Provisional

Section2 Three Action Plans
I. Industry Revitalization Plan………………………………..１
1. Vitalizing of industries..……………………………………..……..１(1) Progress in achieving KPIs
(2) Progress made in implementing measures(3) Specific new measures to be takeni) Promotion of "Proactive Management"ii) Revitalization and productivity improvement of service industryiii) Support for venture businessesiv) Promotion of providing growth capital/risk money, etc.
v)Innovative change in industrial structure/employment structure by IoT,
big data, artificial intelligence

2. Reforming the employment system and reinforcing of humanresources capabilities…………………………………………………20
2-1. Labor mobility without unemployment / Enhancing matching function /Realizing various ways of working / Promoting active social
participation by the young and the elderly / Strengthening humanresource capabilities to meet the needs of globalization……………….20(1) Progress in achieving KPIs
(2) Progress made in implementing measures(3) Specific new measures to be takeni) Implementation/realization of reforming ways of workingii) Reinforcement of human resource capabilities that will support the future(Support of voluntary effort of workers to develop their own careers)iii) Creation of a highly foreseeable labor dispute resolution system, etc.
iv) Ensuring of diversified employment/job opportunities, etc.
2-2. Promotion of active social participation by women / Utilization offoreign human resources...........................................…………………...35(1)Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

i) Promotion of active social participation by womenii) Utilization of foreign human resourcesiii) Promotion of the “Japan’s Robot Strategy,” etc.

3. University reforms / Promoting innovation in science and technology/ Becoming the world’s leading intellectual property-based
nation…………………………………………………………………..50(1)Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Implementation of a national system of innovationii) Promotion of regional innovationiii)Promotion of the “Japan’s Robot Strategy,” etc.

4.Becoming the world’s leading IT society……………………………..65(1)Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Cybersecurity protecting citizens and societyii)Utilizing the My Number system under the premise of security and safetyiii) System development geared towards the smooth circulation of
information and the promotion of business model reforms, etc.
iv) Further promoting the use and application of ITv) The development of telecommunication environments to support futuresocieties

5. Further strengthening Japan’s international competitiveness as abusiness hub…………………………………………………………...84
5-1. Realizing National Strategic Special Zones / Opening up rights tooperate public facilities, etc. to the private sector (expanding utilizationof PPP/PFI) / Improving infrastructure such as airports, ports andharbors / Improving competitiveness of cities………………………….84(1)Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni)Corporate tax reformii) Accelerated promotion of National Strategic Special Zones in the rest of

the period of intensive initiativesiii)Utilization of PPP/PFIiv)Improving the competitiveness of cities and strengthening industrial
infrastructure functions
5-2. Stimulating financial and capital markets / Management of public
and quasi-public funds, etc……………………………………………..102(1)Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni)Revitalizing financial and capital markets, etc.
ii)Reviewing management of public and quasi-public funds, etc.
5-3. Overcoming constraints of environmental/energy ……………………109(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

6. Achieving regional revitalization and regional structural reform /Achieving reform among mid-ranking companies, SMEs and microenterprises…………………………………………………………...114(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni)Establishing “Earning Power” of regional mid-ranking companies, SMEs,
and micro enterprisesii) Promotion of regional innovation

Ⅱ. Strategic Market Creation Plan…………………………123
Theme 1: Extending the nation’s healthy life expectancy…………...123(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

Theme 2: Realizing clean and economical energy supply anddemand……………………………………………………….134(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

Theme 3:Building safe, convenient, and economical next-generation
Infrastructure………………………………………………..138(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

Theme 4:Building regional communities that use their unique local
resources to appeal to the world……………………………142
Theme 4-1)
A rich rural society which produces the world’s
highest-quality agricultural, forestry and fishery products andfood produce……………………………………………………...142(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be takeni) Strengthening production sitesii) Linking domestic value chainsiii) Promoting exports, etc.
iv) Transforming forestry and fishery into growth industries
Theme 4-2) A society which makes use of potential such as tourism resources
to invite many tourists from around the world to regional
communities……………………………………………………..153(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

III. Strategy of Global Outreach………………………….…164(1) Progress in achieving KPIs
(2)Progress made in implementing measures(3)Specific new measures to be taken

Section3 Momentum for the reform~ Promotion of the “Reform 2020” ~ ..………175

II. Three Action Plans
I. Industry Revitalization Plan
1. Vitalizing of industries(1) Progress in achieving KPIs
<KPI> Bring private capital investment back to the pre-global financial crisis
level (¥70 trillion/year) over the next 3 years
FY2014: ¥69.3 trillion (the second preliminary figures) (FY2013: ¥68.2 trillion)<KPI> Ensure that the business startup rate exceeds business closure rate, and raise
the current business startup and closure rates to the 10% range (up from thecurrent rates of around 5%), on a par with the US and UK
FY2013: Business startup rate 4.8%, Business closure rate 4.0%
(FY2012: Business startup rate 4.6%, Business closure rate 3.8%)
Early-Stage Entrepreneurial Activity Index (FY2014): 3.8%
* Regarding the startup/closure rate, the Government has set a goal to "double the
Early-Stage Entrepreneurial Activity Index (the percentage of respondents who
answered that they are "entrepreneurs or prospective entrepreneurs" in the“Survey on entrepreneurial spirit”) in coming 10 years" as a supplementary index
looking ahead for the next 10 years, as it will require not only the government
policies but also change in social attitudes toward entrepreneurship, which makes
it a long-range goal.

(2) Progress made in implementing measures(Drafting the "Corporate Governance Code," etc.)- By setting up the "Council of Experts Concerning the Corporate Governance Code”
for which the Tokyo Stock Exchange and the Financial Services Agency acted as a
joint secretariat, as part of the growth strategies and from the perspective of ensuring"growth-oriented governance" that will stimulate healthy corporate entrepreneurship,
the Government has compiled the key elements of corporate governance (“Japan’s
Corporate Governance Code [Final Proposal]”) in March 2015, which provides that
listed companies should appoint at least two independent directors, and in case ofholding shares as cross-shareholdings, companies should disclose their policy withrespect to doing so. In response, the Tokyo Stock Exchange has formulated its"Corporate Governance Code" and started applying the code to listed companies since
June.

1

(Promotion of support by financial institutions, etc. for business management
and business reconstruction to accelerate industrial restructuring)- In March 2015, the Private Sector Advisory Panel with participation of relevant
ministries and agencies as observers has compiled the report on the reassessment oflegal systems and practice related to business reconstruction, while the "lending basedon customers’ business potential" and the "effective financial intermediation to support
growth of regional economies and industries and innovation" were indicated as thepriority measures in the “Financial Monitoring for Policy for 2014-2015.”(Promotion of medium- to long-term growth funding through private
financing)- To strengthen the fields conducive to mid- to long-term productivity improvement,such as growth-oriented business innovation, and aiming to expand funding into
growth fields, through equity, mezzanine finance, mid- to long-term loans, etc., the"Study Panel Concerning the Promotion of Expanding Growth Funding" was formed
under cooperation of relevant ministries and agencies, in which they discussed andcompleted the report in November 2014. Based on the above report, the "Act for
Partial Amendment of the Development Bank of Japan Inc. Act" and the "Act for
Partial Amendment of the Shoko Chukin Bank Act" were enacted in May 2015.

(Compiling of measures toward promoting dialogue between companies andinvestors)- With regard to the promotion of dialogue between companies and investors, theGovernment has conducted reviews by setting up “The Study Group on Promoting
Dialogue between Companies and Investors for Sustainable Growth," in September
2014, in which they examined and completed a report in April 2015. In the report,
recommendation were made on the concepts and methods; of making a schedule of theshareholders' meeting in a manner to realize a dialogue-based shareholders' meeting
process; of reviewing the record date for determining voting right, which is theprecondition for setting the schedule; on the measures aiming to realize the company
information disclosure in an integrated and comprehensive manner, etc.

(Setting of global benchmarks)- By making a comparative study on the business models and growth potential of global
leading companies and that of Japanese companies, and after having organized thepolicies and procedures of deliberation on the evaluation index (global benchmarks)
that may serve as a reference to make business decisions and to provide businesssupport, the Government has selected 11 industries as the business fields to which it
sets the global benchmarks. Among them, the Government has set the global2benchmarks for 4 industries (petrochemistry, petroleum refinery, iron and steel, andelectronics) by April 2015, and indicated the problems of each industry and the
directions of efforts, e.g., productivity improvement, scale expansion, clarification ofstrategic area, etc. As for the petrochemistry and petroleum refinery sector, theGovernment conducted the survey on the market structure based on the Article 50 of
the “Industrial Competitiveness Enhancement Act” and published the results in 2014.

(Establishment of Venture Business Creation Council)- The Government has established the Venture Business Creation Council in September
2014, to which 414 organizations joined from existing businesses, venture businesses,
financial institutions, venture capitals, etc. as of the end of May 2015. At the sametime with the establishment, the Government held a matching event for venturebusinesses and large companies and set up 1,480 business meetings, 807 of which
turned out to be effective. In addition, "Nippon Venture Award" was established tocommend venture business that created new business that has a strong impact, and thefirst award was given in January 2015.

(Promotion of participation in government procurement by small andmedium-sized venture businesses and clarifying the handling of employment
insurance benefits for people preparing for or considering business startup
while engaged in job-seeking activities)- Regarding the promotion of participation in government procurement by small andmedium-sized venture businesses, the Government has submitted a bill to revise the
Act on Ensuring the Receipt of Orders from the Government and Other Public
Agencies by Small and Medium-sized Enterprise Operators to current Diet session,and immediately after passage of the law, the Government will formulate a "Basic
Policy for Contracts of the State, etc." by incorporating the measures to set the target
volume of contract with new SMEs as well as to increase the opportunities for suchcompanies to win government contracts. Also, the Government has revised the"Operational Guidelines for Employment Insurance" in July 2014, and clearly statedabout the handling of employment insurance benefits for people preparing for orconsidering business startup while engaged in job-seeking activities.

(Creation of "Nihon Service Award", formulation of a guideline for small
and medium-sized service businesses)- The Government has established "Nihon Service Award" to commend mechanism tocreate and provide excellent services, and will start to invite applicants for the award
from July 2015 and give the first award in April 2016. Also, in February 2015, the3Government has formulated and published a guideline that shows the methods andcase examples of efforts by small and medium-sized service businesses toward
productivity improvement.

(3) Specific new measures to be taken
As a result of the past efforts, the earning capacity and earning power of companies
have made a steady improvement. In order not to make it only a temporary phenomenon,
but to make it established and further improve, the Government will give an additional
boost to the companies' challenges after this.

i)

Promotion of "Proactive Management"
To give a boost to businesses in their challenges, the Government willcomprehensively promote initiatives aiming to improve businesses’ profitability andproductivity by promoting; businesses to properly fulfill their governance functions;various investors including institutional investors to have constructive dialogue withbusinesses with the creation of long term value in mind; the financial institutions asproviders of funds to give support to improve and strengthen the quality andsustainability of the borrower. Under such concept, the Government will need to evolvethese initiatives respectively.
The Government should solidify the virtuous economic cycle by establishing andimproving companies' earning capacity and earning power, thereby strengthen thedriving force toward economic growth and lead them to expand the job opportunity,
wage increase and increase in business investments.
[1]Enhancement of corporate governance- We need to work actively to prevail and to promote the adoption of Japan’s
Stewardship Code, established and released in February 2014, and Japan’s
Corporate Governance Code, which entered into force in June 2015, as ‘thetwo wheels of a cart’ such that the sustainable growth of companies will bepromoted by both sides of investors and companies. To that end, theGovernment will, in collaboration with international organizations including
the OECD, actively and globally disseminate the approach of Japan’s
Corporate Governance Code, which seeks “growth-oriented governance" byproperly ensuring accountability and encouraging sound risk-taking, while
ensuring full explanation and publication of the said approach in Japan. Also,
to facilitate dialogue between listed companies and shareholders in adherencewith the aim and spirit of the Corporate Governance Code, the Government
will assess the overall situation and publish the results in cooperation with the4Stock Exchange. In addition, to ensure that institutional investors’ applicationof the Stewardship Code is firmly established based on their full understanding
on its purpose, etc., the Government will assess and publish institutional
investors’ acceptance of the Code, while sending messages to them asnecessary.
- To improve mid- to long-term corporate value, and in light of the developmentof systems in recent years such as the revision of the Companies Act andformulation of the Corporate Governance Code, the improvement of theenvironment will be important to encourage the implementation of corporate
governance. To that end, the Government will formulate and publish guidelines
for interpretations on legal matters of Companies Act on the following points(including specific practices).
- Regarding the scope of matters that have to be discussed at meetings ofboard of directors to increase the effectiveness of the supervision by theboard of directors, as well as the scope of “the execution of the operation"that causes outside directors to forfeit their outsideness in the event that they
perform such acts.
- Regarding company's indemnification(a procedure under which, in the eventthat officers’ liability for damages is pursued, their companies indemnify themfor the amount of money that these officers are liable to pay for the saiddamages and costs in disputes), so that the management can properly take risks,etc.
- At the same time, the Government will improve a system to enable flexible
utilization of stock-based compensation (not money) or performance-based
compensation, etc. as incentives to encourage management to create
mid-to-long term corporate value.
Furthermore, the Government will promote securing of human resources forindependent outside directors by collecting and disseminating specific practicesin Japan and abroad, so that persons with management experience can utilize
their vast range of knowledge and experience accumulated in their careers byassuming positions as outside directors of different industry, etc.

[2]

Fulfillment of steady financing function to strengthen support
enterprises' management
From the perspectives to promote improvement in business management andbusiness restructuring, financial institutions need to further strengthen theirfunctions, capacities and management vitality, which are required to support the5core business of debtor companies, industry revitalization, etc. so that they canprovide financing by taking well into considerations the business potential of the
debtor companies, as well as to cooperate with relevant stakeholders to improvethe business management, productivity, and structure of debtor companies.
In this light, the Government will encourage financial institutions to further
enhance their corporate governance, financial soundness and risk management. As
the financial institutions have already started appointing independent outside
directors and reducing the shareholdings, which is held by financial institutions
for business reasons, the Government continues to closely monitor their efforts.
Especially, the global systemically important financial institutions need to reduceprocyclical factors (that amplify the effects of economic fluctuation) such as therisk of stock price fluctuations, etc. in order to be able to adequately respond to
the economic/market changes and business support needs of enterprises during
hard times, while taking into consideration the international regulatory changes.

[3]

Promotion of dialogue between companies and investors towardsustainable growth
For companies to improve their earning power and enhance corporate value ona sustainable basis, it is important that the companies and investors/shareholders
have constructive dialogue, bearing in mind that they have codependent
relationships with each other to create value toward mid- to long-term growth
together.
Taking consideration of such point as well as broad viewpoints including
fulfillment of capital market function, protection of investors/shareholders, etc,
the Government will build an effective and efficient system as a whole byconducting a cross-sectional review on the systems and practices concerning thecompanies' information disclosure, the process of shareholders meetings, etc.

A) Review toward integrated information disclosure, etc.
Regarding corporate information disclosure, in order to effectively andefficiently provide information necessary for investors, the Financial System
Council will set up a study group consisted of members from companies,
investors, relevant ministries and agencies, etc. The study group will verify the
information disclosures based on the Companies Act, Financial Instruments andExchange Act and listing rules of stock exchanges, conduct a comprehensive
deliberation on possible ways of integrated disclosure which include
de-duplication and utilization of cross-reference, effective unification of audit,
integration of quarterly disclosures, appropriate determination of dates related to6general shareholders meetings, measures for companies to enhance disclosure in
their governance and mid- to long-term business plans, etc., and will reachconclusions within this fiscal year.
B) Review of shareholders' meeting process, etc.
As a measure to solve the problem of the day of shareholders' meetings thatconflicts with other company’s shareholder meetings, and to secure sufficient
time for shareholders to review agendas and to engage in dialogue as much asthat of foreign countries, the Government will improve the environment wherecompanies can set appropriate date of shareholders' meetings and the record datefor determining voting right, and thoroughly streamline the process through theelectronification of convocation notices and related materials and voting, etc.
More specifically, the Government will encourage relevant organizations to
consider measures to smoothly carry out these approaches by 2016, that is, toencourage companies to provide shareholders with enough opportunity to
exercise their voting rights and to have dialogues, and to set appropriate record
dates for shareholders' meetings so that they can reflect shareholders’ voices
close to the day of shareholders' meeting.
In addition, based on the policies of entire government to promote the use ofIT, and by referring to the U.S. system ("Notice & Access" system), theGovernment will deliberate on the challenges and necessary measures inelectronically providing convocation notices and related materials, in principle,
and draw a conclusion by 2016.
Also, to promote electronification and to improve the quality of voting, theGovernment will encourage relevant organizations to consider the problems andmeasures in promoting electronification of entire process of voting by 2016.
Furthermore, in order to help companies to smoothly create their basic
policies for the participation of global institutional investors, etc. not on theshareholders registry, at shareholders' meetings, the Government will encourage
relevant organizations to establish guidelines by the end of 2015.

[4]

Corporate tax reform [described below](Described in “5-1. Realizing National Strategic Special Zones / Opening up
rights to operate public facilities, etc. to the private sector (expanding utilizationof PPP/PFI) / Improving infrastructure such as airports, ports and harbors /Improving competitiveness of cities.”)[5]

Promotion of proactive IT management in companies
The Government will let the business administrators understand that IT is not a7

cost reduction tool but a strategic management tool that should be actively used
when they build up new business models, and encourage them to change their IT
investment activities from "defensive IT investment," which focuses on cost
reduction, to "proactive IT investment," which focuses on creation of added value(Promotion of proactive IT management). To that end, and to build anenvironment where the evaluation is made by capital market from the viewpointof "proactive IT management," the Government will further develop theevaluation scheme "proactive IT management brand," which is currently carriedout in cooperation with Tokyo Stock Exchange, and push forward the measures
within FY 2015, so that the stock market can evaluate companies' IT management,
for instance, by formulating guidelines for IR activities related to companies' IT
management. Also, by the spring 2016, the Government will establish apublic-private-partnership Think Tank that carries out experimental studies related
to the correlation between IT investment and company growth, etc. and promotes
development of management talents and awareness-raising, etc. based on thefindings of the research, and, while promoting changes in the consciousness ofbusiness people through continuous revision of the said guidelines, theGovernment will compile statistics in FY2016 to understand the actual status ofcompanies' IT management that will become the base of such studies.

[6]

Fulfillment of governance function in overseas expansion
In order to back up companies in their overseas expansion as part of support for"proactive management," the Government will revise the "Guidelines to Prevent
Bribery of Foreign Public Officials" prescribed in the “Unfair Competition
Prevention Act” within 2015, and clearly state the desirable form of in-housegovernance including local corporations by taking into consideration of thedifference of legal systems of Japan from that of foreign countries.

ii)

Revitalization and productivity improvement of service industry
The service industry accounts for about 70% of GDP in Japan, and it is essential forthe growth of Japanese economy to vitalize the service industry and improve its
productivity. Therefore, based on the "Service Industry Challenge Program" (Decision
by Headquarters for Japan’s Economic Revitalization on April 15, 2015), theGovernment will promptly implement following measures, starting from the one thatare ready to be put into action, aiming to raise the growth rate of labor productivity inservice industry to 2.0% by 2020 (As of 2013: 0.8%).
- Cross-industry measures
Thorough dissemination of best practices (Nihon Service Award, "Visualization"8

of business challenges and solutions, etc.), the evaluation of service quality(dissemination and promotion of Japanese Customer Satisfaction Index, etc.),
human resource development (promotion of fostering management talents andprofessionals in universities and professional training colleges, etc.), support ofoverseas expansion using Japan External Trade Organization, creation of compact
cities/networking, etc.
- Measures for individual sector
Promote IT utilization, overseas expansion, improvement of activities (“kaizen”),
etc. for each of following industries: accommodation, transportation, foodservice/home-meal replacement, medical and nursing care, childcare, andwholesaling and retailing.
Also, based on the " Policies for Support and Cooperation in Passing on Price
Increases, and Policies Aimed at Improving Service Industries Productivity " decided in
Seiroshi (Government, Labor, and Corporate Management) Meeting for Realizing
Virtuous Cycles of the Economy held on April 2, 2015, Japan Federation of Economic
Organizations(Keidanren), in cooperation with motivated business associations, will
expand activities to obtain business solutions toward improvement of productivity in theretail, beverage, hotels, nursing care, land transportation industry, etc. through theopportunities to have advices from experts in manufacturing industry, etc., and the
Cabinet Office and the ministries in charge of these industries will arrange theenvironment by creating frameworks.
It is absolutely critical to build a support system at local level to back up individual
SMEs and micro enterprises deeply rooted in the region in their challenges toward
revitalization and improvement of productivity. The SME organizations and regional
financial institutions are already well aware of the importance of the revitalization ofservice industry and the improvement of its productivity, and they were informed about
the contents of the guideline for more sophisticated service industry and corresponding
support measures for SMEs and micro enterprises. They have already started
independent initiatives, and the Government will accelerate such movement.
To that end, the Government will conduct analysis of the successful cases and failurecases of business operators, and "visualize" the business challenges and solutions incarrying out business and corresponding measures, and within 2015, the Government
will develop the evaluation index/evaluation method that can be used as a reference tothe management judgment or management assistance to improve the productivity in theregion for a wide range of industry and business category including service industry. As
soon as being developed, these measures will be provided to business operators, SME
organizations, regional financial institutions, etc. one by one, and will be actively used
to promote creation of new businesses.

9Also, the Government will make a list of support specialists, including “service
Kaizen (improvement) experts,” who can help on-site process improvement by making
use of their experience of Kaizen in manufacturing processes, etc., and IT consultants,
and by concentrating and sharing the ‘Yorozu (general)’ Support Hub, which will
strengthen its business support system for SMEs and micro enterprises, and other SME
support organizations, the Government will build a network of regional
specialists/experts, from which business operators can have advices at hand, within
FY2015.
The regional financial institutions will, while utilizing such approaches and networks,
further advance lending based on the customers’ business potentials, consulting services
and push forward their efforts, including support for local government in formulating
and implementing the regional comprehensive strategies aimed to promote revitalizationand productivity improvement of service industry in the region.

iii) Support for venture businesses
Due to ongoing digitalization and networking, business models in the world aretremendously changing and, under such circumstance, to induce a high-impact businessmetabolism, it is very important to have new industries created by venture businesses.
Especially, fostering of world-class venture businesses is absolutely necessary.
Challenge to global market from domestic market or start up a business in overseas andbring in innovation to domestic market and to domestic business players fromabroad---The Government will build a mechanism of creating such global
entrepreneurial ventures (Global Venture Ecosystem).

[1]

Building of global venture network(Silicon Valley-Japan Bridge Project)
Many venture businesses are being created every day in Silicon Valley, and theygrow through the investors' fund and business support, and, by returning profits toinvestors, which stimulates further financing and business support, they haveestablished a "venture ecosystem (virtuous cycle of venture funding and businesscreation) ". By connecting Japanese entrepreneurs with the venture businesssupport organization (Accelerator), which is the implementing body of thisvirtuous cycle, the Government will form a mechanism to sustainably create
world-class innovations. The Government will implement a program that will
make good use of the resource of Silicon Valley in terms of "company," "people,"and "opportunity."A) Company
In order to strengthen the network with Silicon Valley, the Government will10

send people from Japanese SMEs, medium-sized companies, and venturebusinesses in the fields of design (craftwork, industrial), robot, biotechnology,
healthcare, etc. to Silicon Valley in cooperation with the Stanford University,
U.S.-Japan Council, etc. Also in Silicon Valley, the Government will provide
support, in cooperation with the Stanford University, U.S.-Japan Council, etc.,
for the activities to find business partners or to acquire investment fund by
making use of the network of local venture business support personnel withinsight of global level. The Government will improve the acceptance mechanism
in Silicon Valley within FY2015, select companies to be dispatched, and support
about 200 companies in the next 5 years after FY2016.
B) People
The Government will recruit about 100 entrepreneurs, people who are willingto challenge new business in large companies (intrapreneurs) and venturebusiness support personnel such as fund-related people, then, narrow down toabout 20 to 30 people by using the discerning function of those accelerators in
Silicon Valley, and dispatch them to Silicon Valley by the autumn this year. The
Government will give support to them in staying there for several weeks and in
improving business know-how that are necessary to create innovation andfinding business partners that will lead to the global market.
C) Opportunity
The Government will hold matching events with large companies/investors
with venture businesses, etc., of Japan and U.S. in both Tokyo and Silicon Valley
to promote partnership in business tie-ups, joint researches, investment, M&A,
etc. Also, symposiums of government officials with venture business
representatives, etc. will be held to carry out policy dialogues.

[2]

Interlocking with global venture ecosystem
Having entered a competitive age of new business models that use IoT, big data,
artificial intelligence, etc., vitalization of innovative venture business activities is
crucial for the growth of Japan's economy. Especially, fostering of world-classventure businesses is absolutely necessary. The Government will hold alarge-scale "Global Venture Summit (tentative name)" in 2020, in cooperation
with "Silicon Valley-Japan Bridge Project," etc. On that occasion, the Government
will make a plan by referring to the business events in abroad, such as businessevents jointly held with startup training events, music festivals, etc. underleadership of students and young entrepreneurs. Also, in preparation for it, theGovernment will organically integrate and align all the venture-related measures,

11and formulate "Venture Challenge 2020" by the end of 2015, which will serve as aroad map through 2020.

[3]

Support of global venture business development that are responsible
for the next generation
A) Fostering of global venture business that support digital network age
Regarding the "Exploratory IT Human Resources Project" being carried out
by the Information-technology Promotion Agency, Japan (IPA) aiming to recruitand cultivate young human resources with unique ideas and excellent skills who
can create innovation by making full use of IT, the Government will newly
introduce a support system that will lead to business start-up, such as to expand
the scope of support not only for the development of software but also for thedevelopment of products and business models in IoT field. In the new support
system, the Government will introduce a scheme in which, when a supported
person started venture business and made the business grow, IPA will recover thefunds it has invested, especially, in the form of stock options, etc., with which
venture business has less burden.
B) Cultivation of R&D type venture and building of ecosystem taking
advantage of Japan's strength- As Japan has excellent technological capabilities, there is a big potential tocreate/develop venture business by taking advantage of them. In order tocultivate R&D type venture business and to build ecosystem, New Energy
and Industrial Technology Development Organization (NEDO) will
homologate venture fund (accelerator), etc. in Japan and abroad, and provide
support matching of the venture businesses supported by the subject fundwith business partners and investors, etc.
- R&D type venture businesses born from universities, etc. based on innovativetechnologies of the universities, etc. have high level of competitiveness andhold potential to grow to global venture businesses. Therefore, bydiscovering/cultivating technologies conducive to the creation of strong
venture businesses born from universities, etc., by building a network withoverseas investors and by collaborating with the relevant measures such as
the matching with globally operating large companies, etc., that is to be
carried out by relevant ministries, the Government will accelerate the creationof R&D type venture business and its global expansion.

[4]

University reforms that will become the seedbed to create global
venture business

12

The Government will add the function as a platform of creating venturebusiness to the "Special Research Universities (tentative name)," which has
managerial ability to attract various resources in Japan and abroad and aim to
improve global competitiveness. To that end, the Government will
support/promote "Special Research Universities (tentative name)" in their
attracting venture business support personnel with insights on global market fromabroad, supporting business startup, recruitment of excellent entrepreneurial
human resources in Japan and abroad, and implementing practical training forentrepreneurial human resources and for people with technical insight by suchentrepreneurial human resources, while closely correlating the various
venture-related measures of relevant ministries. In a similar fashion, for the"Distinguished Graduate Schools (tentative name)," the Government will create asystem by setting courses considering creation of new areas and industries such as
integrated area of arts and sciences, IoT, big data, artificial intelligence, etc., inwhich multiple universities, research institutions, companies, overseas institutions,etc. cooperate each other [described below] (Described in the "3. University
reforms / Promoting innovation in science and technology / Becoming the world’s
leading intellectual property-based nation.")Furthermore, to cultivate human resources who will take the lead in theinnovative biotech/healthcare field (especially, medical devices development), theGovernment will support the practical education programs in a realistic medical
setting to be conducted by the Osaka University, University of Tokyo and Tohoku
University in cooperation with Stanford University.

iv)

Promotion of providing growth capital/risk money, etc.

To push forward the "proactive management" through promoting dialogues between
companies and investors and by strengthening corporate governance function as wellas to support vitalization and productivity improvement of service industry in terms offinancing, the Government will enhance and strengthen the framework to smoothly
provide growth capital and risk money. To that end, the Government will takefollowing measures.

[1]

Promotion of providing growth money by mobilizing a huge variety offinancing approaches- While using the system related to the investment type crowdfunding, topromote provision of risk money into local area, the Government will promoteutilization of various types of crowdfunding in cooperation with "Home town
investment" Association established by local governments and relevant
stakeholders including regional financial institutions, etc.

13

- As a system to respond to fund provision to companies rooted in the region,
and as a substitute for the Green Sheet Brand system, the Government will
support financing by using "Shareholders Community system" (a system thatenables solicitation for investment and trading between the members of the
Shareholders Community formed by security companies to finance companies
rooted in the region, etc.), which reduces the burden of timely disclosure.
- The Government will promote financing to local companies by utilizing"Regional Business Revitalization/ Business Reconstruction Fund" funded andestablished by regional financial institutions, etc. in cooperation with theRegional Economy Vitalization Corporation of Japan (REVIC) aiming tosupport local healthcare industry, to revitalize local tourism/urban regeneration,
to vitalize local core enterprises, and to support restoration and growth.
Also, by using Private Equity Fund aiming to realize company growth andincrease in value in growth fields and new technology development fields, theGovernment will promote financing to local companies through such funds.

[2]

Further expansion/strengthening of financial intermediation function
and promotion of business reconstructionA) The Government will continue its effort on appropriate management of the
Financial Monitoring Policy for 2014-2015, etc. to ensure smooth fundingby having financial institutions accurately understand the businessconditions based on their insights without relying on collateral or guarantees.
Particularly, the Government will actively push forward the following
approaches.
- To appropriately evaluate the business contents in various stages ofenterprises, and to support them in their effort to improve management
and productivity, the Government will enhance initiatives of financial
institutions to finance based on the customers’ business potential, toenhance their consulting function, and to promote further utilization ofthe "Guidelines for Personal Guarantee Provided by Business Owners"
formulated in December 2013, and to the utilization of short-term trainee
program for regional financial institutions, a program found by REVIC in
January 2015.
- To facilitate smooth funding of operating money based on the needs ofsmall and tiny companies, the Government will thoroughly disseminate
the Financial Inspections Manual (January 2015), which clearly states thehandling of short-term extended loans (including loans on bills which are
the roll-over of short term loans) by holding a briefing session with14

relevant parties.
B) To make it possible to continue business restructuring promptly andsmoothly even when there are oppositions from creditors in out-of-court
debt restructuring, the relevant ministries and agencies will conduct studies
on the legal framework, etc. based on the contents of the report compiled by
the advisory panel in March 2015.

[3]

Promoting medium- to long-term growth funding using private
financing
Based on the report of Study Panel Concerning the Promotion of Expanding
Growth Funding , to further enhance the growth funding by private sector in the
future, although currently public-private sector fund is taking the complementaryrole, the Government will encourage financing such as equity fund, etc. throughprivate sector-driven fund formation by business firms and institutional investors,
etc. and support active efforts of large companies toward business restructuring
aiming to improve profitability and growth of overseas M&As.
To facilitate these efforts, the Government will also make use of the discerning
abilities and financial know-how of the public sector financial institutions. To that
end, the Government will encourage providing equity funds as an incentive to
private sector financing, while cultivating private sector leaders by accumulating
the best practices of growth funding, for example, the use of the Development
Bank of Japan’s function to facilitate growth funding, which was strengthened by
the revision of the law.
Also, when it is difficult for private sector financing institutions alone tofinance because of high risk, e.g. the fund required for the overseas expansion of
global niche top companies, etc., public sector financial institutions are expected
to supplement and cooperate to create regional demand, and the Government willconsider institutional design in the medium- and long-term, under which suchfinancing will be made by private sector financial institutions.

v)

Innovative change in industrial structure/employment structure
by IoT, big data, artificial intelligence

As for the innovative change in industrial structure/employment structure brought by
IoT, big data, artificial intelligence, etc., in order not to lag behind the trends in world,what the Government needs to do first is to pursue collaboration with a wide range of
people from industries and universities to respond to new business models, etc. thathave already started changing, and to strengthen the industrial competitiveness using IT,
while addressing urgent issues such as human resource development and security

15

measures.
In addition, from the medium- and long-term perspective, it is required to promotemeasures toward R&D anticipating the future society and enhancement of fundamental
technologies while advancing innovative changes with the timeline in mind, clarifying
the way to respond, and corresponding measures.
Therefore, the Government will implement the following measures.

[1]

Strengthening of industrial competitiveness using ITA) Building of promotion system by industrial-academic-government
cooperation (Establishment of "CPS Promotion Council (tentative name)"
As IoT, big data, artificial intelligence evolve, Cyber Physical System (CPS),
which interrelates real world and cyberspace, will be established that will bringabout an innovative change of business models centering on data in all industry.
To advance future directions of response based on the businessmodels/technological innovation in Japan and abroad, and to advance specificbusiness solutions in a cross-industrial manner, the Government will establish
the "CPS Promotion Council (tentative name)” within 2015 in cooperation withvarious players including venture business, large companies, etc., as animplementation system. The Council will verify business models in wide rangeof fields and put in place the cross-sectoral rules based on the results.
More specifically, the Government will formulate a standard contract model topromote linkage/sharing of data between companies within FY2015 aiming tocreate new business models making use of huge volume of personal data or big
data of transaction information between each process of supply chains, etc.
Further, the Government will strategically promote international standardizationof big data-based business models.
In addition, the Government will promote establishment of core function(Japan version of ACATECH* (tentative name)) related to survey and analysis,
etc. of latest situation of innovative change in the data-based business models inJapan and abroad, while conducting matching of large companies and venturebusinesses.
*ACATECH: A specialized institution of Germany that provides
recommendations on initiatives and policies to be pursued byprivate sector in order to advance introduction of various
technology innovations, including IT, into the industry. The
German government has actively been supporting it since 2008.
B) Emergence of new businesses and response to them
Anticipating 2020 Tokyo Olympic/Paralympic Games, the Government will16

promote the following leading projects and promote creation of new industries
and new services.
- Promote 9 realization projects (next-generation urban transportation system,hydrogen energy system, etc.) to disseminate Japanese cutting-edge scienceand technology to the world in 2020. Regarding the automated driving
technology, the Government will advance necessary institutional reforms
along with the regulatory reform based on Japan's Robot Strategy inconjunction with the initiative related to the demonstration of near-futuretechnology in National Strategic Special Zones.
- Regarding the small unmanned aerial vehicle, the Government will study on
institutional reform, etc. to promptly carry out demonstration of near-futuretechnology using National Strategic Special Zones. Concurrently, regarding
the rules for safe operation of small unmanned aerial vehicle, etc., theGovernment will advance efforts step by step starting from feasible ones
promptly after coordinating with relevant parties, considering thetechnological rationality, technology development toward future
utilization/dissemination, etc., expansion of business using small unmanned
aerial vehicle, and international trend of restricting small unmanned aerial
vehicle. Among others, for the regulation of operation of small unmanned
aerial vehicle, which requires emergent response, the Government will
immediately prepare and submit a necessary bill to current Diet session. After
that, the Government will finalize the rule after making sufficient
amendments with relevant parties with a view to the development of legal
systems regarding the airframe and operator of small unmanned aerial vehicle
as well as business that uses small unmanned aerial vehicle.
- Through the high-degree application of space infrastructure such as
quasi-zenith satellites, etc. and Geospatial Information (G-space information),and by combining with IoT and big data, the Government, industry andacademia will work together to promote sophistication of disaster/emergency
response, demonstration and mounting of automated operation of
farm/construction equipment, elderly/children watching service, intelligent
transport system, etc. In doing so, the Government, will also pursue
collaboration with G-space Information Center that has aggregated diverse
information of geographical space. At the same time, the Government will
improve relevant legal systems (authorization and continuing supervision forspace activities, the third-party liability scheme , scope of data that is subject
for regulation , etc.) aiming to promote participation into space-related
business of private sector business operators toward further sophistication of
G-space society. Further, by newly setting up the "Task Force on

17Space-system overseas development (tentative name)," the Government andprivate sector will work together to move on to develop into overseas
commercial space market and to promote G-space-related projects.

[2]

Securing and training of human resources
A) Promotion of active participation of foreign human resources into IT field[described below](Described in "2-2. Promotion of active social participation by women /Utilization of foreign human resources")B) Promotion of programming education to young people [described below](Described in "4. Becoming the world’s leading IT society")[3]Strengthening of cyber-security infrastructure(Strengthening of technical capabilities/fostering industry, humanresource development)[described below](Described in "4. Becoming the world’s leading IT society")[4] Strengthening of common fundamental technology, etc. looking aheadof future society- To respond to the creation of new industries in a wide sphere and socialchanges in the future, the Council for Science, Technology and Innovation(CSTI) will plan the strategies related to common fundamental technology thatwill support the new era (IoT, big data analysis, artificial intelligence, sensor,
materials, nanotechnology, etc.) to focus on and the policy to promote themwithin FY2015, and implement research and developments from FY2016. Also,
by applying new technologies, it will implement advanced projects that willsolve the economic and social problems (Intelligent transportation system, etc.)from FY2016. In conjunction with it, it will reflect the ideal form of R&D, etc.
necessary to construct a system to sophisticate and integrate new technologies,
in the fifth Science and Technology Basic Plan.
- Based on the promotion policy mentioned above, the Government will promoteestablishment and social implementation of core technologies to collect theworld's most advanced technologies and knowledge into Japan such as
artificial intelligence, information processing technology, smart device,
networking technology, radiowave utilization technology, etc. In a similar
fashion, regarding IoT, big data and artificial intelligence, the Government will18

carry out R&D and institutional reforms necessary to improve thenext-generation platform to be integrated and utilized across various fields,
while promoting R&D related to cutting edge supercomputer that will realize
the utilization of new big data and high-precision high-speed simulation as wellas its industrial use of them.

[5]

Undelayed response to thestructure/employment structure

innovativechangeinindustrial

The development of IoT, big data, and artificial intelligence having brought
about unprecedented change in the industry/employment structures, it is importantto respond to such structural changes without delay. Therefore, the Government
will consider including time frame on 1) When and how the IoT, big data, andartificial intelligence will bring about innovative change in theindustrial/employment structure and socio-economic system, 2) What kind of
business chances will be created for companies, and 3) How the government andprivate companies should be prepared to seize such chances (regulatory andsystem reform, investment in R&D, equipment, human resource, etc.), or what
will cause Japanese companies to lag behind when we fail to respond, and so on.

19

2.

Reforming of the employment system and reinforcing of humanresource capabilities

2-1.

Labor mobility without unemployment / Enhancing matching function /Realizing various ways of working / Promoting active social participationby the young and the elderly / Strengthening human resource capabilities
to meet the needs of globalization(1) Progress in achieving KPIs
(Labor mobility without unemployment / Enhance matching function / Realize
various ways of working)<KPI> “Decrease the number of unemployed young people for more than six
months by 20% in the next 5 years (2012: 1.51 million) 2014: 1.22 million<KPI> Raise the job turnover rate of general workers (excluding part-timeworkers) who changed their job within a year to 9% in the next 5 years(2011: 7.4%)
 2013: 8.7%
<KPI> Employment rate of age 20-64 in 2020: 80% (2012: 75%)
 2014: 77.5%(Promotion of active participation by the young and the elderly)<KPI> Employment rate of age 20-34 in 2020: 78% (2012: 74%)
 2014: 76.1%<KPI> Employment rate of age 60-64 in 2020: 65% (2012: 58%)
 2014: 60.7%<KPI> 2020: Actual employment rate of people with disabilities: 2.0% (2012:
1.69%)
 2014: 1.82%(Strengthening of human resource capabilities to meet the needs of globalization)<KPI> Double the number of Japanese students who study abroad from 60,000 (2010)
to 120,000 by 2020
The number of students dispatched overseas via the Government-sponsoredscholarship and grant system has doubled from around 10,000 to 22,000.
<KPI> Double the number of international students by 2020 (achieve the goal of
the “300,000 International Students Plan”)
Number of international students at Japanese universities, etc.: 184,155 (as of May
2014)<KPI> 200 schools accredited to offer the International Baccalaureate (16 schools
accredited as of June 2013)
 The number of schools accredited to offer the International Baccalaureate has
increased to 24 (as of April 2015).

20

(2) Progress made in implementing measures(Steady implementation of working style reform; overwork prevention and"Highly Professional Working System," etc.
- The Government has submitted a bill to partially revise the Labor Standards Act inApril 2015, of which contents are; Measures to curb long working hours and topromote the use of annual paid leave (abolition of moratorium to SMEs' extra wage
rate for overtime work exceeding 60 hours/month; To ensure use of annual paid leaveby requiring business owners to designate holiday season for a part of annual paid
leave (5 days/year); Promote review of the way of working/taking holidays bynegotiation between an employer and a union, etc.; Establishment of "highly
professional working system," which enables creative working style in that evaluation
is to be made based on performance not on working hours; Expansion of the scope of
discretionary working system for management-related work and simplification ofprocedures; Extension of settlement period for flextime system, and so forth.)- To prevent overwork, from January 2015, the Labor Standards Inspection Officeenhanced its supervision to companies, etc. that are found to have forced theiremployees work for more than 100 hours/month, and from May 2015, it will publicize
the name of the company when influential companies repeatedly and illegally force
their employees to work long hours, at the time it gives corrective action guidance.

(Promotion of initiative toward diffusion and expansion of job-specificdiversified regular workers)- In July 2014, in the expert group meeting on dissemination and expansion of"diversified regular workers," the Government compiled the “Points to Remember
Regarding Employment Management,” and gathered examples of employment rules asmodel cases of diversified regular workers, and publicized together with the notice on
the interpretation of the Labor Contract Act related to the equal treatment between
diversified regular workers and so-called ordinary regular workers and the status
switching system to ensure widespread awareness of such employment arrangements
among companies. In addition, the Government has collected best practices ofdiversified regular workers and published information by pamphlets and case example
booklets.

(Implementation of analysis/survey toward creation of a highly foreseeable
labor dispute resolution system)- The Government has analyzed and organized the cases of “judicial mediation,” “labor
tribunal decision,” and “conciliation,” which are used as a means for solving labor
disputes, and improved the tools based on the result of analysis, and published them inJune 2015. Also, given that major industrial countries have developed mechanisms for21

providing workers with pecuniary remedies by court judgments in accordance with
their respective employment systems, the Government has conducted surveys andstudies concerning relevant systems and their management in other countries, andpublished in June 2015.

(Promotion of comprehensive measures aimed at the employment andnurturing of the young people who will shape the future)- The Government has submitted a bill to amend the "Act for the Promotion of
Employment of Young Persons (Bill for the promotion of youth employment) in
March 2015, aiming to support in developing and improving occupational skills,
including; Creation of a mechanism that requires companies to provide workplaceinformation in recruiting new graduates; Promotion of initiative aiming to promote
young persons' smooth employment, e.g. by requiring HelloWork (public job
placement offices) to refuse companies violated labor-related laws and regulations to
put recruitment advertisement for new graduates; Dissemination/promotion of job
cards; Creation of registration system of career consultant, etc.
- To enhance countermeasures targeting companies suspected of hiring young people as“disposable” workers, the Government has conducted "targeted supervision" in
November 2014, and in addition, set up the "Working conditions consulting hotline,"
which provides consultation during night and holidays and opened a comprehensive
information website related to working conditions titled "Make sure your work
conditions" from 2014.

(Comprehensive promotion of measures to secure and nurture humanresources in areas of labor shortage)- The Government is currently working to comprehensively promote necessary
measures to secure and nurture young people and other human resources, including
improvement of employment management in the medical care and welfare,construction, manufacturing, and transport sectors, as well as measures focused onmatching personnel with suitable jobs.

(Strengthening of human resource capabilities to meet the needs ofglobalization)- In order to drastically enhance overall English education throughout the elementary,junior high, and high schools, the council of advisers on English education hascompiled the "Report on the measures to improve/enhance English education in the
future" in September 2014, and consulted the Central Council for Education on theway of curriculum guidelines to enhance English skills indispensable for the global
society, including the earlier English language education in elementary schools and to22

incorporate English into the curriculum, etc. In addition, the Government enhanced thedispatch of teachers to educational institutions abroad, acceptance mechanism ofreturnee and foreign children, and Japanese language education system. The
Government will continue its efforts to realize high-quality education at educational
institutions abroad and to improve the educational environment for returnee children
and foreign children.
- Furthermore, with the aim of doubling the number of Japanese students who study
abroad by 2020, the Government has started encouraging students to study abroad
gradually through the public-private partnership study abroad support program called"TOBITATE! (Leap for tomorrow!) Study abroad campaign JAPAN representative
program" by using Study Abroad Program sponsored by national fund or private fund.
In addition, to strategically accept international students, with a vision to achieve thegoal of the 300,000 International Students Plan, the Investigative Panel has compiled
the report in July 2014 on the ideal form of supporting living environment forinternational students, and in the future, the Government will advance its support
improve the dwelling environment for international students including improvement
and management of university dormitories, etc., making use of International
Community House, etc. Moreover, through the Top Global University Project, theGovernment has started support to universities from October 2014 targeting
universities seeking to bolster their international competitiveness such as to increase in
the ratio of international students and professors, increase the number of classes
conducted in English, etc. In conjunction with this, the Government has made therequisite institutional reforms to realize the joint degrees offered by Japanese
universities in partnership with foreign universities.
- Regarding Japanese nationals in seeking posts with international organizations, theGovernment has enhanced the public information services for young Japanese, andnewly dispatched 44 young Japanese (among whom 30 were female) to international
institutions in FY2014 through the Junior Professional Officer (JPO) Program.

(3) Specific new measures to be taken
To realize the "world-class employment environment and ways of working," the "Japan
Revitalization Strategy Revised in 2014" set forth initiatives to spread and expand the"diversified regular workers" whose job, etc. are specified and to realize "Highly
Professional Working System" that enables creative ways of working that evaluatesworkers based on performance rather than the time spent on work, in addition to themembership-type ways of working, typified by such practices as lifetime employment
and frequent transfer between various job positions.
On the other hand, amid the drastically changing environment surrounding companies
and individual persons due to the accelerating technological innovation, intensified global

23

competition, low birth rate and longevity, etc., in order for the citizens to enjoy highquality employment and stable earnings and, at the same time, to increase productivity ofthe businesses, it is of the utmost importance for the Government to continue its effort torealize reform of the ways of working including preventing overwork, while enabling
individual persons to free themselves from "company-conscious” mind (focusing on
company to be employed instead of on their own career), and to improve their expertise
according to their abilities and personalities, and choose their workplace at which they
can maximize their value, and have chances to achieve their potentials. The
Government will lead these efforts to fostering human resources who can realize
innovation. Based on the concept that the investment in human capital will bring aboutcertain and long-term return, the Government will significantly increase the investment in
human capital through the intensive support across relevant ministries and agencies for"voluntary learning of each individual” in every stage from elementary education to
entire lifespan to flexibly respond to the economic and social changes. Under this concept,
and from the standpoint of drastically strengthening the ability to use human resources inJapan, the Government will advance approaches by interlocking employment policy andeducation policy together, while enhancing human resource development which forms thebasis of the ability.
Also, in order to solve the problem that Japanese employment practices are nottransparent, especially to the eyes of foreign countries, and to improve thetemporal/monetary predictability of settlement of dispute overs termination of
employment, thereby to contribute to the effective utilization of human resources andexercise of individual's capabilities, and to protect workers of SMEs and promote foreign
direct investment in Japan, the Government will advance concrete studies aiming tocreate a system to realize the ideal form of the labor dispute resolution system that istransparent, fair, objective and globally acceptable.

i)

Implementation/realization of reforming ways of working

The Government will make efforts to realize the work style reform which was set
forth in the "Japan Revitalization Strategy Revised in 2014." To that end, theGovernment will continue to drive forward the initiatives to prevent overwork, andpursue early enactment of the bill to partially revise the Labor Standard Act, etc. aiming
to realize "world-leading employment environment and work style."[1]Enhancing measures to prevent overwork
The Government will work on for early realization of various approaches toprevent overwork set forth in the bill to partially revise the Labor Standard Act ;Abolition of moratorium on SMEs' extra wage rate for overtime work exceeding
60 hours/month; Realization of work-life balance and well-modulated working

24style by extending the settlement period for flextime system; To ensure use ofannual paid leave by requiring business owners to designate when their employees
take a part of annual paid leave (5 days/year); Promoting review of the way ofworking/taking holidays by negotiations between management and labor at every
company, etc.
Also, the Government will strengthen the systems of inspection and guidance torectify the long working hours at companies, etc., and will enhance thesupervision to companies that are found to have forced their workers work formore than 100 hours/month as scheduled to be started from January 2015.
Also, in order to curb long working hours and realize workers' work-lifebalance, the Government will launch a national campaign "Change summer life
style ("Start early and Leave office early" campaign)" from this summer, so thatworkers can go to work early in the morning and spend more time with theirfamily in the evening during summer season when the daytime is longer.
To be concrete, the Government will request business groups, etc. and collectand publish example cases to encourage private sector businesses to promote the"morning-oriented work style" and the "flextime system" during summer time,
and to change life style to leaving work early in the evening. As for the staffs in
the national civil service, the Government will take the lead in them to go to work
early in the morning and leave early, and has requested the National Personnel
Authority to consider introducing the "flextime system" aiming to a wide range ofstaffs can choose flexible working style. Further, the Government will inform
local governments about measures among the national government staffs.
In conjunction with it, the Government will advance its effort to encouragecompanies to realize offering of more than 4 successive paid holidays ("Plus-one
holiday campaign"), and encourage national and local government, education
board and relevant organizations to cooperate and coordinate to set a "hometown
holiday" in each region.

[2]

Early establishment of "Highly Professional Working System"
From the viewpoint that "highly professional working system" will respond theneeds of workers who want to be evaluated based on performance rather thanworking hours and make workers fully exert their motivation and abilities, on thecondition that business that a ministerial ordinance will prescribe to be covered bythis system must meet the requirements set forth in the "Japan Revitalization
Strategy Revised in 2014" and laws and ordinances, e.g., “ more than ¥10 million
annual income," "specific scope of duties," etc., the Labour Policy Council willpromptly draw a conclusion upon deliberation after the bill was enacted, so thatbusiness, which will lead to creation of new industries and market innovations

25

that change with the times, will be properly covered by this system.

[3]

Improving the environment to raise the minimum wage to facilitatesustainable economic growth
While supporting SMEs and small enterprises to improve their productivity, theGovernment will make every effort to raise the minimum wage so that thevirtuous cycle of wage growth in all income groups and growth of corporate
earnings will be sustained and expanded.

ii)

Reinforcement of human resource capabilities that will support
the future(Support of voluntary effort of workers to develop their own
careers)

Based on a set of initiatives for "reinforcing of human resource capabilities that will
support the future (Employment/Education policies)" (Ministry of Health, Labour andWelfare / Ministry of Education, Culture, Sports, Science and Technology) published onJune 4, the Government will implement measures centering on the following approaches
integrally.

[1]

Promotion of information disclosure by companies on their efforts
toward human resource development, etc.
To help young people face their abilities and personalities in their working lives
and improve and exert necessary expertise, the Government will encouragecompanies to positively disclose their workplace information (Overall informationprescribed in the ministerial ordinance based on the deliberation made by the
Labour Policy Council for each category of the conditions; 1) condition ofrecruitment and employment, 2) condition of working hours, etc., and 3) conditionof development and improvement of occupational skills), after the "Bill for thepromotion of youth employment" will be enacted.
To that end, the Government will encourage companies that submit job postings
at Hello Work(Job Placement Office) to make a registration of a wide range of
workplace information, while encouraging job placement agencies andrecruitment information providers to actively provide workplace information ofcompanies. Further, the Government will continuously review the contents of
information provided, based on the needs of job seekers, attempt to compile a
database of workplace information related to companies' efforts to develop humanresources and promote "visualization" of the companies' efforts to develop humanresources.

26

[2]

Promotion of introducing "Self Career Dock (tentative name)"
As an infrastructure of the labor market take proactive measures againstsocioeconomic changes, it is important to prepare environment that promotes
workers to acquire the habit of proactively thinking about their own careers. Morespecifically, the Government will create "Self Career Dock (tentative name),"which provides opportunities for workers to regularly reflect on their own
working careers, and confirm what kind of career paths they should go on, anddetermine the knowledge, abilities and skills they should acquire. To that end,
when a company uses the "career formation subsidy program," the Government
will make it a requirement or incentive to conduct "Self Career Dock (tentativename)" and, at the same time, from the standpoint to encourage voluntary ability
development regardless of the size of the business, the Government will expand
the scope of target business of this subsidy. Also, the Government will support
companies that make efforts to introduce, implement and promote the "Self Career
Dock (tentative name)" system by actively providing subsidies throughemployment insurance, and create and disseminate model work regulations andimplementation manuals that can be used by those companies. Through suchapproaches, the Government will actively support companies in introducing "Self
Career Dock (tentative name)." Also, regarding the efforts related to thedevelopment/improvement of occupational skills, including its introduction andimplementation status, the Government will encourage proactive information
disclosure of each company through the approach 1) above, after the "Bill for thepromotion of youth employment" will be passed, and based on the results of thedeliberation by the Labour Policy Council.
Further, for a part of the expense incurred to workers when they personally use
the "Self Career Dock (tentative name)," the Government will consider the
support measures for individual persons, e.g. to make them eligible for theTraining and Education Benefits System, etc., and will reach a conclusion within
FY2015.

[3]

Promotion of introducing Training leave system / Short-time work fortraining
It is a responsibility of companies to secure sufficient opportunities for theiremployees to acquire necessary knowledge, abilities and skill in their working
careers. Therefore, the Government will promote introduction of the Training
leave system and Short-time work for training by companies through the use of
the career formation subsidy program, etc. Also, regarding the efforts related tothe development/improvement of occupational skills including its introduction
and implementation status, the Government will encourage proactive information27

disclosure of each company through the approach 1) above, after the "Bill for thepromotion of youth employment" will be passed, and based on the results of thedeliberation by the Labour Policy Council.

[4]

Promotion of company-led ability evaluation, etc.
For workers to choose work with which they can maximize their value, secure
opportunities with which they can display their abilities and efficiently improvetheir abilities, it is important that an environment is in place in the labor market
where workers' occupational skills are properly evaluated. In order to build an
occupational skill evaluation system, it is essential for industry groups andcompanies, who directly understand the needs for human resources, to play the
key roles in its design and operation.
Therefore, while improving the technical skills test in the growth sector
focusing on interpersonal service fields, the Government will proactively support
industry groups and companies that are making efforts to promote these tests,
from the viewpoint to promote practical in-house tests within individualcompanies associated with industry common certification tests.

[5]

Enhancement of support for companies' efforts toward career
progression of employees
Not only to support the efforts of workers to improve their careers, it is also
important for companies to secure opportunities for their workers to have Off-JT
while continuing their work, in cooperation with educational institutions.
Therefore, the Government will promote the efforts of companies toward
Employment and Human Resources Development, which is a combination of OJTand Off-JT, through the use of the career formation subsidies and career up
subsidies, while disseminating and promoting such efforts.

[6]

Make the best out of middle-aged and elderly
Amid rapidly changing environment surrounding companies, it is becoming
difficult for a company to sufficiently respond only with the human resource
development, and amid increasing workers with various careers because of careerchange, the Government needs to improve an environment that the people withabilities and experiences can play active roles in other companies, if they want,
and can demonstrate their abilities. To that end, from the viewpoint of supporting
voluntary challenge of middle-aged and elderly persons toward diversified second
carrier/next step, and aiming to establish a system to support internship for
middle-aged persons, which bears a function of fostering-style secondment or trial
employment by using employment insurance system, the Government will28

conduct the "trial secondment program" first at the Industrial Employment
Stabilization Center of Japan, through which they can accumulate know-how oftrial secondment and extract problems of trial secondment, then, newly create asubsidy device for companies that accept middle-aged and elderly humanresources. After that, the Government will create a new support system utilizing
private sector human resources service businesses in FY2018.

(Educational institution reform to improve professional awarenessand practical career skills)[7] Promotion of workplace experience activities in elementary, junior high,and high schools
For the children and students to become socially and vocationally independent,
the Government will build an age-appropriate step-by-step career education
system. To that end, the Government will, with cooperation from the industrial
circle, have elementary, junior high and high schools (especially in comprehensive
course) to make arrangements for social experience, such as business start-up,
workplace activities, etc., and promote utilization of specialists such as career
consultants, etc. In addition, from the viewpoint of active appointment of humanresources from outside as teachers, such as adults who have excellent knowledge
and experience and skills in various field, the Government will review thetraditional way of issuing special teaching certificates, while simplifying andstreamlining the procedure of giving certificates, and promote utilization of themin all prefectures.
Further, the Central Council for Education will provide further insights into theideal form of new curriculum in high schools to acquire necessary abilities tovoluntarily participate in society and to have independent social life, and of
curriculums in professional courses that meets the social demand, and will draw aconclusion on the desirable form of curriculum guidelines by FY2016.

[8]

Creation of education system by partnership of Specialized Training
College and industry
Regarding Specialized Training Colleges that are practical vocational training
institutions, the Government will enhance the function of fostering professional
human resources to meet the needs of industry. To that end, the Government will
create a guideline for creating an education system combining the learning andpractice together through cooperation of Specialized Training Colleges andcompanies, etc. (industry-university cooperative education program).

29

[9]

Promotion of internship in universities, etc.
The Government will increase the ratio of internship participants so that thelearning in universities, etc. will be seamlessly connected to career choice. To that
end, the Government will promote efforts of those universities, etc. that are giving
credits for participating internship or providing medium and long term internshiplonger than several weeks, etc. through the priority allocation of ‘management
expenses grants for the national university corporations’ and the ‘subsidy forcurrent expenditures to private institutions of higher education.’ In doing so, theGovernment will also promote paid internships and internships at SMEs, throughcooperation of industry and academia, which will provide opportunities forstudents to think about the purpose of working and grow personally.

[10] Enhancement of the function to foster highly specialized professionals
in Professional Graduate Schools
By enhancing the education at Professional Graduate Schools such as graduate
school of business administration, the Government will enhance the function of
fostering highly specialized professionals in the industrial field with growthpotential. At the same time, from the standpoint of globalization and ensuring thequality of education, the Government will inspect the Professional Graduate
Schools and conduct a review within a year based on the results of the verification,
by positively undergoing evaluation of international evaluation organizations, andby creating a world-class educational program, etc., and immediately takenecessary measures including institutional measures.

[11] Foundation of recognition system for "Professional Practical Skill
Training Program" in universities, etc.
Aiming to expand opportunities for adult persons to improve their abilities
required for their work at universities, etc., the Government will build amechanism in which the Minister of Education grants certification and encouragepractical/professional education programs ("Professional Practical Skill Training
Program" recognition system) that meet the needs of adult persons and companies(management, accounting, IT, marketing, etc.).

[12] Institutionalization of new higher education institutions that provide
practical vocational education
In response to the drastically changing industrial structure, and in order for
persons to acquire professional expertise at any time, and from the viewpoint todiversify higher education system, the Government will institutionalize "Newhigher education institutions that provide practical vocational education."

30

The education programs of this institution should be appropriate to acquire
practical expertise, e.g. introduction of "Dual Education Program," in which
persons acquire necessary skills and knowledge in the practical vocational
activities, and based on such practice, attend classes in schools and discuss so thatthey can systematize their skills and knowledge. Also, the Government will makea mechanism that enables to provide diversified education programs with which
adult persons can effectively learn specific knowledge and skills intensively andin short period of time, while incorporating a process to continuously verify andimprove individual education program in close cooperation with industrial circles,
so that the individual education program can respond to the change of industrial
structure. As for the teachers for these education programs, the Government will
actively appoint practical teachers who have acquired knowledge and experienceof doing business and effective teaching technique. The facilities and equipment
must be the one that can flexibly respond to the changes of the real world andreasonable to conduct high quality practical occupational education regardless ofyoung or adults. Also, certificates to be given at the time of graduation will be theone equivalent to the "Bachelor" degree. In conjunction with it, by ensuringconsistency of the public subsidies and scholarship systems with existing
universities, the Government will permit the conversion not only fromprofessional training colleges, but also from existing universities.
Based on the above, toward its institutionalization, the relevant ministries andagencies will cooperate each other to build support/cooperation system to meet theneeds of individual industry, and to ensure the educational level of each industrial
circle by occupational category and industrial field, etc., and toward the opening
in FY2019, the Central Council for Education will draw a conclusion on thespecific system design by the middle of 2016 and take institutional measures
within 2016.

[13] Enhancement of support by training and education benefits to
education programs conducive to acquiring practical expertise
Based on the "Japan Revitalization Strategy," to support adult persons for their
mid-and-long-term career formation, the Government has revised the Employment
Insurance Act and founded the "Professional Practice Training and Education
Benefits" and carried out from October 2014, which allows the rate of benefit fortraining and education to be raised or additional benefits to be provided when
persons take training courses designated by the Minister of Health, Labour andWelfare, among 1) Training course of training institutions to acquire
occupational/title licensing (training period of 1 to 3 years), 2) Professional
practice course of specialized training colleges (training period of 2 years), or 3)31

Training course of professional graduate schools (training period of less than 2 or
3 years).
In the future, based on the actual conditions of the recognition system for"Professional Practical Skill Training Program" and educational programs to be
carried out in the "New higher education institutions that provide practical
vocational education," the Government will study on the ideal form of training
course subject to the "Professional Practice Training and Education Benefits," inlight of beingtruly effective to form practical expertise for adult persons, including
diversified and flexible programs that is easy to balance with work, and promptly
draw a conclusion.

iii)

Creation of a highly foreseeable labor dispute resolution system,
etc.

Because legal action, which is an ultimate solution of labor dispute, puts a significant
burden in terms of cost and time compared to other methods to solve the dispute,sometimes dispute resolution procedures other than legal action are selected, and in thatcase, disputes are solved with less money compared with that of legal action. Because ofthis, and from the fact that the return-to-work rate is low even after the court nullified
the dismissal because of conditions of both labor and management, the Government
needs to establish a labor dispute resolution system that is transparent, fair, objective
and globally acceptable, based on the results of analysis and streamlining of"mediation," "labor tribunal decision," and "conciliation" cases as well as on the resultsof the research and survey on relevant systems and their management in other countries.
To that end, the Government will promptly establish a forum for discussion of specificapproaches to highly foreseeable dispute resolution systems, etc. including pecuniary
remedies at the time when the dismissal was nullified (cause of termination of
employment, nature and level of compensation, etc.) and its necessity, and put in place
the requisite institutional measures after the deliberations by Labour Policy Council.

iv) Ensuring of diversified employment/job opportunities, etc.
a) Promoting active social participation by the elderly
To maintain social vitality and to realize sustainable growth amid the depopulating
society, as well as to satisfy the hopes of elderly and have them live fulfilling life, weneed to improve social environment where motivated elderly can take active roles insociety by taking advantage of their abilities and experience throughout life regardlessof their age. Therefore, by advancing initiatives described below, the Government willseek for drastic improvement and enhancement of job-matching function and ofdiversified employment/job opportunities for elderly.

32

(Enhancement of information, etc. conducive to job-matching
function, etc.)[1] Measures for "quality improvement"
By improving environment where workers can reflect their own career byhaving career consulting before their retirement, the Government will encourage
elderly to participate in in-house or external job trainings for middle-aged people
conducive to rebuild existing abilities by making use of their experience andskills.

[2]

Measures for "quantitative expansion"
Based on the Basic Policy for Employment Security Measures for Elderly, etc.,
the Government will strongly encourage employers, etc. to actively support theiremployees for re-employment, e.g. to encourage their retiring workers who want
to work after retirement to register their job application at Hello Work job
placement office or at private employment agencies.
Also, Hello Work that accepted the registration will regularly update theinformation registered and provides the subject information to private
employment agencies with the consent of the registrant.
In addition, to promote further increase in employment of elderly of age over
65, the Government will study on incentives to be provided by companies anddesirable form of employment insurance coverages.

[3]

Measures for "accuracy enhancement"
The needs of job-seeking elderly are of great variety, and to avoid mismatch ofconditions, the Government will arrange so that the job offer information include
detailed information such as 1) available area to work (railway line, name ofstation, etc.), 2) available day of the week, number of days and time, 3) available
work, etc. in accordance with the applicant's request.

(Creation of diversified employment/job opportunities)
By creating a mechanism to dig up diversified employment and job opportunities in
the region, for example, each local government takes initiative to promote networkingof relevant organizations in the region, etc., and by reinforcing the function of the
National Silver Human Resources Centers, e.g. by extending job categories, theGovernment will seek to expand opportunities for elderly to actively participate in thesociety.

33

b)Promotion of social participation by people with disability, etc.

- The Government will promote support social participation of people withdisabilities, intractable diseases, cancer patients, etc., including job assistance.

34

2-2.

Promotion of active social participation by women / Utilization of foreign
human resources(1) Progress in achieving KPIs
(Promoting active social participation by women)<KPI> Aim for the elimination of childcare waiting lists by securing childcarearrangements for about another 200,000 children by the end of FY2014
and about another 400,000 children by the end of FY2017 (Plan to
Accelerate the Elimination of Childcare Waiting Lists)
The childcare arrangement expanded to about 19.1 million in the last 2 years,
FY2013 and FY2014. (Estimates as of the end of May 2014)<KPI> "Secure 463,000 nursery teachers in nursery schools by the end of
FY2017" (Nursery Teacher Retention Plan) FY2013: 378,000<KPI> "Boost the employment rate of women (age 25–44) to 73% by 2020"2014: 70.8% (2012: 68%)
(Utilization of highly skilled foreign professionals)<KPI> Aim to recognize 5,000 highly skilled foreign professionals by the end of2017
A total of 2,799 foreign nationals were recognized as highly skilled foreign
professionals by February 2015 since the introduction of the points-based system
in May 2012.

(2) Progress made in implementing measures(Enhance securing of childcare arrangement and nursery teachers, etc.)- It is expected that the Government can secure the childcare capacity for about another
200,000 children (or 190,000 anticipating less capacity due to the decline in thenumber of children, etc.) in 2 years, FY2013 and FY2014. The Government further
aims to secure for about another 200,000 in 3 years from FY2015 (or 210,000
anticipating the decline of number of children as stated above.)- In order to realize the Zero Children Waiting List by the end of FY2017, theGovernment has formulated the "Nursery Teacher Retention Plan" in January 2015 bycompiling the measures to realize securing of another 69,000 nursery teachers. Also,
by launching a campaign called "Nursery Teacher Employment Promotion Month" inMarch 2015, the Government has intensified its effort to dig up potential nurseryteachers and assistance of their employment. In March, the Government issued a35

written notification to prefectures, designated cities and major urban areas, to promoteutilization of short-time nursery teachers, and to permit, for FY2015, staffing of
non-certified nursery teachers with nursing experience during morning and evening
hours when they have fewer number of children to care, instead of one certified
nursery teacher.
- The Government has compiled "Training subjects for child care support staff," etc. in
December 2014, and issued the implementation guideline to the prefectures, etc. andinformed about the system.

(Steady implementation of the "Comprehensive After-school Program forChildren")- The Ministry of Education, Culture, Sports, Science and Technology and the Ministryof Health, Labour and Welfare jointly formulated the "Comprehensive After-school
Program for Children" in July 2014, which aimed to newly improve the after-school
clubs for about another 300,000 children and to implement the integrated form ofafter-school club and after-school class for children at more than 10,000 locations by
the end of FY2019. Also, to support municipalities to improve these initiatives
systematically in accordance with the "Comprehensive After-school Program forChildren," the Government has described these initiatives in the "Guidelines on
Preparing Action Plans" formulated in November 2014 based on the “Act on
Advancement of Measures to Support Raising Next-Generation Children," andincluded the expense required to quantitatively expand and qualitatively improve themin the FY2015 budget.

(Building of new legal framework toward active social participation by
women)- In February 2015, the Government has submitted a bill regarding the promotion ofactive participation of women in their working life, which required the Government,
local government and private sector businesses to formulate action plans for active
participation of women including numerical targets.

(Newly created a status of residence for highly skilled foreign professionals)- The Government held information sessions about the “Points-based System for Highly
Skilled Foreign Professionals” for industry groups and universities, and the number ofrecognition expanded at a pace largely surpassing the level required to achieve KPI.
Also, following the "Act on the Partial Revision of the Immigration Control andRefugee Recognition Act" enacted in June 2014, a new status of residence withindefinite period of stay targeting highly skilled foreign professionals was establishedin April 2015.

36

- In February and May 2015, in cooperation with business groups, etc., the Government
held job matching events for JET participants expected to complete the programmeand companies and groups seeking global human resources. Also in June, theGovernment held a seminar for the university staff in charge of international students
and university career advisers to explain the procedures to acquire the status ofresidence, opportunities for job matching, etc. to support international students infinding jobs.

(Promotion of initiative for the transition of the Technical Intern Training
Program to a new system)- To realize the policy to review the systems set forth in the "Japan Revitalization
Strategy Revised in 2014," the Ministry of Justice and the Ministry of Health, Labourand Welfare held joint discussion sessions with experts on the revision of the TechnicalIntern Training Program. Based on its results, the Government has submitted in March
2015, a bill related to proper implementation and the protection of the trainees of theTechnical Intern Training Program, which includes enhancement of the management
and supervising system (institutionalization of the permission of supervisingorganizations and the approval of the technical intern training plans, establishment of
the Technical Intern Training Organization, etc.) as well as the expansion of the system(extension of the maximum training period from 3 years to 5 years).
- In 2015, newly added 4 fields such as fruit cultivation, etc. in the range of occupation
covered.
- In order to add nursing care service to the occupations covered, it was decided that theGovernment would develop a specific institutional arrangements which can meet therequirements arising from the characteristics of the nursing care service such as theneed to guarantee quality; and when the details of the revision of the Technical Intern
Training Program are finalized, after confirming they can meet the requirements
arising from the characteristics of the nursing care service, the Government would add
the service to the occupations covered, at the same time as the start of the new
Technical Intern Training Program.

(Establishment of new employment systems in the fields that require urgent
response to ensure sustainable growth)- In order to make it possible to accept employees from overseas subsidiaries ofJapanese manufacturers to Japan, to have them acquire expertise related to the new
products development, and to transfer such technologies to overseas bases, etc., theGovernment are preparing to establish a system that requires approval of the Ministerof Economy, Trade and Industry, aiming to start it within FY2015.
- In April 2015, from the standpoint of promoting active social participation of women,

37the Government has submitted a bill to revise the "National Strategic Special
Economic Zone Act," which includes exceptional measures that enables foreign
housekeeping support workers employed by housekeeping support service companies
to enter and stay in Japan under a certain administrative system by the local
government, etc.
- In March 2015, the Government has submitted a bill for the "Act on the Partial
Revision of the Immigration Control and Refugee Recognition Act," which includes
the establishment of a new status of residence "nursing care" which allows foreign
workers obtaining the national qualification of care worker, to work in Japan.

(3) Specific new measures to be takeni)Promotion of active social participation by women(Steady implementation of the measure toward "Achievement of
the Zero Children Waiting List")
To ensure elimination of childcare waiting list by the end of FY2017, the Government
will steadily improve childcare arrangements based on the "Plan to Accelerate theElimination of Childcare Waiting Lists" as well as to secure nursing-care staffs based onthe "Nursery Teacher Retention Plan" in cooperation with local governments. Especially,
amid rapidly increasing volume of childcare-related facilities to be improved, andsecuring of childcare staffs has become an urgent issue, the Government will respond tothe various needs of potential childcare staffs by expanding utilization of short-timechildcare staffs and thereby reducing long working hours, while improving the working
conditions of childcare staffs, as well as to strengthen initiatives to improve
employment rate of new graduate nursery teachers in conjunction with conducting theexamination for nursery teachers twice a year, thereby secure nursing staffs.
Also, in order to secure and improve the quality of childcare service amid increasing
volume of childcare-related facilities to improve, the Government will promote
third-party evaluation of childcare business operators.

[1]

Initiatives toward securing nursery teachers- Implementation of effective measures to dig up potential nursery teachers
There are many potential nursery teachers who could work for a short time andit is possible to use them from an institutional perspective, but there are cases that
local government does not allow utilization of short-time nursery teachers fromoperational perspective. Therefore, the Government will take further approach to
local governments to promote utilization of short-time nursery teachers.
Also, the Government will require all nursery teacher training facilities to makeregistration of all new graduates at the local government, and require the Nursery
Teacher and Nursery School Support Center to regularly update the list of38

potential nursery teachers known by them and to approach to the potential nurseryteachers on timely basis.
- Initiative to improve employment rate of new graduate nursery teachers
The Government will continue to take measures such as to incorporate thequantitative results of employment rate of new graduate nursery teachers into theevaluation index, etc. for providing subsidies to nursery teacher training facilities.
- Initiative toward reducing quit rate and retention of nursery teachers
By spreading the best practices of nursery schools with low quit rate nationwide,
and through the presentation/publication of personnel management techniquesnursery schools should aim for (utilization of short-time nursery teachers,
introduction of short-time regular employee system, etc.), the Government will
promote improvement of employment management at nursery schools.
- Measures with immediate effect to secure nursery teachers (Implementation ofregion-based nursery teacher system)
There are many concerns that it is difficult to secure nursery teachers in urban
area and local region, therefore, the Government will start implementation ofnursery teacher test in National Strategic Zoned twice a year (region-based
nursery teacher system) from FY2015 after the bill to revise the "National
Strategic Special Zone Act," which was submitted to the Diet in April 2015, isenacted. As for the implementation of twice-a-year tests in the areas other thanSpecial Zones, the Government will take necessary adjustment considering theneeds of local governments.

[2]

Securing of childcare staffs- Consideration on the number of nursery teachers when the number of children
are few
For regions that are especially hard to secure nursery teachers, the Government
will verify the measure implemented in FY2015 as an exceptional case (to permit
staffing of a non-certified childcare staff with childcare service experience as a
substitute of a certified nursery teacher during morning and evening hours when
they have fewer number of children to care), and based on its implementation
status, examine desirable form of implementation in FY2016 and beyond, anddraw a conclusion within FY2015.
- Consideration on utilization of persons who have other national qualifications,

39

etc.
Regarding the measures to make it easier for persons with welfare-related
national qualification or for childcare support staffs to acquire nursery teacher
qualifications (by providing partial exemption from nursery teacher training
course, examination subjects, etc.), the study panel for securing nursery teachers
will promptly start deliberations and upon reaching a conclusion, the Government
will implement necessary measures one by one.

[3]

Establishment of nurseries, etc. in the city parks in National StrategicSpecial Zones
To respond to the increasing demand for the welfare services such as childcare,etc., the Government will set standards to establish social welfare facilities
including nurseries, etc. in the city parks in National Strategic Special Zones andpromote utilization of the system after the bill to revise the "National StrategicSpecial Zone Act," which was submitted to the Diet in April 2015, is enacted.

[4]

Accurate assessment of actual condition of nursery field and active
publication
In order to accurately assess the improvement conditions of nursery fields, andto facilitate implementation of necessary measures, the Government will takemeasures required to conduct a statistical survey to accurately understand thesituation including the new type of facilities, e.g. small scale nurseries, to be
improved based on the New Child and Child-rearing Support Project Plan, while
making effort to understand the expected volume of improvement of local
governments at the beginning of each fiscal year. In addition, the Government will
actively publish the data that shows to what extent the childcare waiting lists are
reduced, and deepen the public's understanding on improving environment thatallows people to leave their children without worries.

[5]

Promotion of third-party evaluation of nurseries
Aiming to improve the quality of childcare service, and to improve theenvironment where people can leave their children without worries, theGovernment will seek to conduct the third-party evaluation of every childcare
business operators by the end of FY2019. Also, the Government will actively"visualize" the results of such evaluation and promote improvement ofenvironment where nursery teachers seeking job and users of childcare service canchoose better childcare business operators.

40

(Promotion of initiatives of companies to rectify long working hours
and to introduce flexible working style)
In order to further promote active participation by women, it is urgent that both men
and women can work in a good balance between work and family according to their life
stages. It is important to improve work environment where work hours are reduced inentire workplace so that women who work without overwork can improve their career
as men do. Also, there is a report of a case that reducing long working hours
consequently contributed to increase in productivity and earning power of the company
as a result of the effort to improve productivity per hour. Such initiative is also
important not only in terms of women's participation but also in terms of strengtheningof "earning power" of companies. With awareness of these issues, the Government will
promote companies’ efforts to improve their employment management toward reducing
long working hours, as well as to introduce flexible work style including diversified
regular employees, teleworking, short-time regular employees, etc., and to respond tothese issues, the Government will improve the system and advance following initiatives.

[6]

Thorough disclosure of information regarding companies' efforts
After the "Bill related to the promotion of women's participation in theirworking life" submitted to the Diet in February 2015 and the "Bill for thepromotion of youth employment" submitted in March 2015 are enacted,
Government will accelerate the initiatives of companies by making use of suchplatforms as "business operators action plan" prescribed in the "Act for thepromotion of women's participation in their working life" and the "scheme toprovide workplace information" prescribed in the "Bill for the promotion of youth
employment" as well as the "Comprehensive site to support participation of
women and work-life balance," etc. Also, the Government will thoroughly
advance "visualization" of actual condition related to working hours, etc. of eachcompany, and create social environment where companies that are easy to work
for women are more "chosen," e.g., proper working hours. In addition, theGovernment will create a mechanism to make companies properly recognize theirproblem of long working hours and to make effort to improve it, as well as toencourage companies to conduct effective approaches to correct long working
hours, such as "introduction of evaluation system considering productivity perhour" and "incorporate work-life balance as one of the factors of personnel
evaluation for management position." The Government will advance deliberationon the ministerial ordinances and the "Guidelines on Preparing Action Plans" afterthe "Bill related to the promotion of women's participation in their working life" isenacted.

41

[7]Promotion of progressive approaches through various recognition
systems and Minister's awards
When the "Bill related to the promotion of women's participation in theirworking lives" is enacted, the Government will advance consideration that theefforts related to correct long working hours, etc. should be included in theevaluation when granting certification as an excellent company. Also, in theselection of "Excellent Equal Opportunity / Work-Life Balance Companies
Award," "Nadeshiko Brand," "Diversity Management Selection 100," "Advanced
Corporation Awards for the Promotion of Women," and others, the Government
will actively evaluate the efforts of companies to reduce long working hours andencourage progressive approaches of companies.

[8]

Popularization of (Platinum) Kurumin Mark, etc.
While making effort to popularize (Platinum) Kurumin Mark, a certification ofcompany efforts to support child rearing by employees, and encouraging
companies obtained such marks to further improve their employment environment,
the Government will aim to carry out proper management of certification
standards by putting emphasis on the points related to the change of work style
toward reducing long working hours.

[9]

Providing incentives to company efforts to reduce long working hours
In providing various subsidies related to the improvement of employment
management to business operators such as "Positive Action Acceleration
Subsidy," etc., the Government will study on the measures to increase incentives
for companies' efforts, e.g. by focusing on the evaluation of the effort to prevent
overwork aiming to reduce long working hours, etc., and will draw a conclusion
within FY2015.

[10] Consideration on other efforts toward reducing long working hours
Aiming to promote companies' efforts toward reducing long working hours, theGovernment will study to revise the guideline based on the "Act on Special
Measures for Improvement of Working Hours Arrangements." Also, theGovernment will give consideration on the provision of task analysis tools for
SMEs and creation of consulting service system related to the efforts ofcompanies toward work-life balance.

[11] Enhancement of change to regular employee status / improve
employment management
To improve the quality of employment, and to further advance women's

42

participation, the Government will formulate "Project for changing to regular
employee status and to improve employment management (tentative name)"
which aims to change employee status to regular employee status and to improve
employment management by expanding career-up subsidy, within FY2015, andaccelerate the change of non-regular employee status to regular employee status.

43[12] Measures for men to take care of their children and for leaving workfor caring their family
Based on the considerations by the study group on the future efforts to support
work-family balance, the Labour Policy Council will deliberate and reach aconclusion within FY2015 on the institutional measures necessary to increase theuse of childcare/family-care leave, such as enhancing to keep employees informed
about the child rearing and nursing care leave system, desirable way to takefamily care leave in installments, measures to promote flexible working styleduring family-care period, desirable form of lightening the economic burden
during family-care leave, etc.
Also, to promote use of paid leave by men for the purpose of child-rearing,
including taking leave immediately after spouse's childbirth, the Government willencourage companies, etc. aiming to achieve "80% of paid leave usage rate ofmen immediately after spouse's childbirth in 2020."(Review toward a system for better working environment for women,etc.)[13] Review toward a system for better working environment for women,etc.
To promote further participation of women, the Government will review thetaxation, social security system, spouse allowance, etc., to put an ideal system for
women to work into effect, e.g. system conducive to smooth increase in householdincome, social security coverage according to work, etc. Regarding taxation,
based on the "Summary of issues regarding the revision of taxation on personal
income, including the creation of neutral tax system to selecting the way ofworking (primary report)" compiled by the plenary meeting of the Government
Tax Commission in November 2014, the Government will promote national
debate extensively and carefully. Regarding social security system, in addition to
the expanded coverage of the employees' insurance (employees’ pension insurance,
national health insurance) (to be enforced in October 2016) in accordance with the"Act on Reinforcing Pension Function," and based on the prescriptions set forth in
the "Social Security System Reform Program Act" and in the additional clause of"Act on Reinforcing Pension Function," and taking into consideration theimplementation status and effects of the expanded coverage to be enforced in
October 2016, the Government will steadily conduct deliberation toward further
expansion of the coverage, and will take institutional measures to open the door
for SMEs to expand the coverage in conjunction with the enforcement in October
2016. Also, the Government will encourage workers and managements to consider
the spouse allowance, while the Government will deliberate on its revision.

44

(Improvement of the environment to support housework)[14] Ensuring quality of housekeeping support services
In order to create a mechanism to provide safe and high quality housekeeping
support services, the Government will disseminate the "Guideline forhousekeeping business providers" formulated in January 2015, and to conduct
necessary studies to create "Certification scheme for housekeeping support service
providers" by FY2016.

(Improvement of women's "quality of life")[15] Improvement of women's "quality of life"
For every woman to shine, it is important to improve the quality of daily life,
especially toilet is unavoidable in their daily lives. In view of this, theGovernment will send messages on the best practices of comfortable, clean, andsafe toilet, while developing an atmosphere conducive to improve the quality of
toilet, aiming to capture overseas markets of excellent Japanese warm watercleaning toilet seat, water-saving toilet system with imitative sound device,through international standardization and advertisement to foreign visitors toJapan.
Also, to further accelerate women's participation, and to lead it to thesustainable growth of Japanese economy, and based on the "2015 priority policies
for accelerating the promotion of active participation by women" compiled in June
2015, the Government will drive forward the initiatives to expand women's
participation, to foster women who play leading roles to solve social challenges,
and to improve the environment for women to actively participate, etc. The
Government will also further advance initiatives for women's participation in thenational civil services, such as to promote mid-career employment so that women
who retired early because of child-caring can participate in public services again.

ii)

Utilization of foreign human resources
Amid intensifying global competition in securing human resources, it isimportant to actively attract excellent foreign human resources to Japan to further
revitalize Japanese economy and improve its competitiveness.
To that end, the Government will continue such initiatives so that highly skilled
foreign professionals and international students would positively choose Japanand play active roles, and will take measures for promoting participation offoreign human resources in the professional and technical fields, especially IT andtourism, in which demand is expected to increase in the future, and for the active

45

participation of care worker candidates based on the economic partnershipagreement.

[1]

Enhancement of initiative to promote acceptance of highly skilled
foreign professionals- In consideration of the establishment of a new status of residence "highly
skilled professional" in April 2015, the Government will promptly launch amechanism to strategically publicize the "Points-based System for Highly
Skilled Foreign Professionals,” etc. and promote the publicity and its utilizationin cooperation with relevant ministries and agencies, by selecting effective
method and opportunity to appeal it in accordance with the situation of eachindustry including IT, financial and academic fields, etc., and by making use ofindustry groups.
- Promote improvement of environment to accept foreign nationals inaccordance with the "Five Promises for Attracting Foreign Businesses toJapan" (Decision of the Council for Promotion of Foreign Direct Investment
in Japan on March 17, 2015) [described below] (Described in "III. Strategy of
Global Outreach."- To improve the convenience for business operators who employ foreign humanresources in the examination procedures of the status of residence, theGovernment will consider and aim to provide explanations and broadly share
information through website, etc. within FY2015, about the most frequentcases and the ways to deal with it regarding documents to be filed and the way
to prove them, etc. which are frequently asked by business operators.

[2]

Further acceptance of international students and enhancement of
support for their active participation after completion of study- Toward the achievement of "A Plan for 300,000 Exchange Students" and toaccelerate acceptance of international students, the Government will promoteclarification of the policy of accepting international students through theadmission policy, etc. of each university. To encourage each university toclarify their admission policies, the Government aim to formulate and publish a
guideline within FY2015. Also, to increase international students who pursue
degrees in the future, the Government will promote short period study in Japan
programs, the ones combined with internship, etc.
- To enhance further support for the employment of international students,
relevant ministries/agencies and organizations will cooperate in holding
matching events in this summer intended for international students, etc. andcompanies interested in their employment. At the same time, the Government46

will enhance the job seekers/job offerers matching function by collecting job
seeking information of international students, etc. and job offering informationof companies interested in hiring foreign human resources together at
Employment Service Center for Foreigners and at the international student
counter of Public Employment Security Offices for New Graduate, etc. Further,
the Government will verify the effects of relevant ministries' effort regarding
the support for employment of international students, etc., and lead it to further
improvement of support measures.

[3]

Promotion of active participation of foreign human resources in theprofessional and technical fields including IT, tourism, etc.
A) IT field- Aiming to double the number of foreign IT human resources engaged in
information and communications business from 30,000 (current) to 60,000 by
2020, the Government will implement following measures.
- To promote acceptance of excellent foreign IT human resources fromSouth Asia and ASEAN countries including India, Vietnam, etc., theGovernment will proceed intergovernmental consultations about thedesignation of overseas universities that produce highly skilled IT humanresources. At the same time, the Government aim to start initiatives in2015 to newly set up, within Japan, a support group based on theComputer Software Association of Japan, to support graduates from thedesignated universities, etc. to study and find job in Japan after study, etc.
in cooperation with Japanese language schools.
- Especially with India, based on the ministerial-level Joint Statement on IT
Cooperation between Japan and India announced in April 2015, theGovernment will advance considerations about the utilization of Indian IT
human resources in the regular intergovernmental consultations to deepen
people-to-people exchange. Moreover, to Indian universities that produce
top level highly skilled IT human resources, the public and private sector
will cooperate in enhancing initiatives to promote the employment inJapanese companies, and publicize the attractiveness of Japan, etc.
- The
statusofresidence"Engineer"and"Specialistin
Humanities/International
Services"wereintegrated
into"Engineer/Specialist in Humanities/International Services" in April 2015 tomake it easier for foreign human resources with knowledge in culturalsciences such as business administration to take active roles as IT
engineers. Accordingly, the Government aims to clarify and publicize
within FY2015, the requirements for the status of residence by presenting

47

examples of permitted cases, etc.
B) Tourism field- In order to actively respond to the increase of foreign visitors, theGovernment will accurately grasp the needs of the utilization of foreign
human resources in the tourism field, and continuously implement
measures such as the revision of the requirements for the residential status,
for the work considered to be in the professional and technical fields.
Specifically, the Government will implement following measures for thetime being.
- In order to promote utilization of foreign human resources in the tourism
industry, and improve services to foreign visitors in hotels and Japanese
inns, the Government will clarify that the current system permits theresidence of foreign nationals on condition that they meet a certain
condition, i.e. being engaged in services as attendant, concierge, etc. atreception desks in hotels or Japanese inns that require specialized
knowledge, and will publicize it on website, etc. within FY2015.
- As the number of foreign visitors who enjoy skiing in Japan is increasing,the Government will promptly conduct a survey on the needs of snow
resort-related people about the requirement of the status of residence forforeign ski instructors, and will considerate alternative requirements toyears of work experience, and reach a conclusion within FY2015.
- Based on the results of discussions in the study group on the licensed
guide interpreters system, and in order to promote multilingual services,
the Government will consider the measures to promote further
participation of foreign human resources including international students,
etc. in the licensed guide interpreters services, and start implementation of
specific measures within FY2015.

[4]

Promotion of active participation by certified care worker candidates
based on the Economic Partnership Agreements
With regard to the foreign certified care worker candidates from Indonesia,
Vietnam and the Philippines accepted by Japan based on the Economic
Partnership Agreements, the Government will start considerations on specificmeasures to further promote their active participation and reach a conclusion
within FY2015.

48

(Consideration on medium- to long-term approaches to accept foreign humanresources)
To ensure sustainability of economic and social infrastructure, the Government will
advance comprehensive and detailed study on the medium- to long-term approaches to
accept foreign human resources while focusing on the field where they are truly
required. To this end, the Government will conduct cross-governmental surveys andconsiderations regarding essential issues including a mechanism that would not be
misconstrued as an immigration policy, the way to shape the national consensus, etc.

49

3.

University reforms / Promoting innovation in science and technology /Becoming the world’s leading intellectual property-based nation(1) Progress in achieving KPIs
<KPI> At least 10 Japanese universities in the top 100 of world university
rankings in the next 10 years.
 World University Rankings 2014-2015
Times Higher Education: 2 Japanese universities within the top 100, and 5
Japanese universities within the top 200.
QS: 5 Japanese universities within the top 100, and 10 Japanese universities
within the top 200.
Shanghai Jiao Tong University: 3 Japanese universities within the top 100, and 8
Japanese universities within the top 200.
<KPI> Become the No. 1 global innovator within the next five years: No. 5 in the
2013-2014 ranking.
 2014-2015: No. 4 (up one rank from last year)<KPI> Aim to increase the number of people eligible for annual salary or
mixed-salary systems from 6,000 in FY 2014 to 10,000 in FY2015.
 Approximately 6,600 people eligible for annual salary systems as of October
2014.
<KPI> Aim to allocate operation cost subsidies for reform initiatives at each
university and sums dependent on this to be increased by 30-40% by theend of FY2015.
(FY2014 results: 21.1% (FY2013 results: 10.1%)<KPI> Reduce the time required to acquire patent rights to no more than 36
months by the end of FY2015
 Excluding the number of exceptional cases (2.9%) that required applicants tomake revisions many times over, the time required to acquire all other patentrights was reduced to no more than 36 months in FY2014 and the KPI wasachieved ahead of schedule.

(2) Progress made in implementing measures(Steadily implementing university reforms based on the National University
Reform Plan)- Laws to revise the School Education Act and part of the National University
Corporation Act from the perspective of establishing leadership by university

50

presidents, etc., were implemented (this year in April.) Other revisions include theexpansion of authority of vice presidents assisting university presidents, and theclarification of roles of Faculty Councils.

(Strengthening of “bridging” functions and other reforms of national
research institutes)- In its fourth mid- to long-term objective which started in April this year, the National
Institute of Advanced Industrial Science and Technology (AIST) has stated that it will
increase its acquisition of private sector funds from its current level (4.6 billion JPY
per year) to more than triple the amount (13.8 billion JPY per year.) It also publishedthat it will strengthen cooperation with public research and development institutions
etc.
- The New Energy and Industrial Technology Development Organization has stated thatit has changed its third mid-term objective, etc., in March this year. It also listed
objectives such as increasing the ratio of support towards venture companies, medium
enterprises and SMEs by more than 20%. These venture companies, medium
enterprises and SMEs account for funds allocated to newly-adopted projects andsystem development for flexible and swift administration by granting greater authority
to project managers.

(Arrangements for the basic framework of the cross-appointment system)- “The Basic framework of the cross-appointment system and points for consideration”
was compiled last year in December in order for the cross-appointment system to be
used actively in universities, research institutions, and corporations. As of April thisyear, the cross-appointment system is being applied to 92 people in the National
University Corporation (27 of which are from internal national research institutions.)(Restructuring of the research funding system)- Grants-in-Aid for Scientific Research (KAKENHI) is carrying out reforms from theperspective of promoting research in interdisciplinary domains and international joint
research.

(Strengthening of the employee invention system and trade secrets
protection)- A bill was submitted to the Diet in March this year. This bill revises a part of the
Patent Act, including changes to the employee invention system geared towards
ensuring a good balance in terms of combining advantages for companies withincentives for investors.
- The Trade Secret Management Guidelines was revised in January this year in order to51

devise highly-effective measures to prevent the leakage of trade secrets throughinitiatives undertaken via collaboration between the public and private sectors. In
addition, a bill was submitted to the Diet in March this year to revise part of the Unfair
Competition Prevention Law. Namely, contents regarding areas such as increased fines
for acts infringing on trade secrets and additional punishments for illegal acquisitionsof trade secrets.

(Achievement of high-quality examination at speeds comparable to othercountries)- Both the Japanese and U.S. governments reached an agreement in May this year that
the Japan Patent Office (JPO) and the United States Patent and Trademark Office(USPTO) would start a Collaboration Search Pilot (CSP) program in August this year,
which was designed to share opinions and search results of the inventions in theapplications that have been filed with both offices, to promote faster and moreaccurate investigations.
- A bill was submitted to the Diet in March this year to revise a parts of the Patent Act,etc. to properly deal with Patent Law Treaty and the Singapore Treaty on the Law ofTrademarks, both of which were designed to internationally standardize and simplify
the filing procedures differing in each country- By May this year, frameworks for intellectual property cooperation with each of the 10
ASEAN nations were strengthened by the JPO's signing cooperative documents suchas MOCs with each nation.

(Establishment of a standardization system tailored to new market creation)- A standardization system tailored to new market creation was created in July last year
as a structure for standardizing areas which existing industry groups have foundstandardization difficult to achieve, such as fusion technologies that span acrossmultiple fields and the advanced technologies of medium enterprises and SMEs, etc.

(The formulation of Japan’s Robot Strategy and the establishment of the
Robot Revolution Initiative)- Japan’s Robot Strategy was compiled at the Robot Revolution Realization Council in
January this year, and decided upon in the Headquarters for Japan’s Economic
Revitalization in February. Japan’s Robot Strategy is a compilation of action planssorted by strategy and field (manufacturing, service, medical and nursing care,infrastructure, disaster response and construction, agriculture, forestry and fisheries,
and the food industry) for realizing the robot revolution. In addition, the Robot
Revolution Initiative (a powerful parent organization promoting the robot revolution52

as a whole) was established in May this year.

(3) Specific new measures to be taken
Measures for rebuilding national system for innovation were proposed last year in
April in the Strategy for Reforming Japan’s System of National Innovation in order toconstantly create innovative technological seeds and realize its swift commercialization.
The completion of these measures were seen as a structure via the National University
Management Strategy in June this year. The Government implements the measures toreform the national system for innovation in order to become the world’s leading
innovative country by promoting the contents included in the Comprehensive Strategy on
Science, Technology and Innovation 2015 (approved by the Cabinet on June 19, 2015),
strengthening the functions of the national Research and Development Agencies andpromoting the self-improvement initiatives of universities that create innovativetechnological seeds, under Strategy for enhancing managerial ability of National
Universities.
Regarding the regional innovation, the Government will promote and strengthen theincorporation of seeds and needs that those inside and outside the area have, based on thesituation of each area.
Utilizing local intellectual property and initiatives, etc., towards international
standardization and certification will be promoted based on the Intellectual Property
Strategic Program 2015 (approved by the Intellectual Property Strategy Headquarters on
June 19, 2015.)
Moreover, the Government aims to realize the targets set for research and development
investments (at least 4% of GDP, and 1% of internal government research anddevelopment investment GDP,) based on the fourth Science and Technology Basic Plan.
Based on the fact that innovations in science and technology are important pillars
supporting the revitalization of Japan, Investment targets and KPIs will be considered in
the fifth Science and Technology Basic Plan, and concluded within this year, in order toeffectively promote ST policies, an investment for future. In this process, severe fiscal
conditions and the characteristics of R&D will be taken into consideration.

i)
Implementation of a national system of innovation[1] Strategy for enhancing managerial ability of National Universities
A) Rejuvenation of competition between universities strengthening their
management capabilities by placing importance on supporting universities
actively working towards self-reformation

53

Each university establishes KPIs, etc., according to the plans laid out for
initiatives after clarifying its vision and targets, and selecting one of three newly
established prioritized support frameworks. Namely, these three newly
established frameworks are: the “promotion of regional contribution andnational/international educational research in a field that is a strength/specialtyof the university,” the “promotion of national/international educational research(rather than regional) in a field that is a strength/specialty of the university,” andthe “university-wide promotion of superior educational research and social
implementation on a global scale.” Based on performance indicators, etc.,
transparent objective evaluations will be performed regarding the situation on
initiatives for the reforms, and allocate national universities’ operation costsubsidies in accordance with those results.
The logic behind these KPIs, etc., for making these frameworks effective is to
aim to compile and publish allocation methods for operating cost subsidies andmethods for making objective evaluations in a transparent manner.
In these frameworks, it is proactively evaluated and supported initiatives suchas the bold reorganizations and renewals of education and research organizationsof departments etc. adapting to changes in the times, partnerships and alliances
between universities complementing mutual strengths and characteristics, reformof personnel and salary evaluation systems (converting to salary systems basedon ability and educational research results, etc. (annual salary)), the introductionof cross-appointments and the development of personnel creating business
newly.
In order to secure prioritized allocation of operation cost subsidies, theGovernment will aim to establish coefficients and amounts for newly established“Coefficients promoting function enhancement(tentative name)” and “Expenses atthe discretion of the university president (tentative name)” sometime this year
based on each university’s financial structure and initiatives during the reform
acceleration period. In doing so, these will be established based on the essence of(allocation for reform initiatives at each university and sums dependent on this to
be increased by 30–40% by the end of FY2015) described in the 2014 revision of
the Japan Revitalization Strategy.

B) Expanding the degree of freedom in financial operations to enhance
managerial ability of national universities
In order to expand the degree of freedom in financial operations to
independently expand income, necessary measures will be taken only after
obtaining a certain degree of conclusions sometime this year regarding businessexpansion accompanying profit (clarification, etc., on the scope of university
business prescribed to National University Corporations,) and only after also

54

obtaining conclusions regarding policies, etc., towards acquiring donations.
Also, in an effort to expand joint research conducted between universities andcorporations, efforts towards discussions with active corporations andestablishment of cooperative frameworks, etc., by a university will be evaluatedas the president’s management performance, etc., and will be reflected in the
allocation of management expenses grants etc.
Furthermore, regarding contracts for joint research between universities andcorporations, consideration will be given to the way patent applications andcontracts should be for joint research after having investigated the the form ofpatent applications, utilized performance of patents and the condition ofcontracts including non-working compensation regarding joint research. Basedon the results of those considerations, universities and corporations will bepromoted to utilize the way of flexible contracts
C) The focused strengthening of universities competing on a global scale andpromotion of the formation of frontiers supporting future industries andsocieties, through the establishment of “Special Research Universities,” etc.
- Special Research Universities (tentative name)
The system for “Special Research Universities” (tentative name) will beestablished in order to create universities that have a high level of managerial
ability and freedom striving to improve their global competitiveness by callingin a variety of resources both domestically and from overseas. Therefore theGovernment will examine and establish necessary system including submissionof a relevant bill to the Diet which expected timing is next ordinary session.
In doing so, strict management will be demanded to these universities in thesystem, such as the implementation of world-class rigorous evaluations to set
overseas universities as a benchmark byuniversity-related personnel
participation from Japan and overseas, etc., and thorough public information
disclosure. On the other hand, the system includes policies to strengthen
managerial ability such as to increase the flexibility of organizational
restructuring andcapacity management, and to grant further incentives
leading to enhancement of financial bases (greater freedom for asset
management and profit-earning businesses, etc.).
In addition, the system includes policies promoting the development ofinnovative entrepreneurs and the creation of university-launched ventures, etc.,
taking into consideration the similar overseas cases from the perspective of
realizing partnerships and virtuous cycle between venture companies anduniversities.

55

- Distinguished Graduate Schools (tentative name)
In order to also respond to the development of IoT, “Big Data,” and artificial
intelligence, “Distinguished Graduate Schools” (tentative name) will beestablished to promote integrated education in the fields combining different
fields (integration of liberal arts and sciences, etc.) and cutting edge teaching in
the fields Japan excels in, formed through cooperation among universities,
research institutes, corporations, and overseas institutions, etc. For this, a study
group comprised of members from industry, academia and government will
display the mechanisms for setup of fields comprising the Schools andcollaboration between multiple organizations incorporating perspectives fromcreating new domains, industries and businesses within this year. Initiatives
geared towards fleshing out details on the framework through partnerships withcorporations in universities will start from the next FY.
- Distinguished Researchers (tentative name)
The “Distinguished Researchers” system will be created in order to allow
distinguished young researchers to conduct activities in independent and freeresearch environments at Special Research Universities and Distinguished
Graduate Schools, etc., while taking up stable positions. The Distinguished
Researchers system will be administered starting from next FY after considering
how mandatory retirement positions as universities should be utilized, and after
considering elimination of excessive centralization, etc., regarding certain
universities.

[2]

Competitive research expenditure reforms
In recent years, national university corporations have been experiencing
problems regarding a comparative decline in the diversity of their research andbasic research capabilities, and there is a need to integrally promote university
reform and research fund reform.
For this reason, indirect costs will be covered at 30% for newly adopted
projects from next fiscal year for competitive research funds offered by the
Cabinet Office and the Ministry of Education, Culture, Sports, Science andTechnology to universities. In addition, consideration towards appropriate
measures for indirect costs in the competitive research expenditures of relevant
ministries will begin sometime this year under the Council for Science,
Technology and Innovation (CSTI), and the appropriate measures for indirect
costs will be sequentially carried out from next fiscal year.
In addition, consideration will be commenced under CSTI for improving the56operation into the agendas such as promoting the sharing of equipment andfacilities and enabling seamless partnerships between research funding systems,
and for increasing the flexibility of HR-related expenses from direct overhead
costs, while considering the conditions such as the progress of personnel salarysystem reforms at national university corporations. The results will be
implemented sequentially starting from next fiscal year.
In order to flexibly allocate the indirect costs of research funds from the private
sector, including from the perspective of accelerating collaboration between
universities and industries, the Cabinet Office will aim to promote understanding
towards the private sector within this year.
Furthermore, sequential implementation will begin from next fiscal year after
conclusions regarding policies (such as policies for the continuation of sustained
system reform, etc.) for reconstructing the dual support systems of universities
through management expenses grants and competitive expenses (not limited toresearch expenses, but also including all open-type expenses) are obtained
sometime this fiscal year. At the same time, regarding KAKENHI, reviews on
fundamental structures such as inspections categories will be promoted, andresearch funds concentrated on the back of a broad base of degrees will beallocated to diverse and original academic research while strengthening theambitiousness trying to cultivate new frontier and the fusion of wisdom bringing
unexpected breakthrough to new research.

[3]

Strengthening the functions of Research and Development Agencies
and actively introducing the cross-appointment system
Research and Development Agencies will be at the heart of further
strengthening “bridging” functions that join the formation of innovative hubs
promoting active participation from industry, academia and government that go
beyond the borders of respective fields and sectors, with the strengthening of
those functions and the commercialization of innovative technological seeds.
For example, establish targets regarding the promotion of joint research withcross-appointments and private sectors, the introduction of annual salary systems,
the concentration and utilization of ideas and technology from private sectors, etc.,
in National Research and Development Agencies such as RIKEN which strives todevelop leaders in global research, the Japan Aerospace Exploration Agency(JAXA), etc. as a hub for the international circulation of intellect.
Along with each of the above mentioned National Research and Development
Agencies, etc., the promotion of increased cross-appointments and joint research,
etc., will be clearly placed in mid- to long-term objectives regarding National
Research and Development Agencies that welcome the start of the new mid-term

57

to long-term objectives period next fiscal year. This particularly includes the
National Institute for Materials Science (NIMS,) the National Institute forEnvironmental Studies, and the Forestry and Forest Products Research Institute.
Furthermore, the introduction of this system will be promoted to encourage themore active and broad use of this system in universities, research institutions, andcorporations based on last year December’s “Basic framework of thecross-appointment system and points for consideration.”
In addition, operations will be improved for National Research andDevelopment Agencies such as increased flexibility for the procurement of goods
and labor, the handling of self-income, approval on the efforts of management,
and subsidies transfers that last longer than mid- to long-term objective periods.
Moreover, the Government will promote measures for the rationalization of
procurement through the presentation of detailed cases that can depend on
negotiated contracts and new rules regarding procurement based on the Basic
Policy on Incorporated Administrative Agency Reform, etc. (approved by the
Cabinet on December 24, 2013.) At the same time, the upper limit for dependable
negotiated contracts will be considered, including considerations on the overallsituation of National University Corporations and balanced standards, etc., while
taking into consideration the importance of securing competitiveness in bidding.
Along with making efforts to enable speedy and effective procurement based on
the characteristics of research and development, the Government will grasp theoperating conditions of incorporated administrative agency accounting standards,
and consider appropriate management.
Moreover, corporations taking on creative operations that produce world-classresearch and development results are positioned as Designated National Researchand Development Institute (tentative name), and new systems that lay down the
CSTI’s and competent minister’s heavy involvement and special measures for
operations will be created as early as possible.

[4]

Creation of a new innovation cycle system for promoting open
innovation
The Government will aim to establish a virtuous cycle process (innovation
cycle). In this system, the center of open innovation (Open Innovation Arena) willplay a central role, with a core of research institutions such as National Researchand Development Agencies that are tasked with “bridging” with universities,
regional companies will grow into global companies through thecommercialization of technological seeds that had been bridged to, and the profit
will be returned to research funds to create even more technological seeds.
For this goal, universities with innovative fundamental research capabilities and58

the research centers of AIST’s, etc., bridging research institutions will cooperate
closely together so that technological seeds will form bridges between a wide
range of corporations in various business fields, including SMEs and venturecompanies, and form new hubs to speed up commercialization.
Efforts will also be made to reform necessary systems (system improvements
starting with procurement, etc.) in order for several research institutions to
conduct joint research in a smooth manner. These research institutions include
universities, AIST, NIMS, and the Tsukuba Innovation Arena, a pioneering
initiative aiming for industry-academic-government collaboration in the field on
nanotechnology.
Regional SMEs, etc., have room for potential growth but are faced with issues
such as advancements in their company’s own technologies and the expansion ofbusiness partners. In order to help free themselves from these issues and challengethemselves to become corporations driving local economies, these regional SMEs,
etc., are expanding a wide range of support (including support for research anddevelopment, the development of overseas markets, and the development ofstandards) while creating regional support platforms that will carefully provide
these services. Moreover, efforts will be made to promote the use of the Regional
Economy Society Analyzing System (RESAS), which visualizes Big Data such as
business-to-business data and public statistical data that is consolidated by Japanand provided to local governments, etc. At the same time, consideration will bemade towards the addition of data regarding the circulation of local funds,
corporations’ possession of patents, etc. [Described below] (Written in “6.
Achieving regional revitalization and regional structural reform / Achieving
reform among mid-ranking companies, SMEs and micro enterprises”)

ii)

Promotion of regional innovation

Aiming at clarifying the mission of each regional actor like university, research
institution and corporation, and enhancing the mobility of personnel and technology bypolicies such as the cross-appoint system, as well as creating structures that facilitate
utilizing resource across Japan, the following policies will be implemented:[1]

Enhancing nationwide functions of promoting matching amongindustry, academia and government through personnel with good
judgement
In order to promote cooperation between coordinators in regional strategic
industry and matching planners who are supposed to match needs and seeds
among universities, SMEs and corporations, the conference for exchanging
information such as matching achievements will be established in this fiscal year,

59acquiring assistance by regional financial institutions, public research anddevelopment institutes,etc.

[2]Forming clusters through cooperation between industry, academia andgovernment
Based on the future visions of regions, at least two research and development
hubs cooperating in differing fields will be formed by FY2019. These hubs arewhere local governments, universities, the Inter-University Research Institute,
National Research and Development Agencies, research institutes andcorporations cooperate.

[3]

Strengthening the intellectual property strategies of regional SMEs
The Japanese Government will raise awareness on the intellectual property
among SMEs, and promote their use and application of intellectual property by,for example, increasing the ratio of SME’s filing patent applications up to
approximately 15% by 2019 (this ratio was approximately 12% in FY2013.) This
will be achieved by strengthening the services of the IP Comprehensive Support
Center, by supporting the leading projects for matching intellectual properties
with businesses through the support for regional SMEs, and by assigning thepersonnel in charge of bridging over intellectual property to regional public
institutions, etc., in order to promote intellectual property partnerships between
regional SMEs and major corporations, etc.
In addition, the Japanese Government will strengthen the systems of Yorozu
Support Centers and its headquarters, which are one-stop consulting service
counters to deal with various management issues that SMEs and small business
operators are experiencing, targeting doubling the number of intellectual
property support cases per year to 2,000 by 2016(approximately 1,000 cases in
FY2014.) These cases may include discovering of underlying needs concerning
intellectual property, and providing consultations the protection of, intellectual
property, the prevention of the disputes, and the handling of law suits, etc, which
major corporation may be mainly concerned with.
Moreover, the Japanese Government will improve and strengthen theexamination system that is necessary to promote the support for obtaining IP
rights in the regions. One such example will be that examiners visit local regions
to conduct speedy and accurate interview examinations based on user needs. By
FY2020, the Japanese Government will double the number of interview
examination per year to 1,000 (approximately 500 in FY2014.)

60

[4]

Promoting strategic standardization
Utilize systems such as the standardization system tailored to new market
creation, etc., and complete the standardization of 100 projects for the outstanding
technology and products of SMEs, etc., by 2020. In order to achieve this,standardization training programs will be implemented for persons in charge ofproviding support to the corporations of local governments, regional economic
organizations, etc., and support structures will be strengthened ranging fromconsultation to the creation and certification of standards regarding thestandardization projects of SMEs, etc., by strengthening structures, etc., forpersonnel specializing in standardization in the Japanese Standards Association.

iii) Promotion of the “Japan’s Robot Strategy,” etc.
[1] Promoting the “Japan’s Robot Strategy”
Based on the Japan’s Robot Strategy, cross-cutting measures including thedevelopment of next-generation technologies and regulation and system reforms,
and field-specific measures will be steadily promoted to realize the Robot
Revolution.
Regarding the reform of regulations/systems:- Considerations will be made by the end of next fiscal year for developing
system related to the uses of radio waves in robot controls, data imagetransmission, sensors for detecting obstacles, etc., and necessary measures will
be taken after FY2017.
- Regarding review time of new medical devices including those utilizing robotic
thechnogy under the Pharmaceutical and Medical Device Act (PMD Act), thereview time of 14 months for normal review items, and 10 months for priority
review items will be achieved at 80th percentile by FY2018.
- In order to make public road tests of boarding-type personal assistive mobility
devices(devices that were only possible in special zones for structural reform)
implementable nationwide, exceptional measures (such as those involved in
vehicle divisions and preservation standards for boarding-type personal
assistive mobility devices used in public road tests) until now that have been
approved in special zones will be developed nationwide for boarding-type
personal assistive mobility devices based on the evaluations of the evaluation
board and investigation committee of the Headquarters for the Promotion ofSpecial Zones for Structural Reform involved in the results of public road tests
held in cities such as Tsukuba City in Ibaraki Prefecture. Moreover,considerations will continue to be made on the handling of boarding-type
personal assistive mobility devices in the Road Traffic Act and Road Vehicles

61Act including the utilization of the Special System for Corporate Field Tests.
After arranging consistencies with international agreements, considerations forunmanned farm machinery running on public roads as they head towards
farmland will be made while continually verifying safety.
- Regarding the rules for safe operation of small unmanned aerial vehicle, etc.,
the Government will advance efforts step by step starting from feasible ones
promptly after coordinating with relevant parties, considering the technologicalrationality, technology development toward future utilization/dissemination,etc., expansion of business using small unmanned aerial vehicle, andinternational trend of restricting small unmanned aerial vehicle. Among others,
for the regulation of operation of small unmanned aerial vehicle, which
requires emergent response, the Government will immediately prepare andsubmit a necessary bill to current Diet session. After that, the Government will
finalize the rule after making sufficient amendments with relevant parties witha view to the development of legal systems regarding the airframe and operatorof small unmanned aerial vehicle as well as business that uses small unmanned
aerial vehicle. [Described above]- Regarding the practical use of robots in responses to disasters and thepreservation/maintenance of public infrastructure, verifications and evaluations
will be conducted on the ground for robots used in next-generation social
infrastructure, and at the same time evaluation methods geared towards trial
introductions will be considered, etc., and full-scale introduction will bepromptly conducted. [Described below] (Described in “Theme 3: Building safe,
convenient, and economical next-generation infrastructure”)
Measures for the “Fukushima Hama-Dori Robot Testing Zone,” which started
from April this year as a demonstration field for new robot technology indisaster response fields, will be promoted and established as a base for robot
development in the fields of land, water, and air.
In addition, strategies geared towards the creation of new business models willbe established through IoT that include priority fields for international
standardization and security measures. These strategies will be centered on the
Robot Revolution Initiative, and partnerships regarding collaboration, etc.,
towards creating new business models with Germany’s Industry 4.0 Platform
and America’s Industrial Internet Consortium will be promoted.
Furthermore, cooperation will be made with the Council for Science,
Technology and Innovation (CSTI) in order to effectively and efficiently
implement the research and development, etc., of innovative next-generation
technology for important underlying technology, etc., needed in order for Japanto lead the world technologically through a data-driven society.

62Additionally, in conjunction with the Tokyo Olympics and Paralympics in 2020,
etc., the research and development of robots will be accelerated and a “Robot
Olympics” (tentative name) will be held. The Robot Olympics is a competitionand proving test for various robots, and will be held as one method for introducing
and popularizing robots into the real world.

63

[2]

Promoting fundamental technologies that will become driving forces
for Japan’s growth in the long-term
The development of fundamental technologies that will become driving forces
for Japan’s growth in the long term (such as technologies for marine resource
investigation and development, next-generation satellites and rockets,
next-generation airplanes, observations/predictions/measures against natural
disasters, and cyber security) and their implementation in society will bepromoted through cross-ministerial partnerships with industries.

64

4. Becoming the world’s leading IT society(1) Progress in achieving KPIs
<KPI> Reduce the current number of government information systems from1,450 by half within the next 5 years (until FY2018) such as throughpromoting the use of cloud computing in government information systems,
and decrease operational costs by 30% in 8 years (until FY2021) (Numberof systems in FY2012: 1,450; Operational cost for FY2013: 399.8 billion
JPY) No. of Systems: 1,238 (end of FY2013)
Operational cost: 374.8 billion JPY (FY2014 budget)<KPI> Achieve the world’s highest level of public data disclosure in amachine-readable way (with a dataset totaling over 10,000) by the end of2015 The trial version of the data catalog site (DATA.GO.JP) has achieved a dataset in
excess of 10,000 (13,000 as of May this year)<KPI> Increase the utilization rate at skill standard companies from its current
level of 20% to over 25% in the next 4 years (until FY2017)
 Achieved 27.1% as of FY2014(2) Progress made in implementing measures(Promote appropriate utilization of personal data through revisions of the
Personal Information Protection Act, etc.)- For developing environments to promote the protection and utilization of handlingpersonal information in a balanced manner, such as establishment of framework
regulations regarding “de-identified information” that business can freely utilize, theestablishment of independent data protection authority, and introduction of punitive
clauses for the cases when personal information is illegally provided, etc. andexpansion of the use of “My Number" to financial sectors and medical fields, etc. tomake it possible to number bank accounts, and to use for operations, regarding
specific medical examinations and health guidance, in response to the era of big data,
the GOJ has submitted a bill to revise the Act on the Protection of Personal
Information and the Act on the Use of Numbers to Identify a Specific Individual in the
Administrative Procedure (revision of the Personal Information Protection Act andNumber Use Act) to the Diet this March.

65

(A law was established to revise a portion of the Telecommunications
Business Law, etc., and promote competition, etc., in the field of informationand communication)- A law was established in May this year to revise a portion of the Telecommunications
Business Law, etc. Deregulations against businesses dominating the market andenhancements, etc., on the rules for opening mobile telecommunication networks will
be conducted. Efforts will also be made to prepare, etc., business environments for
MVNO (Mobile Virtual Network Operators), and promote the creation of fair andappropriate competitive market environments. Furthermore, efforts were made toenable the smooth use of mobile phone terminals and wireless LAN terminals, etc., byforeign tourists visiting Japan and bringing in those devices for a temporary period oftime.

(Promoting reform of government information systems)- The “Roadmap for Reform of Government Information Systems” was reviewed, etc.,
in March this year to consolidate government information systems and increase the useof cloud computing. The number of government information systems is expected to be
cut by approximately 60% by FY2018, and it is anticipated that aims will be made to
reduce operational costs by approximately 20% by FY2021.

(Starting full-scale operation of data catalog site)- The completed version of the data catalog site (DATA.GO.JP) began operation lastyear in October as an opening of public data to the private sector.

(3) Specific new measures to be taken
The efficient management of personal information and the quick and assured exchangeof personal information amongst multiple institutions will be enabled in the
Administrative Organs of the State and local public organizations through the initialized
operation of the My Number system, review on laws concerning personal data, and etc.
The enrichment of industrial development and the national life will be promoted byfurther accelerating the utilization of IT through the usage of new “IT utilization
platforms” while improving national IT literacy. Accordingly, the Government will carryout the following measures, sparing no effort in strongly promoting “the Declaration to be
the World’s Most Advanced IT Nation” (approved by the Cabinet on June 30, 2015.)i)

Cybersecurity protecting citizens and society

IT is currently an essential element in the people’s lives and economic activities, andin order to not only achieve a safe society that citizens can live in with peace of mind,
but to also improve the vitality and sustainable development of the economic society,66the creation of free, fair, and secure cyberspace is required.
For this, measures to construct Japan’s cybersecurity infrastructure will be drasticallystrengthened and expanded based on the “Cybersecurity Strategy” scheduled drawn up
in the future. Infrastructure for ensuring cyber security will be strengthen while
response capabilities of governmental bodies, private enterprises, and other relevant
entities will be drastically strengthened.

[1] Drastically enhancing response capabilities of government
bodies and relevant entities
The recent data breach incident involving the Japan Pension Service mayundermine public trust in government bodies and other relevant entities that
handle critical personal information. In order to ensure cybersecurity, measures
must be taken to a maximum extent beyond the existing frameworks in addition to
the full implementation of the basic measures. For this, the know-how of bothinternal and external specialists, including those of independent administrative
agencies having expertise in detection, analysis, response to cyber attacks, audit,
and other relevant areas, will be accumulated for the qualitative and quantitative
improvement and enhancement. By doing so, the Government will thoroughly
prevent further recurrences and will quickly take the following concrete measures.
Initially, as for the cross-governmental monitoring of the information systemsof the governmental bodies and government-related entities, the Government will
include, in addition to the governmental bodies, incorporated administrative
agencies, special corporations closely working with the governmental bodies toperform their public functions, and other relevant entities, in the subjects ofmonitoring in a phased manner, taking into consideration equitable-burden sharing
among beneficiaries; the Government will also work to advance its monitoring
methods. More specifically, the Government will promptly decide its policy
regarding the detection and analysis functions of the Government Security
Operation Coordination team (GSOC) as well as the enhanced operationalframework of the GSOC, and take necessary measures.
In addition, the independent audit implemented by the NISC from this fiscal
year will target not only the governmental bodies but also independentadministrative agencies, special corporations closely working with thegovernmental bodies to perform their public functions, and other relevant entities;
in this context, the relevant governmental bodies will promptly decide their policy
regarding the audit of these entities by the NISC, and take necessary measures.
Moreover, the Government will determine its policy regarding necessary
measures taken by the governmental bodies and government-related entities,
including risk mitigation by the separation of the information systems handing67

critical information, including huge volumes of personal information and others,
from the Internet, the enhancement of measures in view of the overall transition toa cloud environment at the governmental bodies and government-related entities,
and the urgent consolidation of connections to the Internet in parallel with to theconsolidation of the information systems of the governmental bodies, while
paying attention to the effectiveness of their functions.
Furthermore, the Government will implement the further functional
enhancement, including appointing highly advanced cybersecurity experts fromthe private sector as the NISC staff.
The Government will take actions Regarding the budgets and organizationalarrangements required to the promotion of the measures for the drasticenhancement of cybersecurity response capabilities, including theabove-mentioned measures. Specifically, the budget and other resources will bereallocated to additional necessary expenses and others, with cost-saving efforts,such as streamlining and increasing efficiency in administrative affairs by thereview of administrative works, system reforms, and the reexamination of otheractivities.

[2]

Strengthening measures for the smooth introduction of the My Number
systemThe My Number system will take various security management measures fromboth an institutional and systematic standpoint. For example, personal information
possessed by various administrative organizations will be dispersed and managed
as in the past and will not be managed centrally in institution. In addition, theexchange of information between various administrative organizations is not
simply a matter of turning My Number into linked keys. It employs the use ofpolicies that turn differing codes from each institution into source linked keys, andthere are structures in place to obstruct contact between administrative
organizations. Furthermore, the independent authority, Specific Personal
Information Protection Commission, monitors and supervises the handling of My
Number, and, in case that a personal information file containing My Number isprovided to a third party without justifiable reason, stiff penalties are to be
applied.
In addition, from the viewpoint of achieving sufficient security monitoring andsupervising functions for My Number possessed by local governments, theSpecific Personal Information Protection Commission develops its monitoring andsupervising system by the end of this fiscal year, cooperating with relevant
institutions. For instance, the Commission organizes a group with specialized
technical knowledge and immediately makes monitoring and supervisory policies.

68Moreover, in regard to the Local Government Wide Area Network (LGWAN,)
monitoring and detection systems overlooking Japan and local regions as a whole
pertaining to the My Number system will be put in place, such as establishing
functions that perform concentrated security monitoring, by sharing information
with the GSOC. At the same time, the security of the My Number system will bethoroughly ensured by strengthening support functions regarding local
government’s security measures, etc.
Furthermore, consideration will be made regarding frameworks forauthentication cooperation for achieving public-private collaboration, and theGovernment will aim to formulate policy initiatives something this year.

[3]

Promotion of countermeasures in private corporationsA) Promoting security measures utilizing market principles
The incident at the Japan Pension Service is not simply a problem that only
concerns a single company. Both government-affiliated agencies and private
corporations are faced with the reality that a similar crisis may occur, and there
is a need to face the problem head-on.
More specifically, cyber security management guidelines clarifying items thatshould be performed in corporate management to ensure cyber security will be
formulated sometime this fiscal year. At the same time, the implementation of
third party evaluations and audits based on international standards, etc., will bepromoted from next fiscal year. Furthermore, in order to promote stronger
security by making corporate initiatives more visible, efforts aiming to formulate
information disclosure guidelines concerning initiatives, etc., for cyber security
measures in corporations will be made sometime this fiscal year. Moreover,awareness regarding evaluations from risk finance markets is expected toincrease through the popularization of cyber security insurance.
B) Measures regarding critical information infrastructure
If social infrastructure (critical information infrastructure or CII) essential tothe people’s daily lives and economic activities is targeted by an organized andsophisticated cyber attack, such as a targeted attack, its consequences would beenormous; therefore, the further enhancement of cybersecurity measures for CII
is indispensable. More specifically, the Government will take its decisionconclusively by the end of this fiscal year on the concrete components of thefurther enhancement of security measures for prompt incident response as thefull-scale efforts of the private and public sectors, including: the implementationof a continuous review of the scope of CII sectors, based on the rapid spread of
IT use, technological progress, and others; the improvement of organizational

69

arrangements and infrastructure building for the effective and rapid sharing of
information, including information on target attacks and vulnerabilities, among
stakeholders; the cross-sectoral implementation of practical training andexercises for stakeholders of the public and private sectors; and the promotion of
the certification of control equipment.

[4]Foundational enhancement geared toward ensuring cybersecurity(Enhancing technological expertise, industrial development and humanresource development)A)
Enhancing technological expertise and industrial development
It is also important to improve Japan’s overall security level by creating anddeveloping globally competitive enterprises industries whose expertise lies incybersecurity technologies. For this, the Government will promote technologicaldevelopment to ensure cybersecurity through frameworks such as the
Cross-ministerial Strategic Innovation-Promotion Program (SIP), and makeefforts to support the cybersecurity industry to become a growth industry. Suchefforts include: promoting international standardization for security-related
technologies, developing projects supported by the New Energy and Industrial
Technology Development Organization’s (NEDO), and utilizing sovereign
wealth funds (SWFs) to promote business ventures and enterprises capable ofoperating large scale business at home and abroad. Furthermore, ensuring
security related to the IoT field that is anticipated to become a growth industry
will be a key of Japan’s economic growth. For this, the Government aims toformulate comprehensive security guidelines for the government-promoted
IoT-systems-related businesses by the end of this fiscal year.
B) Human resources development
To assure counteractions against cyber attacks that have become moresophisticated along with spreading and aggravating cybersecurity risks and rapid
technological innovation, it is a pressing task to develop cybersecurity humanresources capable of supporting such security assurance. The Government will
work to expand education for programing and information morality from theelementary and secondary education levels. As for higher education, theGovernment will make efforts for: network building for participatory education
at universities and other institutions; the promotion of cybersecurity education
programs at national colleges of technology; practical cybersecurity education incollaboration with industries. Furthermore, the Government will introduce
security management examinations to foster managers of security measures for70

business management at enterprises and other entities.
In addition, the Government will enhance the development of highly advanced
practical personnel in view of the Games of the XXXII Olympiad and the Tokyo
2020 Paralympic Games. To this end, the Government will work to: promote
close coordination and information sharing among industries, academia, and the
public sector to build organizational frameworks for their cooperation; create acloud environment for practical cyber training environment; support
industries-academia-public partnerships for the joint development of practicaleducational materials; improve examination systems to timely and appropriately
evaluate practical competencies of cybersecurity workforce in public and private
coordination; and promote the development and utilization of online materials
for every citizen’s self-motivated cybersecurity learning. To promote humanresources development measures, including those mentioned above, theGovernment will establish “Comprehensive policy for enhancing cybersecurity
human resources development” (tentative) during this fiscal year.

71

[5]

Strengthening countermeasures against cyber-crime
Ensuring security and safety in utilization of IT at national and private
corporations, etc. is a prerequisite for consolidating Japan’s growth strategy, andthe strengthening of countermeasures against cyber-crime(s) that threaten thisendeavor is an urgent problem that public and private sectors should cooperate
and work on.
Therefore this, the Government will promote necessary efforts so thatappropriate measures will be implemented, according to laws, etc., regarding thebusiness activities of private corporations such as cyber-related enterprises andbusiness operators dealing with critical infrastructure and other social
infrastructure, in order to secure follow-up traceability important not only forcriminal investigations but also for enhancing security measures of private
corporations.
Secondly, responses to threats will be accurately promoted improving
information gathering and analysis functions through the enhancement of internet
observation activities, improving and strengthening investigative skills through a
training that utilizes private-sectors’ knowledge. At the same time, by promoting
technical cooperation with the private corporations of cyber-related enterprises,
etc. and by placing efforts in strengthening technical bases for analyzing malware,
etc. the Government will take accurate countermeasures against cyber threats.
Collectively, the exchanging of personnel and information between public andprivate sectors will be actively promoted, and information contributing to damage
prevention, etc. obtained through analyses and countermeasures will be
accumulated and shared entirely, and the response capabilities of society as awhole will be strengthened.

ii)

Utilizing the My Number system under the premise of security
and safety

The scope for which the My Number system, which will be introduced from October
this year, is used and applied will be expanded, etc. while accommodating thestrengthening and pace of security measures stated in i) above.

[1]

Expanding the scope of use and application of My Number
Within the fields the Government has considered regarding the approaches,
advantages, issues, etc. to the use of My Number, inquiries regarding family
register-related operations will be made to the Ministry of Justice’s Legislative
Council aiming for some time after February next year. This will be conducted by72

study groups comprised of intellectuals that are established for making
considerations in conjunction with how systems should be, etc. in order to process
family register-related operations. These study groups will identify necessary
issues, promote separate and detailed examinations for arrangements, etc., andtake measures within necessary legislation aiming for the ordinary Diet session in2019.
As for Passport affairs, studies will be made based on the progress in the issue
of application of My Number to family register affairs, and legislative measures
will be taken as necessary aiming for the ordinary Diet session in
2019Furthermore, in addition to operations relating to the management of
information on Japanese nationals residing abroad, such as residence reports,
considerations will also be made regarding the approaches, advantages, issues, etc.
to the use of My Number and will be centered around operations of a highly
public nature in the field of securities, etc. Based on these results, measures will
be taken within necessary legislation, or other necessary measures, aiming for theordinary Diet session in 2019.

[2]

Promoting the popularization of My Number cards as well as their use
and application
The integration of My Number cards with government official identification
will be promoted from January next year. At the same time, consideration will begiven towards using My Number cards as employee ID cards for private
corporations as well as local governments, independent administrative institutions,
national university corporations, etc. Furthermore, consideration will be madewith private business operators towards the use of My Number cards as cash cards,
debit cards and credit cards from FY2017, and the realization of accessing My
Number Portal Sites from ATMs, etc., under the premise that the protection of
personal information and the prevention of financial crime, etc. is sufficiently
secured.
In addition, in regard to public personal authentication functions for My
Number cards, necessary technological developments and consultations withrelated personnel will be conducted in order to achieve applications readable
through smartphones within 2017, and downloading user authentication functions
to smartphones within 2019.
For motor vehicle inspection and registration, systems that can be jointly usedby all Japanese prefectures will be constructed and tailored to the drastic
expansion of One-Stop Services in FY2017, and submission of documents will be
rationalized, etc. by taking necessary institutional measures.
Furthermore, in order to diversify services provided by My Number cards,

73

efforts to increase the total population of administering organizations to over
60,000,000 people will be made aiming for some time within next fiscal year for
convenience stores issuing resident cards, seal registration certificates and official
copies of family registers, etc. which use My Number cards. Moreover, theGovernment will consider issuing My Number cards to Japanese nationals who do
not possess resident cards, and services such as the continued use of publicpersonal authentication functions after being transferred overseas, with an aim tostart some time during FY2019.

[3]

Confirmation of public qualifications through the use of My Number
cards
The Government will develop an online qualification confirmation system for
medical insurance at an early stage sometime after July 2017. Along with enabling
the use of My Number cards as health insurance cards, My Number cards will also
be integrated with other various cards published by administrators such as seal
registrant identification cards etc.
In addition, considerations will be made including the feasibility of placing
various public qualification confirmation functions from various licenses into My
Number cards, and these efforts will be realized in the order of items that are
possible.

[4]

The provision of one-stop services using My Number Portal Sites
The public personal authentication functions of My Number cards will be used
to establish structures created through cooperation between public and private
sectors, and the submission of public and private sector identification papers using
electronic post-office box systems, one-stop services related to moving, death, etc.,
and a diverse range of access to electronic administrative procedures using
televisions, smartphones, etc. will be realized sequentially in accordance with thestart of My Number Portal Sites operation in January 2017.

[5]

Increasing the efficiency of public and private sector government
procurement operations using My Number cards and corporate ID
numbers
The Government will carry out considerations towards creating systems andtaking institutional measures that enable persons delegated by the presidents of acompanies to carry out electronic applications and contracts, etc. without
documentation or meeting face-to-face. By using My Number cards and corporate
ID numbers, the coherent digitization of government procurement-related
operations from screening bidding participation qualifications to contracts will be74

successively initialized from FY2017.
In addition, by sharing information on bidding qualifications and procurements
between national and local governments, and facilitating the acquisition of
procurement information, the use of the above-mentioned systems will be
successively enabled in local government offices from FY2017 in order topromote entry through private business operators.

[6]

Provision of highly convenient electronic administrative services in thefields of pension and tax, improving the collection of insurance
premiums, and increasing administrative efficiency
The “Action Program on Improving, etc. the Convenience of Insurance
Premiums and Taxes by Using, etc. the My Number System” (a team created toconsider strengthening, etc. the June 22, 2015 pension insurance premium
collection system) will be steadily implemented in order to improve theconvenience of citizens and promote the use of the My Number system.
Specifically, a one-stop type service will be provided which can consolidate andhandle various administrative procedures relating to pension, national tax, local
tax, etc. based on the start of My Number Portal Sites services combining national
and local procedures. At the same time, efforts will be made to introduce one-click
exemption applications, and simplify, etc. reporting procedures for medical
expense deductions which use medical expense notifications to My Portal Sites.
Moreover, from the perspective of improving convenience for corporations, theformat of data and the styles of salary payment reports and tax certificate slips
will be standardized in line with when My Number starts to be used, and efforts
will be made to create, etc. structures that make collective creation andsubmission possible.

iii)

System development geared towards the smooth circulation of
information and the promotion of business model reforms, etc.
The foundations for using and applying IT continue to be prepared throughreviews, etc. on laws concerning the initial operation of the My Number systemand personal data. In the midst of this, in order to enable citizens to actually feelthe true richness, convenience, safety and security of using and applying IT intheir daily lives and economic activities, the Government will switch conventional
principles regarding meetings and documentation and make the securing ofelectromagnetic processing and highly distributable information, etc. fundamental
principles. The Government will also conduct considerations regarding thefollowing items, and will take measures, etc. within necessary legislation
sequentially from the next ordinary Diet session.

75

- Establishing “Agency Service Institutions” (tentative name) that will bear the-task of circulating safe and reliable information
Increasing the number of one-stop services and the digitization of applications,etc. in response to various life events using the My Number system, etc.
Further shifting application procedures, etc., regulated in individual laws andordinances, online
Promoting corporations’ cyber security management
Developing environments that promote company challenges which create new
business models using data
Vitalizing new markets such as the “Sharing Economy,” etc.

iv) Further promoting the use and application of IT[1] Promoting the use and application of IT contributing to regional
revitalization issues
Based on the effective implementation of policies for IT needed by local
government authorities to formulate and administer “Regional Comprehensive
Strategies” and “IT utilization plan for regional revitalization” (decided upon by
the IT Strategic Headquarters on June 30, 2015) which determined Japan’s
support policies, the Government will encourage industry revitalization and job
creation by promoting the use and application of IT, and will place efforts in areas
such as: support for IT personnel by temporarily placing successful andexperienced personnel and personnel from the Government CIO, etc. in local
government offices, etc.; support for venture companies and SMEs by using
regional service innovation cloud computing, etc., discovering and developing
regional entrepreneurial talent, and establishing regional IT startup funds;
promoting the flow of companies and employment to local regions by promoting
Furusato Telework; and reforms, etc. on working methods so women and elderly
people, etc. can play active roles in the work place.
In addition, greater emphasis based on the range and business characteristics ofbeneficiaries will be placed on fields obtaining tangible results or fields expected
to become more popular in the future (such as wildlife damage control, forestry,
and the use and application of My Number cards) within results (success models,)
etc. obtained from the ICT community development demonstration project. The
Government will aim to autonomously expand the dissemination of successmodels to more than 100 local authorities (including those achieved by internal
revenue sources) by FY2020 by promoting the creation of autonomous andsustained business operations (commercialization) while participation as a country
is sequentially reduced based on the status of expanding dissemination.

76

[2]

Promoting the aggressive use of IT in corporations [described above][3]

Promoting the use and application of IT through SMEs and local small
enterprises, etc.
The use and application of broadband network and cloud service IT, etc. will bepromoted in SMEs and small enterprises, etc. through cooperative structures withparticipation from networks comprised of regional IT consultant personnel and
SME support organizations, cloud service providers aiming to be developed thisyear, and broadband providers, etc.

[4]

Promoting IT and conducting operational reforms in national and local
administrations
In order to promote economic growth by realizing administrations that are bothbeneficial to citizens and highly convenient, the promotion of IT and operational
reforms in national and local administrations will be promoted mainly in the
Deputy Chief Cabinet Secretary for Information Technology Policy based on the“first report submitted by the National and Local IT and BPR Promotion Team at
the eGovernment Ministerial Meeting” (June 29, 2015 National and Local IT and
BPR Promotion Team).
Specifically, online reforms of administrative services such as considerations
for childcare one-stop services using the My Number system will be promoted
after the operation of local information provider network systems is initiated inJuly 2017. In addition, operational reforms geared towards saving labor andincreasing the efficiency of each ministry’s individual operations, and improving
administrative services, etc. will be promoted, and efforts will be made to increase
the efficiency of government affairs while reducing operational costs related togovernment information systems.
Along with promoting reforms for the information systems of local authorities,
the cost of relevant information systems will be reduced in organizations that have
not yet implemented local government cloud computing services by accelerating
efforts to introduce those services while improving the sharing andstandardization of operations. In addition, even if local government organizations
have already implemented those services, efforts will be made to further improve
the quality of cloud computing services such as by expanding the range of
operations for promoting cloud computing by further improving the sharing andstandardization of operations. By doing this, the operational cost of local
governments’ information systems will be reduced (by 30%,) and considerations
regarding policies for further cost reductions and improving quality will be madein order to reach a conclusion by summer next year.

77

[5]

Strengthening competitiveness through structural reforms in the IT
industry
The IT industry was originally a labor intensive industry that wrote work
processes from top to bottom using computer programming. However,general-purpose package software and cloud computing services, etc. have also
been appearing in recent years, and since operations have become more efficientand from the fact that IT’s role continues to shift from reducing costs to creating
added value, the provision and proposal of creative systems is transforming the IT
industry into a knowledge and ability-intensive industry in Western countries.
Also, the appearance of mobile system development techniques that are said tobe agile, and the increasing number of security risks that occurred in response to
the speed of business reforms have now lead to a need for sophisticatedmanagement capabilities in system development and administration.
However, even now there are still deep-rooted business models that remain in
Japan’s IT industry that deliver products after conducting programing operations
according to specified requirements, and it is for this reason that Japan cannot
escape from its custom of wholly delegating subcontracts to reduce labor costs
and depending on structures that utilize multiple subcontracts. This has led tostructures with high security risks and low productivity.
In order to escape from this situation, there is a need to prevent wholly
delegating subcontracts and to promote measures that appropriately evaluateabilities, results, risks, etc. From this perspective, reviews will be conductedwithin this fiscal year on the IT industry fields of the “Guideline for Promoting
Subcontracting Transactions, Etc.” which explains concepts such as theapplication of laws such as the Act against Delay in Payment of Subcontract
Proceeds, Etc. to Subcontractors (the Subcontracting Act) and othersubcontracting transactions, and together with this transactions that violate theSubcontracting Act will also be strictly dealt with.
Moreover, responsibilities in the security management of the information
system’s ordering party will be clarified within the guidelines created this fiscal
year on ensuring cyber security, and efforts will be made to prevent wholly
delegating subcontracts.

[6]

Developing environments for using personal data
The Government will take measures within necessary legislation aiming for the
next Diet session regarding the handling, etc. of anonymously processed personal
data in incorporated administrative agencies, etc. in order for data possessed bythose agencies, etc. to be used and applied appropriately.

78

Together with the use of anonymously processed information introduced in the
Revised Personal Information Protection Act submitted in this year’s ordinary
Diet session, the Government will strengthen the structures of the Personal
Information Protection Committee which supervises the appropriate operation ofthat information.
For example, a wide variety of personal data in fields such as medical andhealth care are accumulated and managed based on consent from each individual,
and in order to improve, etc. the quality of several services provided by various
service providers and research institutes, the Government will take measures, etc.
within necessary legislation aiming for the next Diet session to consider
establishing Agency Service Institutions (tentative name) and at the same timeallow for the simplification of data collection procedures.

[7]

Thoroughly promoting ICT in the fields of medical and nursing care
[described below](Described in “II. Strategic Market Creation Plan” “Theme 1: Extending thenation’s healthy life expectancy”)[8]

The use and application of open data
The Government will work together with private organizations and begin
collecting and delivering “Open Data 100,” a collection of business andproblem-solving use cases, from this fiscal year in order to discover and provide
success cases, and plan for development into other regions and business fields inan effort towards creating new industries and services by using and applying open
data. In addition, the Government will aim to create scheme by next fiscal yearthat support the mission and dispatchment activities of “open data missionaries”
who preach about methods, know-how, etc. on the release, analysis, use andapplication of open data pertaining to the public institutions and private
corporations of local governments, etc. At the same time, the human developmentwith excellent data science capabilities will be promoted, such as expanding
MOOC (Massive Open Online Courses) “data science online courses” whereanyone can participate online.
In addition to this, in order to further advance open data in official statistical
data, the Government will conduct considerations this fiscal year on the format ofprovided statistical data and how that data is provided. The Government will also
conduct detailed analyses this fiscal year on data utilization methods with users inresearch fields such as university-related personnel, etc, and model businesses ofopen data regarding LOD (Linked Open Data), etc. which aims to identify and79

organize issues. Based on the results of considerations and the performance ofbusiness models, the Government will provide data for LOD, etc. and formulatemanuals from next fiscal year.
Furthermore, in order to promote open data initiatives in local governments, theGovernment will create system that are cross-searchable from Japan’s datacatalogue site (DATA.GO.JP) in next fiscal year, including a public cloud that will
gather and release data possessed by local governments.
Moreover, from the perspective of supporting the overseas development ofJapan’s corporations, etc. the Government will develop packages of applications,systems and know-how on the release, use and application of open data, etc. inorder to promote the use and application of public data in private sectors, andprivate sector access to public data pertaining to overseas countries where no
progress has been made to opening data possessed by their country. The
Government will target Asian countries, etc. and will begin development fromnext fiscal year starting from the countries where Japanese corporations are
conducting business development (around 10 countries.)[9]Creating IoT promotion structures to promote ICT in society as awhole
By collecting vast amounts of information in real-time from IoT and analyzing
big data, etc. using artificial intelligence, the Government will establish the Smart
IoT Promotion Council (tentative name) as a structure for promoting theverificationof,anddeveloping
IoT
technology
throughindustry-academic-government partnerships consisting of private corporations,
universities, and standard-setting organizations, etc. This will be in an effort topromote a wide range of advanced social demonstrations, and establish common
ICT platform technologies, etc. that enable the secure and highly precise
management of ICT systems used in many applications including autonomousvehicles and small unmanned machinery. The Government will establish
necessary technologies by FY2018 and further promote social demonstrations.

[10] Promoting education in programing for young people
The development of information literacy is needed in an IoT-type future society.
Based on the fact that the introduction of programing education is being promoted
from elementary and secondary education stages in overseas countries, theGovernment will create instruction manuals regarding programing education atelementary, junior-high, and high schools within this fiscal year, using theoutcomes of leading practice thus far at school, private corporations, and NPOs,
etc. In the following fiscal year, the Government will promote their use on the80frontlines of education. At the same time, the Government will begin to develop asystematic instruction model about the education of information literacy including
programing, and to train supporting staff in order to promote the smooth use andapplication of ICT in school education.
Along with this, the Government will create systems which promote thepopularization of programing education conducted by local governments, NPOs,
private corporations and universities, etc. in order to expand initiatives promoting
programing education and the range of those initiatives. After doing so, theGovernment will support initiatives towards programing education conducted by
local governments, etc. and draw up guidelines within next fiscal year. Moreover,the Government will begin initiatives that support programing education utilizing
sophisticated language in FY2017, and try to realize systematic programing
education.

[11] Digitization of textbooks
Based on the progression of informatization in education, the increasing needfor deep learning from the perspective of “active learning”, proactive andcooperative learning towards uncovering and solving issues, etc., and the various
proposals, regarding considerations on the positioning of “digital textbooks” etc.,
the Government will conduct technically consider and consequently reach aconclusion on the positioning of so-called “digital textbooks” and how relevant
textbook systems should be sometime next year.

[12] Promotion of participation by foreign personnel in IT fields [describedabove]v)

The development of telecommunication environments to support
future societies[1] Realizing the expansion of frequency bands used for mobile
communication systems in an effort to increase demand and provide
new services
In order to respond to increasing demands, etc. in radio frequencies for the2020 Tokyo Olympics/Paralympics and the sophistication of smartphones, theGovernment will consider developing technology for sharing, etc. radio
frequencies, shifting public radio frequencies for business use, and sharing
frequencies. The expansion of frequency bands used for mobile communication
systems will be realized by FY2018.
Considerations will be conducted in the Information and Communications
Council regarding the expansion of frequency bands which can be used in new81

radio communication systems especially for IoT and small unmanned machinery,etc., and a conclusion will be obtained sometime this fiscal year.

[2]

Promoting competition and developing use environments in mobile
communication fields
Regarding period restrictions for cellular phones and automatically renewing
contracts, the Government will make efforts sometime this year to promote therealization of extending periods when contracts are cancellable without having to
pay contract cancellation fees to major cell-phone companies, and push-type
notifications on the month when contracts are renewed. This will be done in aneffort to develop use environments and promote competition in mobile
communication fields. In addition to these initiatives, the Government will also
conduct considerations on how period restrictions and automatically renewing
contracts should be, and will reach a conclusion sometime this year.
The Government will also create an environment where users can immediately
use MVNO services. This will be achieved by successfully accelerating transfer
procedures to MVNO using the portability of cellphone numbers sometime thisfiscal year.
Furthermore, in order to help improve customer convenience by providing
various inexpensive but rich services such as selling SIM cards for foreigners
visiting Japan to attend the 2020 Tokyo Olympics/Paralympics, and M2M services
for the age of IoT, etc., the Government will promote discussions between
companies regarding the liberalization of mobile network functions including thepossession and operation of member management functions through MVNO, andcontinue making considerations while referring to the status of systems andoperations regarding MVNO in major developed countries.

[3]

Promoting the development of free public wireless LAN environments
throughout Japan
In order to invigorate Japan’s tourism industry through invitations to regions
where foreigners go to visit Japan, and in order to secure means for citizens togather information and communicate with one another in times of disaster andpromote investments through the creation of new innovations, the Government
will promote the use of locations, where private companies provide their services,by sharing, etc. advanced cases using the promotion systems of public-private
partnerships consisting of concerned business operators, organizations, etc. in
local governments, etc. At the same time, support towards local governments, etc.
will be further strengthened, and the development of free public wireless LAN
environments in major sightseeing and disaster prevention sites will be promoted82

with an eye towards 2020.
Moreover, as a measure against foreigners coming to visit Japan, thedevelopment of free public wireless LAN environments will proceed incooperation with initiatives based on the “SAQ2 JAPAN Project.” Theenhancement of communication support between visitors and Japanese will
cooperate with initiatives based on “Global Communication Plan,” and the latest
multilingual speech translation system will be actively utilized in tourist
information centers and transportation facilities, etc.

[4]Developing 4K and 8K technologies
In order to secure new transmission lines to increase the number of TV
channels, necessary systems such as technological demonstrations and frequency
allocations will be developed by FY2017, and broadcasting for practical use insatellite broadcasting will be realized by 2018.
Furthermore, in order to use these technologies in the fields of medical care andeducation, and improve the quality of telemedicine services and remote learning,
the Government will flesh out policies for its use and application sometime thisfiscal year, and establish necessary technologies some time next fiscal year.

83

5.

Further strengthening Japan’s international competitiveness as abusiness hub

5-1.

Realizing National Strategic Special Zones / Opening up rights to operate
public facilities, etc. to the private sector (expanding utilization of PPP/PFI)/ Improving infrastructure such as airports, ports and harbors / Improving
competitiveness of cities(1) Progress in achieving KPIs
<KPI> Japan in the top three OECD member countries in the World Bank’s Easeof Doing Business ranking by 2020 (19th in 2014)
2015: 19th (same as the previous year)* There was no major change in evaluation of each category, and thus Japan held
the same position as in the previous year.
* Due to change of the ranking method, the 2014 ranking of Japan was revised
from 15th to 19th.
<KPI> Tokyo in the top three of Global Power City Index by 2020 (4th in 2012)2014: Tokyo was 4th (same as the previous year)* In the category of “Cultural Interaction,” Tokyo jumped from 8th to 6th, thanks to
the improvement of an index due to the number of visitors from other countries,
etc. In the category of “Livability,” the ranking improved from 20th to 17th since
the score for the unemployment rate increased. On the other hand, the category“Environment” saw Tokyo fall from 1st to 9th because the data collection method
was changed. In the overall ranking, Tokyo reduced the score gap with Paris, the3rd place city, two years in a row but remained in the same position as in theprevious year.
<KPI> Expand PPP/PFI programs to ¥12 trillion over the next 10 years (2013–2022) (¥4.2 trillion by FY2012 (values effective as of March 2014)). Of this,the target of implementing ¥2–3 trillion worth of concession PFI projects
over the 10 years to 2022 was brought forward to the intensive
implementation period designated to run until the end of FY2016.
 PPP/PFI programs in FY2013 were worth 228.9 billion yen (as of May 2015).
* For Sendai Airport, a concession PFI project, procedure concerning public
solicitation of businesses started in June. The same procedure started in lastNovember for Kansai International Airport and Osaka International Airport. The
projects are scheduled to be launched in the respective airports by the end of thisfiscal year.

84

<KPI> Double foreign companies’ direct investment in Japan to ¥35 trillion by2020 (¥19.2 trillion as of the end of 2012) As of the end of 2014: ¥23.3 trillion(2) Progress made in implementing measures(Progress and current status of the National Strategic Special Zones)- With regard to the National Strategic Special Zones that are to serve as the gateway forbold regulatory reforms, based on the Act on National Strategic Special Zones passed
in December 2013, six specific zones were designated in May last year including theTokyo zone (nine wards in the Tokyo Metropolitan area, Kanagawa Prefecture, andNarita City in Chiba Prefecture), the Kansai zone (Osaka Prefecture, Hyogo Prefecture,
Kyoto Prefecture), the Niigata City zone in Niigata Prefecture, the Yabu City zone in
Hyogo Prefecture, the Fukuoka City zone in Fukuoka Prefecture, and the Okinawa
Prefecture zone. This was followed by the launch of Zone Councils first in the Kansai
zone and the Fukuoka City zone in June the same year and in all the other zones by
October. Zone Councils had total 17 meetings during the period of a year to date.
- As well, starting from January last year, the National Strategic Special Zone Advisory
Council, the control tower of this system as a whole, frequently held a meeting in total
14 times, through which as many as 68 projects so far, which took advantage ofcurrent regulatory reform in a variety of areas including medical care, employment,
urban regeneration and development, agriculture, and utilization of historic buildings,
were granted authorization from the Prime Minister.
- The “Tokyo One-stop Business Establishment Center,” first of its kind in Japan,
was founded which would provide consultation and assistance with various
application procedures for foreign-affiliated companies and venture businesses
which wished to open a business.
- An “Employment Consultation Center” was established in the Tokyo, Kansai, andFukuoka City zones respectively, where lawyers would provide advice for free ofcharge with an aim to make employment rules known and prevent individuallabor-related disputes, in addition to the areas of medical care (special measures on
the combination of insured and uninsured healthcare services, regulations on thenumber of beds, etc.), urban regeneration and development (special measures on the
Urban Reconstruction Act and the Road Act).
- In Niigata City and Yabu City zones, agricultural reform was made as in special
provisions related to division of clerical work between the agricultural committee
and the local government, and easing qualifications for officials of agricultural
production corporations, etc.
As seen in the above specific examples, the following projects which would beconsidered as the results of regulatory reform have been promptly implemented in a85

visible manner.
[1] The Tokyo zone (the base for international business and innovation)
Number of authorized projects: 27
Date of authorization of Zone Plans: December 19, 2014, March 19, June 29,2015- Special provisions of the Act on Special Measures concerning Urban
Reconstruction (one project)- Special provisions of the City Planning Act (five projects)- Special provisions of the Road Act concerning the area management (fourprojects)- Special provisions related to the combination of insured and uninsured-

healthcare services (six projects)
Special provisions of the Medical Care Act concerning the regulations on thenumber of beds (six projects)
Lifting the ban on practice by foreign medical doctors based on a bilateralagreement (three projects)
Employment Consultation Center (one project)
One-stop Business Establishment Center (one project)[2] The Kansai zone (the base for medical care and other innovation, assistance for
Challenge Human Resources)
Number of authorized projects: 8
Date of authorization of Zone Plans: September 30, December 19, 2014, March
19, 2015- Special provisions related to the combination of insured and uninsured
healthcare services (three projects)- Special provisions of the Medical Care Act concerning the regulations on thenumber of beds (one project)- Special provisions of the Road Act concerning the area management (oneproject)- Special provisions of the Ordinance for Enforcement of the Hotel Business
Law concerning historic buildings, etc. (one project)- Special provisions of taxation concerning investment in facilities (one project)- Employment Consultation Center (one project)86[3] The Niigata City zone (the reform base for large-scale agriculture)
Number of authorized projects: 14
Date of authorization of Zone Plans: December 19, 2014,
June 29, 2015
- Special provisions of the Agricultural Land Act, etc. concerning agricultural
production corporations (seven projects)- Special provisions concerning the division of clerical work between the
agricultural committee and municipalities (one project)- Special provisions concerning establishment of farmer-operated restaurants(four projects)- Application of the credit guarantee program to farming (one project)- Employment Consultation Center (one project)[4] The Yabu City zone (the reform base for agriculture in the semi-mountainous
area)
Number of authorized projects: 11
Date of authorization of Zone Plans: September 9, 2014,
January 27, 2015
- Special provisions concerning the division of clerical work between the
agricultural committee and municipalities (one project)- Special provisions of the Agricultural Land Act, etc. concerning agricultural
production corporations (eight projects)- Application of the credit guarantee program to agriculture (one project)- Special provisions of the Ordinance for Enforcement of the Hotel Business
Law concerning historic buildings, etc. (one project)[5] The Fukuoka City zone (the reform base for employment for startups)
Number of authorized projects: 6
Date of authorization of Zone Plans: September 9, September 30, 2014, June 29,2015- Special provisions of the Road Act concerning the area management (fourprojects)- Special provisions of the Medical Care Act concerning the regulations on thenumber of beds (one project)- Employment Consultation Center (one project)[6] The Okinawa Prefecture zone (the base for international tourism)
Number of authorized projects: 2
Date of authorization of Zone Plans: June 29, 201587

- Special provisions of the Road Act concerning the area management (twoprojects)- In October last year, a bill for the revision of the Act on National Strategic Special
Zones was submitted to an extraordinary session of the Diet, which would establish
new special measures concerning regulations in a variety of areas including education,
medical care, employment, childcare, and promotion of acceptance of foreign humanresources, based on proposals made by Zone Councils and collected from the public inaddition to regulatory reform included in “The Japan Revitalization Strategy, revised
2014”. Although the bill was shelved and discarded, another bill which included more
special measures concerning regulations was submitted to the Diet in April this year.
- As well, in March this year, the National Strategic Special Zone Advisory Council
decided that the following three regions would be designated as “Regional Vitalization
Special Zones,” the secondary designation of the National Strategic Special Zones,
with an aim to realize local revitalization through regulatory reform, provide
comprehensive assistance to highly-motivated municipalities through simplification ofprocedures and dispatch of experts, and demonstrate “near future technology” such as
remote medical care and small drones:- The Semboku City zone in Akita Prefecture as the center for reform of “agriculture
and forestry / medical care”- The Sendai City zone in Miyagi Prefecture as the center for reform on “women’s
active social participation and start-ups”- The Aichi Prefecture zone as the center for general reform for education,
employment, agriculture, etc. for “fostering industry leaders”(Efforts during the intensive implementation period for utilization of
PPP/PFI)- With regard to the Sendai Airport, the public solicitation procedure for businesses wasstarted by the publication of the Implementation Policy on the Qualified Project Etc.
for Sendai Airport Operation in April, followed by announcement of guidelines forapplication in June last year. For the Kansai International Airport and the Osaka
International Airport, Implementation Policy on the Qualified Project Etc. for Airport
Operation of Kansai International Airport and Osaka International Airport was
published in July last year and application guidelines were announced in November
the same year, thereby the public solicitation procedure for businesses was begun.
Efforts are being made for these three airports ahead of other projects.
- A bill for the revision of the Act on Promotion of Private Finance Initiative wassubmitted to the Diet in March this year, which aimed to facilitate establishingmeasures to institute a system to realize resignation dispatch of government employees

88who had technical knowhow, etc. for smooth and efficient implementation ofconcession projects.
- With regard to tax treatment concerning replacement investment, etc. in concession
projects, handling by concessionaires such as treating as deferred assets was madeclear based on the implementation policy (draft) announced by Osaka City inNovember last year.
- In June last year, the Ministry of Internal Affairs and Communication issued anotification concerning the designated administrator system and handling of public
enterprises under the concession system. This was followed by the issuance of a
notification by the Ministry of Land, Infrastructure, Transport and Tourism in August
last year, with regard to handling of the designated administrator system concerning
implementation of qualified projects of local government administration airports inaccordance with the Act on the Private Sector Operation of Government-managed
Airports, etc.
- A bill for the revision of the Act on Special Districts for Structural Reform, which
would enable the private sector to operate toll roads managed by public companies,
was submitted to the Diet in April this year.
- While the Government provides physical and financial support in the areas of airports,
water supply and sewerage systems, etc. with regard to the burden involved in
preparatory work carried out by local government for concession projects, it also
started to take special subsidy tax measures from this fiscal year for the burden on
local governments concerning inspection and other preparatory work ahead of
introduction of concession projects carried out by local governments with a statesubsidy.
- The Government has requested (with a notification by the Minister of Internal Affairs
and Communications, January this year) all the local governments to produce financial
statements, etc. in accordance with a unified standard which requires maintenance of
fixed assets ledgers in three years, as a rule. At the moment, the Government is also
driving development by announcing manuals and implementing special subsidy tax
measures.
- The Government has requested (with a notification by the Minister of Internal Affairs
and Communications, January this year) all the local governments to apply public
enterprise account to projects which have not adopted the accounting measure,especially sewerage projects and small water utilities, in five years. At the moment, theGovernment is also driving development by announcing manuals and implementing
local financing measures.
- The Government is also providing assistance to local governments through conducting
briefing sessions, taking special subsidy tax measures, etc. in order to promote
development of the overall administrative plan for public facilities, etc.

89

- The Cabinet Office strengthened its systems for promotion of concession projects, etc.

(Establishing the Basic Plan on Transport Policy to strengthen international
competitiveness)- The Basic Plan on Transport Policy in accordance with the Basic Act on Transport
Policy, which prescribed the basic framework for comprehensive transport policy, wasapproved in a Cabinet meeting in February this year. Based on the Plan, theGovernment is aiming to enhance international competitiveness of Japan by promoting
a variety of measures to strengthen functions of the industrial infrastructure.

(Enhancing competitiveness of cities)- Completion of about forty large-scale, superior urban development projects by theprivate sector which were authorized by the Minister of Land, Infrastructure andTransportation is targeted by FY2020, of which six projects were finished in the last
fiscal year.
- The Government strengthened financial support to businesses which would facilitate
enhancement of international competitiveness based on the Revised Act on Special
Measures concerning Urban Reconstruction which was enforced in August last year.
As well, special provisions for taxation to vigorously push forward large-scale,superior urban development projects by the private sector based on the Act on Special
Measures concerning Taxation have been extended for two years until March 2017.

(Enhancing functions of the industrial infrastructure)- The Government established the council for enhancement of functions of the airports
in the Tokyo Metropolitan area participated by relevant local governments, etc. inAugust last year, where paramount importance is placed on efforts to increase theHaneda Airport’s annual slots for arrival and departure by about 80,000 by the 2020
Tokyo Olympics and Paralympics and, to this end, discussion has been held on ways
to enhance functions such as revising flight paths to and from the Airport.
- In order to enhance the international competitiveness of the Port of Yokohama, its
compulsory pilotage will be relaxed starting from August this year based on the
conclusion reached in August last year that it should be relaxed to 10,000 tons (fromcurrent 3,000 tons) (except for vessels carrying a dangerous cargo). In October lastyear, Kobe-Osaka International Port Corporation was established from businessintegration of special port operating companies in the Hanshin Port. In December thesame year, the Government invested in the company, through which a system ofcooperation among the Government, the port management body, and the privatecompany was established.
- In March this year, the Central Circular Route inaugurated full services in the whole90route, which became the first of the three Circular Routes in the Greater Tokyo area.
As seen in this case, the development of circular routes in the three metropolitan areas
is underway and stimulating investment from the public sector in the form of increased
shipment of manufactured goods and the siting of large-scale distribution facilities.

(Promoting the formation of compact cities with public transport networks)- With regard to the siting adjustment plan system based on the Act on Special Measuresconcerning Urban Reconstruction, and local public transport network development
plans based on the Act on Revitalization and Rehabilitation of Local Public
Transportation System, the Government is conducting activities to make them widely
known and has established the “support team to form compact cities” participated byrelevant ministries and agencies since March this year. The team has organized
briefing sessions for local governments and bloc-by-bloc conferences, and thus
provided cross-departmental assistance to efforts by local governments.
- In order to provide assistance to projects aiming to reconstruct a local public transport
network, a bill to revise the Act on Revitalization and Rehabilitation of Local Public
Transportation Systems and the Act on the Japan Railway Construction, Transport andTechnology Agency, Independent Administrative Agency was passed in May this year.

(3) Specific new measures to be takeni)Corporate tax reform
We will strengthen Japan’s locational attractiveness and enhance competitiveness ofJapanese companies. In this context, we aim to reduce the effective corporate tax rate to
the internationally-comparable level and complete growth-oriented corporate tax reformthat we are promoting as soon as possible.
Accordingly, in the tax revision of FY2016, the Government will aim to further
decrease the tax rate of the same year. The Government will aim to continue its efforts
for tax reform afterwards to reduce the percentage level of the effective corporate tax
rate down to the twenties in several years.
As regards the revenue sources to fund such rate reduction, including the fact that theJapanese economy is pulling out of the deflation and showing structural improvements,
in order to be consistent with “The Plan to Advance Economic and Fiscal
Revitalization”, permanent revenues will be secured through such measures as
broadening the tax base and so forth.
In light of the need to achieve the fiscal consolidation target set in “The Plan to
Advance Economic and Fiscal Revitalization”, we will proceed with the implementationof the tax reform while checking the progress towards the target.

91

ii)

Accelerated promotion of National Strategic Special Zones in therest of the period of intensive initiatives

In order to take advantage of National Strategic Special Zones and open the way toreform of the bedrock of Japan’s regulatory regime in general during the period of
intensive initiatives which will terminate in the end of this fiscal year, it is essential torealize a bold regulatory reform more quickly during the time left, less than a year, inconsideration of the “Timetable for Reforms of the Bedrock of Japan’s Regulatory
Regime (Priority Issues and Schedule)” presented in the 8th and 11th National StrategicSpecial Zone Advisory Council.
To this end, it is necessary to further accelerate various initiatives concerning the
National Strategic Special Zones, including the following measures, thereby ensuring aflexible and speedy response to the need for specific projects and proposals andachieving visible results.
As well, with regard to the initiatives in the six zones which received primary
designation, the Government will evaluate the reform results urgently and strictly inaccordance with the “Basic Policy on National Strategic Special Zones” (approved by
the Cabinet on February 25, 2014 and partially revised on October 7), and manage
progress through the PDCA cycle.

a) Fleshing out and implementing projects without delay, adding
designated zones, etc.
It is necessary to put into action, at the earliest possible time, specified projects
involving regulatory reforms including additional matters specified in the bill for therevision of the Act on National Strategic Special Zones in not only the six zones but
another three zones designated as Regional Vitalization Special Zones. To this end, assoon as receiving ordinance designation, these additional three zones as well need toestablish Zone Councils, develop Zone Plans, and have them authorized by the Prime
Minister. That way, specified projects will be aimed to start as early as this fall.
The designated zone of the Tokyo Metropolitan area of the Tokyo zone shall be
expanded to the whole Metropolis without delay as in the cases of the other designatedPrefectures.
As well, second designation of Regional Vitalization Special Zone (the third
designation of the National Strategic Special Zones) shall be made during this year, atthe earliest possible time, in order to further drive efforts of local governments which
are highly-motivated for local revitalization through regulatory reform, and aim tostimulate the country’s overall economy even more by promoting competition among
designated special zones, as well as demonstrate near future technology including
remote medical care, small drones, and automated driving.

92b) Implementing further regulatory reforms
In addition to proposals not adopted to date and those from the public collected byJune this year, the National Strategic Special Zone Advisory Council and the National
Strategic Special Zone Working Group will consider the following regulatory reforms
to be tackled in the National Strategic Special Zones, examining which should be
added to the Act on National Strategic Special Zones, etc. Based on these deliberations,the relevant legislative measures will be taken without delay, possibly in the next Diet
session.
In this regard, as previously done, the Government will combine these initiatives
with special measures to be introduced within the special zones, as well as regulatory
and institutional reforms to be applied nationwide, with a view to achieving reforms
either nationwide or at least within the special zones.
At the same time, the Government will, where necessary, proactively consider
regions not designated as National Strategic Special Zones and regulatory reforms thathave not yet been included, with a view to implementing them as regulatory reforms in
Special Zones for Structural Reform or Comprehensive Special Zones, or as
nationwide reforms.
Moreover, based on the Basic Policy on National Strategic Special Zones whichstates that proposals should be solicited at least twice a year, the Government will
make sure to solicit proposals from local authorities and the private sector nationwide
every year.

(Promotion of “near future technology” including remote medicalcare, small drones, etc.)[1] Special provisions to the principle of face-to-face instruction for taking
medicine by pharmacists using a videophone- Currently, pharmacists are required to provide face-to-face instruction topatients taking prescription drugs. However, in order to meet the need ofremote medical consultation, the Government will take legal measures to makean exception to the principle of face-to-face medication instruction bypharmacists and allow providing medication instruction through a videophonedemonstratively in the National Strategic Special Zones in cases where
face-to-face instruction cannot be provided because of locations such as
isolated islands or remote rural areas where medical institutions, pharmacies,
and other medical resources are not widely available.
- At the same time, the Government will take necessary measures to make it
clear that drugs can be delivered by private businesses in the said provisions.

93

[2]

Clarification of handling of remote medical consultation- The Government will promptly issue a notification to clarify that remote
medical consultation is allowed based on the doctor’s judgement in cases
where the patient is not in an isolated island or remote rural area specified in
the existing notification concerning remote medical care, or in cases where
consultation would not be one of the nine specified remote medical
consultation types, or even in first examination cases where face-to-facecontact is hard to provide, in order to meet patients’ needs of remote medical
consultation.

[3]

Introducing IT-based educational measures which connect schools, etc.
located far away from each other- The Government will conduct demonstration experiment of joint classconnecting remotely situated classrooms by utilizing IT, thereby evaluate andinspect effects and challenges, and promptly develop new rules, etc. forintroduction of such educational measures, with a view to ensure that evenchildren studying in downsized schools due to depopulation and declining birthrates can learn through friendly competition.

[4]

Realizing sound utilization of small drones- With regard to small drones which could help create a new industry in a varietyof areas including disaster monitoring, distribution, etc. and improve
convenience and quality of people’s life, the Government will develop
operation rules without delay through revising the Civil Aeronautics Act, andthen hear opinions from the private sectors whenever necessary on additional
regulatory system reforms through Zone Councils concerning the National
Strategic Special Zones, with a view to realizing sound utilization of small
drones and eventually letting them contribute to the country’s growth strategies.
And then the Government will work on regulatory system reforms necessary topromptly demonstrate the new technology by utilizing the special zone system.
Including these efforts, the Government will consistently proceed withinitiatives for necessary nationwide system reforms.

[5]

Accelerating issuance of radio station licenses related to demonstration
projects, etc. with small drones- In order to promote demonstration experiments related to utilization of small
drones in the special zones, product development by venture companies, etc.,
the Government will revise the current system of specified experimental test
stations and allow more flexible establishment of licensed area to be94

announced according to the needs, for example, of the municipality level, notthe local branch office level which is currently permitted, through making finer
adjustment so as not to generate problems of interference, etc. At the same time,even frequency bands currently widely used for Wi-Fi, etc. shall be madeavailable for utilization under a speedier procedure.

[6]

Promoting development of environment for fully automated driving- With regard to automated driving systems with near future technology which
will drive our country’s economic growth, it is necessary to conduct
demonstration experiments properly and inspect the resulting effects with aview to developing technologies to realize automated driving systems so called“Level 4 (fully automated driving)” according to the “Public-Private ITS*
Initiative/Roadmaps 2015” (decided by the IT Strategic Headquarters on June30, 2015).
*
ITS: Intelligent Transport Systems- To this end, the Government will develop environment in the special zones, etc.
to proactively and safely conduct demonstration experiments on public roads,
which is required to collect safety-related data in light of Level 4, and also
make ardent efforts to develop international standards related to automateddriving, so as to realize the world’s first social systems and structures in linewith future technological development. With regard to the disaster danger areain the region stricken by the Great East Japan Earthquake, demonstration
experiments may be conducted in places other than public roads.
- Moreover, while discussing revisions to international treaties concerning
automated driving, the Government will continue to carefully deliberate on
accident liability and drivers’ obligations as well as the Road Traffic Act inconsideration of data acquired through demonstration experiments on publicroads with a view to promptly realizing fully automated driving society.

[7]

Expanding the application area of robots for medical care
- As the social needs to use robots for medical care grow in the graying society,
the Government will take necessary measures to clarify the area where use of
medical robots which received approval for manufacture and sales as medical
equipment and are considered to be usable for non-medical purposes as well isallowed, by taking account of specific application needs so that such robots
could be widely used not only in medical institutions but also in welfare
facilities without causing misunderstanding on medical effects.

95

(Promoting medical innovation and building sustainable social
security systems)[8] Accelerating development of innovative medical equipment throughestablishing the system for Pharmaceutical Affairs Consultation on
R&D Strategy in the special zones- In order to promote development of innovative medical equipment originatingfrom Japan and powerfully push forward medical innovation based in the
National Strategic Special Zones, the Government will shorten the clinical trial
period at clinical trials core hospitals in the special zones, establish the system
for “Pharmaceutical Affairs Consultation on R&D Strategy in the special zones”
to accelerate the process from development to approval and sales, and promptly
develop structures to provide focused assistance at PMDA.
- Moreover, as a national measure, the Government will promptly develop
guidance to promote clinical development of medical devices, which classifies
clinical test results acquired all the way through approval of manufacture andsales by each medical equipment type.

[9]

More flexible application of medical insurance related to so called“16km rule” concerning a house call, etc.
- From the perspective of promoting active social participation by women, etc.,
the Government will make it clear and notify without delay accordingly that
insurance covers cases in which a house call or visiting examination is madefor a child where medical institutions are not readily available to provide
services, for example, house calls or visiting examination conducted together
with sick child day care of a visit type, even if the distance between the
medical institution and the patient’s residence exceeds 16km.
- In order to secure a system to offer medical care service at home, theGovernment will deliberate on clarification of qualifications concerning
establishment of medical institutions authorized to treat patients with healthinsurance coverage which do not have functions for receiving outpatients, andcome to a conclusion during this fiscal year.

[10] Promoting preventative healthcare business- With regard to approval by prefectures of establishment of medical institutions,they have currently adopted different standards based on which a building withmultiple structures and facilities, as in case of multiple floors, can berecognized as one medical institution. In order to promote establishment of
medical institutions offering preventative medicine, the Government will
deliberate on a clear uniform policy and issue a notification thereof without

96

delay.
- As well, with regard to a process of taking a blood sample by users themselvesin a specimen measurement lab which is not a medical institution, theGovernment will clarify cases where nurses, etc. can provide assistance tousers as non-medical act, and take necessary measures without delay
accordingly.

[11] Relaxing qualifications for domestic quality assurance managers inmanufacture and sales of medical equipment- In order to promote more companies to enter medical equipment market, theGovernment will recognize work experience not only in quality managementtasks concerning products prescribed in the Pharmaceuticals Medical
Machinery, etc. Act but also in quality management tasks concerning ISO9001
and ISO13485 and count it towards three years or more of work experience, aprerequisite for domestic quality assurance managers, in case of handling
low-risk medical equipment, and issue a notification without delay accordingly.

[12] Relaxing enrollment standards for correspondence nursing schools- In order to train nurses to improve the community healthcare system, as anational measure, the Government will deliberate on significantly shortening
required number of years of work experience as a practical nurse from current
10 years as admission standards of correspondence nursing schools, come to aconclusion during this fiscal year, and then take measures without delay.

(Realizing bold regulatory reform with local initiatives)[13] Building a new framework related to treatment of naturally
contaminated soil
- By taking into account the importance of urban regeneration and international
competitiveness through cost reduction in redevelopment projects, etc. as well
as opinions from businesses, the Government will discuss regulations on
naturally contaminated soil from the perspective of applying the minimum
regulations according to risks for human health. Without delay, theGovernment will tentatively start implementing measures executable in a shortperiod of time in the National Strategic Special Zones ahead of introducing
them nationwide, the result of which shall be applied to the national
introduction.

[14] Deliberation related to establishment of universities and departments
for training veterinarians

97

- In cases where new plans different from existing veterinarian training throughcurrent proposers have taken a definite shape, thereby specific demand in the
new area which veterinarians will work on including life science has beenclarified, and existing universities or departments cannot handle such newplans, the Government will take into account the recent trend of demand forveterinarians and make deliberation from the national standpoint during thisfiscal year.

iii)

Utilization of PPP/PFIThe concession system makes it possible to develop and operate infrastructure
effectively and efficiently in tight fiscal situation and brings the private sector large
market and opportunities to improve their international competitiveness. For this reason,
it is necessary to strengthen efforts to achieve numerical goals included in the “Policy
on Initiatives during the Intensive Implementation Period of the Action Plan toward theFundamental Reform of PPP/PFI” (decided by the Council for the Promotion of Private
Finance Initiatives on June 16, 2014).
As well, promotion of PPP/PFI is a very important measure not only to enhanceindustrial competitiveness but also to achieve fiscal soundness, and thus it is necessary
to strengthen efforts for the whole PPP/PFI project including concession systems.
From this perspective, the following efforts are to be made.

[1]

Providing incentive to strengthen promotion of PFI concession projects- With regard to the scheme using anonymous associations, etc., the Government
will organize general requirements for their establishment and continuation,
make them well known to facility managers, etc., and thereby develop businessenvironment to ensure stable pass-through.
- When local governments work on the concession system, they may subject to apartially greater burden in some business schemes, compared to cases where
they operate business by themselves. In such a case, the Government will
deliberate on assistance measures for the local government.
- In order to resolve the issues preventing a lump-sum payment of concession
fees, the Government will take into account specific business schemes by local
governments, discuss specific measures from a broad standpoint, and come to aconclusion roughly in a half year.
- With regard to the burden related to the preparatory work, etc. for theconcession system which local governments implement in the priority fields,
the Government will discuss assistance by the national and local governments
for the areas where the framework of assistance is not yet available.
- In the field of water supply, the Government will consider a measure for98

applying the existing system to the concession system to ensure that concession
projects are placed on an equal footing with existing projects.
- For the government-managed airports run under concession system, theGovernment will develop facilities while taking into account that it will earnconcession fees.
- In order to realize flexible business plans for concession facilities anddevelopment plans covering the surrounding area, the Government will
promote regulatory reform concerning concessionaires’ proposals anddevelopment plans by utilizing the special zones.
- In water projects, the Government will deliberate on measures to further
promote enhancement of infrastructure including wider coverage of watersupply based on the need to improve business efficiency from the perspectiveof promoting the concession system as well.

[2]

Strengthening efforts of the whole PPP/PFI project including
concession- In order to further promote the entire PPP/PFI project, the Government willrevise targets of project scales included in the “Action Plan Toward theFundamental Reform of PPP/PFI,” discuss specific measures to attain goals,
and come to a conclusion roughly during this fiscal year.
- With regard to public buildings such as school facilities and public housing
which generate usage fees, the Government will deliberate on the concession
system’s feasibility roughly in half a year, and while taking into accountpossibilities of opening and conducting incidental business and utilizing public
real estate, come to a conclusion regarding selection of facilities designated asa priority and establishment of numerical targets during this fiscal year.
- In response to the request from local governments and concessionaires, theCabinet Office will aim to provide a unified liaison coordinating various
ministries and agencies concerned.

iv)

Improving the competitiveness of cities and strengthening
industrial infrastructure functions

In order to strengthen Japan’s international competitiveness and drive economic
growth, the Government will aim to enhance functions of industrial infrastructure
through quickly developing and utilizing high-speed transport networks, includingarterial high-standard highways, new shinkansen high-speed train lines, and the Chuo
Shinkansen maglev line, as well as airports in the Tokyo Metropolitan area andInternational Container Hub. At the same time the Government will make efforts tomaximize stock effects of infrastructure including stimulation for private investment

99and improvement of productivity. In addition, it will implement the following measures.

[1]

Improvement of the competitiveness of cities
Aiming to realize self-reliance and multi-sourcing of energy and strengthen
disaster-prevention functions through development and improvement of densely
built-up areas, the Government will promote development of communities capableof handling advanced issues such as an aging society through joint initiatives
between the public and private sectors, while pushing forward large-scale,superior urban development projects by the private sector. As well, in order toform international business bases and communities’ core bases for business andlife, the Government will promptly upgrade the urban regeneration system withpossibilities of revising relevant laws and take assistance measures gradually,
beginning with what is possible, by the next fiscal year.
As well, the Government intends to establish a comprehensive information
system concerning real estate; develop distribution environment to promoteutilization of inspection at the time of transaction through revising the Building
Lots and Buildings Transaction Business Law, aiming at the next ordinary sessionof the Diet; and expand Japan’s secondhand housing and renovation market to 20
trillion yen by 2020 by eliminating the concern about quality through providing
assistance for realizing long-life, quality secondhand housing.

[2]

Strengthening industrial infrastructure functions
To realize enhanced functions of airports in the Tokyo Metropolitan area, theGovernment will give the highest priority to efforts towards increase of annual
arrival and departure slots in Haneda Airport by about 80,000 by 2020 by having
interactive dialogue with residents on revisions of flight paths, and developing
environmentally friendly measures. With regard to enhancement of functions after
2020, the Government will discuss various challenges including fundamental
expansion of capacity of Narita Airport with relevant local governments, etc.
While building a unified vessel traffic control for the Bay of Tokyo with apossibility of revising the Maritime Traffic Safety Act, thereby easing thecongestion of the bay, the Government will aim to develop a system which will
enable integrated operation of container terminals in three ports of Tokyo,
Kawasaki, and Yokohama as Keihinko (Port of Keihin) during this fiscal year withcooperation of the Government, the port management body, and the private sector,
through which the Keihinko’s international competitiveness will be enhanced.
As well, in order to realize fast and smooth distribution and ease traffic
congestion by maximizing stock effects of road network, the Government will
promote development of circular routes in the three metropolitan areas including100the three Circular Routes in the Greater Tokyo area while introducing a new fee
system in the Greater Tokyo area and timing it at the next fiscal year to coincidewith the near completion of the Ken-O Expressway (Metropolitan Inter-City
Expressway), thereby stimulating investment for siting for distribution facilities,
etc. from the private sector.

101

5-2.

Stimulating financial and capital markets / Management of public andquasi-public funds, etc.

(1) Progress in achieving KPIs
<KPI> Japan in the top three OECD member countries in the World Bank’s Easeof Doing Business ranking by 2020 (19th in 2014)
2015: 19th (same as the previous year)* There was no major change in evaluation of each category, and thus Japan held
the same position as in the previous year.
* Due to change of the ranking method, the 2014 ranking of Japan was revised
from 15th to 19th.
<KPI> Tokyo in the top three of Global Power Inner City Index by 2020 (4th in2012)
2014: Tokyo was 4th (same as the previous year).
* In the category of “Cultural Interaction, Tokyo jumped from 8th to 6th, thanks to
the improvement of an index due to the number of visitors from other countries,
etc. In the category of “Livability,” the ranking improved from 20th to 17th since
the score for the unemployment rate increased. On the other hand, the category“Environment” saw Tokyo fall from 1st to 9th because the data collection method
was changed. In the overall ranking, Tokyo reduced the score gap with Paris, the3rd place city, two years in a row but remained in the same position as in theprevious year.
<KPI> Double foreign companies’ direct investment in Japan to ¥35 trillion by2020 (¥19.2 trillion as of the end of 2012) As of the end of 2014: ¥23.3 trillion(2) Progress made in implementing measures(Enhancing settlement systems)- With regard to the expansion of operating hours of the Zengin System, the Japanese
Bankers Association published “On the Results of Examining the Future Shape of the
Zengin System (final report)” and decided that the Zengin System should be
developed to enable real-time bank transfers, etc. 24 hours a day, 365 days a year by
the end of 2018. As well, a joint system experiment was carried out in the last fiscal
year to test coordination between settlement information and commercial distribution
information by using the enlarged information column for EDI (Electronic Data
Interchange), through which it was confirmed that operation efficiency could be
improved.

102

- With regard to measures to improve the convenience and efficiency of payments bymaking cashless payment more prevalent, in December last year, the relevant
ministries and agencies published the “Measures to shift into cashless society” which
includes the measures for popularization of ATMs dispensing cash with credit cards
issued overseas, introduction of credit card payment terminals in regional shopping
streets and tourist sites, and wider use of electronic payment in the public sector.

(Establishment of a cycle in which abundant household assets flow toward
growth money)- As a result of the efforts to promote the use of NISA scheme in government publicity,
etc., total investment through the current NISA scheme had amounted to 4,411 billion
yen and the number of accounts had reached 8.79 million by the end of March thisyear.
On another note, introduction of “Junior NISA” and increase of annual investment
limit (from 1 million to 1.2 million) were decided in the FY 2015 Tax Reform. These
measures will start from next year.

(Promotion of an increase in the number of companies voluntarily adopting
IFRS)- The Government put together advantages of transition to IFRS based on a fact-finding
survey and interviews with companies which have voluntarily adopted IFRS, andpublished “IFRS Adoption Report” in April, 2015. As of June 15, 2015, the total
market capitalization of 86 listed companies which announced their voluntary
adoption of IFRS was at about 121 trillion yen, accounting for about 20% of the total
market capitalization of all the listed companies.

103

(Reviewing management of public and quasi-public funds, etc.)- With regard to the Government Pension Investment Fund (GPIF), the Government
reviewed its policy asset mix in October last year based on the result of “Actuarial
Valuation of the Employees’ Pension Insurance and the National Pension” published inJune last year, in line with the changes in the long-term economic and investment
climate, including Japan’s success in overcoming deflation and transitioning to an
environment with moderate inflation. As well, the Government announced
establishment of the Governance Council and appointment Compliance Officers, at thetime of the said review of its policy asset mix. As another mid-term objective period
will start in April this year, the Government also added a director who would be incharge of administering and managing pension reserve as an official of the GPIF, aspart of initiatives to secure highly skilled experts in accordance with the Basic Policy
on Incorporated Administrative Agency Reform, etc.
- In March this year, the GPIF, the Federation of National Public Service Personnel
Mutual Aid Associations, the Pension Fund Association for Local Government
Officials, and the Promotion and Mutual Aid Corporation for Private Schools of Japan
jointly established an asset mix target (model portfolio) of reserve fund to beconsidered for deciding on the policy asset mix, and announced that its application
would start in October.

(3) Specific new measures to be takeni)Revitalizing financial and capital markets, etc.
The following measures will be taken with a view to advancing asset management,
increasing financial functions, forming a financial market attractive to investors, andrealizing a lively financial market by directing household assets toward growth money
while having individuals build assets by properly including risk assets according to theirlife stage in Japan.

[1]Deliberation on advancement of payments and transaction banking
services and legal framework concerning financial groups
The Government will develop action plans from the perspective ofstrengthening growth potential of Japanese companies conducting businessglobally for advancement of payment and transaction banking services. The action
plan will include advancing cash management services by banks, realizing
seamless settlement infrastructure across borders, and further utilizing
electronically recorded monetary claims.
As well, the Government will discuss legal framework concerning appropriate
business and risk management by and scope of permissible activities for financial

104

groups with a view to improving users’ convenience by promoting advancementof payments and transaction banking services and conducive strategic IT
investment by the financial industry.

[2]

Improvement of convenience of financial and capital markets and theirrevitalization
As international markets are fiercely competing with each other in financial
centers around the world, in order for Tokyo market to keep up with counterpartsin other countries, and secure and improve its position as an international financial
center, the Government will proactively take the following measures for
improvement of convenience of financial and capital markets and theirrevitalization, including diversifying products of various funds and derivatives infinancial instruments exchanges, and enhancing settlement functions in markets.
The Government will also continue to provide assistance for the National
Strategic Special Zones’ efforts contributing to increase of attraction as a financial
center.
- The Government will aim to form infrastructure funds and promote listing
thereof while developing required environment so that investors could easily
put money in infrastructural assets. As well, relevant ministries and agencies aswell as industry groups will cooperate and accelerate efforts for popularizationand education for healthcare REITs by conducting briefing sessions tohealthcare businesses, etc.
- In order to diversify product providers and financiers in real estate investment
market, and realize its sustainable growth, the Government will establish a
growth target and a policy to achieve it.
- As the exchanges, facing the tough international competition among them, aremaking alliances in the financial centers overseas, and the financial/ securities
and derivatives market and the commodity derivatives market are being
increasingly integrated, the Government will continue to make efforts to realize
a comprehensive exchange at the earliest possible time and ensure listing ofelectricity futures and LNG futures without delay.
- The Government will promote the market players’ initiatives to revitalize theTOKYO PRO-BOND Market participated by institutional investors in andoutside Japan and introduce systems to report and announce transaction
information on corporate bonds so that Japanese bond market would play acentral role in Asian bond markets. As well, the Government will encourage
market players to discuss on expansion of services provided by Book-entry
Transfer Institutions and Clearing Organizations and promotion of issuance and105circulation of foreign currency-denominated bonds.
- Market participants including the Japan Securities Dealers Association aredeliberating on shortening of settlement period of government bonds, stocks,
etc., considering settlement periods in other major developed countries. In
addition to ongoing efforts to realize the “Grand design for shortening of JGB
Settlement Cycle (T+1)” announced by the Japan Securities Dealers
Association in November last year, the Association is also deliberating on
realization of T+2 settlement of stocks, etc. The Government will encouragesuch efforts for shortening settlement periods.

[3]

Establishing position as an international financial center andsupporting Japanese companies entering overseas markets
With a view to further strengthening assistance in the financial field forJapanese companies, etc. to enter into overseas markets, and powerfully
conveying the appeal of Japan’s financial and capital markets overseas, “Asian
Financial Partnership Center” will be reorganized to “Global Financial PartnershipCenter (tentative name)” and the following measures will be taken:- In order to ensure easier access to the necessary financial services (financial
consulting, accounting and legal services, etc.) by Japanese companies, etc.,
when they expand their business to Asian countries, it will be necessary, incooperation with relevant organizations including foreign financial authorities,
to provide relevant information to companies, to hold and expand various
seminars and training programs, and to set up a contact point at the FSA forgathering various information including information on such seminars, thereby
disseminating information to both domestic and foreign audiences. Seminars
and training programs for the human resource development of foreign financial
authorities’ staff, etc. should be systematically implemented as well.
- The scope of technical assistance should be widened from Asia, which has
been the primary focus, to emerging economies in other regions such as theMiddle East, Africa and Latin America, thereby expanding and strengthening
the system of technical assistance.
- In addition, the “Global Financial Partnership Center (tentative name)” willserve to convey the appeal of Japan’s financial and capital markets around theworld and it should implement overseas IR in major financial and capital
markets around the world. Moreover, conferences and meetings related tointernational finance should be proactively hosted or invited to be hosted inJapan.

106

[4]Promotion of further increase in the number of companies voluntarily
adopting the IFRSWith a view to achieving “a single set of high-quality accounting standards,”
which was prescribed in the G20 Leaders’ declaration in 2008, the Government
will continue to strive to increase the number of companies voluntarily adopting
IFRS.
With a view to facilitating accounting practice at companies which haveadopted IFRS or are considering transition to IFRS, and contributing to promotionof further increase in the number of companies which have voluntarily adopted
IFRS, the Government will enhance and revise reference formats for preparing
financial statements in accordance with IFRS, taking into account examples of
disclosure by companies which have adopted IFRS and the recent updates to
IFRS.
Listed companies have disclosed their thoughts on adoption of IFRS in “Basic
views on selection of accounting standards” in their earnings reports since thefiscal year ending on or after March 31, 2015. With regard to this, the Government,in cooperation with Tokyo Stock Exchange, will make analysis and publicize thesituation of IFRS adoption in order to contribute to deliberation on transition to
IFRS by listed companies.

[5]

Promotion for providing quality investment products for individuals
and expanding the use of NISA scheme
In order to realize a lively financial market where household assets are directed
to growth money through implementing environment to enable individuals to takeappropriate risks according to their life stage, the Government will encourage bothsales companies and investment management business operators to fulfill theirroles and responsibilities (fiduciary duty*) and provide better-quality products totruly meet the needs of investors, through monitoring efforts by the Financial
Services Agency, etc. The Government will also take measures to promote further
use of NISA scheme, including the “Junior NISA” (the upper limit of annual
investment: 800,000 yen) which is scheduled to be launched next year. As well,
the Government expects to see greater use of the post office network for sales ofquality products satisfying investors’ needs.
(*) A general term indicating a wide variety of roles and responsibilities borneby an entity which is to perform a certain task based on trust conferred by others.

107

[6]

Improving the defined-benefit corporate pension system
In order to develop environment where companies could easily implement
corporate pension plans, the Government will discuss the defined-benefit
corporate pension system regarding introduction of a corporate pension system ofa hybrid type, in which business owners and members could share operational risk,
and measures to realize flexible operation with an eye to the future economic
fluctuations, and thereby reach a conclusion during this year.

[7]

Promotion of a cashless society
The Government will seek to improve the convenience and efficiency of
payments by making cashless payment more prevalent, in light of the forthcoming2020 Tokyo Olympic and Paralympic Games. Accordingly, based on the“Measures for a cashless society” formulated by the relevant ministries andagencies in December last year, the Government will promote measures toimprove the convenience for foreign visitors to Japan through further
popularization of ATMs dispensing cash with credit cards issued overseas, todevelop environment where credit cards can be used more safely throughencouraging shift to IC credit cards, and to expand the use of electronic settlementin the public sector including further popularization of electronic payment ofpublic service fees.

ii)

Reviewing management of public and quasi-public funds, etc.

In terms of approaches to the management of public and quasi-public funds,
including the GPIF, in light of the recommendations by the Panel, the Government willtake the requisite steps to ensure that the necessary measures are implemented swiftlyand steadily, taking into account the need to ensure long-term soundness, according to
the scale and nature of the funds in question.
With regard to the governance system of the GPIF, the Government will accelerate
efforts to implement the necessary measures with possibilities of the future legal
reforms from the viewpoint of the whole pension system and its organizational
structure.

108

5-3.

Overcoming constraints of environmental/energy(1) Progress in achieving KPIs
<KPI> Complete the Electricity System Reform by 2020 at the latest
In April this year, the Organization for Cross-regional Coordination ofTransmission Operators was established. As the final stage of the reform,
Amended Electricity Business Act (3rd stage) including legal unbundling of thetransmission and distribution sector was enacted in June this year.
<KPI> Aim for practical use of 1500°C-class IGCC during the 2020s
Design work for plants for commercial use was started the last fiscal year.

(2) Progress made in implementing measures(Compiling Long-term Energy Supply Demand Outlook and the draft
greenhouse gas emission reduction target)- In June this year, The Long-term Energy Supply Demand Outlook (draft) for 2030 was
complied, which included a policy objectives of reducing electricity cost, improving
the rate of energy self-sufficiency (to roughly 25%, exceeding the pre-earthquake
level), etc. Also, in the same month, the greenhouse gas emissions reduction target in
FY2030 (26% compared to FY2013 (25.4% compared to FY2005)) was developed asa draft INDC consistent with the aforementioned outlook.

(Implementing the Electricity System Reforms, etc.)- With regard to the Electricity System Reform, based on the first-stage andsecond-stage legal amendments, the Organization for Cross-regional Coordination ofTransmission Operators was established in April this year as an authorized corporationof which all the electric utilities must sign up as members, while detailed systemdesign of ministerial ordinances, etc. for full liberalization of the retail market was
promoted. Moreover, as the final stage of the reform, Electricity Business Act (3rdstage) was enacted in June this year, thereby enabling to secure the neutrality of thetransmission and distribution sector through legal unbundling, etc).
- With regard Gas and Heat Supply System Reform as well, the aforementioned bill
partially revised both the Gas Business Act and the Heat Supply Business Act. The
former now includes full liberalization of the gas retail market and is securing theneutrality of the gas pipeline service while the latter has changed in the entry
regulation from the conventional license system to a registration system(Deciding to further enhance FC (frequency converter)- With FC (frequency converter), preparatory work for construction is underway forcapacity increase up to 2.1 million kW by 2020. Moreover in April this year, the109Government requested the Organization for Cross-regional Coordination ofTransmission Operators to deliberate on actualization of the policy of capacity
enhancement up to 3 million kW, including its implementation time.

(Developing guidelines for-Trading Negawatts)- In order to promote Negawatt (amount of reduced demand) trading, the Government
developed guidelines for negawatt transactions related to how to measure the amountby which demand reduced, in March this year.

(The Nuclear Regulation Authority approving changes in reactor installationof four units in two nuclear power plants)- The Authority certified that Unit 1 and 2 of Sendai Nuclear Power Station and Unit 3
and 4 of Takahama Nuclear Power Station satisfied the new regulation standard, andthereby granted permission to make changes to the reactor installation respectively.

(Acquiring a participating interest in the ADCO Onshore Concession in Abu
Dhabi)- In the end of April this year, a Japanese company acquired a participating interest in
the ADCO Onshore Concession in Abu Dhabi, one of the world’s largest deposits ofoil, and became the first Asian participating company to do so.

(Promoting optimization of facilities and restructuring of operations at
petrochemical complexes)- In order to promote optimization of facilities and restructuring of operations at
petrochemical complexes, the Government announced new criteria concerning the“Act for Upgrading the Energy Supply Structure” in July last year.

(3) Specific new measures to be taken
The Government will push forward the following initiatives based on the Fourth
Strategic Energy Plan (approved by the Cabinet on April 11, 2014) in order to reinforce
systems for a stable supply of energy, both in normal times and in times of crisis, whilecurbing energy costs and greenhouse gas emissions as much as possible, as Japan’s
energy costs are already at a higher level compared to other major countries’ due to theincrease in import costs of fossil fuel and the recent trend of weak yen, and CO2
emissions of FY2013 reached at a record high level of 1,480 million tons.
More Specifically, the Government will plan further improvements in energy efficiency
and conservation by promoting thorough efforts to achieve energy efficiency andconservation, while, not only curbing power and gas service fees as much as possible
through reforms of electricity systems, gas systems, and heat supply systems, but also110aiming to create new industries and employment by promoting new business entry fromother industries to a wide variety of fields including related industries from upstream todownstream markets.
With regard to renewable energy, the Government will take necessary measures
including a review to the feed-in tariff system based on the “Strategic Energy Plan” andthe “Outlook of long-term energy supply and demand” which is currently underdevelopment. Other measures to be implemented include resumption of nuclear power
generation at safety-confirmed plants, diversification of resource suppliers throughacquiring a participating interest and realizing import from North America, etc.,stabilization of supply, diversification of fuel types used in transportation industry.
As well, the Government will continue to promote enhancement of monitoringmeasures against nuclear disaster including establishing evacuation plans, conducting
evacuation drills, and securing evacuation routes by road maintenance and improvement,
etc.

[1]

Promotion of thorough energy efficiency and conservation initiatives- For industrial, commercial, residential and transport sectors, the Government
will promote further energy efficiency and conservation activities throughrevising top-runner standards for machinery, equipment and other items ,establishing a benchmark system for the operation sector, while popularizing
energy management using IoT including FEMS, BEMS, and HEMS.
As well, with a view to introduction and diffusion of demand response, theGovernment will develop rules related to trade Negawatt including wheelingconsignment contract for such-tradings.
- The Government will also promote development and introduction ofhigh-efficiency thermal power generation (coal, LNG), co-generation, storage
batteries, and innovative materials including next-generation semiconductors,
etc. for example using gallium nitride (GaN) which makes further
energy-saving possible.

[2]

Pushing through reforms of electricity systems, gas systems, and heat
supply systems
In order to promote an integrated system reform securely by cutting through thebarriers among electricity, gas, and heat supply markets according to the schedule,
the Government will push forward preparatory work including laying downnecessary ministerial ordinances for full liberalization of the electricity retailmarket (roughly in April next year), legal unbundling of the electricity
transmission and distribution sector (April, 2020), full liberalization of the gas
retail market (roughly in 2017), and legal unbundling of pipe divisions of three111

major gas companies (April, 2022), and liberalization of heat supply business(roughly next year). The Government will also prepare for establishment of theElectricity and/ Gas Markets Surveillance Commission with the independency anda high degree of expertise in order to ensure properly functioning markets which
will be liberated by these reforms . As well, the Government will promptly
proceed with deliberation on development of natural gas pipelines, and reach aconclusion without delay. In addition, the Government will develop energy futures
markets by promptly making detailed design of electricity futures market andenhancing LNG over-the-counter market.

[3]

Reviewing the feed-in tariff system
The Government will review the feed-in tariff system in order to realize
introduction of well-balanced mix of renewable energies and compatibility
between introduction at the largest volume and the least national burden inconsideration of characteristics and reality concerning renewable energies, basedon which the Government will take necessary measures.

[4]

Utilization of nuclear power stations once their safety has been
confirmed
Based on the premise of prioritizing safety above all other considerations andsparing no effort to eliminate the concerns of citizens, the Government will leave
matters concerning the safety of nuclear power stations to the judgment of the
Nuclear Regulation Authority (NRA), so if the NRA accepts that a nuclear power
station complies with the world’s most stringent regulatory requirements, theGovernment will respect its judgment and move forward with the restart of that
nuclear power station. In doing so, the national government will be at the forefrontof efforts to secure the understanding and cooperation of interested parties,
including the local authorities of the areas in which they are sited.
Moreover, as well as engaging in international cooperation focused on thedevelopment of technology to reduce the volume and toxicity of radioactive waste
through utilizing test reactors and experimental breeder reactors owned byuniversities, etc., and the development of nuclear technologies that serve thesafety improvement of nuclear use, such as high-temperature gas-cooled reactors,
the Government will promote nuclear nonproliferation initiatives. At the sametime, it will implement human resource development in these fields.

[5]

Maintaining and improving domestic supply chains for oil and LPG,
etc.
The Government will promote oil companies to make early implementation of112

plans spanning until the end of next fiscal year to achieve targets for facility
optimization, based on criteria for the Act for Upgrading the Energy Supply
Structure (announced in July 2014), while promoting development of action plans
for resilience investment to strengthen disaster-response capabilities at
oil-refineries, etc. The Government will also implement measures for regional
stable supply under the Council for Underpopulated Areas with Few or NoSS
(Service Stations).

113

6.

Achieving regional revitalization and regional structural reform /Achieving reform among mid-ranking companies, SMEs and microenterprises(1) Progress in achieving KPIs
<KPI> Ensure that the business startup rate exceeds business closure rate, and raise

the current business startup and closure rates to the 10% range (up from thecurrent rates of around 5%), on a par with the US and UK
FY2013: Business startup rate 4.8%, Business closure rate 4.0%
(FY2012: Business startup rate 4.6%, Business closure rate 3.8%)
Early-Stage Entrepreneurial Activity Index (FY2014): 3.8%
* Regarding the startup/closure rate, the Government has set a goal to "double the
Early-Stage Entrepreneurial Activity Index (the percentage of respondents who
answered that they are "entrepreneurs or prospective entrepreneurs" in the“Survey on entrepreneurial spirit”) in coming 10 years" as a supplementary index
looking ahead for the next 10 years, as it will require not only the government
policies but also change in social attitudes toward entrepreneurship, which makes
it a long-range goal.
<KPI> Increase the number of profit-making SMEs and micro enterprises from
0.7 million to 1.4 million by 2020.
FY2013: 805,979 enterprises (FY2012: 734,646 enterprises)(2)

Progress made in implementing measures(Construction of a support platform for bringing regional revitalization
measures together as a single package)- As the Local Revitalization Act was amended in November last year, one-stop
authorization by the Prime Minister can now replace authorization procedures
spanning across different ministries and agencies for plans related to regional
revitalization. As efforts for comprehensive reform of local industry, ministries andagencies concerned have cooperated and provided consultations and follow-up
supports to the “model cases of local revitalization” (33 cases) chosen in May last year,
while 26 Local Revitalization Plans including these model cases were authorized by
the Prime Minister by March this year based on the Local Revitalization Act. As well,
as of June this year, four areas have been designated as Coordinated Core Metropolitan
Areas which, in the midst of depopulation, declining birthrate and a growing
proportion of elderly people, keep a certain level of population and aim to maintainactive social economy while 90 settlement and independence areas have been foundedas places to accept settlers.

114

(Adding design technologies to the support target by the Small and Medium
Sized Enterprise Manufacturing Enhancement Act- In February this year, the Government revised the policy related to advancement ofspecified fundamental manufacturing technologies of small and medium sizedenterprises based on the Small and Medium Sized Enterprise Manufacturing
Enhancement Act, thereby included technologies concerning design development in
the specified fundamental manufacturing technologies. In consideration of this, theGovernment has selected technologies concerning design development in the projectfor promotion of cooperation in establishment of innovative manufacturing industry.

(Promoting regional startups)- Based on the Industry Competitiveness Enhancement Act, over 1,000 municipalities
are working on startup support business plans developed in cooperation between local
governments and startup support businesses, of which 547 cases (605 municipalities)
have been approved to date. As well, by April this year, 215 businesses which werefirmly linked with communities and had a large capacity of employment through theuse of regional resources and funds were launched as pilot models for Regional
Economic Innovation Cycles. As well, the Japan Finance Corporation held the 2nd
Business Grand Prix for High School Students, which saw 4,928 participants from 207
schools, exceeding the previous year’s result, while it established and enhanced a loansystem for young or female entrepreneurs in February of this year, as well as
strengthened a financing facility exclusive for social business operators including
nonprofit organizations.

(Cultivation of strategic industries centered on mid-ranking companies inJapan’s regions)- In April this year, the Regional Economy Vitalization Corporation of Japan, etc.
established the “Regional Core Business Revitalization Fund” which would provide
financial support and human resource for early improvement and growth of regionalcore companies’ performance. Through financing from the Fund, the Corporation will
provide assistance for improvement and growth of regional mid-ranking companies’
performance. Also starting April this year, a certain proportion of investment in
mid-ranking companies by financing business of the Organization for Small &Medium Enterprises and Regional Innovation, is considered as investment in SMEs.
This way, support for business expansion of mid-ranking companies has grown.

(Backing for hometown specialties)- With a view to regional revitalization by utilizing “hometown specialties” made of115

local industrial resources, the Government submitted a bill to revise the Small andMedium Sized Enterprise Local Resource Utilization Act in the current Diet session.
After it has been enacted, the Government will ensure promotion of productdevelopment and cultivate markets catering to the needs of consumers throughproactive involvement by municipalities in the form of making “hometown specialties
supporter declaration,” etc., and cooperation with retailers and internet businesses
well-versed in the consumer needs.
- In order to introduce the system for license plates with a design, for the first time inJapan, which would allow license plates with a regional design, the bill to partiallyrevise the Road Transport Vehicle Act and the Automobile Inspection Independent
Administrative Agency Act was enacted in the current Diet session.

(Promoting smooth business succession, etc.)- Since February this year, the low-interest financing system for businesses conducting
succession or M&A has been enhanced. As well, in April this year, the “Guidelines forbusiness succession” was developed and announced while Business Succession
Support Centers, located in 20 different places in the country as of the end of May thisyear, in cooperation with regional financial institutions are promoting smooth businesssuccession, etc. through providing matching services between business owners who do
not have successors and companies which aim to expand their business by taking
advantage of management resources of such owners’ business. The Government isaiming to spread Business Succession Support Centers to the whole country during
this fiscal year.

(Promoting efforts for international expansion)- The Japan External Trade Organization (JETRO) has provided hands-on assistance tomore than 1,600 mid-ranking companies and SMEs to date, through the expertise offormer corporate employees well-versed in business, as part of efforts to help withinternational expansion. As well, JETRO established a local assistance platform foroverseas expansion in 17 locations by March this year.

(3) Specific new measures to be taken
Were it not for revitalization of regional economies, growth of Japan as a whole would
be impossible and Abenomics would fail. In response to “The Japan Revitalization
Strategy, revised 2014,” the “Headquarter for Overcoming Population Decline andVitalizing Local Economy” was established in September last year and the“Comprehensive Strategy” was approved by the Cabinet in December the same year, inorder to tackle Japan’s structural challenges squarely, such as regional revitalization andovercoming depopulation. The “Headquarter for Overcoming Population Decline and116

Vitalizing Local Economy” is working on further promotion of policies, providing
follow-up activities for individual measures, and conducting regional assistance, through“information support” utilizing the Regional Economy Society Analyzing System(RESAS), “human support” for the formulation of Regional Comprehensive Strategies
and for the implementation of its measures, and introduction of “new type grant forregional revitalization” which financially support pioneering projects beyond
conventional “vertically-segmented project,” with a view to accomplishing regional
revitalization.
The “Comprehensive Strategy” and the “Basic Policy for Overcoming Population
Decline and Vitalizing Local Economy, 2015” (approved by Cabinet in June 30, 2015)
focused on regional revitalization including a virtuous cycle of regional economies,
together with the growth strategy for growth of the country as a whole, need to make “thetwo wheels of a cart” to powerfully drive Local Abenomics, thereby putting Japanese
economy on a growth path. While ensuring efforts to revitalize regional economies are
made following the PDCA cycle based on the “Comprehensive Strategy,” etc., cooperatewith the “Headquarter for Overcoming Population Decline and Vitalizing Local
Economy”, growth strategy will focus on improvement of profitability and productivityof mid-ranking companies, SMEs, and micro enterprises across the country. In light of2020 Tokyo Olympics and Paralympics, the Government will also consider sports as
business seeds with potential to create and grow business, and thus promote a variety ofmeasures so that sports could lead to revitalization of regional economies anddevelopment of new business models.

Establishing “Earning Power” of regional mid-ranking companies,
SMEs, and micro enterprises[1] “Visualization of growth strategies for businesses,” and getting acrossmeasures/ ensuring publicityi)

In order to support initiatives to strengthen “earning power” byhighly-motivated mid-ranking companies, SMEs, and micro enterprises, theGovernment will “visualize growth strategies of businesses” by plainly organizing
business management challenges, solutions for them, and inquiry counters. As
well, the Government will make sure to give the widest possible publicity toassistance measures for SMEs through aggressive advertising and enhanced
contents listed in the catalog of measures with a view to increasing registrants to a
website (Mirasapo) which supports SMEs and micro enterprises in their futureendeavors.

[2]

Creation of core companies driving regional economy- In order to support initiatives of regional companies with a potential to grow,117

although with challenge in refining their own technologies, developing
customers, expanding into global market, etc., to transform themselves into
companies driving regional economy, the Government will build a regional
assistance platform which provides a variety of fine support catering to theneeds of such companies (support for research and development, developmentof overseas sales channels, improvement activities on site, and development ofstandards). More specifically, industrial support institutions of prefectures andregions will play a central role, and ensure that they and other support
institutions, including local universities, public research and development
institutions, regional intellectual property support institutions, JETRO, and
SME supporting institutions, cooperate and share information with each other,and thereby manage the progress of support provided. In the meantime, it will
make sure that KPIs, related to understanding of regional corporate activities
and the number of supported companies, are established and that adoption of
the PDCA cycle is promoted.
- The Government will promote the use of the “Regional Economy Society
Analyzing System (RESAS)” which visualizes big data, including public
statistics data and transaction data among corporations, compiled and provided
to municipalities by the Government, and deliberate on addition of data
concerning a regional funds flow and patents owned by corporations, as needed.
While linking with RESAS, the Government will also promote new analysis of
economy and industry by combining data owned by the national and local
governments as well as the private sector, including the use of the “Chart for
Creation of Regional Industry and Employment” which has made it possible toacquire information on key industry with a competitive edge by eachmunicipality.

[3]

Strengthening business support system for SMEs and micro enterprises- The “Yorozu Support Centers,” that serve as comprehensive consultation
centers for a variety of inquiries from SMEs and micro enterprises, will aim to
substantially enhance their support system through the initiatives to increase
support staff and accessibility while improving evaluation items, and raising
their support standard in order to play a central role in consultation and support
for regional businesses and cover many enterprises with their service. As well,with a view to making high-quality consultation service catering to the needs ofenterprises available, the Government will make prompt effort to train anddevelop support staff of the “Yorozu Support Centers” through the use of SME
training institute, etc., while securing superior supporting human resources.
- The Government will support efforts towards improvement of sales force and118

productivity of SMEs and micro enterprises by working for enhancement ofbusiness support quality by the Commercial and Industrial Associations and the
Chambers of Commerce and Industry, supporting bodies closest to SMEs andmicro enterprises, while utilizing the framework of approval of “businessdevelopment support plans” based on the Act for Supporting Small Businesses.
In addition, the Government will promote the initiatives to enhance support
from the National Organization for SMEs which supports the Commercial andIndustrial Associations and the Chambers of Commerce and Industry providing
business support in various locations. The Government will also visualize
results of support provided and fields of expertise of Support agencies forbusiness innovation based on the Act for Facilitating New Business Activities
of Small and Medium-sized Enterprises. In addition, by enabling the “Yorozu
Support Centers” and SME organizations, etc. to make referrals to each otherwith cases of consultation and provide joint assistance, the Government will
promote building the coordinated system with the “Yorozu Support Centers” at
its center.

[4]

Enhancement of support for recruitment by SMEs and microenterprises
For regions which have seen the number of workers decrease, in order to realizeenhancement of productivity through securing fine human resources for SMEs
and micro enterprises which are exposed to structural challenge of humanresources shortage, the Government will enhance efforts to provide regional
SMEs and micro enterprises with fine and thorough support ranging fromdiscovery of a variety of talent in and outside the region, making referrals, tolong-term employment, through, for example, collecting and rolling out to otherregions good business cases where sales or productivity has improved due to theemployment of human resources of UIJ Turn types (those who come back to theirhometown to find a job after a stint in urban areas, are originally from urban areas
but go to the country side for employment, or move from urban areas to a region
other than their home town for a job), and enhancing efforts to provide businessowners employing new workers with seminars related to specific examples ofimproved work environment with a view to long-term employment, humanresources management for enhanced productivity, etc., when support is provided
for regional SME recruitment or training and dispatch is conducted for regional
human resources who can help on-site process improvement.

[5]

Strengthening capabilities concerning sales and development bycooperation of SMEs and micro enterprises

119- With a view to expansion of a virtuous cycle to SMEs and micro enterprises
throughout the country, the Government revised guidelines for subcontract
transactions in 14 industries, and thereby added good practices such aspreferable business practices for passing the costs of raw materials and energy.
The Government is strongly requesting industrial circles to make transactionsin accordance with the said guidelines based on “Policies for Support andCooperation in Passing on Price Increases, and Policies Aimed at Improving
Service Industries Productivity" decided in Seiroshi (Government, Labor, andCorporate Management) Meeting for Realizing Virtuous Cycles of the
Economy held on April 2, 2015, and will check on improvement by conducting
inspection as needed.
- With a view to enhancing sales force of SMEs not through conventional
business relationship with large corporations but in open business environment,
the Government will promote efforts for development of new customers
through mutual exploitation of management resources amongst a coordinatedgroup of small and medium-sized subcontractors; appropriate intellectual
management and utilization in SMEs’ joint development; and cooperation/
networking of multiple businesses centered around core companies in the fieldsof research and development and manufacturing processes.

[6]

Enhancement of financing functions to establish “Earning Power” of
SMEs and micro enterprises- As the recent financing environment increasingly recognizes the importance of
supply of funds for growth, the Government will encourage the efforts ofgovernment financial organizations, and at the same time, promote cooperationand partnership between private financial institutions and government financialorganizations through providing opportunities to discuss, etc. As well, with aview to further enhancing private financial institutions’ support for
improvement of business and productivity, the Government will promote
disclosure of information (publicity) on results of their efforts, etc. In addition,
it will enforce transparency in the results of business support andreconstruction support extended by supporting institutions, the SME
Revitalization Support Council, the Business Improvement Support Center, etc.
Furthermore, while taking all possible measures to ensure financing for SMEs
and micro enterprises in consideration of their business environment, theGovernment will deliberate on the credit guarantee system during this year,
thereby clarify future directions thereof, and take necessary measures.
- In order to promote vitalization of SMEs and micro enterprises and support
smooth withdrawal and new trials, the Government will take necessary120measures including promotion of fundamental reconstruction support by the
SME Revitalization Support Council, encouragement of utilization of“Guidelines for Personal Guarantee Provided by Business Owners” byfinancial institutions through announcement of utilization results, request for
local governments’ establishing relevant regulations with a view to promoting
prompt debt consolidation in so called lawful voluntary liquidation, anddevelopment of relevant rules at governmental institutions.

[7]

Building regional support network for start-up business andsupporting women and the young in starting business- For regional economic structural reform, region-based start-up, possibly
realized by opening of infrastructure owned by local governments to theprivate sector, are important. From this standpoint, based on the Industry
Competitiveness Enhancement Act, the Government will strengthen
cooperation with SME organizations and local governments by forming
partnership among municipalities, SME organizations, and regional financial
institutions, and ensuring publicity to support measures for SMEs and microenterprises.
- In order to support start-up in the regional service sector and assist women andthe young in starting business, the Government will promote smooth financing
to those launching new business and stimulate entrepreneurship in the publicby aiming to further encourage utilization of loan programs for startups
provided by Japan Finance Corporation, etc. and enhance entrepreneurshipeducation. As well, the Government will strengthen structure of regional
support for start-up business including establishment of the consulting counterat Japan Finance Corporation, so accessible that female entrepreneurs could
ask for advice comfortably, development of networks of those experienced instarting business and those supporting new businesses in each community, andcreation of a cofinancing scheme by governmental financial institutions
concerning start-up and private financial institutions.

[8]

Visualizing growth strategies for regional shopping districts, andfurther enhancing advanced efforts and promotion thereof
Shopping districts have an important role of attracting customers from outside
the region and promoting communication in the region thereby realizing growthand liveliness in the region. Strategic understanding is deemed to be necessary
concerning the region’s strengths and how shopping districts should be positioned
in the whole picture of the region. While each community is taking revitalization
measures for shopping districts utilizing subsidies for urgent support for regional

121

residential life, it is important to roll out superior efforts, such as utilizing IT,
providing additional services for elderly and child care, etc., to other regions in
the country without having them disappear as temporary success, although taking
into account different strengths of regions. In consideration of this, theGovernment will visualize effective efforts to revitalize shopping districts,
including details of involvement by local governments, efforts by shopping
districts for their own revitalization, specific talent required, and specific efforts tosecure and develop such human resources, learned by analyzing success factors
and challenge in shopping districts throughout the country. Based onunderstanding acquired from such analysis, the Government will provide further
support for advanced efforts by highly-motivated shopping districts working
together with the local government, and aim to promote the result in other regions.

ii)

Promotion of regional innovation

While clarifying a mission of each type of bodies, including universities, research
institutions, and companies in regions, and aiming to increase personnel and technology
mobility through utilizing the cross-appointment system, the Government will promotemeasures to enhance nationwide industry-academia-government matching functions byconnoisseurs, form complexes through industry-academia-government collaboration,
strengthen strategies for intellectual properties of regional SMEs, and encourage
strategic standardization, in order to build the structure allowing active use of resources
located throughout the country without being limited to one’s own region. [Describedabove]

122

II. Strategic Market Creation Plan
Theme 1: Extending the nation’s healthy life expectancy(1) Progress in achieving KPIs
<KPI> Extend the nation's healthy life expectancy by one year or more by 2020
[70.42 years for males and 73.62 years for females (2010)]
 2013: 71.19 years old for males and 74.21 years old for females<KPI> By 2020, reduce the number of citizens with metabolic syndrome by 25%
from FY2008 [14 million (FY2008)]
 FY2012: Actual and would-be patients of metabolic syndrome decreased by
12.0% from FY2008<KPI> Eliminate the assessment lag of pharmaceuticals and medical devices to“zero” by 2020[Pharmaceuticals: 1 month, Medical devices: 2 months (inFY2011)]
 FY2012: Drugs – zero month, medical devices – zero month(2) Progress made in implementing measures(Creating the “business alliances through a new healthcare corporation
system”)- In April this year, a bill was submitted to the Diet, incorporating the creation of the“business alliances through a new healthcare corporation system” which enables tointegrate multiple medical corporations etc. by the general meeting of members, andmanage it integrally, in order to promote sophistication and efficiency in medical
services etc. and construct the system to provide high-quality and efficient medical
services in local areas.

(Providing incentives to individuals for disease prevention and healthpromotion)- In May this year, the Diet passed the Act which incorporated additional support for the
self-help of subscribers as health services by insurers, aimed at giving incentives toindividuals for disease prevention and health promotion. Going forward, theGovernment will set out in the guideline and publish, by the end of this fiscal year, thethinking on specific criteria etc. when insurers award health care points or support for
insurance premiums according to individuals’ efforts to promote their own health andprevent disease.

123

(Creating “patient-proposed health care services”)- In order to fulfill the wishes of patients to use drugs etc. awaiting approval in Japan
promptly under the system for combining insured and uninsured health care services,
the Government submitted a bill to the Diet in March this year to create“patient-proposed health care services” as a new health care service under the
combining system in response to proposals from patients (to be implemented in April2016). The bill was passed and promulgated in May.

(Accelerating assessments of the advanced medical services, and promoting
the international expansion of medical services etc.)- As for accelerating and streamlining assessments of the advanced medical services(regenerative medicine therapies and medical devices), creating a mechanism forregularly identifying examples of selected health care services that should be
introduced, and developing groundbreaking drugs etc., the Government implemented
measures for creating the “Priority Examination Designation System” that would giveprioritized treatments etc. in approval examinations, and promoting the international
expansion of medical services to develop Japanese medical bases overseas etc.

(3) Specific new measures to be taken[1] Support for the creation of the health care industry
In order to realize the development of new growth industries and revitalizationof local areas, while extending the healthy life expectancy and restraining thedemand for medical and nursing care services, it is necessary to promote thevitalization of the health care industry, which is outside the scope of public
insurance, in local areas. Accordingly, relevant ministries and agencies will
implement the following specific measures by the end of this fiscal year, aimed atpromoting the creation of the health care industry in collaboration with local
comprehensive care systems and local resources (agriculture/food and tourismetc.) through local versions of the Next-Generation Health Care Industry Council
and so on.
- Promote expansion of advanced efforts all over Japan, including successful
business models in local areas and Living Lab (social verification experiment)
etc., by promoting the establishment of local versions of the Next-Generation
Health Care Industry Council and creating a network of said councils.
- As for the business seeds to be created by local versions of the
Next-Generation Health Care Industry Council etc., in order to strengthenfunctions to supply human resources together with risk money from the124pre-investment stage, cooperate with the Regional Economic Vitalization
Corporation of Japan (REVIC) and other institutions to establish the “Platform
for Commercialization of Regional Health Care Business (tentative name)” todevelop the systems across the regions for providing programs and supplying
management talents etc. to accelerate health care business.
- Prepare a “Guidebook for Promoting Utilization of Services outside the Public
Insurance (tentative name)” and distribute it to regions for reference bycompanies and local governments when creating services outside public
insurance in the areas of support for daily life, nursing care and disease
prevention services, and nursing food, in order to promote the utilization ofprivate services linked to local comprehensive care systems.
- The Government will develop the following business conditions aimed atcreating new health care businesses linked to local resources (agriculture/foodand tourism etc.):- Aimed at strengthening business development for the combination of healthand agriculture/food, prepare a “Dietary Life Infrastructure Development
Package to Support Health through Food and Agriculture” including theconstruction of database on the evidence concerning healthy agricultural
products and diets; and- Aimed at strengthening business development for the combination of healthand tourism, examine the creation of a third-party accreditation system toevaluate the quality of services in health tourism, while creating attractionsof tourist sites utilizing local resources.
- Aiming to establish the brand of “Japan as a Healthy Long Life Nation” andexpand into health and disease-prevention services in emerging countries etc.,
endeavor to improve the recognition level by holding overseas exhibitions etc.,
in cooperation with Japan External Trade Organization (JETRO) and Medical
Excellence JAPAN (MEJ).

[2]

Thorough ICT use in health care and nursing care etc.
The My Number system will start by notifying My Numbers to Japanese people
all over Japan from October this year. Taking this opportunity, in the field of
medical care etc., the Government will strongly promote the use of ICT, so thatJapanese people can receive medical and nursing care with the peace of mind, あaiming at improving the convenience for patients by enhancing and reinforcing
local comprehensive care systems; improving the quality of medical service andcreating R&D environment in the field of medical care including drug discovery
etc., contributing to vitalization of health care industry, after taking sufficient
information security measures. Accordingly, the Government will implement

125

policy measures in the following four areas intensively during five years to 2020:- Introduce an ID number system in health care and similar fields, utilizing theinfrastructure of the My Number system
The Government will introduce an ID number system in health care and similarfields, utilizing the infrastructure of the My Number system such as publicpersonal authentication and My Number cards; and using it as the base, willstrongly promote the cooperation in information in health care and similar fields.
Specifically, first, the Government will develop an online qualification
confirmation system early after July 2017 to enable ID number cards to be used ashealth insurance cards at the reception of medical institutions, and thus construct
the common base for information cooperation in health care and similar fields.
Moreover, for improving information sharing between regional medical
institutions, promoting R&D, improving the quality of medical services, theGovernment will examine specific designs for the ID number system to be
implemented in health care and similar fields , and rules for managing personal
information associated with specific numbers; and after reaching a conclusion on
the above issues by the end of this year, commence—utilizing the base of theonline qualification confirmation system—phased operation in medical care andsimilar fields starting in FY2018, aimed at full-fledged operation by 2020.
- Promote digitalization and standardization of data in health care and similarfields/ Promote information-sharing between regional medical institutions (incl.
nursing care)
The Government will promote collection and utilization of information on
medical care including the medical check, medical treatment, and prescription,
through digitalization and standardization of data in health care and similar fields.
Moreover, it will promote the information-sharing on the site of healthcare/nursing care utilizing the numbers in health care and similar fields, from theviewpoint of improving the convenience for patients.
Accordingly, the Government will achieve nationwide expansion of theregional medical information sharing network by the 2018 fiscal year (including
the mutual sharing between hospitals and clinics). By fiscal 2020, it will raise thenational diffusion rate of electronic medical records to 90% at general hospitals
with 400 or more beds (hospitals which are particularly expected to serve a corerole in regional medical care), aimed at creating the environment for promoting
the introduction of electronic medical records by small- and medium-sized
hospitals and clinics.
To achieve the above objectives, the Government will take measures to provide

126

financial support for network creation in order to specialize and coordinate sickbed functions via the Fund for Comprehensive Securing of Regional Medical andNursing Care, while encouraging prefectures to include in their health care plans
their future initiatives for the regional medical information sharing network.
Additionally, at the time of the next revision of remuneration for medical services,
the Government will discuss evaluations of medical information sharing thatutilizes ICT for remuneration of medical services. At the same time, it will reducethe costs for network construction and management by constructing thestandardized digital data on the executed results (outcome) of medical services,
standardizing system specifications of network construction etc., promoting cloudcomputing for them and the like.
Moreover, in order to improve the quality of medical services, the Government
will aim to enable individuals to grasp and use medical information around 2018by utilizing the infrastructure of the My Number system including specified healthcheckup data and My Portal so that patients themselves can grasp their medical
information over time in their life and use it for their health management. For
starters, the Government will discuss and reach a conclusion on methods fortransferring data approximately by the end of this fiscal year, to enable smoothtransfer of specified health checkup information even when insurers are changed.
Furthermore, in order for patients themselves to be able to acquire prescription
information anytime and anywhere, as well as to receive appropriate prescription
guidance etc. from pharmacists at pharmacies, the Government will discuss the
improvement of the functionality of electronic medicine notebooks by the end of
this fiscal year, and promote their diffusion to Japanese people along with theregional medical information sharing network which is targeted to be spread allover Japan by FY2018.
In addition to the above specified health checkup data and prescription
information, the Government will discuss and reach a conclusion by the end of thenext fiscal year on measures which enable patient themselves to grasp the medical
information over time during their life.
In addition, the Government will take initiatives toward standardization of
information items etc. to be shared by many occupations in the fields of homehealth care and nursing care.
Above objectives will be constantly reviewed through the PDCA cycle,
including reviews by the Next-Generation Medical ICT Infrastructure Council on
the status of achievements etc., from time to time.
- Further utilize data in policies for medical and nursing care (improvement of
the quality in medical and nursing care, promotion of research and127

development, adjustment of costs for medical and nursing care etc.)
Aiming for the further realization of healthy long life society, the Government
will drastically promote the utilization of medical and nursing care data in policies
under appropriate rules upon the introduction of the number system in health careand similar fields, including reinforcement of insurers’ functions such as healthcare guidance based on data, improvement of medical and nursing care as well as
adjustment of medical and nursing costs through benchmarking utilizing data baseanalysis, and creation of environment for research and development on drug
discovery etc. as well as promotion of safety measures for drugs etc. by collecting
and analyzing large-scale medical information etc.
Accordingly, as for relevant data bases in health care and similar fields held by
the Government etc., targeting for the implementation by 2020, the Government
will develop infrastructure to realize long-term follow-ups of patients’ data andtheir sharing between individual data bases, and proceed in stages with what are
possible.
Furthermore, at the same time, the Government will also discuss the following
for utilizing these data: frameworks for standardization of health care andevaluation of quality; cost and benefit analysis as well as adjustment of medical
and nursing care; analysis on specialization and cooperation of medical functionsin the region; research and development (clinical research, cohort study and soon); and methods to utilize safety measures etc. for drugs and the like (including
discussions on rules for the treatment of information).
The Next-Generation Medical ICT Infrastructure Council will formulate, by theend of this fiscal year, the “Program for Utilizing Data in Health Care and Similar
Fields (tentative name)” incorporating specific measures and implementation
schedule for the realization of the above. Moreover, the Government willreinforce the headquarter functions to be charged in an integrated manner with theutilization of information in health care and similar fields, including managementof various data bases as well as collection and analysis of information.
- Develop the environment for utilization of data in health care and similar fields
by private health care businesses etc.
By utilizing the “Agency Organization (tentative name)” system which is aimed
for the creation at the next ordinary session of the Diet, the Government will
invigorate the health care industry which provides health management andpromotion services in cooperation with R&D activities in health care and similarfields as well as medical and nursing care services, by developing the enabling
environment for the utilization of medical and health information by privatecompanies, research institutions etc., while paying due consideration tocharacteristics and treatment of medical and health information. Moreover, the128Government will also promote the utilization by the private sector of the data heldby the central government etc.

[3]International expansion of medical services (Outbound and inbound)
In cooperation with international organizations such as WHO, the Government
will support the reinforcement of health service systems in emerging anddeveloping countries, which could become the infrastructure of outbound services
from Japan. In doing so, it aims to promote the international dissemination ofJapanese technologies and expertise which could contribute to the global efforts todeal with public health crisis, ageing and dementia etc., as well as international
expansion of the nutrition improvement project through public and private
cooperation.
Moreover, the Government will implement initiatives to attract foreign patientsto Japan by disseminating information on medical services in Japan. This includes
certifying corporations that provide comprehensive support for the acceptance andcare of foreign patients, and providing easy-to-understand information to foreigncountries regarding “Japan International Hospitals” (tentative name), which aredomestic medical institutions that possess the desire and ability to accept foreign
patients, based on the “Approach to the certification of companies supporting
travels for medical treatment and information-dissemination to foreign countries
by medical institutions accepting inbound medical examinees” formulated by the
Inbound Working Group under Task Force for International Expansion of Medical
Services.

[4]

Creation of the framework to evaluate quality of nursing care services
The Government will start verifying the effect of additions as the outcome
evaluation related to the quality of nursing care services which was introduced at
the time of the FY2015 revision of nursing care service compensation. At thesame time, based on the results of the “Research study project concerning theevaluation of the quality in nursing care insurance services” etc. which was
implemented in the last fiscal year, the Government will examine steadily thecreation of a framework for evaluating the quality of nursing care services, whilecollecting and analyzing the data that contribute to improving the quality ofnursing care services.

[5]

Promotion of international regulatory harmonization and international
cooperation based on the Strategy for International Harmonization of
Pharmaceutical Regulations
Based on the Strategy for International Harmonization of Pharmaceutical

129

Regulations, the Government will enhance reliability and attraction ofpharmaceutical approval in Japan by creating the environment where innovative
drugs and medical equipment are approved ahead of the rest of the world as wellas proactively disseminating information to the international community. At thesame time, it will invigorate the pharmaceutical and medical equipment industries
in Japan by encouraging investment in Japan by domestic and foreign
manufacturers and increasing export of excellent products. These should be doneby eliminating entry barriers arising from differences etc. in pharmaceuticalregulations with foreign countries through the promotion of international
harmonization and cooperation clarifying the medium- to long-term visions aswell as priorities.

[6]

Creation of the “business alliances through a new healthcare
corporation system”
The Government will make efforts for early passage of the bill to partially revise
the Medical Service Act incorporating the creation etc. of the “business alliances
through a new healthcare corporation system” which enables integrated
management of multiple medical corporations etc. At the same time, it willcontinue discussions on necessary matters including the governance between the
new type of corporations and participating existing ones, and requirements offinancing and capital contributions etc. for the smooth implementation after thepassage of the bill so that this new corporation system will become an influential
tool for the sophistication and streamlining of regional medical services etc.,
achievement of regional

medical initiatives and promotionof regional

comprehensive care.

[7]

Providing individuals, insurers and business managers with incentives
to promote health and prevent diseaseA) Incentives for individuals
In formulating the guideline concerning assistance for insurance premiums
and health care points to be awarded from insurers to insured individuals, theGovernment will conduct examination to enable provision of incentives withlarge differences in order to encourage the self-help of insured individuals toprevent disease and promote health, taking into account the results of a trial of ahealth promotion model using ICT.
B) Incentives for insurers
Regarding the system for increasing or reducing funding for health care for
elderly people aged 75 and over, as well as the “system to support insurers’

130efforts,” the Government will conduct deliberations to make the scheme avigorous one to proactively evaluate the implementation status of specified
medical checkups and health guidance as well as the status of using genericdrugs in order to encourage the efforts of insurers for the insured’s
maintaining/promoting health, and adjustment of medical costs. Moreover, it
will discuss the creation of a new incentive system for Japan Health Insurance
Association and the medical insurance system for the elderly aged 75 or over.
C) Incentives for managers etc.
In order to promote health-management by companies, relevant ministries andagencies will take necessary measures, as incentives for managers etc., within
this fiscal year to enable the promotion of health-management through thefollowing efforts according to the size of companies.
- Small- to medium-sized companies etc.
- In cooperation with chambers of commerce and industry, the Government
will promote development and utilization of health-management personnel
through the establishment of the “Health-management advisor system(tentative name),” while collecting and publishing excellent examples ofhealth-management by small- to medium-sized companies etc.
- Utilizing the system for publishing excellent safe and hygienic companies
etc., the Government will formulate evaluation standards for theestablishment of a system to recognize excellent health-managementcompanies; at the same time, it will discuss incentive measures(facilitation of acquiring and maintaining human resources etc.) linked tothese systems from the viewpoint of promoting the utilization by privatecompanies etc.
- Large companies etc.
- The Government will continue implementing initiatives to spread
health-management by such as stocks of companies withhealth-management and surveys on health-management levels. Moreover,while analyzing and compiling advanced initiatives of companies selected
for health management stocks etc., the Government will trace their impact
etc. on corporate earnings, productivity, and medical costs over time to
inform corporate managers of the results.
- In order to develop the environment where health management initiatives
can be grasped qualitatively and quantitatively, the Government will
formulate the “Guidance for information disclosure on investment bycompanies in health promotion (tentative name)” to promote information131

dissemination to stakeholders such as investors.
- Focusing on medical insurers and service businesses, including companies
practicing advanced health management and health insurance societies, theGovernment will consider formulating evaluation indicators on healthmanagement and health business activities by companies and insurers,
while developing the data format etc. for distribution and utilization ofhealth information- Other- Utilizing private funds and services, the Government will consider
introducing social impact bonds in the health care field as an incentive for
insurers including municipalities etc. which are engaged in healthpromotion and disease prevention projects effectively and efficiently.

[8]

Construction of clinical innovation networks (Creation of clinicaldevelopment infrastructure utilizing disease registration information)
The Government will facilitate invigoration of domestic development of
anticancer drugs, intractable diseases therapeutic agents, biomedicines etc., andattract overseas drug manufacturers for domestic development, by solving issues
in clinical development in Japan with higher development costs than in othercountries and constructing new clinical development methods.
Accordingly, utilizing the registered information on various diseases, includingthat in the disease registration system to be developed by National ResearchCenter for Advanced and Specialized Medical Care (NC), the Government will
formulate the clinical trial consortium by the industry-academia collaboration by
constructing a network centered on NC, core clinical research hospitals,
Pharmaceuticals and Medical Devices Agency (PMDA), and Japan Agency for
Medical Research and Development (AMED); at the same time, it will promote
the utilization by companies of the registered information on diseases
accumulated by NC and others through personnel exchanges between hospitals in
the network and PMDA, as well as regulatory science studies on clinicalevaluation methods. Moreover, the Government will enlarge this network to the
Asian regions to construct the system which facilitates multi-region joint clinical
trials.

[9]

Promotion of initiatives for the realization of genome medical care withsecured confidence
Given that genetic checkups are conducted with the progress in analyticaltechnologies for genes and genomes etc., the Government will consider various

132issues for the practical use and utilization of genetic information in medical care(prediction of onset of diseases, disease prevention, diagnosis, decision on optimalprescription volumes, development of new drugs and so on) to promote initiatives
for realizing the “genome medical care” according to physical constitutions andsymptoms of individual persons.
Moreover, as regards the genetic examination business for consumers, theGovernment will endeavor for its sound development, by providing information
based on scientific evidence, ensuring the quality of examinations, protecting
personal information, and so forth.

[10] Development and commercialization of medical equipment etc. fromJapan utilizing its collective manufacturing power
The Government will accelerate the development and commercialization of the“only one” most advanced innovative medical equipment in the world and deliver
its benefits to Japanese people, in order to improve the quality and efficiency of
medical care taking medical care needs into consideration, extend healthy life, andinvigorate the medical equipment industry.
Accordingly, the industry, government and academia will collaborate inpromoting international standardization of medical equipment made by Japan,
international expansion of medical equipment along with developing overseas
local human resources who can handle Japanese medical equipment, and so on,while acquiring intellectual property rights of developed medical equipment andencouraging their strategic utilization.
Moreover, aiming for promoting development and commercialization of
medical equipment by businesses and universities etc. with technologies in local
areas, the Government will promote the “networks to support medical equipment
development” which provide support from the initial development stage of
medical equipment to commercialization, strengthen development of consulting
personnel required for them, and reinforce support for developing companies ineach phase of grasping medical needs, cultivating markets, applying forpharmaceutical approvals, etc.
In addition, the Government will promote research and development, as well as
the diffusion, of prostheses utilizing Japan’s manufacturing power.

[11] Further promotion of anti-cancer measures
The Government will accelerate initiatives to overcome cancer, a national
disease, and formulate by the end of this year a “plan to accelerate anti-cancer
measures” with the pillars of prevention, treatment and research, and symbiosis.
Based on this, it will further accelerate its efforts for anti-cancer measures.

133

Theme 2: Realizing clean and economical energy supply and demand(1) Progress in achieving KPIs
<KPI> Market size of advanced storage batteries to be captured by Japanesecompanies Annual 500 billion yen in 2020 (about 50% of the global
market) FY2013: Annual 240 billion yen (total market size of in-vehicle storage
batteries and electricity-storage ones)* KPI was changed from “Capture 50% of the global market by 2020” in order tosteadily acquire markets of advanced storage batteries and ensure profitability,
without fixated on the market share.
<KPI> “Add windows to the target of products covered by the top-runnerprogram by the fall of 2014.”
 Newly add windows (sashes and multi-layered glasses) to the target of products
covered by the top-runner program.
<KPI> “Aim for residential fuel cells (ENE-FARM) 1.4 million units in 2020, and
5.3 million in 2030.”
115,000 units (as of end of FY2014)
Current period required to recover investment by users: 18 years* “Aim for the investment amount by users recoverable in 7-8 years by 2020” isset as a supplementary index, as it will be spread with increasing speed if theinvestment recovery period is shortened to the level which is acceptable tousers.
<KPI> “Aim to increase the share of new automobiles accounted for by
next-generation automobiles to between 50% and 70% by 2030.”
 FY2014 (preliminary figure): 24.3%<KPI> “Conclude consultation and establish the Joint Crediting Mechanism(JCM) with 16 countries by the end of 2016.”
 Having concluded the bilateral consultation and signing the documents with 3
new countries by the end of May 2015 (14 countries in total).

134

(2) Progress made in implementing measures(Requiring large-scale building to comply with the energy consumption
performance standards)- In addition to requiring buildings—other than those for residential use—with no lessthan a certain size to comply with energy consumption performance standards, theGovernment submitted to the Diet in March this year a bill concerning theimprovement of energy consumption performance of building to create incentive
measures including the accreditation system for plans to improve energy consumption
performance.

(Promoting research on maritime resources)- Having conducted research for identifying the volume of shallow methane hydrate
reserves, the Government confirmed by March 2015 the existence of 971 gas chimney
structures with the possibility of shallow methane hydrate reserves.
- As for maritime mineral resources, following the institution of government ordinanceto extend Japanese continental shelves last September, the Government started
exploring the extended continental shelves in October. In December last year, it
confirmed the existence of new sea-floor hydrothermal deposits in the northwest
offshore of mainland Okinawa, and in January this year promising sea-floorhydrothermal deposits in the offshore of Kumejima Island of Okinawa prefecture.

(3) Specific new measures to be taken
Seeing the restraints on environment and energies Japan is facing as good opportunities,
the Government will strive to acquire global markets through active international
expansion, positioning as growth industries energy-saving/renewable energy technologies,
products, services, and systems which Japan excels, while realizing the supply anddemand of clean and economic energies. At the same time, it will promote developmentof maritime resources.

[1]

Creating a hydrogen-based society with less CO2 emissions
Based on a roadmap with a view to creating a hydrogen-based society, theGovernment will steadily proceed with introductory support to encourage thediffusion of residential fuel cells and fuel cell vehicles; and development oftechnologies and review of regulations on hydrogen stations including permissionof self-charging. Moreover, while increasing the demand for hydrogen, theGovernment will promote development and demonstration of technologies forestablishing large-scale production and supply systems for hydrogen to utilize
unused energies; combining CCS (Carbon dioxide Capture and Storage) withhydrogen production; or establishing CO2-free hydrogen production and supply

135systems utilizing hydrogen originating from renewable energies.

[2]

Creating societies overcoming restraints on environment and energies
Under the cooperation between relevant ministries and agencies, municipalities
etc., the Government will promote the realization of regionally-distributed energy
systems which contribute to reducing the environmental burden and the expansionof virtuous cycles of local economies by combing energy saving, renewableenergies, low-carbon technologies such as hydrogen and fuel cell technologies,
etc.; at the same time, targeting for the 2020 Tokyo Olympic and Paralympic
Games, it will demonstrate the results at the sites of Olympics/Paralympics games
and in other regions for people in Japan and abroad to see. Specifically, on the
demand side of energies, the Government will proceed with developing innovative
materials such as next-generation semiconductors and putting them in practicaluse for home electric appliances and transportation such as buses and railways, aswell as putting in practice energy cell technologies for buses and others. On the
supply side of energies, in addition to renewable energies, the Government will
actively expand the introduction of utilization of waste heat from waste disposal
facilities and cogeneration, from the viewpoint of achieving high energy
efficiency through the effective use of heat. Furthermore, the Government will
demonstrate a model of the virtual power plant which makes a region function as
if it is a power plant by effectively utilizing storage battery banks, demand
response etc., for adjusting supply and demand, utilizing sophisticated energy
management technologies.

[3]

Expanding the balanced introduction of renewable energies
Aiming to expand the introduction of renewable energies, the Government will
engage in the balanced introduction, while taking into consideration thecharacteristics and actual status of each electric source, including development of
power grids and their operations in wider areas, research and development as well
as demonstration of storage batteries, facilitation of environmental assessment
procedures, and reinforcement of supporting measures for geothermal electric
power generation which is a base load power source.

[4]

Promoting international transfer of excellent energy-saving andclean-energy technologies
The Government will contribute to reducing the emission of greenhouse gases
on a global scale, while facilitating the penetration of overseas markets for theenergy industry, by promoting international transfer of excellent energy-saving
and clean energy technologies (Highly Efficiency Law Emissions (HELE) electric

136

power generation, energy-saving home electric appliances, energy-saving
components, next-generation automobiles, renewable energy related technologies,etc.). In this regard the Government will promote the “Enevolution” initiative
which prompt international expansion of the energy industry throughinfrastructure export etc.; realizing Japan’s highly efficient and reliable energy
infrastructure exports through policy dialogues with emerging countries etc.
Furthermore, it will promote overseas activities such as supporting forestablishment of energy-conservation systems dispatching of government-private
missions, and partnering with local companies through demonstration projects. In
addition, Japan aims to increase the number of partner countries to the Joint
Crediting Mechanism (JCM) from the current number of 14 to 16 by 2016,
supports the formulation of projects, evaluates Japan’s contributions to GHG
emission reductions or removals appropriately in a quantitative manner, and uses
it to achieve Japan’s emission reduction targets.

[5]

Promoting maritime resource development and developing relatedindustries- Regarding the deep hydrate, the Government will endeavor to develop
long-term and stable production technologies by conducting a long-term
offshore production test, Japan-U.S. joint research etc. In addition, as for theshallow methane hydrate, the Government will implement concentrated drilling
surveys to identify the resource volume, and based on their results, engage in afull study and research and development of resource recovery technologies etc.
For sea-floor hydrothermal deposits, surveys and technology development for
the extraction and lifting of minerals will be conducted jointly by thegovernment and the private sector in order to start trial production ahead of theworld by the end of FY2017. Moreover, evaluation of resource potentials will
be given for rare earths by the end of this fiscal year.
- In order to develop the environment to promote the entry by private businesses
into the field of maritime resource development, the Government will support
the development of technologies for maritime resource development relatedindustries. At the same time, aiming to develop engineers as the infrastructure,
the industry, government and academia will cooperate in coordinating theestablishment of a special institution/organization to coordinate the matching
between universities and industries during this fiscal year to start the operationof personnel development system from next fiscal year.

137

Theme 3: Building safe, convenient, and economical next-generation
Infrastructure(1) Progress in achieving KPIs
<KPI> “By 2030, achieve efficient inspection and repair of all important and aged
domestic infrastructure using advanced technologies, including sensors
and robots”
 As regards the inspection by robots for next-generation social infrastructure etc.,
the Government conducted evaluation in preparation for the trial introduction byimplementing on-site inspections in 5 fields. On the monitoring technologies forsocial infrastructure using sensors etc., it decided the technologies to implement
on-site inspections in 5 fields, and started on-site inspections.
<KPI> “By 2030, ensure safety driving support equipment and systems are
installed in all new automobiles sold in Japan, as well as in most existingones”
 Among passenger cars produced in 2013 to be sold in Japan, the number of cars
which have braking equipment (including that mitigates such damage at low
speeds) which are being spread as safety driving support equipment and systems.
About 653,000 cars (Ratio of the equipped: about 15.4%)(About 185,000 cars in 2012 (Ratio: about 4.3%)(2) Progress made in implementing measures(Formulation of the “Action Plan for Life Extension of Infrastructure”)- As of April 2015, Action Plan was formulated by Ministry of Land, Infrastructure,
Transport and Tourism, Ministry of Agriculture, Forestry and Fisheries, Ministry ofJustice, National Police Agency, Ministry of Education, Culture, Sports, Science andTechnology, 2. Ministry of Health, Labour and Welfare, Ministry of Economy, Tradeand Industry, and 75 municipalities. Among 3,185 organizations required to formulate
an Action Plan, about 99% are planning to do so.

(Research and development/introduction of robots
technologies for next-generation social infrastructure)andmonitoring- As regards the inspection by robots for next-generation social infrastructure, theGovernment publicly solicited proposals for on-site inspections from April 2014 infive fields of bridges, tunnels, underwater maintenance and management, disastersurveys, and emergency recoveries; and formulated 101 on-site inspection plans; andconducted 91 on-site inspections by January 2015. Afterwards, it conducted 53
evaluations in preparation for trial introduction.
- As regards the monitoring technologies for social infrastructure using sensors etc., the138Government publicly solicited proposals for on-site inspections from September 2014
in five fields of bridges, slope and slant faces, river embankments, maritime andcoastal structures, and airport facilities; and decided 40 cases of technologies foron-site inspections by December; and started on-site inspections.

(Executing a strategy for world-leading ITS)
- Based on the “Public-Private ITS Initiative/Roadmaps 2015,” which was decided by
the IT Strategic Headquarters in June 2014 and revised in June 2015, the Government
has established a joint meeting structure for the SIP Automated Driving System
Promotion Committee—under Council for Science, Technology and Innovation(CSTI)—and the Road Transportation Sub-committee of Expert Panel on New
Strategy Promotion under the IT Strategic Headquarters; and is promoting the strategy
for the automated driving system.
- Under the “Public-Private ITS Initiative/Roadmaps 2015,” the Government is deciding
on the future direction, specific initiatives to be taken for the time-being etc. to utilize
transportation data, and promoting strategies for them. Moreover, the Government
formulated the Future Vision for Utilizing Automobile-related Information in January
2015, in order to utilize automobile-related information.

(3) Specific new measures to be taken
As regards life extension of infrastructure aimed at reducing and averaging the total
cost, developing new technologies and cultivating the maintenance industry, while
ensuring the peace of mind and security of Japanese people, those which are managing
and in charge of each infrastructure—including the national government and local
governments—will formulate, following the existing initiatives, the “Action Plans forLife Extension of Infrastructure” by the end of the next fiscal year, formulate plans forindividual facilities, and promote maintenance cycles. Furthermore, each ministry will
announce and enhance various supporting measures to be used for formulating plans formeasures to deal with aged infrastructure and for promoting such measures. In addition,
the following measures will be taken in order to develop and put into practice newtechnologies that support new infrastructure businesses and translate into reality thevision for a society in which people and goods can move safely and smoothly.

[1]

Conducting research and development and introducing robots fornext-generation social infrastructure
As regards robots for next-generation social infrastructure, the Government will
publicly solicit proposals, facilitate development and improvement by conducting
on-site inspections and evaluation in national projects, and examine evaluation
methods etc. in preparation for trial introduction. In particular, as for some139

technologies such as disaster surveys etc. based on on-site inspections andevaluation, the Government will bring forward their trial introduction in national
projects, which are planned for next fiscal year and after, to as early as possible
including implementation during the current fiscal year. Furthermore, theGovernment will establish a portal site, develop a collaboration system of industry,
academia and government in each local block and so on, in order to provide
technical support for the introduction by local governments. The Government will
strive for expeditious and full introduction by promoting these initiatives.

[2]

Developing and invigorating the infrastructure maintenance industry
Aimed at developing and invigorating the infrastructure maintenance industry
which is to become the basis for the implementation of the “Action Plans for Life
Extension of Infrastructure” etc., the Government will establish a National
Council on Infrastructure Maintenance (tentative name) as a platform by which
the industry, government and academia will tackle this issue with all their mightfrom next fiscal year. At the same time, it will create a Maintenance Award(tentative name) to honor best practices and diffuse the philosophy.

[3]

Executing a strategy for world-leading ITS
Based on the “Public-Private ITS Initiative/Roadmaps 2015,” the Government
will execute the strategy, while implementing research and development projectsof the Strategic Innovation Promotion Program (SIP) under the Council for
Science, Technology and Innovation.
As regards automated driving systems, taking into consideration the issues
Japan is facing, including the reinforcement of competitiveness in global markets,
reduction of traffic accidents, and response to the on-going ageing of the society,
the Government—with a view to starting trial use of fully automated driving
systems in the latter half of the 2020s—will proceed with the following
developments in advance for the time-being: “Automated Driving System toContribute to Strengthening International Competiveness in Global Markets”;“Local Public Transportation System” aimed for the introduction at the 2020
Tokyo Olympic and Paralympic Games; “Small Automated Driving Systems for
Local Communities” bearing in mind transportation means for the elderly etc. in
local areas, and so on.
Moreover, as regards the utilization of road transport data, the Government will
promote: research and development under the government and private cooperationon the map information infrastructure (the dynamic map) which is required as thebasic information for automated driving etc.; consideration of necessary rules etc.
for common use of probe data; initiatives to cleverly use roads by enabling the140road networks as a whole to function to the maximum extent in terms of time andspace through the elimination of traffic jam bottle necks and potentially dangerous
locations for traffic accidents with the utilization of big data and focused measures
based on scientific analyses; more flexible procedures of permission with theutilization of ITS technologies for those who use roads appropriately in order toensure appropriate traffic of large vehicles; and initiatives to create new services
and innovate industries based on the “Future Vision for the Utilization ofAutomobile Related Information” which aims to realize new insurance services
utilizing telematics, the traceability service to collect and utilize the history
information of automobiles, and so on.

141Theme 4: Building regional communities that use their unique local
resources to appeal to the world
Theme 4-1) A rich rural society which produces the world’s highest-quality
agricultural, forestry and fishery products and food produce(1) Progress in achieving KPIs
<KPI> “Increase the ratio of farmland used by business farmers to 80% in thenext 10 years”
End of FY2013: 48.7%  End of FY2014: 50.3%<KPI> “Reduce the cost of rice production by business farmers by 40% in thenext 10 years compared with the current national average cost, including
through efforts by industry”
National average cost of rice production in 2011: ¥16,001/60kg
 The cost of rice production by business farmers in 2013:- Individual management* ¥11,374/60kg (29% reduction from ¥16,001/60kg)- Incorporated organizational management** ¥11,931/60kg (25% reduction from
¥16,001/60kg)*
Among certified farmers, individual management bodies in which agricultural
income per agricultural worker from rice-farming is equivalent to income fromother industries (with the cropping acreage of paddy rice no less than 15 ha)**
Incorporated organizational management bodies whose sales amount of rice is thehighest (average cropping acreage of rice: about 29 ha)<KPI> “Increase the number of corporate farmers four-fold from the 2010 levelto 50,000 in the next 10 years”
2010: 12,511  2014: 15,300<KPI> “Expand the market size of agriculture based on collaboration among the
primary, secondary and tertiary industries (sixth industry) from thecurrent ¥1 trillion to ¥10 trillion in 2020”
FY2010: ¥1.2 trillion  FY2013: ¥4.7 trillion** Total market size of 7 areas which are expected to grow (processing and direct
sale, export, interactions between cities and villages of agriculture, forestry
and fishery etc.); it was compiled as the market size of sixth industry by theCouncil of Food, Agriculture and Rural Area Policies

142

<KPI> “Increase the value of exports of agricultural, forestry and fisheryproducts and foods to ¥1 trillion by 2020 (2012: approximately ¥450
billion)”2012: ¥449.7 billion  2014: ¥611.7 billion<KPI> “Increase the number of projects to promote collaboration among the
primary, secondary and tertiary industries with regard to dairy farming to
500 by 2020”2014: 236 projects  2015 (as of end-April) 284 projects(2) Progress made in implementing measures(Implementation of agricultural cooperatives reform)- In order to implement integrated reform of agricultural cooperatives, agriculturalcommittees, and agricultural production corporations, the Government submitted a billwith the following main contents to partially revise the Agricultural Co-operatives Act
etc. to the Diet in April this year.
[1] Revising the Agricultural Cooperatives Act- Clarify the management objectives of agricultural cooperatives; while giving
the maximum consideration for increasing agricultural income, and stipulatethat they should realize high profitability through appropriate businessactivities and endeavor to distribute the surplus in accordance with the amountof use of businesses to farmers etc.
- Stipulate that a majority of board members of regional agricultural
cooperatives should be certified farmers and the like in principle.
- Stipulate that National Federation of Agricultural Cooperative Associations canbe converted into stock companies if it chooses to do so.
- Abolish the Central Union of Agricultural Cooperatives system, shifting
Prefectural Central Unions to Federations of Agricultural Cooperatives, andNational Central Union to a general incorporated association. Moreover,abolish mandatory National Central Union audit on agricultural cooperatives,and instead require audit by certified public accountants.
[2] Revising the Act concerning agricultural committees etc.
- Change the selection method of committee members from the public election
to the appointment by the heads of municipalities- Newly establish Farmland Utilization Optimization Promotion Commissioner(tentative name)- Appoint the agricultural committee network organizations at the prefectural143

and national levels to support agricultural committees[3] Revising the Agricultural Land Act- Review requirements for agricultural production corporations (requirements for
directors and voting rights)(Promotion of collaboration among the primary, secondary and tertiaryindustries)- In order to accelerate the promotion of collaboration among the primary, secondary
and tertiary industries by the Agriculture, Forestry and Fisheries Fund for Innovation,
Value-chain and Expansion Japan (A-FIVE), the Government took such measures in2014 as the formulation of the guideline for the utilization of A-FIVE by various
entities engaging in agriculture, forestry and fishery as well as the raising of the
sub-funds’ ratios for capital contributions.

(Diversifying distribution channels of dairy farming)- The Government implemented measures last year, including improvement of freshmilk transactions by enabling dairy farmers to sell distinctive fresh milk directly tomilk producers etc., and the easing of regulations on the establishment of milk
production facilities.

(Promoting exports)- In order to promote the Japan Brand, since last fiscal year to this fiscal year, theGovernment has established the nation wide export promotion institutions of sevenmajor products such as rice and processed rice food, and beef. In October 2014,
moreover, the Fisheries Agency started the HACCP approval of fishery processing
establishments required for exports of fishery products to the EU.

(Promoting urban farming)- The Basic Act on Urban Farming Promotion was passed in April this year to facilitate
policy measures concerning the promotion of urban farming comprehensively andsystematically.

(3) Specific new measures to be taken
In order to transform agriculture, forestry and fishery into growth industries andincrease income of farmers, the Government will steadily implement a series ofagricultural reforms identified in the “‘Japan Revitalization Strategy’ Revised in 2014”
and the “Plan to Create Vitality for Agricultural, Forestry and Fishery Industries andLocal Communities” (revised by the Headquarters on Creating Dynamism through144

Agriculture, Forestry and Fishery Industries and Local Communities on June 24, 2014),
including the reform of rice production adjustment program, farmland consolidation
through the Public Corporations for Farmland Consolidation to Core Farmers throughRenting and Subleasing (Farmland Banks), and expansion of farmland partitions and thecreation of multi-purpose paddy fields. At the same time, taking advantage of the EXPO
Milano 2015 and the 2020 Tokyo Olympic Paralympic Games, the Government willfurther policy measures by taking in new demand frontiers such as disseminating theattractions of diversified Japanese food and food cultures in local areas as well as ruralvillages, and thereby increasing inbound demand and promoting export more.
In order for agriculture, forestry and fishery to transform into growth industries, value
chains that connect demand and supply need to be sophisticated based on amarket-oriented approach, along with further improvement of productivity through thepromotion of agricultural land improvement projects, reduction of costs in production anddistribution systems, utilization of ICT technologies, and so on. Accordingly, it will be ofimportance to: (i) develop managers who accurately identify market needs at the
production level; (ii) increase added value by linking value chains from production toprocessing and sales; and (iii) link higher value added agricultural, forestry and fisheryproducts and processed ones to markets in Japan and abroad. At the same time, theGovernment will also (iv) strive to transform forestry and fishery into growth industries.
From these perspectives, the Government will promote the following initiatives. In
promoting these policy measures every year, the Government will conduct constantinspections and reviews on them to ensure steady results of these projects.

i)Strengthening production sites[1] Steadily implementing reform of rice policy- In order to create an environment that enables farmers to choose their crops
based on their management decision, the Government will implement theinitiatives for the reform of rice production adjustment program, aimed at rice
to be produced in 2018. In doing so, aiming to promote the production basedon the market demand, the Government will further encourage stabletransactions through the contracts before sowing and those for multi-year etc.
Moreover, it is important to form transparent and fair prices reflecting the
supply and demand movements by utilizing various functions of the market.
Accordingly, the Government will make necessary encouragement toinvigorate the spot market to become an indicative one with representative
brands.
- As regards strategic crops including rice for feed, the Government will promote
the enhancement of productivity to encouraged production, along with the
expansion of production, based on the Basic Plan for Food, Agriculture and145

Rural Areas. In particular, as for the productivity ofrice for feed, theGovernment will improve it to twice as much in 10 years (FY2025) throughcost reduction and yield growth by accelerating the development of high-yield
varieties, reduction of costs, consolidation farmland to business farmers, and soon. To achieve this target, the Government will monitor the implementation ofpolicies through the PDCA cycle, while grasping and making public the cost
structure of rice for feed.
- In promoting the production according to demand, the Government will
actively promote policy measures to increase the export of rice, directing its
attention to overseas demand as well.
- Based on the “Plan to Create Vitality for Agricultural, Forestry and Fishery
Industries and Local Communities,” regional agricultural cooperatives will aim
to increase returns while taking appropriate risks, in such ways as gradually
expanding purchase and sales of agricultural products by setting numericaltargets, with the cooperation of the agricultural cooperative associations andagricultural economic federations.

[2]

Strengthening the functions of the Public Intermediate Organization
for Farmland Consolidation
In order to steadily achieve the target of increasing the ratio of farmland usedby business farmers to 80% in the next 10 years, relevant parties, including theGovernment, prefectures, municipalities, together will accelerate the efforts forconsolidating farmland, by taking the following and other initiatives. The
Headquarters on Creating Dynamism through Agriculture, Forestry and Fishery
Industries and Local Communities will evaluate the Public Intermediate
Organization for Farmland Consolidation every fiscal year.
A) Announcing achievements of the Public Intermediate Organization for
Farmland Consolidation
Achievements of the consolidation of farmland by each prefectural Public
Intermediate Organization for Farmland Consolidation will be made publicalong with the ranking.
B) Improving the system of the Organization
The Government will require Public Intermediate Organization for Farmland
Consolidations and prefectures to fundamentally change their mindset anddevelop the system for their executives and employees etc.; and request Public
Intermediate Organization for Farmland Consolidations to make public theirimproved system of the executives and staff in charge of coordinating farmland
consolidation on site (including the placement of the staff at contractors as well).

146

In addition, the Government will require Public Intermediate Organization for
Farmland Consolidations to report to it such improvements, examine thecontents of the report, and request further improvements, if necessary.
Furthermore, the Government will request municipalities, through prefectures,to steadily conduct dialogues with farmers in the region, including reviews on
personnel and farmland plans for farmland consolidation so that Public
Intermediate Organization for Farmland Consolidations is able to rent farmlandin large volumes.
C) Developing the environment for farmland consolidation
In order to increase the incentives for Public Intermediate Organization for
Farmland Consolidations to consolidate farmland, the Government will constructa system to encourage governors of prefectures, who should play a leading role,
to consolidate farmland. It will do so by such efforts as collecting best practices
of prefectural Public Intermediate Organizations for Farmland Consolidation andsharing them with prefectures and Public Intermediate Organizations; strengthen
the linkage to agricultural infrastructure development; and give consideration forvarious policy measures of the prefectures which have achieved good results.
D) Strengthening or reducing taxation on idle farmland etc.
The Government as a whole will consider and reach a conclusion as early as
possible during this fiscal year on a system of incentives/disincentives bystrengthening/reducing etc. taxation on ownership of farmland, aimed ateliminating idle farmland through the leasing etc. to the Public Intermediate
Organization for Farmland Consolidation in cases where there is no intention touse farmland effectively and efficiently as farmland; and promoting more
efficient and sophisticated use of farmland through the increase of the size of
agricultural management etc., and thereby improving the productivity ofagriculture.
E)

Improving the system for disclosing information on agriculture
The Government will construct and start operating a system which is capable

to reflect the latest information on agriculture (the reference number for each
cultivator, the status of implementation of measures on idle farmland, theintention of owners on leasing etc.)[3]

Securing and developing business farmers with excellent management
sense, and promoting incorporation- In order to realize sustainable and powerful agricultural structure, it is147

important for business farmers (such certified farmers as corporate farmers andfamily farms) to manage and prosper by playing a leading role through creative
initiatives. As for corporate farmers, they have advantages in sophisticating
business management and securing human resources stably, succeeding
management smoothly, taking leaves easily etc. Accordingly, aimed atincorporation of agricultural management, the Government will establish target
for incorporation at the prefectural level; at the same time, it will develop a
supporting system by experts such as agricultural management advisors,certified tax accountants, small- and medium-sized enterprise management
consultants, and regional financial institutions.
- In order to secure and develop leading farmers with excellent management
sense, it is important not only that agricultural producers grasp their own
business situation accurately, and improve and develop it but also that
financing from financial institutions, including policy-based finance, should be
provided more smoothly and so on. Accordingly, the Government will consider
creating supporting systems in accordance to the stages of managerial
development, including a system to objectively evaluate marketing skills(marketing, financing, etc.), and to promote lending based on customers’
business potentials; or one to encourage employed farmers in agricultural
corporation to develop their career towards succeeding business, or starting up
and becoming independent.
- Regarding the introduction of income insurance for agricultural producers, theGovernment will consider its structure and relevant systems (e.g. an
agricultural mutual relief system) while conducting a feasibility study.
Consequently, the Government will take the necessary legislative action.

ii) Linking domestic value chains[1] Promotion of collaboration among the primary, secondary and tertiaryindustries- In order to facilitate the creation of management bodies to practicecollaboration among the primary, secondary and tertiary industries under clear
business strategies, the Government will promote the utilization of supporting
measures according to the development stages of business etc., including the
Act for Collaboration among the Primary, Secondary and Tertiary Industries/Local Production for Local Consumption, and the Agriculture, Forestry and
Fisheries Fund for Innovation, Value-chain and Expansion Japan (A-FIVE). At
the same time, it will promote supporting systems for farmers etc. willing toengage in collaboration among the primary, secondary and tertiary industries aswell as regional collaboration among the primary, secondary and tertiary

148industries.
- The Government will promote initiatives for collaboration between the medicalcare, welfare, food and agricultural sectors, including domestic production of
medicinal plants.

[2]

Strengthening livestock and dairy farming- In order to strengthen the foundation of production for livestock and dairy
farming, it is important to change the production structure to support livestockand dairy production by the region as a whole. Accordingly, by promoting
livestock clusters in which relevant parties cooperate in improving profitability
and other initiatives, the Government will proceed with strengthening thebusiness foundation of dairy farming which is the common breeding
foundation for dairy and beef cattle, developing the breeding base (cattle
breeding stations etc.), making breeding and fattening of beef cattle acontinuous operation and so forth. Moreover, the Government will promote
more efficient production and distribution systems etc., such as streamlining
the distribution and transaction of fresh milk.
- As livestock and dairy farming business requires a lot of funds for constructionof barns and production materials, it is important to lower costs and to reducerisks. Accordingly, the Government will consider initiatives to review
regulations etc. such as simplification and acceleration of relevant procedures,and smoother financing from financial institutions, including policy-based
finance.
- Moreover, the Government will proceed with initiatives for the differentiation
and branding based on a market-oriented approach that responds appropriately
to changes in market needs; at the same time, it will promote initiatives forcollaboration among the primary, secondary and tertiary industries and export
based on innovative ideas of livestock and dairy producers.

iii) Promoting exports, etc.
[1] Promoting the Japan Brand- The Government will aim at achieving ahead of schedule the target annual
export value of ¥1 trillion by 2020 for Japanese agricultural, forestry andfishery products and foods. For this purpose, the Export Strategy Executive
Committee, serving as the headquarters for export promotion throughout Japan,
will establish yearly policies for increasing exports of each products. Under
such policies, the Government will further promote exports under the Japan
Brand together with the export promotion institutions of seven major products,
Japan External Trade Organization (JETRO) and others; through focusing on

149

products with the “room for growth” going forward such as rice with potential
substantial demand as well as beef that is easy to differentiate from othercountries’ beef.
- Taking advantage of the 2020 Tokyo Olympic and Paralympic Games, theGovernment will promote overseas expansion combing Japanese foods andliquors effectively, and at the same time, facilitate exports of regional
specialties utilizing the Geographical Indication protection system (GI Marketc.).

[2]

Improving the export environment- The Government will develop, as model export zones, export bases for
agricultural, forestry and fishery products and foods, by promoting one-stop
services for certificate issuance and exporting procedures such as quarantine inwholesale markets near international airports including the Narita International
Airport.
- In order to enhance the food safety of agricultural products and strengthen thecompetitiveness of the food industry, the Government will promote formulationof an internationally acceptable GAP (good agricultural practices) standard
from Japan by the end of this fiscal year so that the standard will be applied in
FY2017, and promote standards concerning food safety management based on
HACCP by the end of this fiscal year. The Government will support forestablishing food value chains in the wide range of regions and countries
including advanced countries to promote overseas business and investments ofthe food industry.
- The Government will identify impediments for export promotion, including
restrictions in export-destination countries; issue annual report to clarify thestatus of efforts for improvements; and systematically promote initiatives tosolve issues by prioritizing them in a well-planned manner. Moreover, theGovernment will establish a mechanism to ensure that the trade in animal
products can continue even in an outbreak of a foreign animal disease throughexporting from disease-free zones within the affected country.

iv) Transforming forestry and fishery into growth industries[1] Transforming forestry into a growth industry- To create new demand for wood products, the Government will promote efforts
to popularize domestic CLT (Cross Laminated Timber), while developing
fireproof materials , realize the production capacity of about 50,000 ㎥ at the
beginning of the next fiscal year, and construct the production system of150

approximately 500,000m³/annum by FY2024. On the occasion of the 2020
Tokyo Olympic and Paralympic Games, the Government will promote the useof wood products.
- As regards wood biomass energy, considering that the procurement pricecategory was newly established for biomass electric power generation utilizing
unused timber from forest thinning in small volumes (less than 2,000kW) in
the feed-in tariff system from April 2015, the Government will promote the useof energy using a combination of small-scale regional power generation andheat utilization, as well as the use of new materials while proceeding withresearch and development focused on cellulose nano-fiber for international
standardization.
- The Government will establish a low-cost and efficient production/supply
system for wood products (wood product value chain) by consolidating forestry
practices, improving wood transportation system etc.
- Moreover, the Government will promote systematic harvesting
and forest
management(including the conversion to forest with less pollen tocontribute to the circular utilization of forest resources), and at the same time,
accelerate efforts to clarify owners and boundaries of forests in order toconsolidate forestry practices.

[2]

Transforming fishery into a growth industry- The Government will increase “Fishing Village Revitalization Plans”— underwhich fishing regions themselves aim to achieve structural reform of thefishery industry and fishing villages with the support of companies, NPOs,
etc.—to 600 cases (427 cases as of end-FY2014) by the end of the next fiscal
year to cover about 70 % of the landing volume all over Japan. At the sametime, the Government will aim for the formulation of “Wide–Area Fishing
Village Revitalization Plans” in 60 regions by the end of FY2017 for thecooperation of multiple fishing villages. Through these initiatives, theGovernment will increase the income of regions that have formulated the plansby more than 10% within five years of formulation, and thereby lay thefoundations for a sustainable and highly profitable fishery and fish farming
industry. Moreover, the Government will convert marine fishery (using fishingboats) to one with highly profitable fishing and production systems, andpromote the utilization, of IT technologies and cost reduction in the fish
farming industry and fishing sites.
- The Government will promote the enhancement of resource management bystarting the evaluation of the effects of the test-case of IQ(Individual Quota)
scheme from this summer and implementing the assessment/evaluation of151resource management plans made by fishermen from this fiscal year.
- The Government will expand exports and promote distribution of fisheryproducts through HACCP authorization of fishery processing establishments
for export to the EU and hygiene management of fishing ports. By FY2017, theGovernment will formulate the guideline for introduction of traceability which
also contributes to countermeasures against illegal fishing.

152

Theme 4-2)

A society which makes use of potential of tourism resources andothers to invite many tourists from around the world to regional
communities(1) Progress made in achieving KPIs
<KPI> “Increase the annual number of foreign visitors to Japan to over 30 million
by 2030”
 2014: 13.41 million (2012: 8.36 million)(2) Progress made in implementing measures(Strategically relaxing visa requirements)- Visa requirements have been relaxed, primarily for countries from which many foreign
visitors to Japan are expected. Specifically, visitors from Indonesia are exempt fromvisa requirements based on a system of e-passport registration; issuing requirements
are substantially relaxed for multiple-entry visas for visitors from the Philippines,
Vietnam, and China; and multiple-entry visas are introduced for those from India andBrazil. As a result of a combination of the effects of strategic promotion of visits toJapan, expansion of airline networks, and exchange rate movements, the number ofvisitors from these regions has increased significantly.

(Creating a program for longer stays of foreign visitors in Japan)- In June 2015, the Government created a program to grant wealthy foreign visitors thepermission for longer stays in Japan.

(Further expanding the consumption tax exemption system for foreign
visitors)- The Government has achieved ahead of the schedule the target of “Doubling thenumber of tax-free shops across Japan to 10,000 towards 2020”: The number oftax-free shops across Japan increased to 18,779 as of April 1, 2015, through such
efforts as enhancing prior consultation services at Regional Transport Bureaux andRegional Bureaux of Economy, Trade and Industry; holding briefings all over Japan;
establishment and promotion of use of the logo for tax-free shops; and expanding thescope of tax exemption items to all items in October 2014.
- Following up on the expansion last year, with a view to further increasing the numberof tax-free shops in regions and improving the convenience, the Government createdin April 2015 a system to outsource tax-exemption procedures by installing“Tax-free Counter”; where tax-free procedures is completed at once in shopping
districts, etc. and created a notification system for tax-free shops at the ports at whichinternational cruise ships call. New systems are already starting to be used in local
shopping districts or port facilities.

153

(3) Specific new measures to be taken
The annual number of foreign visitors to Japan was about 13.41 million in 2014(29.4% increase from the previous year) with the consumption reaching to ¥2,027.8
billion (43.1% increase from the previous year), both showing a substantial increase fromthe previous year. As regards the number of foreign visitors to Japan, aiming at the early
realization of the “age of 20 million” foreign visitors, as well as exceeding 30 million by
2030, the Government will set tourism—including inbound and domestic tourism—as akey industry which leads the Japanese economy, given its wide ranging spillover effects
and significance. Accordingly, the Government will promote a tourism-oriented country,with more emphasis than before on “earning” and “revitalizing regional economy,” aimed
at “expanding the consumption by foreign visitors to ¥4 trillion in the year when foreign
visitors exceed 20 million,” “creating 400 thousands new jobs across Japan in the year
when foreign visitors exceed 20 million,” and “increasing the number of tax-free shops inregions from current about 6,600 (April 2015) to around 12,000 in 2017 and around
20,000 in 2020.”
Therefore, the Government will conduct an effective promotion, and engage instrategic relaxation of visa requirements etc., while more strongly conscious about theimportance of strategic policy guidance than before. In addition, in order to strategicallycreate the flow of tourists from inside and outside of Japan, and promote the revitalizationof regional economy through tourism, the Government will promote establishing theorganizations/functions which play a central role in developing tourism areas from theviewpoint of “tourism management” (Japanese version of DMOs: Destination
Management/Marketing Organizations); polishing up local attractiveness thoroughly,
including the promotion of tourism-based community development; and disseminate
information widely by networking local areas with specific themes and stories as if
joining the dots into lines, and then combining the lines into larger objects.
Moreover, in preparation for accepting 20 million foreign visitors to Japan annually,and 30 million of them later, the Government will establish necessary systems in each
local area, while both the public and private sectors carefully look at the situation so thatcapacities of transportation such as the gateway function of airports, airlines and buses aswell as accommodation facilities etc. will not become restraining factors.
Furthermore, the Government will rapidly improve the tourism environment to accept
foreign visitors, including acceleration and facilitation of immigration procedures throughthe development of necessary physical and human resources for CIQ, increase in the
supply of paid guide interpreters by changing the system of the licensed guide-interpreter,
multilingual services, and reinforcement of base functions of airports, sea ports, androadside stations.
Including these policy measures, the Government will take the following initiatives

154based on the Action Program toward the Realization of Japan as a Tourism-Oriented
Country 2015 (approved at a meeting of the Ministerial Council on the Promotion ofJapan as a Tourism-Oriented Country on June 5, 2015):- Taking strategic initiatives for new age of inbound tourism;- Further expanding tourism consumption, incorporating wide-ranging industries
as tourism-related ones, and reinforcing tourism industry;- Developing tourism areas which contribute to revitalizing regional economies,and promoting domestic tourism;- “Aggressively” improving the tourism environment to accept foreign visitors inadvance;- Actively attracting foreign business visitors etc., and enabling high-quality
touristic exchanges; and- Accelerating tourism promotion in preparation for “after the Olympic Games in
Rio de Janeiro,” “Tokyo 2020 Olympic and Paralympic Games” and “After the
Games in Tokyo.”Among these initiatives, the following are the ones which should be taken in particular
to achieve KPIs.

[1]

Taking strategic initiatives for new age of inbound tourism- While establishing numerical targets for each regional block, the Government
will induce foreign visitors who tend to concentrate on the so-called goldenroutes to regional areas through various strategic promotions including theformation of wide-area tourism excursion routes and dissemination of
information to overseas etc.
- The Government will disseminate information on regional attractions
throughout the world by inviting trend setters abroad including producers oftravel programs in foreign countries, and power-bloggers/Youtubers.
- The Government will create the demand for visiting Japan throughout the year,
by appealing attractions of seasons not only those in summer which has been
the high season for travelling to Japan but also cherry blossoms in spring,autumn color of leaves, and snow in winter.
- As regards educational trips from overseas, aimed at increasing the annual
number of visitors by 50% by 2020 from about 40,000 in FY2013, theGovernment will treat the Japan National Tourism Organization (JNTO) as thesole contact point for matching cultural exchanges; at the same time, it willcompile and implement a “Program to promote school exchanges andexperiences” (tentative name) by considering the invitation of relevant partiesof overseas schools, holding of seminars abroad, and a policy package ofidentifying schools to participate in understanding-promotion and exchanges of155

schools.
- In order to take in the demand for visiting Japan by those in the U.S. andEurope who are highly interested in history and culture of Japan but have notyet come in large numbers, the Government will change once again the
promotion strategy for people in the U.S. and Europe, implement promotion
under the themes of Japanese history and traditional culture aimed at visitorsfrom the U.S. and Europe, and enhance experience-type visiting Japan tour
products.
- Overseas offices of JNTO will play a central role in directly and powerfully
promoting the Japan brand as a whole, by forming a consortium with local
Japanese companies and government related organizations that endeavor toprovide attractive goods, services and food.
- In order to powerfully appeal attractions of Japan to overseas, the Government
will disseminate information on Japanese cuisine, local sake, culture etc. thatJapan is proud of, and thereby promote visits to specific regional areas, bystrengthening cooperation among relevant organizations and combining policy
measures of Visit Japan, Cool Japan etc.
- With capital contribution from the “ Japan Localization and Promotion +” andthe Cool Japan Fund, the Government will further strengthen the disseminationof information on contents etc. to introduce regional specialties such as
Japanese TV travel programs, and famous local sweets and local sake, andthereby strive to attract visitors to regional areas.
- When Japan External Trade Organization (JETRO) implements the “Projectcontributing to local areas” which appeals to overseas local attractions acrosssectors such as local handicrafts, manufacturing, and agriculture, and thereby
realize exports and investment in Japan, it will endeavor to attract visitors fortourism by strengthening dissemination of information to overseas through theinvitation of media people etc. with the cooperation of JNTO.
- Aimed at the realization of the annual number of foreign visitors to Japan to 20
million, the Government will endeavor to strategically relax visa requirements
further with the emphasis of ensuring national security. As for visitors from thePhilippines and Vietnam, with the cooperation with these countries, theGovernment will make efforts, while monitoring the operational situation of
the system which was newly introduced last fiscal year.
- Realize issuance of multiple-entry visas for Mongolia at an early date.
- Conduct intensive promotions in countries and areas for which visa
requirements have been relaxed.
- In response to the increase in foreign visitors to Japan, develop necessary
physical and human resources for visa examinations at Japanese diplomatic156

missions overseas in order to enable foreign visitors to apply visas for Japansmoothly.

[2]

Further expanding tourism consumption, incorporating wide-ranging
industries as tourism-related ones, and reinforcing tourism industry;- Regional Transport Bureaux and Regional Bureaux of Economy, Trade andIndustry will cooperate in strongly encouraging relevant parities ofmunicipalities, chambers of commerce and industry, and shopping districts torealize “tax-free shopping districts” utilizing tax-free counters. Moreover, they
will create the environment for foreign visitors to shop comfortably in regional
areas, by enhancing support for the introduction of necessary terminals forcashless settlement, tax-free systems, Wi-Fi equipments and others. That
shopping districts conduct along with the realization of “tax-free shopping
districts.”- JNTO will strongly disseminate information on the courses created for eachregional block to visit attractive local shopping areas where visitors can enjoy
shopping while experiencing local specialties, Japan-specific products andtraditional handicrafts.
- In coordination with export promotion measures for agriculture, forestry andfishery products and food, the Government will develop the environment andsystem which enables for foreign visitors to purchase local agriculture, forestry
and fishery products and food and bring them back to their own countries.
- Regional Transport Bureaux will select high-quality services and products that
can appeal to foreign visitors and provide the brand mark for each regional
block. For the acknowledged regional brands, it will dispatch producers toteach how to attract visitors to the regional area, expand to overseas, andenlarge sales channels, utilizing said services and products.
- Aimed at creating and diversifying the sales channels of high-quality optional
tour products all over Japan, the Government will invigorate region-specifictravel businesses to “concierges for travels in regional areas” by reviewing
necessary requirements to engage in region- specific travel business andpromote entry into such business.

[3]

Developing tourism areas which contribute to revitalizing regional
economies, and promoting domestic tourism- In order to induce foreign visitors to regional areas, the Government will
certify multiple wide-area tourism excursion routes, and support as a package
the initiatives promoted by regions by inputting policy measures of relevant
ministries and agencies intensively; at the same time, it will strongly appeal to157overseas.
- In model regions across Japan, the Government will promote establishing
Japanese version of DMOs (Destination Management/Marketing
Organizations) and support its initiatives to promote tourism such asconsensus-building among relevant parties, formulation of strategies based onmarketing, “tourism management” to manage the consistency between
strategies and tourism related projects of various entities, development of new
products and so on.
- The Government will strive to establish Japanese version of DMOs withdesirable functions across Japan. Accordingly, the Government will formulate amanual with required functions and disseminate it to relevant parties so that
DMOs can be improved gradually according to the actual situation of eachregion, taking into account advanced practices in the U.S. and Europe.
- In order to improve the quality of regional initiatives, the Government will
strengthen the dissemination of information on advanced practices of creating
tourism areas in various regions, including the development of organizations
with the functions of the Japanese version of DMOs, cooperation with relevant
parties in sectors other than tourism, development of the environment to accept
foreign visitors, and the creation of comfortable tourism sites including throughthe maintenance of cleanness and the construction of toilets.
- Treating the “Roadside Stations” as the core of promoting tourism in theregions, the Government will support initiatives to make them the bases of
tourism by selecting the “Roadside Stations” with excellent initiatives as
national model “Roadside Stations” and priority “Roadside Stations,” while
fully mobilizing policy measures of relevant ministries and agencies.
- Aimed at promoting tourism-based community development in acomprehensive way, while utilizing relevant policy measures such as theestablishment of good scenery, development of historical landscape, anddevelopment of international business environment, the Government will
prepare and disseminate the “Guideline for tourism-based community
development” (tentative name), and establish the consultation desk for the
tourism-based community development at the Ministry of Land, Infrastructure,
Transport and Tourism.
- The Government will promote full-scale removal of utility poles in tourism
sites etc., by newly preparing a plan to facilitate removal of utility poles, inorder to improve attractions of tourism sites, maintain historical streets, andrevive regional culture etc. such as traditional festivals etc.
- The Government will utilize nature and scenic areas which are representativesof Japan such as national parks and Geoparks*, and disseminate their158

attractions.
* Geopark: An area, with distinct boundaries, that not only includes numerous
geological heritages—which clearly show the geohistory andgeological phenomena in the regions—but also ecologically,archeologically, or culturally valuable sites.
- In order to link the dissemination of attractions to overseas and export
promotion of Japanese foods and culinary culture to the inbound demand fortasting them at their “home,” the Government will promote the initiatives todisseminate the attractions of foods and agriculture, including the utilization of
the system to protect geographical indications.
- Aiming to further vitalize inter-regional exchanges in Japan and the flow offoreign visitors within Japan, the Government will strive to create new demand
for travelling as well as enhance the networks of LCCs and highway buses
which are inexpensive and good-quality transportation services, by establishinga council for invigorating LCCs etc. and highway buses (tentative name);
implementing promotional strategy to improve images; securing inexpensive
and convenient access to airports, and promoting LCCs and access to the
airport together; developing the information platform for highway buses, andpromoting cooperation with “Roadside Stations”; and so on.

[4]“Aggressively” improving the tourism environment to accept foreign
visitors in advance- Aiming to enhance the functions of Tokyo Metropolitan Airports, theGovernment will strive, as the top priority, to increase the number of annul
landing slots by about 80,000 by 2020, by conducting dialogues with residents
on changes of flight routes from/to the Haneda Airport, formulating measures
paying due attention to the impact on the environment, and so on. Moreover, as
regards the reinforcement of functions after 2020, the Government will havemore in-depth discussions with relevant local governments on various issues
including the fundamental expansion of capacities at the Narita Airport.
[Described above]- In order to meet a rapid increase in demand for visiting Japan, the Government
will continue not only enhancing the functions of airports at Tokyo
Metropolitan areas, but also promoting the entering of service to all airports
across Japan, and with the cooperation with relevant ministries and agencies,
reinforcing the systems to accept all over Japan as soon as possible.
- In response to the increasing number of foreign visitors to Japan, theGovernment will develop necessary physical and human resources for CIQ, inorder for foreign visitors to enter/exit from Japan expeditiously, smoothly and159

comfortably, paying also due attention to the situation of immigration
examinations at local airports and sea ports.
- In preparation for cases where demand for staying at hotels, inns etc. becomes
too high, the Government will relax regulations on the operations to offer ones’
own houses etc. temporarily at the time of events, and expand the scope of
special measures for the standards of structural equipment concerning
small-scale agricultural, forestry and fishery guesthouses. As regards privatehouse lodging services utilizing ordinary houses etc. and advertising throughthe internet, since it is a new form of business, the Government will havediscussions among relevant ministries and agencies for starters including thegrasping of the actual situation.
- In order to flexibly meet the increasing demand for chartered buses, theGovernment is implementing flexible treatment until September 2015 toexpand the operating areas of chartered buses to the unit of regional blocks andto the neighboring prefectures of the ones where there are business offices; itwill consider its policy for October 2015 and after.
- As regards the expansion in the supply of paid guide interpreters through thechanges in the system of the licensed guide-interpreter, the Government will
ensure the quality of those for all over Japan through the training after theiracquisition of qualification, while introducing the “regional guide interpreter
system” for municipalities to develop guide interpreters on their own to meetthe demand for various guide interpreters in the region.
- By utilizing regional liaison committees—mainly consisting of regionalorganizations of the Ministry of Land, Infrastructure, Transport andTourism—geared toward accepting 20 million foreign visitors to Japanannually, the Government will compile an interim report of information on thestatus of regions’ tourism environments, as well as any issues and related
countermeasures by around this summer, and implement the necessary
measures. Information to be compiled should include that regarding
airport/seaport CIQ systems, airport capacity, the securing of highway buses,
accommodations, etc. to be provided.
- The Government will take necessary initiative to ensure the integrity andcontinuity of multilingual services, based on the multilingual service guideline(March 2014).
- In order for restaurants to take initiatives such as preparation of multilingual
menus, the Government will inform advanced practices and hold seminars incooperation with business groups.
- In view of the Tokyo 2020 Olympic and Paralympic Games, the Government
will consider ideal road signs that are easy-to-understand for foreign drivers.

160

- Utilizing the council for promoting the development of free public wirelessLAN, the Government will: 1) develop systems to enable the sign-in at about
200,000 spots across Japan with one-time registration, by simplifying
certification procedures beyond the walls of operators; and 2) disseminate
information effectively through the media such as HP and apps by promoting
the “visualization” through the spread and utilization of the common trademark“Japan. Free Wi-Fi” as well as making available venues as open data.
- In order to introduce mutually usable transportation IC cards in all prefecturesin Japan by 2020, the study group for spreading and enhancing the convenienceof transportation IC cards will discuss specific approaches to spread such cards
and increase their convenience, and reach a conclusion by this summer.
- The Government will promote “Hands-Free travel”—i.e., enabling visitors to
do tourism without carrying luggage—by temporarily keeping luggage andshopping goods of foreign visitors and deliver them to airports, stations, hotels
and so on; at the same time, it will sophisticate services by allowing
tax-exempt and delivery procedures to be done together at shopping districts
etc.
- To increase sales of local products, Regional Development Bureaux will
cooperate with seaport management bodies in strongly facilitating theutilization of the notification system for temporary tax-free shops at the piersfor cruisers.
- The Government will enhance systems to accept foreign patients so that
foreign visitors can receive medical services in Japan safely and with the peaceof mind; and in cooperation with local governments, will select medical
institutions which can treat wide-ranging cases of foreign visitors at least one
for every prefecture by the end of this fiscal year.

[5]

Actively attracting foreign business visitors etc., and enablinghigh-quality touristic exchanges- JNTO will enhance regional cities’ ability to attract MICE, by conducting
finely-tuned consulting according to the needs and resources of regional cities.
- In order to increase the possible venues for medium-sized conventions, theGovernment will select 4 cities or so for the “city to be strengthened for global
MICE.”- The Organization for Promoting Urban Development will provide long-term
financing at low interest rates for excellent private urban development projects
including development of MICE facilities.
- Integrated Resorts (IR) are expected to contribute to the promotion of tourism,
regional prosperity and industrial development. Meanwhile, as a precondition,161

it is necessary to study institutional measures to prevent problems from theperspective of preventing crime, maintaining security, ensuring the sounddevelopment of youth, and preventing pathological gambling. Therefore,
relevant ministries and agencies will study this matter in light of the status of
the IR promotion bill (*) and public debate on IR.
* IR promotion bill: The Bill on Promotion of Development of Specified
Complex Tourism Facility Areas.
- As regards the program for longer stays of foreign visitors in Japan, aiming topromote the utilization by wealthy visitors, the Government will disseminate
information overseas and hold briefings in prospective markets; at the sametime, it will hold briefings for domestic private companies, local governments,and so on.
- Aiming to fully inform foreign visitors of the value and attractions of cultural
assets which embody Japan’s history and culture, the Government will consider
approaches and points etc. for easy-to-understand explanatory displays in
English, including the utilization of ICT; at the same time, it will support thedissemination of information on cultural assets in English.
- The Government will attract visitors to regional areas from within and outside
Japan by promoting the initiatives to make a digital archive, withhigh-resolution images, of works in museums and art galleries, cultural assets
in various regional areas, natural and cultural heritages, and furthermore, aerial
photographs of landscapes across Japan which show many different beauties;
and to disseminate them with presence on the internet.
- Starting from this fiscal year, with the “World Cultural Heritage Invigoration
Project,” the Government will support initiatives to plan and disseminate
information etc. of multilingual guided tours, visiting groups for cultural assets
preservation and repair, programs to experience preservation and repair and thelike; and invigorate regional economies which have world heritages to attract
visitors.
- By FY2020, the Government will certify approximately 100 cases (18 cases inthis fiscal year) of “Japan Heritages” which express Japan’s culture andtradition in stories through historical attractions and features in local areas.
Furthermore, local areas will play a leading role in developing and utilizing, in
a comprehensive way, groups of attractive tangible and intangible cultural
assets which are essential for telling stories, and strategically disseminate
information in Japan and abroad.
- By creating tourism resources out of Noh and Kabuki, experience in the tea
ceremony, visiting to temples and shrines, and characteristic local culture
across Japan such as experiences in making traditional local handicrafts and162

traditional entertainment, the Government will enhance them as high-quality
programs to experience Japanese culture which appeal to foreign visitors fromthe U.S. and Europe who are highly interested in Japanese history and culture;promote the participation in experience programs; and prolong their length of
stay.

[6]

Accelerating tourism promotion in preparation for “after the Olympic
Games in Rio de Janeiro,” “Tokyo 2020 Olympic and Paralympic
Games” and “After the Games in Tokyo.”- After the end of Rio de Janeiro Olympic Games in 2016, taking advantage ofcultural programs across Japan, the Government will disseminate theattractions of Japanese culture etc.—including world-class tangible andintangible cultural assets, festivals and fireworks with full sense of the seasons,traditional local entertainment, and cuisine—and attract visitors to regional
areas.
- The Government will endeavor to attract visitors to various regional areas fromwithin and outside Japan by reliably hosting not only the Tokyo 2020 Olympic
and Paralympic Games and advance training camps, but also the Rugby World
Cup in 2019 to be held in Japan and other international competitions.
- The Government will strongly promote the “Host city/town initiative” that
local governments across Japan will attract athletes and spectators fromparticipating countries to regional areas to learn the history and culture ofparticipating countries to the Games (the “One school one country campaign”)
and to study Paralympics and deepen exchanges with the handicapped.
- In preparation for the Tokyo 2020 Olympic and Paralympic Games, theGovernment will not only steadily promote initiatives based on the Act on
Promotion of Smooth Transportation, etc. of Elderly Parsons, Disabled Parsons,etc., but also focus on the promotion of smooth transportation on multiple routes
at major terminals and in major regional tourism spots, as well as promote the“elimination of prejudices in people’s mind.”163

III. Strategy of Global Outreach(1) Progress in achieving KPIs
<KPI> Aim to raise the FTA ratio to 70% (2012: 18.9%) by 2018
 As of June 2015: 22.3%* The share of trade value in total Japanese trade value with countries with which
EPA/FTA has entered into force or signed as of June 2015 (based on 2014 tradevalue).
*Negotiations on 8 EPAs are under way with a view to an early conclusion.
<KPI> Double inward foreign direct investment (FDI) stocks to ¥35 trillion (as ofthe end of 2012: ¥19.2 trillion)
 As of the end of 2014: ¥23.3 trillion<KPI> Double the value of exports by SMEs by 2020 compared with the 2010level
 The value of exports by SMEs owning overseas subsidiaries increased by 40%,from approximately ¥3.7 trillion in FY2010 to approximately ¥5.3 trillion in
FY2013.
<KPI> Raise overseas infrastructure project orders received to approximately ¥30
trillion by 2020 (2010: approximately ¥10 trillion) 2013: Approximately ¥16 trillion* KPI figures include “income from business investments on overseas
infrastructure, etc.”<KPI> Triple overseas sales of broadcast contents by FY2018 from the FY2010
level
FY2010: ¥6.63 billion  FY2013: ¥10.57 billion(2) Progress made in implementing measures(Progress made in EPA negotiations with various countries, including theentry into force of the Japan-Australia EPA, the signature of theJapan-Mongolia EPA, etc.)- In terms of economic partnerships, the Japan-Australia EPA entered into force inJanuary 2015, and the Japan-Mongolia EPA was signed in February. As regards theJapan-EU EPA, the both sides agreed at the Japan-EU Summit in May 2015 to164

accelerate negotiations further, aiming to reach an agreement in principle within thisyear. Regarding the TPP (Trans-Pacific Partnership) negotiations, it was agreed at the
TPP Leaders' meeting in November 2014 to accelerate work for an early conclusion of
the negotiations. Since then, with a series of negotiation meetings of all 12 countries
and bilateral consultations including those between Japan and the U.S., significant
progress has been made in the negotiations.

(Actively implemented the Infrastructure Export Strategy through sales
pitches by the Prime Minister and Cabinet Ministers)- Regarding infrastructure exports, the Prime Minister and Cabinet Ministers made a
total of 74 sales pitches in 2014 (including 32 made by the Prime Minister), farsurpassing the KPI of at least 10 sales pitches each year. These efforts have steadily
led to such results as receiving (in February 2015) the order for the “Doha Metro”
project that is the first subway system to be constructed in the State of Qatar, andagreeing (in May 2015) on the policy of introduction of Shinkansen bullet traintechnologies into the high-speed rail project in Thailand. Moreover, the Government
promoted strategic implementation of ODA through the improvement of various
systems for strategic use of ODA loans and JICA’s Private Sector Investment Finance,
as well as through active use of Grant Aid and Technical Cooperation. In February
2015, the Cabinet decided the “Development Cooperation Charter” that shows the
expansion of scope of cooperation through ODA, etc. In March, the Government
submitted a bill to revise the Trade and Investment Insurance Act aiming at changing
Nippon Export and Investment Insurance (NEXI) into a special stock company torealize more flexible, efficient and agile management. Furthermore, the law toestablish the Fund Corporation for the Overseas Development of Japan’s ICT and
Postal Services (Japan ICT Fund) which supports projects related to overseas
telecommunications, broadcasting and postal services was enacted in May 2015, andthe revised “Infrastructure Export Strategy” for FY2015 was formulated in June.

(Supported overseas business in emerging markets in many aspects)- Aiming to formulate the rule making strategy under which products and services ofJapanese companies that contribute to solving social issues—such as 3R/waste
disposal and treatment including water and food disposal, and ageing society—areproperly appreciated, the Government is taking initiatives such as submission of
proposals at international conferences, exchange of views with other governments, anddialogues between the public and private sectors, while making effective use of the
Economic Research Institute for ASEAN and East Asia (ERIA). Moreover, for theconstruction of the new state capital of the Andhra Pradesh State in India, theGovernment signed a memorandum on industrial cooperation in November 2014, and165

is participating in the project from the designing stage in order to contribute to theexport of Japanese products and services to local market. In March 2015, with a viewto spreading Japanese rules to emerging countries, the Government compiled a joint
document for Japan-EU regulatory cooperation in the areas of robots, chemicals,
automobiles, etc.
- The Government strengthened the function of sales route support of the Japan External
Trade Organization (JETRO) and provided hands-on support to more than 1,600 SMEs
by the retired experts in international business. In addition, under the “SMEs' Overseas
Development Fastpass” program, the Government has provided support to companies
in cooperation with more than 350 organizations supporting overseas expansion,
including local governments and financial institutions.
- In order to facilitate the building of the network, exchanges, and co-creation ofpro-Japanese foreign nationals such as former international students with experiencestudying in Japan and former trainees at HIDA (The Overseas Human Resources andIndustry Development Association), the Government is promoting the initiatives forcreating the “Community of pro-Japanese and Japan experts” utilizing online network.
- Aiming at strengthening cooperation with Regional Economic Communities (RECs) in
Africa for the promotion of wide-area development, the Government newly posted theambassador in charge in October 2014, held high-level policy dialogues, andsupported developing local human resources, etc.
- In Asia, the Government provided technical assistance in the area of legislative system
including development of human resources, and supported overseas Japanesecompanies utilizing Japanese legal professionals.

(Cool Japan Strategy Promotion Council formulated Strategies)- With regard to the Cool Japan Initiative, the Cool Japan Strategy Promotion Council
established in January 2015, discussed the promotion of cooperation between the
public and private sectors, the measures to strengthen information dissemination, etc.,
and compiled in June the “Cool Japan Strategy Public-Private Partnership Initiative”.
Moreover, the Cool Japan Fund has decided investment for 12 projects in total, for the
maxim amount of about ¥32 billion by the end of May 2015, in contents-related
businesses, Japan mall development projects and so on. As regards overseas expansionof Japanese contents, the Government supported 2,611 localization projects and 1,204
promotion projects by the end of the FY2014. In ASEAN and other Asian countries,
furthermore, in cooperation with Broadcast Program Export Association of Japan(BEAJ), the Government has disseminated attractive Japanese broadcast contents
continuously by securing broadcast/distribution slots in terrestrial broadcast, satellite
broadcasts, video distribution platforms, etc. (Implemented 43 projects in 13
countries/areas)

166

(Adopted priority measures and strengthened the system to promote inward
FDI)- In March 2015, the Council for Promotion of Foreign Direct Investment in Japan
adopted the “Five Promises for Attracting Foreign Businesses to Japan” to improve
what have been requested by foreign companies to enhance the convenience ofbusiness and life in Japan, including: 1) enhancement of multilingual services of retailshops, restaurants, hospitals, public transportations, etc.; 2) promotion of preparationand simplification of usage procedures for free public wireless LANs in urban areas;3) development of a protocol for receiving business jets with shorter advance notice atregional airports; 4) support for the employment of foreign students in Japan; and 5)
implementation of the “Investment Advisor Assignment System” which enables
foreign businesses that have made important investments in Japan to consult directlywith the State ministers. Moreover, Japan’s diplomatic missions abroad and JETRO
overseas offices have cooperated in identifying and attracting investments, and a totalof 73 sales pitches have been conducted by the Prime Minister and Cabinet Ministers
since April 2014 in which the Council for Promotion was established, by May 2015.
Furthermore, industrial specialists—assigned in Japan and abroad to strengthenfunctions to attract foreign companies and enhance support system—have approached3,000 or more foreign companies individually, and are continuing the efforts to attract
them to Japan. In April 2015, in Tokyo area National Strategic Special Zone, the“Tokyo One-Stop Business Establishment Center” was established to integrate thecounters for consultation and various application procedures for entrepreneurs,
including registration of corporations and tax matters, labor matters, insurance,
employment, etc. In the same month, the Government submitted to the Diet a bill torevise the Act on National Strategic Special Zones promoting acceptance of foreign
entrepreneurs and clarifying the availability of certification of Articles ofIncorporation by the notaries outside notary’s offices.

(3) Specific new measures to be taken
Regarding EPA negotiations, the Government will push forward to achieve earlyconclusion on TPP negotiations in a way that maximizes Japan’s national interests. At thesame time, the Government will promote strategic and prompt negotiations on other
EPAs including RCEP, the Japan-China-Republic of Korea FTA and the Japan-EU EPA,
in order to enhance Japan’s external economic relations and to promote domestic
structural reforms through progress in global rule-making concerning trade andinvestment.
In terms of infrastructure exports, the Government will pursue its order target byquickly and steadily implementing further initiatives stipulated in the revised

167

“Infrastructure Export Strategy” for FY2015. In particular, in order to contribute todeveloping business conditions for promoting Japanese companies’ overseas businessexpansion and infrastructure exports, the Government will strategically strengthen the
JICA training program through the implementation of measures prescribed in the above
mentioned revised Strategy.
At the same time, in order to promote inward FDI and tap into foreign markets in a
strategic manner, the Government will reinforce the public-private partnership between
government offices and relevant organizations—including Japan’s diplomatic missions
abroad—and private companies. Furthermore, the Government will take the following
new measures.

[1]

Improving business conditions and developing system for promoting
foreign direct investment in JapanFor further vitalization of the Japanese economy, it is important to make foreigncompanies—that may bring with them into Japan new business models andresearch and development activities for advanced technologies—select Japan as
their bases.
Accordingly, ministries/agencies in charge will promptly and steadily
implement the measures in the “Five Promises for Attracting Foreign Businesses
to Japan".
Moreover, in the midst of fierce competition among countries to attract foreign
investment, it is important to continue developing the system to attract foreign
investment incessantly to the level comparable with competing countries.
Accordingly, the Government will strengthen public relations and information
dissemination on investment environment in Japan through sales pitches
conducted by the Prime Minister and Cabinet Ministers (at least 10 sales pitches
per year) as well as the cooperation among Japan’s diplomatic missions abroad,
JETRO and local governments. Furthermore, JETRO’s special team for attracting
foreign investment, established in major cities abroad will lead intensive
promotion in the areas where further growth and vitalization of the Japanesemarkets are expected. Through these efforts, the Government will engage in“aggressive” marketing, along with the domestic initiatives including multilingual
consultation services and support for the foreign companies already in Japan.
In addition, utilizing the “Platform for Regional Vitalization” :—a joint database of Ministry of Internal Affairs and Communications and all local
governments—the Government aims to start this autumn the provision of
information from local governments to JETRO about investment environment,
etc., as well as information from JETRO to local governments about methods,
cases, etc. for attracting foreign companies. Furthermore, the government will

168

deepen cooperation with local governments by starting JETRO’s customized
support by the end of FY2015 according to the needs of local governments fromformulating strategies to attracting investment.

[2]

Implementing “Partnership for Quality Infrastructure”
The Government will fully mobilize Japan’s public and private sector resources
to respond to global demand for infrastructure, especially huge demand in the
Asian region. It will realize, in cooperation with local public and private sectors,“quality infrastructure investment” which leads to low life cycle costs,
consideration for environment protection and disaster risk reduction, etc.,
development of local human resources, which are the key features of Japan’s
infrastructure development. Especially in the Asian region, the Government, incooperation with the Asian Development Bank (ADB) which strengthened its
function, will provide approximately $110 billion (about 30 % increase) for“quality infrastructure investment” over the next five years (about $53 billion
through the ADB, about $33.5 billion through the Japan International Cooperation
Agency (JICA), and about $20 billion through the Japan Bank for International
Cooperation (JBIC) and others). The Government will pursue both “quality” and“quantity” by mobilizing private funding and know-hows in addition to publicfunding.
Accordingly,

theGovernment

will

launch“Partnershipfor

Quality

Infrastructure”, which consists of the following four pillars: expansion andacceleration of assistance through the full mobilization of Japan’s economic
cooperation tools; strengthening cooperation with the ADB; doubling the supplyof funding for projects with relatively high risk profiles by such means as theenhancement of the function of JBIC; and promoting “quality infrastructure
investment” as an international standard.
Through this initiative, Japan, in collaboration with the ADB and others, willlead innovation in infrastructure development by attracting various financial
resources, including those from private sector from all over the world to Asia.
- Expansion and acceleration of assistance through the full mobilization ofJapan’s economic cooperation tools
The Government will increase the amount of Japanese ODA Loans for Asia’s
infrastructure by about 25% by way of coordinating Japanese ODA Loans,Technical Cooperation, and Grant Aid, as well as enhancing the implementation of
F/S and JICA’s Private Sector Investment Finance. It will promote themobilization of private funding for infrastructure projects through the utilization169

of new types of ODA Loans that support developing countries to provide capitaland guarantee for Public Private Partnership (PPP) infrastructure projects. Also,
the Government will make continuous efforts to further expedite Japan’s ODA
Loans procedures.
- Strengthening cooperation with the ADB
The Government supports the ADB’s initiatives such as the expansion of its
lending capacity, the expansion of its lending portfolio to the private sector, andthe reduction of the project preparation period. It will also establish a newcollaboration mechanism between JICA and the ADB to facilitate the use of PPP
for infrastructure investment by utilizing JICA’s Private Sector Investment
Finance.
- Doubling the supply of funding for projects with relatively high risk profiles bysuch means as the enhancement of the function of JBIC
By enhancing the functions of JBIC, the Government will establish a newmechanism to provide funding for overseas PPP infrastructure projects withrelatively high risk profiles, etc., utilizing private funding and know-hows.
Specifically, the Government will enhance the functions and the organization of
JBIC so that it will more actively provide funding for overseas infrastructure
projects—in which technologies, know-hows and others of the Japanesecompanies are expected to be utilized—that are deemed to be risky because of the
difficulty in forecasting changes in demand and business environment. At thesame time, the Government will further promote exports of infrastructure, by
utilizing NEXI, the Japan Overseas Infrastructure Investment Corporation forTransport & Urban Development (JOIN), Japan ICT Fund and others.
- Promoting “quality infrastructure investment” as an international standard
The Government will edit a casebook on “quality infrastructure investment”,
which consists of infrastructure projects supported by Japan, and actively
disseminate it widely across the world. At the same time, the Government willoffer more opportunities for relevant parties overseas to visit successful
infrastructure projects with Japan’s excellent technologies and investment. In
collaboration with international organizations such as the World Bank, the ADB,
and ERIA, and other foreign countries, the Government will hold more seminars
on “quality infrastructure investment” while stressing its importance atinternational fora, etc., including G20 and APEC. In response to requests fromoverseas, the Government will enhance the provision of technical cooperationnecessary for “quality infrastructure investment”.

170

[3]

Strengthening
thepublic-private
partnershiptopromotecomprehensive regional development including urban development
In emerging countries, etc., rapid urbanization has exacerbated various urban
problems, including disfunctioned traffic system and serious environmental
problems according to their development stages. Moreover, many regions needdevelopment of wide areas including suburbs, industrial bases, and networks toconnect them. Development projects to deal with such problems can becharacterized as large and complex ones with many companies and areas involved,
and requiring a long project period. Accordingly, the project risk tends to be highand it is difficult for private companies alone to be engaged. For such projects, itis necessary for Japan’s public and private sectors, including the national and local
governments as well as companies, to cooperate with each other while
collaborating with local public and private sectors overseas, and to be involved inprojects from their “upstream” planning stage.
Bearing these in mind, in order to make “Quality Contribution” with high QOL
and excellent safety and functionality, the Government will newly strengthen thesystems to promote comprehensive regional development including urban
development overseas, through the provision of know-hows based on the pastexperiences in development projects, excellent relevant technologies and services,
etc. Through these measures, while effectively utilizing sales pitches by the Prime
Minister and Cabinet Ministers, the Government will engage in information
gathering, marketing, and the subsequent project identification andimplementation seamlessly. Then it is important not only to get involved in a
one-shot problem-solving project but also strive to continuously get involved in aseries of projects for a long term as well as successively formulate and promote
the subsequent diversified projects. In addition, it is also important to expand
economic spillover effects including further overseas expansion of Japanesecompanies including SMEs. Through these efforts, the Government willproactively get involved in various development initiatives overseas as well, while
having the strategic perspectives of deepening effective relationship between
development of overseas regional economic zones and Japan’s economic growth.
- Strengthening activities for identifying development projects
In foreign countries, the Government will gather information and identify
projects in cooperation with private companies and relevant organizations
including the Ministry of Foreign Affairs, the Ministry of Economy, Trade andIndustry, the Ministry of Land, Infrastructure, Transport and Tourism, the Ministryof Internal Affairs and Communication, JICA, JBIC, JOIN, and JETRO, while171

closely collaborating with Japan’s diplomatic missions abroad.
In order to attract interest from overseas on urban development utilizing Japan’s
strengths, it is effective to explain and disseminate, to relevant parties overseas,
individual excellent examples implemented in various parts of Japan. The
Government will encourage participation of local governments, where companies
having problem-solving means are located, and which are eager to disseminate
local development examples to overseas.
- Strengthening planning and coordinating function
The Ministry of Economy, Trade and Industry and the Ministry of Land,
Infrastructure, Transport and Tourism will lead the efforts to analyze information
on prospective development projects. Especially, for important projects whichshould be promoted by the entire government, relevant ministries, agencies andorganizations will closely cooperate under the Ministerial Meeting on Strategy
relating Infrastructure Export and Economic Cooperation, to discuss and share
information on appropriate directions and specific actions. To that end, acoordination team will be formed for each project, and the ministry or agency
closely related to the project will take the lead in taking the initiatives below, withthe participation of private companies when necessary:- For each project, coordinate roles of public and private sectors, and present
a proposal package to other countries in accordance to local issues andrequests.
- Utilize policy resources in terms of human resources and budget of relevant
ministries, agencies and organizations in a cross-governmental way.
Specifically, coordinate cross-utilization of F/S research budget and masterplan formulation project budget, and comprehensive utilization of publicfinancing tools (including ODA, investment and loans from relevantorganizations, etc.).
- Consult with other countries to win projects. In doing so, coordinate to haveparticipation of entities with close ties to the projects.
- Mobilizing experts who support the realization of Quality Development
Realization of Quality Development requires experts who know very well theactual situation of the businesses and development projects, and can support
flexible negotiations, etc. with other countries. Accordingly, relevant ministries,
agencies and organizations will develop, in cooperation with private organizations
and local governments, the lists of experts in each public and private field who
can provide technical and professional assistance, advice and so on. Moreover, by
sharing these lists, the Government will develop systems to enable experts to172

respond promptly as a group even in cases where a package proposal of
multifaceted supporting measures is essential, including development of social
infrastructure such as industrial parks in littoral regions, transportation and energy
infrastructure as well as development of relevant legal systems related to land
readjustment, the housing supply system, etc.
- Expanding the supply of risk money, etc.
The Government will promote the expansion of the supply of risk money, etc.,
under the “Partnership for Quality Infrastructure”. Moreover, it will continue
considering measures to actively utilize JOIN further.

[4]

Promoting Cool Japan initiatives utilizing contents
In order to link the promotion of the Cool Japan Initiative to specific economic
growth, the Government will mobilize all policy measures of relevant ministries
and agencies, and tackle cross-sectorial policy issues as the entire government.
Accordingly, the Government will promptly implement the Action Plan based on
the “Cool Japan Strategy Public-Private Partnership Initiative” compiled by the
Cool Japan Strategy Promotion Council in June 2015.
As regards overseas exports of Japanese contents, together with the effects ofimproving image of Japan, attracting interest in Japanese culture, and promoting
Japanese language education, it is important to “earn” effectively, by linking themto Japan’s characteristic products and peripheral industries such as tourism,
Japanese food. On that occasion, it is also important to utilize attractive regional
resources to promote further vitalization of regional economy.
Accordingly, the Government will promote—the contents production while
taking overseas sales into consideration from the beginning, the further
acceleration of rights management, the localization and promotion of contents, theinternational joint production, and the continuous broadcasting of contents.
Moreover, the Secretariat of Intellectual Property Strategy Headquarters of the
Cabinet Secretariat will take initiatives to establish, around this autumn,
Public-Private Partnership Platform for Promotion of Cool Japan (tentative name)composed of Cool Japan related ministries, agencies, organizations, etc., andformulate the basic policy for disseminating information utilizing Japanesecontents and for integrated overseas expansion of contents and their peripheralindustries by all-Japan effort; collect and share information; consider necessary
system reform and supporting measures; conduct the matching to formulate
collaborative projects; and so on. As a specific way to conduct the matching, theGovernment will hold Matching Forum (tentative name) under this Platform withthe participation of diversified relevant business operators not only from the field173

of contents but also from the non-contents fields such as Japanese food, tourism,
manufacturing, etc. By utilizing this Forum, in cooperation with Cool Japan Fund,
BEAJ, Visual Industry Promotion Organization (VIPO), JETRO, etc., theGovernment will continuously create cross-industry collaborative projects whichhave high synergistic and spillover effects, such as product placement,
collaboration overseas of company advertisement and contents.
Moreover, the Government will realize the second dissemination of Cool Japanby foreigners by strengthening dissemination of Japan’s attractions to overseas
through active utilization of Japan’s diplomatic missions abroad, promotion ofpeople-to-people exchange of media people and young people with highdisseminative ability, contributing to the Cool Japan Strategy. Furthermore, theGovernment will promote development of human resources who will take chargeof the Cool Japan initiative.

174

III Momentum for the reform ~ Promotion of the “Reform2020”
It is important to accelerate reform and innovation, using as a momentum the year 2020
when the 2020 Tokyo Olympic and Paralympic Games are to be held; Japan attracts muchattention from all over the world; and many foreigners visit Japan.
Accordingly, while using as the leverage the 2020 Tokyo Olympic and Paralympic Games,
the Government will make all-out efforts to promote core projects—which should beaccomplished by 2020 and will become legacies succeeded to future generations—asaccelerators of reform and innovation. Specifically, the Government will implement thefollowing six projects in the three priority areas, as the ones which can generate high policy
effects by the implementation along with the rising attention from the world; put Japan’s
strengths in practical use and show cases; appeal to overseas; and lead to economic growth
afterwards.

(Technology-utilizing solutions to social problems and export of system solution
technologies)[1] Use of next-generation transportation systems and automatic driving technology- The Government will make the utmost use of the research and development results of ITS
public-private collaboration promotion body, and the Strategic Innovation Promotion
Program (SIP) under the Council for Science, Technology and Innovation to realize A)
next generation transportation systems (ART：Advanced Rapid Transit). Moreover, by
utilizing sophisticated automatic driving technology, the Government will strive to realize:B) securing of transportations for those with restraint on movement such as the elderly, andC) convoy traveling of trucks[2] Solutions to energy/environmental problems through use of distributed energy
resources-- It is a common issue for the world to deal with energy and environmental problems. It
should be realized simultaneously to supply energy inexpensively and stably, and to reducecarbon dioxide (CO2) emissions. On the other hand, since energy and environmental
issues are common across the world, global competition has been intensified seeing thisissue-solving as a growth market: Hydrogen and new energy management systems arewhich Japan can take the lead in such competition. In doing so, it also requires thedevelopment of competitive business models, taking into consideration the progress indigitalization and network society.
- Taking these developments as good opportunities, the Government will strive to establish:A) utilization of CO2-free hydrogen derived from renewable energy sources; and B)
innovative energy management systems.

175[3] Realization of a universal future society through leading-edge robotic technology- Currently, Japan is the No. 1 “Robot Super Power” in the world in terms of industrial
robots’ annual shipment value and the number of operating machines within the country. In
the midst of the social issue of emerging labor shortage in the population decreasingsociety, the Government will take advantage of technologies to create the scenes where
robots are active in every space of life, and diversified people, including the elderly, thehandicapped and foreigners, can enjoy a wide-ranging services necessary for realizing
stress-free life; and offer opportunities to actually experience them.
[4] International implementation of high-quality Japanese medical services andtechnology (inbound use of medical care)- Seeing the year 2020 as a good opportunity to disseminate Japanese medical services tooverseas, and focusing on the areas where there are high needs from overseas and Japan’s
medical care has an international advantage, the Government will list the medical
institutions which actively accept patients for medical services (health checkups, medical
treatment and examination (including follow-ups after medical treatment)) from foreigncountries (hereinafter referred to as “visiting foreign patients”); and thereby enhance
opportunities for visiting foreign patients to experience Japan’ medical care in person(prevention not to become sick, early detection, medical treatment after contracting
diseases and return to normal life through rehabilitation etc.).
(Developing an environment to increase the number of foreign tourists to Japan)[5] Showcasing Japan as a country of tourism- Aiming to realize a tourism-oriented country full of attraction, with a view to achieving thenumber of visiting foreigners to Japan 20 million in 2020, and 30 million in 2030, theGovernment will develop world-class attractive tourism areas, taking advantage ofpotentials of tourism resources etc.; and therefore, it will strive to upgrade the tourism
industry as one of Japan’s core ones by taking the following initiatives in A) tourism area,B) Tokyo, and C) Narita and Haneda International Airports:A) Tourism areas- The Government will select a private-public-run tourism management organization(Japanese version of DMO*), among areas thought to be the top tourist areas ofJapan, into which policy resources of individual ministries and agencies areintensively input. It will polish up tourism resources, develop a tress freeenvironment including multilingual translation, disseminate information to overseas,
and thus create the tourism areas representing the tourism-oriented nation to be
selected by more visiting foreign tourist to Japan by 2020.

176B) Tokyo- By 2020, the Government will realize best practices in Japan where theunprecedented aging of the population is in progress, by thoroughly promoting
barrier-free and easy-to-understand guiding information in the continuous areas ofTokyo linking major terminal stations, Olympic and Paralympic Games facilities, andpopular tourist spots, in addition to the initiatives for stress-free environment etc. in
the area selected for Japanese version of DMO.
C) Narita and Haneda International Airports- At the Narita and Haneda International Airports, the Government will enhance theconvenience and comfort by improving access to the airports by railways and busses
as well as developing the bases for information dissemination with the airport as thegateway (including latest bathrooms in the world, utilization of robots, disseminationof information on tourism resources of the target areas for Japanese version of DMO),
in addition to the initiatives for stress-free environment etc. in the area selected forJapanese version of DMO. Moreover, the Government will diffuse similar initiatives
to local airports other than Narita and Haneda International Airports.
(Expanding foreign direct investment in Japan and improving business environments)[6] Policies to attract more foreign direct investment in Japan- It will be effective for the expansion of foreign direct investment in Japan to focus on it
towards the year 2020 when international attention to Japan is heightened due to thehosting of the 2020 Tokyo Olympic and Paralympic Games etc. At that time, it will be
important to develop attractive business environment etc. for domestic companies as well,
not to mention taking into consideration the needs of foreign companies. It is necessary to
strategically engage in identifying and attracting investment projects, by actively
disseminating the improvements in business environment etc. through the promotion ofpolicy measures in the Growth Strategy, under the cooperation with local governments etc.
Moreover, using the developments in such identifying and attracting activities as theleverage, the Government will accelerate reforms in regulations and systems in Japan.
- For the expansion of foreign direct investment in Japan, going forward, with the target
year of 2020, the Government will disseminate information on the initiatives that Japan ismaking full-fledged efforts such as hosting of business conferences, making the utmost useof international events including the 2020 Tokyo Olympic and Paralympic Games,
Going forward, while improving the above six projects towards 2020, the Government
will manage the progress strictly to ensure the realization by 2020. Moreover, theGovernment will conduct reviews continuously to enhance the momentum for reform,
including the addition of projects if necessary.

177