the rate of children in lower income households
entering the universities is lower than the children of wealthy households. The
government will be committed to creating a society where any children from a poorfamily can advance to specialized training colleges or universities if they have highmotivation, to prevent the cycle of poverty and fixed inequity. The government will
provide free higher education to children of poor income households and to children who
are really in need of assistance 6. To realize this, along with the upgrading and expansionof tuition fee exemption, the paid amounts of the grant-type scholarship will besignificantly increased.
(Details)
From a viewpoint that supporting children in low-income households, promoting theincrease in their income and eliminating the fixed inequity would be a solution to the lowbirthrate and in order that adequate support is provided to children who truly need support,
the support measures will be restricted to children in low-income households.
First, regarding the measures for tuition fee exemption, the grants will be delivered touniversities, junior colleges, colleges of technology and specialized training colleges(hereinafter referred to as “Universities, etc.”) so that students don’t need to pay tuition
fees to the Universities, etc by themselves. As for children in the households with
exemptions from municipal residence tax, they will be exempted from tuition fees if theychoose to go to a national university. In case of choosing to go to a private university,
students are exempted from portion of the tuition fees which equivalent to the amount oftuition fee at a national university added by a certain amount considering the standard of
the average tuition fees of a private university. For university freshman, the admission
fees will also be exempted 7｡
Secondly, regarding the grant-type scholarship, the grants will be delivered to individual
students. Proper amount of grants that pays for necessary living expenses 8 will be

5

According to the survey by the Japan Institute for Labor Policy and Training (2016), there is gap inlifetime earnings by some 75 million yen between people graduating from high school and thosegraduating from university/graduate school. According to the “2012 Survey on parents of high school
graduates” (MEXT Grants-in-aid Scientific Research Report), while the rate of going to university is
27.8% in households with annual income of 4 million yen or less, the rate is 62.9% in households withannual income of 10.5 million yen or more.

6

Free higher education is applied to universities, junior colleges, colleges of technology and specialized
training colleges.

7

The grants will be provided up to the admission fees of a national university.

8

From the standpoint of fairness compared with other students, the grants shall be provided within thescope of common sense. For example, according to the classification of expenses in the Student Life
Survey for 2012 and 2014 by the Japan Student Service Organization, the textbook and other book
expenses, extracurricular activity expenses, commuting expenses, food expense (limited to students not

2－5

delivered for students to be able to dedicate themselves to their studies. In addition,necessary measures will be taken if the students’ households undergo a significant change
while in school.
Furthermore, to avoid the overall support (benefit) “cliff” and “gap”, the gradual support
measures will be taken for children in the households close to those with exemptions frommunicipal residence tax.
(Requirements of students covered by support measures)
As for eligibility for support, the candidate student’s learning motivation as well as his/heracademic performance in high school will be checked. On the other hand, after entering
Universities, etc., certain requirements regarding the learning conditions and progress
will be imposed and if such requirements aren’t fulfilled, the financial aid will be
discontinued. Specifically, the financial aid will be discontinued depending on the credits
acquisition status, GPA (average academic performance), status of disciplinary action forthe student and the grant payment requirements including the above-mentioned items will
be stipulated 9.
(Requirements of Universities, etc. covered by support measures)
The goal of the support measures is to provide financial assistance to low-income children
who are willing to study in Universities, etc. and to encourage these aided children to
study hard and learn to become independent and play an active role in society by linking
the studies at Universities, etc. with the employment or startup of business that will leadto a prevention of the fixed wealth inequity among generations. To achieve this goal, theuniversities covered by the support measure have to provide the following function; thepursuit of both academic research and practical education in a well-balanced manner todevelop human resources who can play an active role in rapidly-changing society by bothmaking using of their own features and advantages and responding to the needs of thesociety and industries. Specifically, the following are the requirements that should be metby the target universities: 1) Arrangement of courses by the teachers who have practicalwork experiences 2) The proportion of appointed outside board members exceeds acertain percentage 10, 3) Strict academic record management and announcement based onliving at home), housing, utility expenses (limited to students not living at home), health and sanitation
expenses, other payments to school except tuition fees will be appropriated excluding leisure/luxury
expenses. In addition, the entrance examination fees at university are appropriated.
910

For example, the following criteria are possible reasons for the cancellation of grants; 1) if a student
acquires less than 60% of the required credit per year, or 2) if a student’s GPA score is ranked in thelower 25% of the school, the university, etc. gives a warning to the relevant student and if the student
gets a warning in succession, the grants will be discontinued, or 3) if a relevant student gets disciplinary
actions such as expulsion from school, and school suspension, the grants will be discontinued. On suchoccasions, certain consideration will be paid regarding a temporary leave from school.
For example, the following criteria are considered:
1) Teachers with practical work experiences (including part-time teachers) are assigned to teach subjects
with number of credits that account for 10% or more of the average number of credits required to be

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the academic record evaluation standards 11 4) Disclosure of financial and management
information in accordance with laws and regulations. The guidelines based on the abovementioned requirements will be formulated after careful deliberation among the relevant
parties.
(Implementation schedule)
The above-mentioned free higher education will be implemented from April 2020.
Moreover, regarding the details yet to be determined, the government will continue toreview them before reaching a certain conclusion by next summer.
(Learning support for children in poor households)
The government will strengthen the learning support for children in high school
generation including high-school dropouts and assist children in need of social care andchildren in households on social welfare to enter universities.
4. Substantive free education at private high schools
Regarding the realization the substantive free education at private high schools forhouseholds with annual income of less than 5.9 million yen (upgrading and expansion of
the current High School Tuition Support Fund), the government will first secure therevenue source that can be appropriated by the revision of the current system and thebudget through the change in the use of consumption tax.(Specifically, on a basis of thebudget for FY2017, the revenue source will be secured for providing 1) substantive freeeducation will be provided for households with exemptions from municipal residence tax,
2) A maximum of 350 thousand yen will be provided for households with annual income
less than 3.5 million yen 12 and 3) As for households with annual income less than 5.9
million yen 13, a maximum of 250 thousand yen will be provided).
Then, by FY2020 after the change in the use of consumption tax revenue, while thegovernment overall securing stable revenue source continuously including the revenue
source to be appropriated for the current system on normalized fiscal year basis, thegovernment will realize the substantive free education at private high schools targeted forthe households with annual income less than 5.9 million yen from the standpoint ofproviding wide range of educational opportunities for children despite their family
financial conditions.
acquired annually (regarding the requirements for the science and humanities areas, examination isnecessary for their applicability)
2) 20% or more of the total appointed board members are occupied by the outside persons from industry,etc.
11

In-campus standards for objective and strict academic performance evaluation. For example, it isstipulated that you need to get a score of 90 or more at examinations and reports to get “Particularly
excellent (S)” or your results are required to be ranked in the upper 20 %.

12

It refers to the case where the amount of the municipality tax less than 51,300 yen.

13

It refers to the case where the amount of the municipality tax less than 154,500 yen.

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5. Improvement of compensation for long-term care workers(Details)
In the 100-year life era, long-term care is a realistic and pressing challenge that we all
face. The government has been promoting multilevel efforts towards preventing workers
from leaving their jobs for nursing care by accelerating the improvement of thehome/facility services and work environment that allow workers to take family care leave
easily. The Abe administration intends to provide care services for at least 500 thousand
elderly people by the early 2020s, and the greatest challenge is how to secure the longterm care workers. To secure the long-term care workers, the coalition administration of
LDP and Komeito has realized the monthly wage increase by 47,000 yen, including by
creating a mechanism for experience-based salary increases that improve monthly wagesof long-term care workers by 10,000 yen on average in the budget for FY2017. To further
improve the efforts for securing the long-term care workers, the government will
endeavor to improve compensation for long-term care workers by focusing on theexperienced and skilled workers.
Specifically, on the premise of allowing flexible application of this revenue forcompensation improvement to that of other long-term care staff, the government will use
public expenditure of about 100 billion yen for improving the compensation of those whohave more than 10 years’ work experience in any long-term service business facility on
the calculation basis of increasing average monthly wage by 80,000 yen.
In the same way, similar compensation improvement will be realized for social workers
for people with disabilities as with the long-term care workers.
(Implementation schedule)
The above-mentioned compensation improvement will be implemented from October
2019 in response to the revision of the remuneration accompanied by the consumption
tax rate hike.
6. Stable financial resources to realize the measures
With the rapid progress of falling birthrate and aging population, it is urgent to implement
these policies soon, however, we can never impose the government debt on future
generation. Therefore, these measures will be implemented as soon as the stable financial
resources are secured.
Striking a balance between the enhancement of social security and fiscal consolidation,
the government will use the revenue sources from the consumption tax rate hike to 10%
scheduled for October 2019 as stable financial resources. The estimated 5 trillion yen inrevenue from the 2% consumption tax rate hike will be split between the social programs
including alleviation of education burden, child-rearing support and securing of long-term

2－8

care workers, etc. 14 and the fiscal reconstruction 15 on 50-50 basis approximately. As forthe former, approximately 1.7 trillion yen will be appropriated to the funds for free earlychildhood education, elimination of the childcare waiting lists through advancement of
the Plan for Raising Children in Peace of Mind, improvement of compensation forchildcare personnel, free higher education, and improvement of compensation for longterm care workers within this economic policy package. These policies will be
implemented on the premise of the consumption tax rate hike to 10% scheduled for
October 2019.
The purposes of use of the revenue from consumption tax, pursuant to the provision of
the Consumption Tax Act that goes “The consumption tax revenue shall be allocated forcovering the institutionally established social security benefits including pension, medicalcare and long-term care and the expenses needed for measures to cope with the fallingbirthrate” (Article 1, paragraph 2), is restricted to the four types of social security
expenses (pension, medical care, long-term care and countermeasures to the fallingbirthrate). Regarding the above-mentioned 1.7 trillion yen allocated to this economic
policy package, while it will be mainly expended for covering the expenses for free earlychildhood education, etc., with regard to the financial support for higher education, inorder to contribute to the measures to cope with the falling birthrate, the financial support
will be limited to the low-income families where costly tuition fees hinder improvementof birth rates.
Moreover, in the current Comprehensive Support System for Children and Child-rearing,
because balancing work and childcare contributes to securing of the labor force andshould be addressed by the entire society, the Children and Child-rearing Contributions
made by the employers are allocated to the company-led childcare services, etc.
Regarding the financial resources necessary for this economic policy package, from a
broader perspective of supporting the child-rearing generations by the entire society andfrom a viewpoint of sharing the childcare burden between individuals and corporations,
it is appropriate to request the business world to assume certain level of burden whilerevising the purposes of use of the revenue increase from consumption tax rate. For thisreason, the government will increase the Children and Child-rearing Contribution by 0.3
trillion yen. The government will change the legally stipulated upper limit of thecontribution ratio from 0.25% to 0.45% and allocate the increased amount of 0.3 trillion
yen to the company-led childcare services (including subsidy for the burden on users in
the company-led childcare services for children between the ages of 3 and 5 and children
under the age of 2 in the households with exemptions from municipal residence tax after
implementation of the free early childhood education) and operating expenses inchildcare services (corresponding to children under the age of 2) 16, both of which are
14“Etc.” means the social security enhancement measures that were planned to be implemented at the timeof consumption tax rate hike to 10%, including the pensioners support benefits (around 1.1 trillion yen).

15

Reduction of debt to be imposed on the future generation and increase in expenditure regarding foursocial security expenses accompanied with consumption tax rate hike to 10%.

16

“Operation expenses in childcare (corresponding to children under the age of 2)” refer to the operation
expenses in nursery schools, certified nurseries, small-scale childcare, family childcare, home-visit

2－9necessary for realizing the Plan for Raising Children in Peace of Mind to be implemented
from FY2018. For this reason, the government will submit the law revision bill of theChildren and Childrearing Support Act to the next ordinary session of the Diet.
Furthermore, the government will consider the alleviation of the payment burdens oflabor insurance premiums placed on the business sector by verifying the trend of theinsurance finance. For SMEs, the government will consider the subsidy policies for theoperation expenses of the company-led childcare services such as reduction of the portionof the burden.
7. Relevance to the fiscal consolidation
Since the revision of the purposes of use of the tax revenue generated from theconsumption tax rate hike affects the periods for achieving a fiscal surplus in the national
and local primary balance, it is difficult to achieve the goal of fiscal surplus in the primarybalance for FY2020. However, the government will never give up on the fiscal
consolidation and stick to its target for thoroughly and continuously making efforts toreform both revenues and expenditures and aim for achieving a fiscal surplus in the
primary balance. To achieve this target, the government will announce the period ofachieving a fiscal surplus in the primary balance and develop a concrete and highlyeffective plan to support this in the “Basic Policies on Economic and Fiscal Management
and Reform” for the next year upon closely examining the efforts for the integrated reformof finance and economy in the past.
8. Items to be discussed continually towards next summer(1) Recurrent education
In the 100-year life era, a single-track life structure in the past that consists of schoolingin the primary/secondary and higher education (high school and university) system, entry
to company upon graduation, work until retirement and post-retirement life no longer
works for everybody but it is important for individuals to redesign their life, choose acarrier in keeping with their lifestyle and acquire abilities and skills required in the newstage. Also, in face of technology progress such as advance in artificial intelligence, it isnecessary to participate in re-learning activities over the course of their life. It is also
necessary for the government to prepare a variety of support programs.
In order to build a society that offers opportunities for re-learning and starting over in life
to everyone, including senior citizens, people from single-parent family, people who
couldn’t complete compulsory education, people who didn’t advance to high schools anduniversities on their own will, people who left jobs due to childbirth and child-rearing,“freeters” (part-time workers without permanent jobs), NEETs, young people who havewithdrawn from society and people with diseases and physical disabilities, thegovernment will ensure the opportunities for re-learning and new challenges.

childcare and childcare in the company that are subject to the childcare benefits in accordance with the
Act on Child and Childcare Support.

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To realize this, looking ahead to the 100-year life era, the government will dynamically
expand recurrent education and will review the measures for improving an environmentthat allows everyone to take on a challenge for new active opportunities at any age
including carrier progression for the working generations, reemployment support for
middle-aged people, use of a mechanism that approves the accumulated credits earned
from various schools as graduation diploma as well as utilizing employment insurance
system, towards next summer.
(2) Reviews by reference to the instances in foreign countries including HECS system
The government will continue to review the measures to provide equal access
opportunities for middle-income class along with the university reform and improvementof quality of education and research by reference to the instances in foreign countries
including HECS 17 in Australia.
(3) Further realization of social security that accommodates the needs of all generations
Toward further realization of social security that accommodates the needs of all
generations after the consumption tax increase scheduled for October 2019, thegovernment will review the further measures required to cope with the falling birthrate
along with the measures to ensure the source of its financing under the principle of“sharing the burden by across all the society” including the financial efficiency, utilizationof tax, new social insurance systems and company contribution. In doing so, thegovernment will keep in mind that it is currently requesting additional Children andChildrearing Contribution from the business sector and seriously listens to the opinion
that the measure is imposing excessive burden upon the SMEs, etc.
9. Regulatory and institutional reforms, etc.
(1) Regulatory and institutional reforms based on the report from the Regulatory Reform
Promotion Council
In response to the second report from the Regulatory Reform Promotion Council(approved on November 29, 2017), the government will work on the institutional
reforms 18 toward eliminating the childcare waiting lists including the prefecture-led
strengthening of the legal framework for coordinating the use of childcare facilities
beyond the boundaries of municipalities based on the imbalance in the number of children
on waiting lists among the adjacent municipalities.

17

HECS is a higher education funding system in Australia where students don’t need to pay their tuition
fees while in school and after graduation they are required to pay back a certain portion of the debt
according to their payment ability.

18

Implementation matters in the second report compiled by the Regulatory Reform Promotion Council(approved on November 29, 2017)2－11

(2) Foreign workers in the long-term care field
Under the Asia Health and Human Well-Being Initiative, the government will implement
measures to permit status of residence (long-term care) to foreign workers who havepractical experience in Japan for longer than three years through technical intern training
in the long-term care field or as activity other than that permitted under the status ofresidence while studying in Japan, took the practical training, and pass the State
Examination for Certified Care Workers, and develop the Japanese language learning
environment overseas, and through these measures the government develop theenvironment in Japan and overseas toward accepting foreign workers in the long-termcare field.

2－12Chapter 3

Supply System Innovation

The emergence of Information Technology (IT) in the 1990s dramatically changed
operation processes in every industry. The progress of business efficiency and laborsavings dubbed IT Revolution enabled the G7 countries to achieve a nearly 2 percent
growth annually on average in productivity during the period from the 1990s through2000s. However, while such technologies were spreading widely, the effect of
productivity growth associated with greater operational efficiency gradually declined. In
the 2010s, many developed countries saw their productivity growth remaining at a zero
percent level with growing concerns of a long-standing stagnation.
On the other hand, the appearance of new innovations such as the Internet of Things, bigdata, robots, artificial intelligence (AI), has enabled us to solve various social problems
including energy-related environmental constraints, producing many innovative
businesses and services. It has a significant potential to revolutionarily boost productivity
not only by achieving business efficiency and labor-savings, but also by creating
innovative added values in the era of Society 5.0. Supply System Innovation is being
well-noticed throughout the world. Aiming to achieve it in 2020 as a big target, Japan willtake all the possible measures to realize it first in the world.
The Japanese economy has been closing gaps between supply and demand. To achieve
further economic growth, there is a need to increase potential economic growth by taking
supply-side measures. For this reason, leveraging record-high corporate profits, we needto proactively promote investments to increase productivity.
While disruptive innovations have been progressing in the world through the forthindustrial revolution, the declining status of Japan’s innovative capability has come to thesurface. In order to maintain and increase Japan’s global economic competitiveness in the
future, it is necessary to accelerate developing systems for the societal implementation ofSociety 5.0, and to create a world standard innovation eco-system in response todisruptive innovations.
For this purpose, the government will steadily implement measures incorporated in the
Growth Strategy 2017 and take all the possible measures, including bold tax reforms,
budgetary measures, and regulatory reforms, for the next three years until 2020 as “periodof supply system innovation and intensive investments.” Through these measures, we will
aim to (i) double Japan’s average productivity19 growth of 0.9 percent for five years until
2015 increased by 2 percent annually, (ii) increase Japan’s capital investment amount by
10 percent by the FY2020 compared with the FY2016, and (iii) achieve more than 3
percent annual wage increase after the FY2018, so that we could realize supply systeminnovation. This could lead to motivation for every citizen of Japan to work, sustainablewage increases and getting out of deflations, increase Japan’s potential growth rate andstrengthen our global competitiveness.

1. Supply System Innovation of SMEs and small-scale entrepreneurs

19

Productivity as used here refers to labor productivity (actual GDP for an hour per person).

3－1

(1) Investment promotion by SMEs and small-scale entrepreneurs and improvement ofenvironments to facilitate wage increases- As drastic measures to realize supply system innovation of SMEs and small-scale
entrepreneurs, including those facing harsh business environment and deficitridden enterprises, the government will take fixed-asset tax relief measures tomake a strong push for new capital investments to increase productivity during
the intensive investment period while considering local governments’ autonomy.
At the same time, the government will expand budgetary measures for matterssuch as “subsidies for manufacturing, commerce and services” to support themintensively.
- Amid the severe shortage of workers, to provide a broader and stronger support to
SMEs who are making efforts to make wage increase and human resource
investments (provision of training for employees to learn new skills andopportunities for them to relearn), the government will take corporate tax relief
measures to promote wage increase.
- The government will make a strong support for the installation of IT tools andcloud computing systems needed to increase productivity and visualize of IT tools
and performances of IT businesses. Also the government will establish local
support systems (platforms) such as management improvement support provided
by closer support organizations. Through these measures, the government will aim
to promote the installation of IT tools by about one million enterprises, accounting
for about 30 percent of all SMEs and small-scale entrepreneurs, for the next three
years.
- While promoting the National Movement for Productivity Improvement
Promotion Council and utilizing results of local benchmarks and others, thegovernment will involve relevant industry associations and support organizations
such as local financial institutions to increase productivity through sharing bestpractices and other measures according to their industry and business categories- The government will continue to consider measures to enhance flexibility andelasticity of SMEs’ budget execution.
(2) Intensive support for business succession- It is expected by 2025 that the number of owners of SMEs and small-scale
entrepreneurs who would be older than 70 will be 2.45 million, half of which 1.27
million owners have yet determined who will be their successors. This number isequivalent to about 30 percent of the total number of Japanese companies. If thecurrent situation were left as it is and their business closure increased rapidly, there
would be a risk of losing about 6.5 million job opportunities and about 22 trillion
yen GDP for the next ten years. About half of the companies that closed theirbusinesses had high productivity and earned profits. In order to improve
productivity of SMEs and small-scale entrepreneurs through smooth businesssuccession, the government will strengthen initiatives for the next ten years or soas an intensive execution period for business succession. For this purpose, the3－2

government will provide a seamless support from early and planned preparation
for business succession to management innovation after business succession,
including promotion of mergers and acquisitions. With regard to the businesssuccession tax systems, reflecting opinions that they are reluctant to use such
systems due to factors including the tax grace system that may cause an excessive
burden despite expected future changes in management environment andemployment requirements amid the serious shortage of workers, the government
will make a radical expansion of the business succession tax systems.
(3) Expansion of efforts to make fair subcontracting transactions- To promote awareness and thorough understanding of fair business transactions
as well as an increase in added value, the government will take appropriate followup measures including revision of the application standards of the Subcontract Act,
request for cash payment of subcontract proceeds in principle, and monitoring theimplementation of voluntary action plan by business. In addition, the government
will make a large-scale survey (on more than 60,000 companies) for theirsubsequent improvements based on these initiatives within this fiscal year, andmake interviews by government officials (of more than 2,000 companies) torequest review of their voluntary action plans within the fiscal year if necessary.
At the same time, the government will promote the expansion of the scope ofbusinesses to establish voluntary action plans and subcontract guidelines(voluntary action plans: 8 to 12 businesses).
(4) Strengthening of functions of support organization for SMEs
- The government will take necessary measures to enhance capabilities of support
organizations (various experts, local financial institutions, Chambers ofCommerce, and Chambers of Commerce and Industry) that are familiar with
SMEs and small-scale entrepreneurs and to strengthen cooperation with them, andpromote “visualization” of support measures from business operators’
perspectives. Also the government will support small-scale entrepreneurs who aretaking initiatives to develop sales channels with support from Chamber ofCommerce and Chamber of Commerce and Industry.
-

The government will encourage financial institutions to demonstrate theirappropriate financial intermediary functions to provide SMEs with loans based on
their assessment of SMEs’ businesses, not excessively relying on collateral or
guarantee, and with management support, including utilization of “Guidelines for
Personal Guarantee Provided by Business Owners”, to increase their productivity.
Furthermore, the government will strengthen other measures, including theestablishment and publishing of objective Key Performance Indicators (KPI) by
next summer to indicate the status of financial intermediation, support for humanresources and knowhow by Regional Economy Revitalization Corporation ofJapan (REVIC) and Japan Human Resources, promotion of collaboration andcooperation of public and private financial institutions through appropriate role
sharing, provision of equity funds through cooperation between financial
3－3

institutions and REVIC. Also, to secure continued soundness and financial
intermediary functions of local financial institutions, the government will
strengthen inspection and supervision of local financial institutions and startconsidering an ideal state of competition among financial institutions as early as
possible.
(5) Revitalization of regional economies by regional core companies- Taking advantage of the Regional Future Investment Promotion Act, thegovernment will aim to support around 2,000 companies nationwide for the next
three years so that they can drive their regional economies forward. Throughcooperation among Ministries, the government will intensively and effectively
support businesses to lead regional economies, including research anddevelopment and capital investments, by identifying specific businesses andstrengthening support measures, including preferential measures on budget,
finance, and regulations. To this end, based on big data and recommendation by
local governments and others, around 2,000 regional core companies (Leading
Companies for Regions’ Future) as candidate leaders of businesses to lead regional
economies will be selected and published within this year.
- The government will support regions for their efforts to acquire external demand
into the regions by taking advantage of their strength through promotion of CoolJapan and community-building using regional resources.
- To overcome regional problems and revitalize regions by utilizing sharing
economy and community-based Internet of Things, the government will provide
comprehensive support and improve communication environments to create bestpractices in regions and their nationwide development.
(6) Promotion of regional revitalization- With regard to regional revitalization, while promoting cooperation between
industry, government, academia, and finance, all players, including SMEs andsmall-scale entrepreneurs and local governments, will participate in taking
measures to promote supply system innovation toward Society 5.0 in regions.
- With regard to voluntary and independent projects implemented by local
governments, such as base facility building, based on regional comprehensive
strategies, the government will promote measures including building leading
facilities to encourage supply system innovation while taking into consideration
the local situation.
(7) 50 percent reduction of patent fees for all SMEs
- Patent fees for all SMEs will be reduced by half. The relevant bill will be
submitted to the next ordinary session of the Diet.

3－4

2.

Supply System Innovation through improved profitability and investment
promotion of corporations(1) Acceleration of wage increases, and capital/human resources investment- During the intensive investment period, the government will reduce substantive
tax burden on profits of companies that make proactive efforts to increase wages
and capital investments, to an extent they can fully compete in the global market.
Especially, for those companies that earnestly make human resource investments,
further tax reduction will be made. In addition, for those companies that take boldinitiatives to increase productivity by using innovative technologies while
increasing wages, substantive tax burden will be drastically reduced to an extent
they can outperform global competitors. At the same time, for those companies
that are reluctant for wage increase and investment amid a record high corporate
profit, tax measures will be taken to encourage their decisive management
decision-making.
(2) Corporate governance revolution- Based on considerations in Council of Experts Concerning the Follow-up ofJapan's stewardship Code and Japan's Corporate Governance Code, thegovernment will establish Guidance to encourage companies to take the following
measures and review the corporate governance code as necessary throughdeepening of dialogue between investors and companies by June 2018, the peakseason for shareholders meetings.
Decisive management decision-making such as flexible exchange of businessportfolio according to changes in the business management environment,
including withdrawal from or sale of the business (in this case, for example,
the establishment of policy on reviewing the business portfolio and of aneffective reviewing process as well as their explanation will be promoted)



Effective use of companies’ retained earnings as well as their increasing cash
and deposits for capital investments, research and development investments,and human resource investments



Establishment of an effective process regarding appointment, dismissal, or
development of CEOs and determination of compensation for the
management, including utilization of an independent Nomination andCompensation Committee, and an effective supervision of and advice for the
management by independent outside directors

Clarification of policy on the reduction of cross-shareholding as well as
understanding of such reduction by the cross-shareholding partners



Fulfillment of expected functions as asset owners of corporate pension funds
and support by the parent company- In light of importance of ESG investment (environment, social and governance),
the government will develop the information disclosure platform regarding
company management such as environmental information and establish “The3－5

Forum for Integrated Reporting and ESG Dialogue (tentative name)” as soon as
possible, where investors and companies have dialogue.
(3) Promotion of drastic business restructuring- To promote companies’ business restructuring, the government will strengthen
provision of risk money and take necessary measures to promote a merger andacquisition with consideration of shares for a drastic business restructuring.

3.

Supply System Innovation through societal implementation of Society 5.0 and
disruptive innovation(1) Institutionalization of regulatory “sandbox”- Regarding new technologies and new business models that were not envisaged
under existing regulations, the government will submit a bill aiming to establish aproject based regulatory “sandbox” at the next regular session of the Diet. It will
enable demonstration of certain projects under environments where relevant
regulations are not applied immediately by limiting the number of participants andduration through a certain process under a cross-fields and cross-ministerial
system.
- The government will submit to the next ordinary session of the Diet an amendment
bill to revise the National Strategic Special Zones Act. The bill aims to establish
an area-limited regulatory “sandbox” in a national strategic special economic zone,
and to conduct a prompt and smooth experimental demonstration concerning therealization of automated driving, small unmanned aerial vehicles, other nearfuture technologies and the forth industrial revolution, the government will set a
monitoring and evaluation system to strengthen after-check and rationalize
advance regulations.
- The government will establish a centralized system to strongly promote societal
implementation of Society 5.0 in a cross-governmental manner in order tocentrally accept a wide range of proposals from private business operators at home
and abroad for a project based sandbox and an area-limited sandbox for a strategiccooperation between the two.
(2) Societal implementation of the Forth Industrial Revolution and the system reforms
in the areas experiencing sluggish productivity
1) Automated driving- Aiming to achieve provision of unmanned automated-vehicle transport
services in 2020 and commercialization of platooning trucks on an express way
as early as 2022, the government will systematically implement measures suchas implementation of a public road demonstration project, sharing of its results
and data among relevant parties, and development of necessary systems andinfrastructures.
- Aiming at the commercialization of advanced automated driving in around
2020, the government will establish an outlined development policy of the
3－6

government’s entire systems, including safety standards, traffic rules, andresponsibility matters in an accident, within this fiscal year.
- From perspectives of deepening and expansion of cooperative areas among
relevant business operators regarding automated driving technologies as well
as strengthening of competitiveness, the government will establish a policy tocollect and utilize videos of running automated driving vehicles and accident
data to accelerate the development of core technologies of vehicle’s recognitionand judgment within this fiscal year.
- The government will take initiatives in a strategic manner, including matters tocommercialize automated driving maps (commercialize expressway maps in
the next fiscal year and establish a policy to develop ordinary road maps in thenext fiscal year), promote 5G projects, which contribute to societal
implementation of automated driving (start services by 2020), ensure vehicleinstalled security devices (establish a timetable to make a safety evaluation
system within this fiscal year)2) Health, medical care, long-term carei) System of the online qualification confirmation, establishment of datautilization infrastructure- With regard to the health insurance number, the government will change theexisting number system on a household basis to that on an individual basis.
Utilizing the infrastructure of the My Number system, the government willconsider a system to centrally manage qualification information and other dataon an individual basis even if the individual has to change the health insurer
due to job change or retirement, and aim to implement a full-scale operation of
the online qualification confirmation from 2020. In addition, the government
will continue to consider the concept of identifier (ID) in terms of coordinationof information in the medical and other fields, including utilizing suchinfrastructures and aim to obtain conclusions next summer.
- Furthermore, with regard to National Health Insurance Medical Treatment
Information Network to provide optimal health management, medical
treatment, and care, the government will aim to show a timetable next summer
based on this year’s experimental projects while considering issues such as
types of information for coordination and information management. At thesame time, the government will start designing a detailed system of Healthcare
Data Platform to link and analyze big data of health and medical and long-termcares. Implementing these initiatives, the government will aim to start fulloperation of the data utilization platform in the FY2020.
ii) Remote medical treatment, etc.
- With regard to remote medical treatment that would contribute to effective andefficient provision of medical services by combining it with face-to-facemedical treatment in an appropriate manner, the government will stipulate a
new assessment standard in the FY2018 revision of medical service fees. At
the same time, to disseminate a safe, effective and efficient remote medical
3－7treatment, the government will develop guidelines to cover necessary rules,
including “basic concept of remote medical treatment” for all citizens, specificuse cases, a treatment period to apply remote medical treatment, and idealconsensus building with patients. These measures will be compiled as aconsistent package and published within this fiscal year.
- The government will consider remote medication instructions based on
experimental treatment in National Strategic Special Zones from perspectivesof response to needs to promote them along with remote medical treatment andof securing safety.
iii) Promotion of long-term care for self-reliance, ICT of long-term care, use ofrobot censer- Support for self-reliance resulting in a certain effect will be appropriately
evaluated by combining structure and process assessment with outcome
assessment 20 in the FY2018 revision of long-term care fees.
- With regard to the use of robot censor in places where long-term care isprovided, such services resulting in a certain effect such as watching service atnight, which could contribute to remain and improve the quality of users’ lifeand reduce burden of caregivers, will have institutional responses, including
reviewing of long-term care fees and personnel and facility standards, when
the FY2018 revision of long-term case fees is implemented.
- The government will aim to establish a system in 2020 that enables provisionof high-quality and effective long-term care services by using innovativetechnologies such as ICT to increase productivity at care sites. For this purpose,the government will also ascertain the status of mandatory forms required by
the national and local governments at long-term care service facilities andimplement an interim reviewing within the next fiscal year. Thereafter, thegovernment will implement further reviewing, including original documents
prepared by facilities, and aim to reduce the quantity of such forms by half.
Furthermore, Efforts will be made to prepare standard specifications of ICTfrom the next fiscal year.
3) Financial and commercial transaction sectors- Due to changes in the business environment, including advanced IT
technologies, some financial functions that have been provided by financial
institutions have been taken by certain organizations to specialize in, andmovements to provide new services by integrating multiple financial and nonfinancial services have been spreading. Based on such drastic changes in theenvironment surrounding the financial system along with commercial
distribution, the government will start consideration to revise the Financial
Instruments and Exchange Act and other relevant regulations in cooperation
20

Long-term care fees depending on the quality of services can be categorized into the following threeperspectives; (i) structure means a structure of personnel allocation, (ii) process means a process ofinteraction between the business operator and the patient, and (iii) outcome means assessment ofchanges in condition of a patient generated by medical services.

3－8

with Ministries and Agencies within the FY2017 in order to revise the current
legal systems by industry to be those by function and cross-industrial legal
systems while striking a balance between promotion of innovation andprotection of users. At the same time, to improve users’ convenience,
strengthen companies’ growth potential, and realize a cashless society, thegovernment will consider how to promote use of FinTech.
4) Construction sector- Regarding i-Construction, the government will expand the range of application
to all processes, including construction and maintenance of bridges, tunnels,
and dams, as well as building sector, by the FY2019 and strongly support theuse of three dimensional data and the adoption of ICT for their application tosmall and medium constructors and local governments. Also, the government
will promote advancement of construction management, inspection anddisaster response by using AI and robots, and demonstrate them at construction
sites before putting them into practice.
- To respond to rapidly aging infrastructures, the government will make a steadyprogress of planned preventive maintenance and the establishment of social
infrastructure information platform. In addition, the government will promote
the introduction of new technologies of inspection and examination led by the
National Council of Infrastructure Maintenance integrating industry, academia,
government and private sectors in order to increase productivity of themaintenance industry.
- The government will enhance construction environments by establishing a
construction career advance system next fall, which records work history ofskilled construction workers so that their construction management, document
preparation and cultivation of human resource could be streamlined and theirskills and work experiences could be appropriately evaluated.
- The government will level the ordering period of construction work by
integrating and publishing expected orders by region on a nationwide basis
within this fiscal year. At the same time, the government will start considering
streamlining of requirements for the allocation of skilled workers atconstruction sites stipulated by the Construction Act within this fiscal year andacquire conclusions within the next fiscal year.
5) Transportation sector- The government will reduce waiting time and handling time for loading or
unloading through the introduction of truck booking system used by consignees
and its release to carriers as well as promotion of shifting to machine loadingor unloading.
- As part of the dynamic pricing system of taxi fares 21, the government willconsider, for the introduction of flexible pick-up charges, its experimental
demonstration and the development of operation policy within the next fiscal
21

Method to change fares according to supply and demand by time-of-day or on the day of the week

3－9

year.
- The government will keep expanding volume discount and frequency discountfor transport charges of automobile carriers and keep consigners and carriers
informed of the revised Standard Motor Truck Transportation Contract that wasrevised to clarify freight and charges of trucking. The government also will
establish and publish measures by around next spring to improve work stylesof drivers of truck, bus, and taxi and further increase their productivity.
- Parcel delivery services by a small unmanned aircraft (drone) will start inmountainous and other remote areas next year. Aiming to implement its fulloperation of safe delivery services even in urban areas in 2020s, thegovernment will promote technical development and institutional responses
that enable advanced flight such as flight beyond visual line of sight without
placing an assistant and flight over third parties. In addition, the government
will promote initiatives to expand industrial use of drones, including utilizing
Fukushima Robot Test Field.
- To improve productivity of international marine container transportation, thegovernment will establish standards needed for remote operation of cargohandling equipment within this fiscal year. At the same time, using AI and othermeans to realize AI terminal that would make the entire operation of theterminal efficient and optimized to create world’s highest level productivit y,
the government will establish and publish its specific objectives and timetablewithin the next fiscal year.
- By adopting ICT to all phases of development, building and operation of avessel, the government will promote i-Shipping that could increase
productivity of Japan’s shipbuilding and marine transportation with support ofinnovative technological development using AI.
6) Agriculture, forestry and fisheries sectors- To promote forestry as a growth industry, based on the second set ofrecommendations for Regulatory Reform Promotion Council (determined on
November 29, 2017) and the Vitalization Plan for Agriculture, Forestry and
Fisheries and Regions (revised on December 8, 2017 hereinafter referred to as
Vitalization Plan), the government will submit to the next ordinary session of
the Diet a bill aiming to establish a new forest management system toconcentrate and consolidate management to the forestry management who havestrong motivation and excellent abilities. At the same time, the government will
study issues including restructuring of supply chains from a market-oriented
concept and employing activities of the private sector for national forests.
Furthermore, the government will establish specific growth objectives forforestry and a timetable to achieve them by the mid next year and takenecessary measures. This would promote regional revitalization andrevitalization of regional economies.
- Amid the progress in diversification of food distribution, to increase producers’
income and to respond to consumers’ needs as well as to establish a distribution
structure to respond to changing environments, based on the Vitalization Plan,
3－10

the government will promote rationalization including streamlining of logistics
and adoption of information and communication technologies. At the sametime, reflecting the diversified logistics, the government will review
regulations on the wholesale markets, where fair transactions are expected to
conduct, and submit to the next ordinary session of the Diet a bill aiming toencourage ingenuity to meet the needs of each market.
- To meet new needs for use of farmland, based on the Vitalization Plan, thegovernment will review handling of farmland under the Agricultural Land Act,
including a case of greenhouse whose entire surface ground is covered withconcrete, and utilization of unclaimed farmland. For this purpose, thegovernment will submit a bill to the next ordinary session of the Diet.
- To promote fisheries as a growth industry, based on the Vitalization Plan, thegovernment will consider and embody initiatives next year, including the ideal
proper legal system; that is, establish scientific and effective methods forevaluation and management of resources that are equal to international levels;
establish a competitive distribution structure of fisheries; and respond to issues
including development of environment to secure people who support fisheries
and keep enough investments to fisheries.
- To realize smart agriculture, forestry and fisheries, and to increase productivity
through the entire value chain, the government will strongly promote
development and implementation of cutting edge technologies such as AI, IoT,
Big data, robots, and drones in all sectors. These include big data from thephases of produce to consumption using Agricultural Data Cooperation
Platform (established this year and full-operation in 2019), optimization of
produce and distribution through information sharing among the entire forestry
and wood products industry, prediction of fishing ground and detecting andselecting of fish by AI, and automated production and cooking of food by
robots.
7) Tourism, Sports, Culture, and Art- The government will start developing an information system within this fiscal
year that centrally manages information in the travel industry to improve thesafety of tourists. Also, the government will implement initiatives to increase
productivity based on the “Tourism Vision to Support the Future of Japan”.
These initiatives include use of ICT technologies for the accommodationindustry, development and use of human resources through establishing an
MBA program in tourism, use of multilingual speech translation technology,
improvement of environment to accept cruise ships, use of ICT technologies innatural parks.
- The government will compile problems and solutions when the private sector
proactively involve in achieving sustainable management of stadium arenasand encourage their involvement.
- With regard to development and use of human resources for sports management,
the government will consider ideal human resources and education curriculumthat are required to establish an educational institution with a view to creation
3－11

of a degree (sports MBA), and indicate the direction within this fiscal year andcompile the ideal education system within the next fiscal year.
- The government will leverage the economic scale of culture and arts industry(cultural GDP) and resources of culture and arts to expand economic ripple
effects. For this purpose, while strengthening the functions of the Cultural
Affairs Agency, the government will develop infrastructures for “moneymaking culture” that creates new values by taking measures, including
developing and securing of human resources, further disclosure and use ofcultural properties and review of protection systems, and strengthening offunctions of regional cultural resources and global communication capabilities.
(3) Radical strengthening of the foundation for the innovation promotion
1) Promotion of strategic innovation for the full implementation of Society 5.0- The government will steadily progress public-private collaborated research anddevelopment and its societal implementation that would contribute toproductivity increase, including Strategic Innovation Program (SIP), a crossministerial project to promote Society 5.0. At the same time, to encourage
Ministries and Agencies to implement similar initiatives, the government will
promote establishing technological platforms for AI and quantum computer
using Public/Private R&D Investment Strategic Expansion Program (PRISM)
that will be newly established, while paying attention to international trends
regarding development and utilization. In addition, with a view to international
implementation of a series of systems, institutional reforms, includinginternational standardization, and loosening of relevant regulations, will beincorporated at the planning phase of the project. Also the government will
promote an industry-academia-government joint use of cutting edge large
research facilities, including a large synchrotron facility and super computersthat contributes to increase Japan’s research capabilities and companies’
productivity.
- To promote societal implementation of new technologies toward Society 5.0,
regarding Innovation Network Corporation of Japan, the government will aim
to strengthen its function of providing risk money while ensuring political
governance and enabling flexible investment, and submit necessary bills to thenext ordinary session of the Diet.
2) Promotion of young researchers’ activities- After visualizing research expenses and research results per national university
and young researcher, the government will progress the reform of types andframeworks of research expenses, which, for example, enables qualified young
researchers to easily obtain research grants from this fiscal year. Also thegovernment will consider introducing an incentive system that encourages each
university to prioritize as many research grants as possible to young faculty.
- The government will consider the ideal reform of the human resources andpayroll management system. This includes the establishment of fundamental
principles such as effort management, performance evaluation, and reflected3－12treatment, the adoption of cross-appointment system and annual salary system,a program based on a diversifying career paths, including well-balanced
treatment such as shifting full-time job posts of senior faculty who should
obtain external research grants by themselves to promising young faculty andimprovement of mobility of senior faculty.
- The government will expand measures to provide young researchers who havemotivation and abilities with opportunities to study abroad. At the same time,
the government will promote international educational cooperation withoverseas universities to obtain joint degrees. Also the government will consider
the reform of system which ensures that they may obtain overseas doctorates
and have job opportunities after returning to Japan within the next fiscal year.
3) University as an innovation center- While promoting the establishment of the post of provost (vice president) who
assists the president, which has started at part of designated national
universities, the government will progress necessary reforms, including
appointing external human resources to top management, so as to promote
optimal management where top management can exercise more leadership andmanagement capability will be improved as well as the division of academicroles will be promoted.
- With regard to the ideal collaboration, integration and role sharing ofuniversities across the framework of national, public and private universities
centered on innovation, including reorganization such as multiple universities
under one holding company, the government will obtain a definite plan within
the next fiscal year and progress necessary reforms.
- The government will encourage universities, national research anddevelopment institutes, and other organizations to make their own efforts tosecure diversified fund sources. At the same time, from a perspective ofpromoting donations to universities and other organizations, the government
will consider relaxing tax-exemption requirements for donations of valuation
assets.
4) Promotion of innovation of public and private funds- For the existing projects in the public sector, by promoting the adoption of
cutting-edge technologies, the government will implement initiatives to shiftthem to science and technologies innovation from the next fiscal year. In the
public fund-raising sector, to promote use of venture capital, the government
will formulate guidelines within the next fiscal year, aiming to identify specificissues and establish a step-up structure from research and development to fundraising and commercialization.
- The government will steadily implement the content of “Guideline forEnhancing Industry-Academia-Government Collaboration Activities” topromote open innovation. In addition, the government will consider new
support methods calling for private research and development investment,
including fund allocation system based on the results of industry-academia
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collaboration, government-private collaboration of research topics competition,
and award programs, and will take initiative to create a research anddevelopment fund of public offering. These initiatives aim to promote aneffective use of national research and development funds and induce private
reserve funds of more than four hundred trillion yen into innovation investment.
In addition, they will establish structures of industry-academia-governmentfinance collaboration by region and of support for ventures, and increase thenumber of investable research and development institutes, enable universities
and research and development institutes to obtain and hold for a long termshares and stock acquisition rights associated with their support for ventures.
- With regard to good examples including SIP and the high impact research anddevelopment program ImPACT, the government will continue research atnational research and development institutes and universities, transfer results
to private companies, and promote commercialization of ventures to establish
an exit strategy.
5) Obtaining of international technology standards- The government will expand support for private activities for international
standardization and formulation of rules. At the same time, the government will
strengthen public and private collaboration, including consideration of how toserve as a control tower by government’s Chief Standardization Officer,
progress initiatives in a strategic manner. These initiatives include international
standardization of important fields, cooperation with regulations andgovernment procurement, and development of human resources forstandardization. In addition the government will submit to the next ordinary
session of the Diet an amendment bill to revise the Industrial Standardization
Act, aiming to expand to apply the Japanese Industrial Standards (JIS) to
service fields.
6) Promotion of innovation policies in an integral manner- To establish consistent policies from basic research, applied/experimental
research, startups and societal implementation, to capturing the global market,
the government will integrally establish innovation-related policies that havebeen developed by each sector of IT, marine, space, health and medical, and byeach step of technology development, intellectual property, standard system,
and regulatory matters, to formulate evidence-based consistent and scientificpolicies. Relevant data of each Ministry and Agency will be linked within three
years. For this purpose, Council for Science, Technology and Innovation will
formulate and promote KPI and a timetable regarding initiatives for the next
three years of “period of intensive investment towards the supply systeminnovation” by collaborating with other relevant various controlling functionsof the cabinet.
(4) Infrastructure development for Society 5.0
1) Strengthening of communication infrastructurei) Reform of radio wave system
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- The government will steadily implement the measures indicated in the second
set of recommendations for Regulatory Reform Promotion Council(determined on November 29, 2017) including the following initiatives.
 As means for radio wave allocation and visualization of the status of radio
wave utilization, while considering preventing any problems with various
operations from interception and interference of communication, thegovernment will conduct proactive publication of the allocation status of
frequencies for public use and effective surveys on the status of public andprivate utilization of radio waves. In addition, as a response measure tosecure frequency bands, the government will set up the goal of securing
frequencies to meet the needs of new frequencies.
 The government has determined to formulate a system to conduct a smooth
return by mobile phone operators of frequency bands with no effective use,
including after the end of the approved period of the plans for opening
specific base stations formulated by them, and to expand and establish
incentives including measures to promote transfer frequencies. To
implement these initiatives, the government will submit necessary bills
within the next fiscal year. In addition, the government will consider “public
safety LTE” for joint use by relevant Ministries, Agencies and other relevantorganizations in the public sector and frequencies among public sectors,
joint use of systems. At the same time, in the private sector, the government
will consider effective use of frequencies allocated for broadcasting with aview to the future vision of broadcasting business.
 Undertaking a drastic review of allocation methods of frequencies, thegovernment have determined to apply the amount (including expenses fortransferring frequency bands) of the economic value of newly allocatedfrequency bands through competitive application procedures, and to
introduce a new method to determine allocation of frequencies based on acomprehensive evaluation of multiple items (population coverage ratio andtechnical capabilities) including the above economic value, and willconsider these initiatives to submit necessary bills within the next fiscal year.
Revenues obtained by this new method will be used for the promotion oftransfer of frequencies, implementation of Society 5.0 and others, andmeasures for them will be considered.
 For optimization of spectrum user fees reflecting the economic value ofradio wave, the government will review characteristic coefficient anddivision of frequency bands in calculation of spectrum fees conforming to
the status of utilization of radio waves and also review the use of spectrum
fees so that the government or other organizations can collect spectrum user
fees from licensees’ stations for public use that have not been effectively
used, surveys on the status of utilization of radio waves that would
contribute to the effective use of frequencies (including surveys on the statusof radio launch), and promotion of transfer of frequencies. To achieve these,
the government will submit necessary bills within the fiscal 2018.
Furthermore, the government will consider requesting licensees who use
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radio waves as national common property to bear the burden based on theireconomic value.
ii) Realization and utilization of the 5th Generation Mobile Communication
System (5G)
- With regard to 5G that enables ultra-high speed, high-capacity, multipleconnected, and low-latency communication, the government will achieve it
first in the world with a view to conclude in 2020 and speedily promote thespread and development of 5G in regional areas while developing specificapplication such as automated driving.
iii) Development of large-capacity international communication infrastructure- The government will encourage private companies that undertake collaborative
research with universities and other institutes to use academic information
networks and consider the necessity of reinforcing tight lines based on an
increasing volume of data communications.
2) Data sharing and establishment of collaboration platformi) Promotion of public and private data sharing and collaboration- The Strategic Conference for the Advancement of Utilizing Public and Private
Sector Data and The Executive Committee of Basic Plan for the Advancementof Utilizing Public and Private Sector Data serving as the control towers will
start cross governmental initiatives from this fiscal year towards the disclosureof public data which is highly demanded by the private sector through thoroughexamination of public data, continued dialogue through public and private
round tables and strengthening of support for local governments’ efforts to open
data. Along with opening of data held by the public sector, the government will
promote Evidence-based Policymaking (EBPM).
- Based on Connected Industries Tokyo Initiatives 2017, the government willsubmit to the next Diet session bills aiming to establish a certification systemfor data – sharing - business in collaborative areas and a data - requesting
system to the administrative sector. In addition, to promote the distribution andutilization of personal data under individual responsibility, the government will
formulate guidelines for certification for “Information Bank” within this fiscal
year.
- With collaboration and advanced utilization of data with cyber-security
measures, the government will support investment for IoT facilities, including
information systems, censors, and robots needed for initiatives to create new
added values.
- Through means including the establishment and expansion of use of sevensatellite constellation of Quasi-Zenith Satellite System, strengthening offunctions of Geospatial Information Center, and utilization of various kinds ofinformation obtained from space, the government will strongly promote
Geospatial Project including automated driving, automated farming, remotesensing in the forestry and support for disaster evacuation. The government
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will also gather various kind of public and private information on geospatial
data to consider how public organization should encourage secondary andtertiary use and consider strengthening the government’s control tower
functions and developing the system as soon as possible in order to promote
Geospatial Project.
- To promote the progress of new businesses using big data, the government willsubmit to the next ordinary session bills aiming to develop flexible regulationsof restrictions on rights in the Copyright Act and to establish remedy measures
for improper acquisition, use and provision of data in the Unfair Competition
Prevention Act.
ii) Formulation of Infrastructure for Multilayer Interoperability and establishmentof common market to promote data connection- Aiming to collaborate all the data scattered among the national and local
administrative organs and private companies, the government has determined
to establish a platform to promote data standard and cross-cutting data use of
Infrastructure for Multilayer Interoperability (IMI) for both “cross-cuttingareas” (place, time, etc.) and “individual areas” (agriculture, infrastructure,etc.) within three years, and will start developing the system to implement suchinitiatives. At the same time, the government will consider collaboration withdata collaboration platforms in the USA and European countries, aiming toestablish a common data market for one billion people in Japan, USA andEurope.
3) Strengthening of cyber security measures- Toward the 2020 Tokyo Olympics and Paralympics, the government will
speedily develop legal systems to establish the structure where a variety ofentities, including national administrative organs, critical infrastructure
operators, and cyber security-related operators can mutually cooperate tostrategically and promptly share information on cyber-attacks we are facing. In
addition to this, from a viewpoint of strengthening IoT security, the government
will build a framework of public and private collaboration within this fiscal
year to promote initiatives to ascertain the actual situation, implement andmake aware of counter-measures, and promote combatting bots (computermalware to remotely operate IoT equipment from outside).
- The government will strengthen developing human resources who will playcore roles for cyber security countermeasures in the industry, who will lead
operation and management of networks to support IoT, and who will lead thepromotion of security and open data.
- To promote SMEs’ cyber security countermeasures, the government willstrongly encourage them to use secured cloud services and take voluntary
initiatives through guidelines and other regulations.
4) Development of social infrastructure- The government will intensively develop infrastructures to increase
productivity of the Japanese economy, including high-standard key roads like
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major metropolitan ring roads, new Shinkansen lines, high-speed traffic
network like linier central Shinkansen, international hub airports, andinternational container and bulk strategy ports.
- In the water supply and sewage business facing issues of decreasing watersupply and water treatment capacity as well as aging facilities in line with thedecreasing Japanese population, to accelerate the introduction of PPP/PFI, thegovernment will implement a model project where local governments that arehighly motivated to take advanced initiatives will be publicly recruited andtheir activities will be examined by private operators who have experiences andknow-how of its operations.
- To promote the utilization of land of unknown ownership and vacant lots andto curb further increase in such land, the government will submit a bill to thenext ordinary session of the Diet aiming to establish a structure to facilitate theutilization of land of unknown ownership and a structure to promoteconsolidating and reorganizing scattered vacant lots.
5) Promotion of bold energy efficiency and investment in renewable energy sources- From a view point of striking a balance between global warming
countermeasures and economic growth, the government will make maximum
progress in energy-efficiency investment and introduction of renewable energy
sources by taking budgetary and legal measures, including energy efficiency
efforts by cooperation among multiple operators, support for SMEs by privatecompanies that have energy-efficiency know-how, development of renewableenergy technologies for cost reduction, and promotion of renewable energy
supply using regional resources towards the target of 26% reduction ofgreenhouse gas emissions by FY2030 and achieving the Energy Mix Policy by
FY 2030.
- To improve resource efficiency, the government will revise the Fundamental
Plan for Establishing a Sound Material-Cycle Society early next year in orderto accelerate recycling resources including collecting metal from urban mines.
(5) Promotion of the transfer of human resources to growth sectors and the diverse andflexible work styles(i) Development of an environment for employment and education that brings out
individuals’ talent- The government will restructure the labor movement support subsidy (underthe “two unemployment insurance related services”) and other schemes with
an emphasis on supporting career enhancement and career change. In addition,
the government will promote the use of career consulting at major turning
points related to age, years of employment, posts and other factors, as well as
the activities including those to support reemployment of middle-aged andelderly persons. Furthermore, the government will develop the Guidelines for
Expanding Opportunities for Diverse Selection and Employment Regardlessof Age within this fiscal year to establish a flexible labor market in which
career change and reemployment will not be disadvantages.
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- The government will provide support through public vocational training(under the “two unemployment insurance related services” and othermechanisms) and educational training benefits (“unemployment and otherbenefits” under unemployment insurance), so that working adults are able torelearn effectively at various stages of life.
 The government will enrich the programs of public vocational training andgeneral educational training benefits, so that not only the personnel in the
IT sector but also those working in a wide range of industries that use IT
would usually be equipped with basic IT and data skills.
 To support the acquisition of professional and practical skills newly
required due to technical innovation and other factors, the courses of study
offered at professional universities and other institutions will be madeeligible for receiving the professional and practical educational training
benefits. In addition, eligible courses will be expanded throughcoordination with the Brush Up Program for Professional offered byuniversities, Applied Professional Postsecondary Course offered by
specialized training colleges, the Certification Program for Fourth
Industrial Revolution Skills Courses which focuses on IT and data-related
fields, and other programs.
-

The government will improve the training and use of personnel withexceptional ability who would serve as a driving force of innovation, by
establishinghuman resources training
programs that support
commercialization and starting up of a business through one-on-one guidanceby project managers and providing support for taking on the challenge totackle creative technical issues.
- The government will initiate activities of a “public-private consortium”
comprised of industrial and educational sectors within academic year 2017,to promote practical education in universities and other institutions that use
actual themes, data and other information of corporations, while keeping trackof the needs of the industrial community.
- The government will undertake activities including the revision of theuniversity establishment standards with the target of completing them within
the academic year 2017, with an aim to make progress on engineering
education reform, including the abolition of vertically divided departments
and the promotion of an integrated educational system from undergraduate tograduate school.
- To ensure that computer programming education can be implemented
effectively in all elementary schools by academic year 2020, when the new
Guidelines for the Course of Study for Elementary Schools will be fully
implemented, the activities including the following will be moved into fullgear in academic year 2018: speeding up the development of school children’s
educational materials by the Learning Consortium for the Future; and setting
up a system for using personnel from outside. Also the government will
ensure that all schools and other institutions across the nation will be able to3－19

take actions including the selection of educational materials and the trainingof teachers from the outset of academic year 2019. Efforts will be made tocreate an environment in which school children can learn computer
programming continuously and progressively in each region.
- In order to utilize new educational services that use artificial intelligence (AI),
big data and other elements (EdTech), and to promote the improvement anddevelopment of individuals’ capacity tailored to diverse needs, thegovernment will prepare guidelines for introducing EdTech based on theimpact of EdTech verified through demonstration projects, along with theimplementation of other activities.
(ii) Promotion of diverse and flexible work styles- The government will revise the guidelines for telework within this fiscal year
and make them widely known so that telework will become widespread, while
ensuring that long working hours will be prevented and appropriate security
measures will be taken. In addition, the impact of telework in improving
productivity will be analyzed based on actual proof, and the results will be
used to transform the mind-set of management.
- The government will make efforts to understand actual conditions and issues
concerning work styles that are not bound by employment relationships, suchas freelance and crowdsourcing. Based on the findings, medium- to long-term
study will be conducted from the next fiscal year under the Labor Policy
Council and other bodies, which will look into issues such as the need forlegal protection.
- The government will recommend side jobs/multiple jobs from the viewpointof supporting responsible career development of workers without depending
on a single company. Toward this end, the model rules for employment will
be revised and the guidelines will be developed within this fiscal year. In
addition, studies will be conducted under the Labor Policy Council and otherbodies focusing on effective ways of working hour management and on theways of compensations for on-the-job accidents and injuries, in view of thechange in work styles and other factors, while taking into consideration thatworkers’ health should be ensured.
(iii) Review of monetary relief systems when termination of employment is invalid- Concerning the review of monetary relief systems when termination of
employment is invalid, a professional study focusing on technical aspects oflaw will be initiated by the Labor Policy Council as soon as possible, basedon the findings of the Study Committee on Transparent and Fair System andOther Mechanisms for Resolving Labor Disputes. Necessary institutiona lmeasures will be taken based on the final conclusions of the Council.
(6) Strengthening support for ventures- The government will initiate the Startup Japan (tentative name) within this fiscal
year and will take the following actions: (i) select startups that can win globallyand provide intensive support; (ii) provide locations in which they can use trial
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and error in designing and building prototypes for mass production; and (iii)
support overseas expansion. In addition, (iv) make more efforts to lure foreign
ventures to Japan.
- In order to stimulate new challenges which would become starting points ofinnovation, the government will provide more growth funds for open innovation(startups and other entities), through the capacity improvement of the Innovation
Network Corporation of Japan (INCJ) and other mechanisms. A system will be
developed to support ventures to solve the problems they will be having at eachstage, while improving operational efficiency by integrating or enhancing
cooperation among public and private funds.
- The government will set up the system of “super accelerated examinations” forpatents from startups within the next fiscal year, in which the first action will be
issued within one month in principle.
- The Startup Program (tentative name), a business incubation program, will be
initiated within the next fiscal year. The program will strengthen the development
and use of innovators with exceptional ability in Japan who could become venture
entrepreneurs. In addition, the government will take measures concerning theimmigration control system, for example to provide a period of residence in Japanfor a maximum of one year to prepare for starting up businesses, aiming atreceiving more foreign entrepreneurs. Also, measures of control and support will
be implemented, such as the checking of the status of activities for starting up
businesses, and the establishment of a consultation system.
(7) Supply System Innovation from the government(i) Promoting digital government- To improve productivity of both public and private sectors through a review
of operational and other processes inside the government, the governmentwide Digital Government Implementation Plan will be compiled this year. By
reviewing administrative procedures, the government reduces its operational
cost by at least 20% (It should be achieved by March 2020).
- The government implements coordination of information based on Individua lInformation System, enrichment of Corporate Information Site,
simplification of procedures for individual identification according tosecurity levels, reduction of documents for public services’ applications, andimprovement and full utilization of government’s procurement system. In
addition, progress should be made in setting up the online system of SMEs’
application for subsidies in the next fiscal year.
- To realize provision of digital services quickly with new technologies, thegovernment sets up a team which reviews its cross-sectional procedures andadvance reforms of IT systems based on design thinking inside thegovernment immediately. In addition, the government starts reviewing theways of procurement of IT systems in order to improve the level of services
and optimize their cost structure by introducing new development methods
such as an agile development (a method in which both developments and3－21

improvements are repeated within a short period of time) and, introducing
new technologies timely and properly.
(ii) Promotion of the Use of the Individual Number Card
- Measures included in the roadmap for promoting the use of Individua l
Number Cards, which has been put together in March 2017, will be put into
practice steadily in a way that the people can feel the convenience in daily
life. Activities will include the following: realizing and expanding online
confirmation of health insurance eligibility using the Individual Number Card
(operation will begin in stages from FY2018 and will be in full operation fromFY2020), and the public and private one-stop online service using
Mynaportal (started in this fiscal year for areas related to child-raising, andservices related to other life events to follow from the next fiscal year, instages from those that are available); and promoting the introduction of point
systems to support regional economies using the Mykey Platform (started inthis fiscal year).
(iii) One-stop online procedures for starting a business- With an aim to provide a world-class environment for starting a business, andto allow all procedures required for starting a business to be completed online
in one-stop, the government will prepare a definite plan before the end of thisfiscal year concerning concrete measures and the stage of work towardrealizing the following:i)

Aiming for the online process of registration of incorporation to becompleted within 24 hours, and for appropriate and swift procedures inworld-class standard thorough digitalization of operations;ii)

Abolition of the requirement to register a seal at the time ofincorporation;iii) Streamlining electronic articles of association, including the ways ofcertifying original articles of association; andiv) Digitalization of the procedures of starting a business and providing onestop service using the Mynaportal.
(8) Taking in growing overseas markets- The government will push forward to achieve entry into force of the TPP
agreement involving 11 countries, and continue discussions on expansion of its
member countries and regions. The government will also make efforts towardearly signature and entry into force of the Japan-EU EPA, which was reachedagreement in principle in July 2017. The government will work on negotiations torealize a high-quality RCEP, and promote negotiations on other economic
partnerships strategically and expeditiously, including the Japan-China-Republicof Korea FTA.
- The government will take measures to support overseas business expansion of
SMEs through Consortium for the New Export Nation and public-private
partnership utilizing the Official Development Assistance (ODA), etc.
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- Based on the Infrastructure Export Strategy (hereinafter referred to as the Export
Strategy), the government will continue to promote sales pitches and further
utilize supportive policy tools. In addition to the strategies of three fields(electricity, railways and information and communication) which have alreadybeen established, the government will establish the strategies for overseas
expansion strategies in other fields such as medical services, ports, airports,
environment, etc by the next revision of the Export Strategy.
The necessary steps concerning budget and tax will be taken and systems will be amended
concerning the measures mentioned above, and the status of implementation will be
reviewed. Concerning the matters that must take concrete shape, further efforts will bemade toward the next summer.

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Chapter 4

Response to current additional fiscal demand

The government will compile the FY2017 supplementary budget toward the end of thisyear in order to deal with additional fiscal demand properly. When doing so, and toward
the Supply System Innovation, measures will be implemented in areas such as providing
support for improving manufacturing, commerce, and service management capability andintroducing IT, as means to provide concentrated support specifically to the types ofbusinesses with low productivity, second-tier companies, SMEs, and small-scale
entrepreneurs. At the same time, the government will implement activities including thoseunder the Strategic Innovation Promotion Program steadily to promote research anddevelopment. In Human Resources Development Revolution, measures will be taken inareas such as providing support for building childcare and other facilities, as the schedule
to implement the Plan for Raising Children in Peace of Mind has been moved forward.
In addition, in view of the occurrence of large-scale disasters such as the recent torrential
rains that hit northern Kyushu, the government will take disaster recovery and othermeasures, and will ensure that thorough measures will be taken on disaster management
and mitigation. Furthermore, measures will be taken in areas such as the strengthening ofagriculture, forestry and fisheries, to strengthen constitutionally in preparation of the
Economic Partnership Agreement between Japan and the EU, etc., based on the“Comprehensive TPP related Policy Framework”, which was revised in late November
2017.

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