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1 Point

Fundamental Ideas(Where do we stand in our growth strategy and what is expected?)
Under the Abenomics, reforms have been implemented that had previously been considered“impossible to realize”. Such reforms include complete liberalization of retail market for electricity
and gas in 60 years, reforms of the Agricultural Cooperatives, introduction of regenerative medicine
ahead of the world, and reduction of effective corporate tax rates to the 20% level. After the changeof power, the number of employed workers in the labor market has increased by almost 1.85 million ,thereby creating the best employment situation in 20 years. Companies are achieving the highest
level of current profit in history, while capital investment has restored to the level before the collapseof Lehman Brothers. The number of bankruptcy has hit the lowest level since the 1990s. Virtuous
cycle of the economy is steadily expanding.
However, private sectors still lack the dynamism due to the following reasons:(i) On the supply side, growth of productivity has been sluggish for a long period of time;and(ii) On the demand side, no new demand has been created.
This is a “secular stagnation” common to the developed countries.
The key to break the secular stagnation and achieve mid-and-long-term growth is to realize“Society 5.0 1” that resolves various social challenges by incorporating the innovations of the fourthindustrial revolution (e.g., IoT, big data, artificial intelligence (AI), robot, and sharing economy),which has recently been taking place rapidly, into every industry and social life.
In this respect, Japan is in a superior environment.
(1) Japan was one of the first countries in the world to face the social challenges such as
decrease in the productive-age population, aging of local communities, and energy andenvironmental issues. This means that there is a great potential demand for new thingsand services resulting from the fourth industrial revolution.

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The history of humankind reveals that the evolution of human society has been fueled bytechnological advances, with key steps along the way as a hunter‐gatherer society, agrarian society,industrial society, and, today, an information society. “Society 5.0” is next. It will create new values,
new services continuously, then make people’s lives more comfortable and sustainable.

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Provisional(2) The fourth industrial revolution may trigger unemployment issues, as they involve
fundamental improvement of productivity. This being said, since Japanese labor force
will continue to decrease on a long term, with appropriate investment in humanresources and shifts in employment, we would be able to avoid the social frictions as
experienced in other developed countries.
(3) Unlike the first chapter, where we took advantage of the Internet data (virtual data), in
the second chapter, real data will be used in the fields which will be the major
battlegrounds in the future, including healthcare, autonomous driving, plant facilities,
agriculture, and construction. The keys to the competitiveness are the accumulation ofreal data from markets, approximation of software and hardware, and approximation ofsoftware and fields. Japan can have superiority in each scene.
These strengths may provide a huge opportunity to Japan, which is at a historical turning
point.
As the baby boom generation becomes 75 years old and “2025 Crisis” fast approaches, if we
do not break the status quo, the burden of healthcare and nursing care would weigh on our shoulders,labor force would decrease, accumulated knowledge and skills would be scattered and lost, and our
economic society would lose its vigor.
Under the traditional economic system, where the sources of competitiveness that generate
added values were “things” and “money”, we created models of success which enabled efficienteconomic activities as a result of “intensification” and “homogenization”. Most of the organizations
and social systems had also been designed on this basis.
With the progress of the fourth industrial revolution, however, the sources of value shiftedto “human (human resources)” and “data” under the economic system of Society 5.0. In this system,high values are added where various things that exist “independently and dispersedly” are“integrated” through new technical innovation. With the realization of a society where “knowledge”
generates value and diversified “uniqueness” is exploited, motivated people from all generations
need to take advantage of the technical innovation and “integrate” various knowledge, information ,technologies, and human resources that are currently dormant. We could thus establish a system toachieve innovation and resolve social challenges ahead of the world, and realize optimized andhigh-value-added economic activities as well as a vigorous economic society. They will provide
opportunities to everyone across all industries, regardless of age or sex, size of company, or size ofcommunity.
On the other hand, caution is required as the innovations of the fourth industrial revolution

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have been accelerating with speed and through routes that are unpredictable. Should there be a delay
in taking actions or should we hesitate to implement major reforms, we may become a mere
subcontractor of companies taking a lead, and the middle class may end up collapsing.
With the progress of the fourth industrial revolution, it seems possible to realize a societythat had previously been considered impossible. Things that we had perceived as a distant future
dream until recently are now nearly close to touch if we tried hard enough. This is exactly when weshould launch our full attempt to operate Society 5.0. We will open up a new frontier in different
dimensions with speed by strongly promoting efforts in strategic fields.
(Perspectives for Future Efforts)
While drastic reforms implemented by digital revolution remained only within the computerindustry and communications-related industries, the wave of the fourth industrial revolution holds
the promise of dramatically changing all industries and social life.
German “Industry 4.0” and American “Industrial Internet” are principally an effort to
optimize production management and inventory control of manufacturing industry using IoT,
beyond the scope of individual plants and companies. On the contrary, Japan needs to realize
Connected Industries, where various things are connected beyond manufacturing industry,including the connections of things and things, human beings and machineries/systems, humanbeings and technologies, companies which belong to different industries, human beings fromdifferent generations, and manufacturers and consumers.
The “Society 5.0” that we aim to operate is an effort to resolve various social challenges by
incorporating advanced technologies into all industries and social life and “only providin gnecessary amount of required things and services at required timing to people who need them”.
(Specific Plans)First of all, we need to choose and focus on the odds-on “strategic fields”.
In order to identify and choose the strategic fields, the following perspectives should be taken
into account: Whether or not it is a field where we can take advantage of Japan’s strengths (aptitude for
manufacturing things, innovativeness and scope of social challenges, and likelihood ofacquiring and using real data);

Whether or not growth is anticipated for the field in and outside of Japan; andWhether or not it is a field appealing to the world which can be used as a model case of acountry with advanced challenges.

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Based on these perspectives, the policy resources of Japan should be concentrated on thefollowing five fields to promote future investment.
“Extension of healthy lifespan”– Japan is among the very first in the world to head toward an aging society. However,
we do have rich data, as we have a universal healthcare system and nursing careinsurance system.
-> We aim to establish a “new system of health, medical care, and nursing care” with
an emphasis on health management, prevention of sickness and nursing, and selfsupport. With this system, we aim to further extend healthy lifespan and will realize
ahead of the world a society where we can be active throughout our lives.
“Realization of mobility revolution”– Although we are facing the social challenges such as labor shortage in logistics andlack of means of transportation for elderly people in local communities, Japan has
strengths in manufacturing for AI as well as approximation of data and hardware. It isalso able to acquire mass travel data on automobiles.
-> We will expand the range and opportunities of day-to-day activities of eachindividual by streamlining logistics and sophisticating transportation services toreduce traffic accidents, resolve labor shortage in local communities, and eradicate
the issue of transportation-vulnerable people.
“Creating of next-generation supply chains”– We have already had a pioneering approach called Kanban system (just-in-timeinventory management system). In addition to the in-depth “approximation”, which isone of the strengths unique to Japan, we have abundant data from plants as well as
distribution data with a focus on convenience stores.
-> This will enable us to create innovative products and services which meet demandsof individual customers and consumers.
“Building and developing pleasant infrastructure and towns”– While we have conspicuous problems of aging of skilled workers and labor shortage,
there is also a great demand, including construction of Olympic/Paralympic-related
facilities, renovation of worn-out facilities, and disaster-prevention measures.。 Our
services may feature integration of competitive construction machines and data.
-> We will balance efficiency and safety without being bothered by labor shortage or
cost increase, and penetrate the market with stable maintenance, management andupdate.

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Provisional"FinTech"– We still have higher rate of cash transaction compared to other developed countries,
and the use of IT by small and medium-sized companies is still limited. This is why wecan expect to have a profound effect by introducing FinTech.
-> We will use this to tremendously improve the convenience of finance-related
services for users and drastically improve the fund-raising capacity of companies
as well as their productivity and earning capacity.
Second, we will address the enhancement of a common base aimed at creating value sources.
To start with, we will establish “database (real data platform)”, which will be our new social
infrastructure. We will be completely open about the public data possessed by government and local
authorities in the fields where there is high private demand, including public transportation andautonomous driving. At the same time, with respect to the private data, we will support data
coordination that goes beyond individual corporate frameworks. Concurrently, in order to facilitate
the use of data, we will realize sophistication of rules, including the rules on intellectual propertysystem and standardization.
In addition, we will invest on human resources who would be able to respond to the fourthindustrial revolution, as well as facilitate shift in labor force. As the fourth industrial revolution
progresses, it is inevitable to experience drastic changes of industrial and employment structures.
The skills and abilities required of each individual must also change significantly. It is not only the
IT industry that requires IT human resources but also all other industries. In 2020, we anticipate
that there will be a shortage in IT human resources by approximately 370,000 persons, which meansthat more people will be required to acquire the ability to master the use of IT. For this reason, we
will establish an “Intensified Emergency Plan on Enhancement of IT Capacity”, and concentrate
our policy resources on it.
Furthermore, we will advance reforms on work styles to improve productivity and enhancecreation of new values. While addressing to eliminate working long hours and improve working
conditions of non-regular employees, we will also challenge to make labor market more fluid. Our
efforts will include clarification of working conditions such as job description and abilities as well
as realization of matching fair evaluation and conditions, in a form appropriate for the new
employment structure focused on knowledge-based industry.
As we shift from capital-intensive economy to knowledge-based economy, we will pushforward university reforms to promote industry-university cooperation and enhance management
capacity, and promote research and development in the fields where Japan can take advantage of its

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strengths. This will be implemented with a focus on universities and national institutes that are thestrongholds of knowledge and human resources, and involve industry. The purpose is for the entire
society to establish an ecosystem for innovation and ventures where blue-chip researches anddevelopments as well as ventures will be created spontaneously and consecutively.
Third, we will “try first” and shift to “shape policies based on demonstration”.
As the innovations for Society 5.0 accelerate all over the world with speed and through routes
that are unpredictable, the effective way would be to take a process of trial and error, with the
involvement of the society. Should we continue to rely on traditional flat and rigid systems where
we can only introduce something with complete data and proof, Japan may not be able to keep pacewith the world, and become a mere subcontractor of companies taking a lead or be isolated fromrest of the world. Therefore, we will introduce a “sandbox” system for regulations, whereparticipants and period will be limited, thereby accepting trial and error.
With respect to the administrative procedures, we will conduct a thorough review frombusiness perspective. We will thus aim at reducing, in principle, 20% of the cost for administrative
procedures in the fields which we focus on. This will be done through integrally promoting
regulatory reforms, streamlining of administrative procedures, and online procedures.
Fourth, we will establish a metabolic system aimed at creating an industrial structure for theperiod of Society 5.0.
We will elevate the reforms on corporate governance from a mere formality to a substantial
reform to promote decisive managerial judgments. In order to remove obstacles for this, we willdevelop systems which enable speedy and flexible business restructuring.
Under the private finance initiative system, private business management approach is
introduced into the operation of public facilities. This will enable effective and efficientdevelopment and operation of infrastructure under severe financial conditions, thereby creatinglarge market and opportunities of international competitiveness for private companies. With a viewto expanding the use of PPP/PFI, we are aiming at resolving tasks for each focused area, while
preparing guidelines based on private businesses to develop cross-governmental systems for thepromotion.
Fifth, we will establish a system whereby local economies will be in a virtuous cycle.
In and outside of communities, we will strengthen connections among human beings, things,
money, and data to facilitate active circulation. We aim at creating growing industries and highquality employment for the entire sphere beyond the framework of industries, including agriculture,

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forestry, fishery, manufacturing, and services (such as tourism, sports, and culture).
In order to facilitate the above, it is important to have a perspective that a particular project,which will serve as a breakthrough to change the status quo, will be strategically promoted by thegovernment and the private sectors. For this purpose, “Public-Private Strategic Project 10” of“Japan Reconstruction Strategy 2016” (as approved by the Cabinet on June 2, 2016) will be
developed into an effort under this new growth strategy. It will facilitate self-sustained efforts ofprivate sectors. As the government and the private sectors are appropriately assigned theirrespective roles, various technological innovations will be introduced into the society to facilitate
structural reforms.
In the course of implementing these projects, the government and the private sectors will
together set a time limit for giving concrete forms to their efforts, as shown in “2020 Reforms”. It
is important that we showcase our efforts to the world taking the opportunities when we receive
attention, including the 2020 Tokyo Olympic/Paralympic Games. The spirit of the “2020 Reforms”
will be spread across the growth strategy, based on which all measures will be taken in line with aroad map-style where plans are made and deadlines are set based on how many days are left.
The key to the true success of these efforts is for both the government and the private sectors
to break away from a “narrow-viewed” structure, where individual organizations continue to follow
the traditional policies without thinking, and to put in place drastic reforms. A leading role inrealizing Society 5.0 should by all means be played by the vigorous private sectors. All industries
are required to courageously push through and take actions for a drastic transition of businessportfolio from traditional systems to knowledge-based industrial structure. The responsibilities lie
with the government to draw creativity and ingenuity from private sectors and to develop the best
business environment. The government will proactively promote the structural reforms. They willfurther focus on establishing an integral system to powerfully advance the growth strategy on across-governmental basis through social implementation of innovations.

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I. Strategic Fields to be Targeted by Society 5.0

I-1. Extension of Healthy LifespanSocial Vision that We Aim at
Thanks to the maximum use of technical revolution including big data and AI, by 2025,
when the entire baby boom generation has become over 75 years old, the “new system of health,
medical care, and nursing care” will have been realized, part of which include the best healthmanagement and medical care, as well as nursing care with an emphasis on self-support. Healthy
lifespan will have been further extended, and a society where we can be active throughout our lives
will have been realized ahead of the world.
<Scenes from Life/Spot after the Change>(Elderly people/family) An aged father who lives in a place far from urban area uses remote
medical care. His once burdensome weekly visit to the hospital has now been reduced to oncea month, and he is able to receive medical care from his primary care doctor without effort,
using data and AI. A mother in need of care has been offered a care plan prepared by using
data and AI, and the level of her care needed improved. She has more time to spend at home,and enjoys time with her family.

(Medical care/scenes from nursing care) With the consent of patients, doctors check therecords of their medical check, treatment, and nursing care that had previously been scattered.
The patients’ information is used by medical institutes when they first visit doctors or at
emergency times, which enables best treatment for each individual anytime, anywhere. On
the spot of nursing care, the rugged work environment of care staff including night-time
watching has been substantially improved by using robots and sensors. The staff have moretime to take advantage of their expertise to provide best care for each user.

Major Items Required for Realization
Establishment of Data Using Base(Remaining Issues)Sharing of information between communities as well as development of database forstatements of medical expenses and the like have been advancing. However, data is
scattered for health, medical care, and nursing care and sectionalized for each database,with limited user access. We need to establish a data using base whereby each individua l8Provisional

citizen’s data on health, medical care, and nursing care is organically connected to allow
his/her access over time, and which could be used for research and development of new
medicine or the like through big data analysis.
(Major Efforts)
The “National Healthcare Information Network”, a base which allows individuals to follow
their own lifelong medical information over time and provides best and individual/patie ntoriented health management, treatment, and care is expected to go into a full-scale
operation in FY2020. We will launch an experimental business during this fiscal year to
examine specific system configuration and the like. Detailed designing will be launchedduring or after the next fiscal year.

The “Healthcare Data Platform”, a platform which allows researchers, private sectors, andinsurers to connect and analyze big data on health, medical care, and nursing care as thehistory of individuals is expected to go into a full-scale operation in FY2020. We will
launch an experimental business during this fiscal year to examine specific system
configuration and the like. Detailed designing will be launched during or after the next
fiscal year.

As the Next-generation Medical Base Act was enacted in April this year, we will use
anonymously processed medical information for research and development in the medical
field through businesses certified in accordance with the said Act while keeping in mind
the coordination with the aforementioned data using base.

The systems of online qualification check of medical insurance and medical IDs will be thebasis that supports the above, which we aim at introducing. With an aim of launching a
step-by-step operation next fiscal year and full-scale operation in 2020, we will surely startdeveloping the systems this fiscal year.

Prevention and Building of Health: “Full-fledged Change of Individuals’ Behavior” by
Insurers and Business Operators(Remaining Issues)


Although insurers have a pile of individuals’ statements of medical expenses as well as dataon medical checks, they have not been fully used for the improvement of lifestyle habits(such as exercise and eating habits) or specific efforts aimed at preventing aggravation ofdiabetes and the like. There is neither sufficient incentive for insurers to reach out to theindividuals nor proactive effort of business operators to maintain and enhance theiremployees’ health.

(Major Efforts)


For the purpose of facilitating the efforts of insurers to encourage changes in the behavior

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Provisionalof insured aimed at preventing disease and building health, we will enhance incentive forthe insurers. Starting from the results of this fiscal year, we will also publish the rate ofspecific health checkups and specific health guidance implemented by all insurers. The
rates of both addition and reduction of subvention for late-stage elderly people provided by
the health insurance association/mutual aid association will be gradually increased fromnext fiscal year. The rates will be increased up to the statutory maximum of 10% in FY2020.
In order to strengthen the data health of insurers and promote coordination with healthmanagement of corporations (collabo-health), the Ministry of Health, Labour, and Welfare
and Nippon Kenko Kaigi will coordinate to record the health conditions and healthinvestment situation of each insurance subscriber and notify them to business operators.
This will start from the next fiscal year.

Medical care: “Drastic Improvement of Quality and Reducing of Burden of Doctors/Patients”
by Promoting Introduction of New Methods(Remaining Issues)

There are neither sufficient incentives nor rules which allow remote monitoring/guidance
based on online data combined with face-to-face medical care by primary care doctors or

which promote the use of AI and provide effective and efficient medical care.
(Major Efforts)With respect to the remote medical care, something that would contribute to providin geffective and efficient medical care by appropriately combining face-to-face medical careand remote medical care will be evaluated at the time of amendment of medical treatment
fee that follows. This includes effective guidance to and management of patients of adult

diseases such as diabetes by remote medical care combined with online medical care.
In order to strategically promote the development of AI in the field of healthcare, we havedesignated the following six areas to focus on the promotion of development and practicalapplication: diagnostic imaging support, development of drugs, support on operations,

genomic medicine, support on medical care and treatment, and nursing care/dementia.
We will establish systems for development and authentication of cloud environment for AI
development, and develop rules on evaluation pertaining to the quality and securing of thesafety of medical devices using AI. Based on these, we aim at evaluating, at the time ofamendment of medical treatment fee that follows, the improvement of the quality of the
medical treatment by the appropriate support using AI for the doctors.

Nursing Care: “Promotion of Self-support” by Introducing Scientific Nursing Care
(Remaining Issues)
 Although advanced efforts have been partially expanding to prevent nursing care fromoccurring or to prevent/improve aggravation of state in need of care, Japan has not been

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(Major Efforts)
At the next amendment of medical treatment fee, we will evaluate the self-support that is
effective.

With the aim of realizing nursing cares such as self-support which have scientific basis, wewill establish database to collect and analyze necessary data, and will aim to put in place

its full-scale operation in FY2020.
With respect to the nursing care services the scientific effect of which is supported byanalyzing data, we will evaluate them at the time of amendment of care payment in or after
FY2021. Further, we will publish on the website of the Ministry of Health, Labour, andWelfare the companies which offer such services, so that the services will be “visualized”
to the citizens.



We will steadily substantiate the effect of the use of robots and sensors at the nursing carescenes. Based on the results thereof, at the time of the next amendment of care payment,
we will review the nursing care fee and standards for personnel and facilities.
In our future development of nursing care robots, our goals are to maintain and improve
the quality of life of users through self-support and at the same time to reduce the burdenof caretakers. We will thus newly cultivate and assign project coordinators who can truly

pick up the on-site needs and turn them into development seeds.
We will re-examine the development fields to be focused on for the robot nursing careequipment, decide the direction of our strategic development by this summer, and reflect itto the development support goal for the next fiscal year and on.

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I-2. Realization of Mobility Revolution
Social Vision that We Aim at
With respect to the transportation of human beings and things, thanks to unmanned autodriving, delivery of packages by drones and auto-operated ships, logistics has been streamlined andtransportation services have been sophisticated by the “mobile revolution”. This has led to the
reduction in traffic accidents, labor shortage in local communities, and elimination oftransportation-vulnerable people. In 2020, over 90% of the new passenger vehicles sold in Japan
would be loaded with automatic brake. The social acceptability has been increasing for the
penetration of unmanned auto-driving.
<Scenes from Life/Spot after the Change>(Logistics site) With the progress of e-commerce, transactions of goods have drasticallyincreased. Although we are facing shortage of drivers and long working hours, masstransportation of freight is available by one single driver driving a truck in convoy. At thesame time, as the individual delivery using drone becomes common, we have been able toengage in logistics business without any heavy burden. New delivery services which meet
consumer needs have been created on a daily basis.

(Shipment/Receipt) A package is shipped from a remote island of Shikoku to a friend living
in Hokkaido. Thanks to the coordination of transportation which is supported by robot-ticks
such as auto-operated ship, truck drive in convoy, unmanned auto-driving, and individua ldelivery by drone, the package was delivered safely, securely, speedily, and cheaply, despite
being in the middle of winter.

(Elderly people and their family) Since the discontinuance of railway and bus services, anelderly person has used a car for shopping and hospital visits as well as for joining a gettogether with his/her friends to play a game of go. His/her family, however, were worried andsuggested that he/she refrain from driving. An unmanned auto-driving bus which runs on theprefectural road, as well as a transportation service from a rest stop, have been introduced.
This has allowed him/her to keep living in a familiar place without causing concerns to his/herfamily while being able to continue going out.

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Major Items Required for Realization
Experiments Ahead of the World(Remaining Issues)Auto-driving skills that have a potential to fundamentally change the current traffic systems
as well as the social recognition have been emerging and have been sophisticated. In thissituation, we have not been able to fully identify the problems accompanying the change
and implement demonstration in the real world that is essential for fostering social
acceptability while clarifying the timing of implementation of systems that meet private
demand. There is a concern that this may impair the full-scale social implementation.

(Major Efforts)


We aim to commercialize truck driving in convoy on freeways in 2022 at the earliest. In
order to realize unmanned convoy driving for vehicles that follow on freeway (Shin-tomei)
in 2020, we will launch experiments of manned-following-vehicle system during this fiscal
year and unmanned-following-vehicle system next fiscal year on public roads.

With an aim to realizing a transportation service of unmanned auto-driving in 2020, we
will launch experiments for local communities on public roads this fiscal year, picking overten locations across Japan for the experiment.
With the aim of commercialization of auto-driving, where there is no driver in the vehicles,
we need to enable experiments of auto-driving on public roads. For this purpose, we willdevelop necessary systems, including the requirements on electronic traction pertaining to
the convoy driving, examination of matters related to inter-vehicle distance, andrequirements of space exclusive for the transportation service by unmanned auto-driving.



Looking ahead to the 2020 Tokyo Olympic/Paralympic Games, we will showcase thecutting-edge auto-driving technology in and outside of Japan and make it a legacy. For thispurpose, we will implement cutting-edge experiments in Haneda Airport and the waterfront
areas, and develop systems.



Our goal is to be able to deliver packages in the mountain areas by drone next year. We
also aim to engage in safe delivery of packages in the urban areas on a full-fledged basis in
the 2020s. For this purpose, we will develop technologies and systems that enable advanced
aviation, including unassisted flying without monitoring by pilot and overhead flying.

Strategic Collection and Use of Data, Expansion of Cooperating Fields(Remaining Issues)The “data” which will be the core to realizing the mobility revolution is randomly
possessed by related persons and is not fully shared among them. At the same time, there
is no system of generating added value by using data.

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We need to further expand the areas of cooperation by each company, so that Japanesecompanies can devote resources to the competing areas of auto-driving field.

(Major Efforts)
 By the end of the year, we will establish systems for the sharing and collection of
information. This includes indexing of complexity of driving environment and clarificationof experiment data that needs to be collected in common.


We will accelerate the research and development to drastically enhance competitiveness ofrecognition/judgment technologies that are the key to auto-driving. By the end of this fiscal
year, we will make up a basic policy on strategic collection and use of data on driving
images and accidents.



By the end of next fiscal year, we will make up the specifications and systems for the
dynamic maps where information that keeps changing on a real-time basis is linked.



As part of the infrastructures to realize auto-driving, we will promote efforts for launching,by 2020, the services of fifth-generation mobile communications system (5G) that enable

ultrafast speed, multi-connections, and ultralow-delay.
With a view to improving the security of auto-driving vehicles, we will compile a scheduleby the end of this fiscal year to promote establishment of a system for the evaluation ofsafety.

With a view to commercializing the auto-operated ships by 2025, during the next fiscal
year and at the initiative of Japan, we will establish an international specification for thedata transmission relating to the in-ship equipment. By the end of FY2023, we aim to reachan agreement on the international standards concerning vessel facilities and operation, andestablish standards in Japan.

Development of Systems looking to International Inter-system Competition(Remaining Issues)
 In order to commercialize future advanced auto-driving and provide services related thereto,
traditional traffic-related regulations that are made based on “driving by a driver” must be
re-examined. With a view to international inter-system competition, we need to accelerate
our consideration on a full-fledged development of systems.
(Major Efforts)
 With a view to commercializing an advanced auto-driving (above level 3) by around 2020,
by the end of this fiscal year, we will compile a policy (outline) for the development ofsystems for the entire government. This will include the necessary review of traffic-related

regulations, such as safety standards pertaining to the driving by the systems.
We will enhance the playmaker function of the government, so that it can powerfully

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implement the development as a national strategy, together with the private sectors.

I-3. Creating of Next-generation Supply Chains
Social Vision that We Aim at
Acquiring and using of real-time data in every phase including development, manufacturing, sale,and consumption have been realized. This has realized the creation of innovative products andservices that meet individual customer’s demand, lean supply chain optimized through data
coordination, as well as safe and productive manufacturing process in smart factories. Companies
have increased that collect data and use it for their management, and labor productivity of the entire
manufacturing industry has improved by more than 2% per year.
<Scenes from Life/Spot after the Change>(Consumers) On a casual occasion in our daily life, we can input whatever clothes we want
to wear into our smartphones. Now, we are able to purchase tailor-made clothes with size,
color, and materials of our taste in price and with effort that are almost the same as the readymade products.

(Small-and-medium manufacturers) A company consulted a specialist who visits the site ofsmall and medium-sized companies personally, and introduced a low-cost and functional
robot and IoT tool that suit itself. In addition to the streamlined manufacturing process, thanks
to the coordination of data with suppliers of raw materials and customers of products,
manufacturers are now able to take actions in advance based on the operational status andsales plan of suppliers/customers. They have been successful in having transactions with nonassociated companies, and have been able to increase their turnover with less fluctuation
throughout the year.

Major Items Required for Realization
Creation/Development of Advanced Precedents on Data Coordination Ahead of the World(Remaining Issues)
 Most of the small and medium-sized companies in Japan have still been slow in data
coordination internally and among equipment. Even large companies need to work on thedata coordination beyond the framework of factories and corporations. There are neither
enough advanced precedents that could serve as a model case nor development ofsystems/rules that would motivate companies.

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By the end of this fiscal year, we will launch an international experiment of data
coordination across multiple companies in and outside of Japan. We will establish a unified
format for data description and make a proposal on international standards by 2020.
We will promote efforts for the establishment of strongholds where small and mediumsized companies can consult “Smart Manufacturing Supporters” for the use of data andintroduction of IoT/robot. We aim at establishing around 40 strongholds across Japan in

two years.
In the field of automobile, we aim to enable development of more speedy and accurate“approximation” for the entire supply chains using data. With this in view, we will establish
a simulation model concerning evaluation of vehicle performance through cooperation



between industries and universities.
Our goal is to give regulatory incentive to the businesses that are making efforts to achieveadvanced industrial security by constant monitoring of facilities using IoT and data. For
this purpose, we will diffuse the “Super Certification Business Establishment System” thathas newly started based on the High-Pressure Gas Safety Act, and examine, based on
experiments, the expansion of fields where advanced safety using IoT needs to be promoted.

In order to promote coordination and use of data among multiple businesses on supply
chains, we need to position “coordinated energy saving”, where we can properly evaluate
the energy saving achieved not by individual businesses but through coordination among
multiple businesses, as the new method of energy saving. To achieve this, we will look into

reviewing the necessary systems.
With the aim of introducing the latest IoT equipment into the manufacturing sites, we will
first introduce the latest international standards by the end of this fiscal year in theregulations concerning explosion protection based on the Industrial Health and Safety Act.
We will also look into the systems which can respond speedily to the amendments ofinternational standards that follow.

I-4. Building and Developing Pleasant Infrastructure and Towns
Social Vision that We Aim at
With the use of ICTs, robots, and sensors across Japan, productivity of all construction sites
including roads, bridges, and dams have improved (by 20% by FY2025). There is no labor shortage,
and appropriate infrastructure has been developed and managed. The work environment ofconstruction sites has improved, and the sites have evolved into a more attractive workplace. All of
the above are supporting the comfortable and safe daily life of citizens.

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Provisional<Scenes from Life/Spot after the Change>(At normal times) With the development and introduction of ICT and 3D data as well as robots
which can efficiently provide necessary inspection and repairing requiring professional skills,
we are now able to implement appropriate management and detect hazardous spots at an earlystage. This has led to the decrease of unpredictable accidents, shortening of construction andrepairing period, and reduced traffic regulations.

(At the time of disaster) A major earthquake occurred and there were damages in infrastructure
in broad areas. However, with the help of drones, inspections were implemented in a shortperiod time. Thanks to the auto-construction machines, recovery works at dangerous spots
proceeded at a fast speed, enabling daily life before the earthquake to return at an early stage.

(Construction sites) Thanks to ICT construction machines, it now takes a shorter time toacquire knowhow that we previously needed years. Constructions that previously required
even weekends can now be completed without relying on long hours of work of skilledworkers, securing workers days off on Saturdays and Sundays.

Major Items Required for Realization“Social Implementation led by Public Sectors” Tailored to each Characteristics ofInfrastructures(Remaining Issues)In the field of construction, where public works have a significant impact, they have justbegun using “i-Construction”—the ICT engagement throughout the entire processes frominvestigation and measurement to designing, installation, inspection, maintenance andmanagement, and renovation. It has not yet prevailed in the field.

In the fields where private businesses have initiative, such as maritime field, developmentof public systems has significance. However, neither the internal standards that accompany
the development of advanced technologies have been developed nor the international
specifications have been standardized.

(Major Efforts)

By 2019, we will expand the use of ICT to all processes including construction types otherthan earthmoving and pavement (such as bridges, tunnels, and dams) as well as
maintenance and management.
By the end of this year, we will establish a policy on the use of 3D data, and develop specificrules for the use aimed at making data open by 2019.

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ProvisionalWith the aim of familiarizing small-and-medium construction companies that accept orders
from local municipalities with the advantages and standards of ICT earthmoving, we will
provide a demonstration-type support for actual construction works.

In order to promote “i-Shipping”, where we introduce ICT into every phase fromdevelopment and construction to operation of vessels, we will establish international
specifications for the data transmission relating to the in-ship equipment next fiscal yearwith the initiative of Japan.



By the end of this fiscal year, we will establish evaluation standards and test methods forthe inspection of infrastructure and disaster-ready robots. “Procedures for the Inspection of
Robots” for underwater robots that show procedures of robot use will be established by theend of this fiscal year, and we will further establish procedures for other fields includin gbridges and tunnels.
In order to promote the development of robots used for the inspection of infrastructuresand disaster-ready robots by presenting targets, starting this fiscal year, we will establish
and publish performance required of robots for each situation of use. Further, incooperation with the managers of infrastructure, we will support the development ofadvanced technology that supports inspection of infrastructures, such as robots and AI.

Our goal is to resolve social challenges of local communities by promoting the use of data
possessed by local governments. We will achieve this by making things open in the fields
focused in the government-private strategic meetings on the promotion of data use andgovernment-private round tables as well as taking advantages of a business proposal system
based on the “Act on Promotion of Future Investment on Communities”.

I-5. FinTech
Social Vision that We Aim at
While safety and security of users are secured, , FinTech corporations and financial institutions thatuse advanced technologies such as blockchain cooperate with each other through open API andprovide services competitively to users one after another. Cashless settlement is pervasive.
<Scenes from Life/Spot after the Change>(Users of service (individuals)) Monthly household accounts can be kept automatically byusing an application. One can transfer money to a friend using a smartphone. Identity
confirmation that is required when making applications for services can be done online.
Sending money to your son studying in the U.S. has become much less costly thanks toblockchain. We do not use cash for shopping.

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Provisional(Users of service (corporations)) We do not use bills anymore. Thanks to money transfer
telegrams with information on commercial distribution, we are now released from onerous
works concerning accounts receivables and tax documents. By using lending service based on
big data analysis of commercial distribution, we could avoid fund shortage that we had notbeen able to predict and avoid before.
seconds with blockchain.

Arrival of goods and credits can be checked by(FinTech companies) A FinTech company thatprovides money transfer services in API

cooperation with financial institutions has been listed. When the company advanced into
England, the local authority took the trouble to do a matching.

Major Items Required for Realization
Acceleration of Challenges for Innovations(Remaining Issues)
 Experiments are still not enough for the innovative FinTech services. Particularly, there arehesitation and concerns against challenges to the experiments over the risks pertaining to
the compliance and surveillance. Coordination and cooperation with international humanresources and authorities overseas that are essential for keeping up with the international
movement for standardization of blockchain are insufficient. When Japanese FinTech
ventures expand overseas, coordination with local authorities would be a challenge.
(Major Efforts)
 In order to eliminate hesitation and concerns that FinTech companies and financial
institutions tend to have when they try to implement unprecedented experiments(compliance and surveillance risks), we will take measures to facilitate experiments related
to FinTech (FinTech experimenting hub (tentative name)). Related government agencies
will cooperate to take measures to remove obstacles beside those pertaining to finance

related laws and regulations.
Using a platform for the experiment of blockchain, we will implement experiments on thesophistication of financial infrastructure including credit transactions, confirmation ofidentification, and management of settlement/logistics information.

With respect to the blockchain technology, we will promote joint research in cooperation
with international research institutes and will consider financial authorities’ participation
to an international consortium.
Taking advantage of frameworks of international cooperation with English andSingaporean authorities, we will support FinTech companies to expand overseas. We will

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also consider expanding the frameworks. We will organize a FinTech summit.
Promotion of Open Innovations(Remaining Issues)
 There is insufficient coordination between FinTech corporations and financial institutio ns
through open API. There is still room for improvement in providing financial services withsignificantly enhanced convenience for users using a network of Japanese bank systems
that are developed to a relatively high level.
(Major Efforts)
 We will enact the law on the partial amendment to the Banking Act and the like and follow
up on the number of banks providing API and number of contracts banks entered into withagencies which handle electronic settlement. We will also review additional taskspertaining to the promotion of open API in meetings for the review of open API.
Based on the perspective of open innovation, we will look into the challenges pertaining tothe bank agency business and the like.
We need to use new technologies in the finance industry, and allow financial institutions to
implement the agile development of services and abilities through IT as well as expand
their business opportunities. For this purpose, we will further examine the development ofcross-sectoral legislations pertaining to the settlement services.
We will examine promotion of “RegTech”, where government and private sectors takeeffective and efficient actions pertaining to the regulation and supervision using
technologies such as open API and blockchain.

Promotion of Use of FinTech to Enhance Corporate Growth(Remaining Issues)

Our task is to connect FinTech with the improvement of productivity of corporations.
Particularly, our challenges are the computerization of small and medium-sized companies
that maximize the effect of new XML system which starts operating next year as well as
the utilization of XML data.

(Major Efforts)

Based on the “FinTech Action Plan for the Enhancement of Corporate Growth” thatoriginates from the use of financial EDI, we aim to achieve an integral sophistication of theentire processes of finance and settlement.
We will look into financing services and tax support using data obtained from the new
XML system. In and after autumn this year, we will implement experiments on integral
management of settlement and logistics information by blockchain.

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Provisional

We will look into financing services and tax support using data such as new XML systems.
In and after autumn this year, we will implement experiments on integral management ofsettlement and logistics information by blockchain.

We will look into the transition to electronic bills and checks across Japan throughcoordination between the government and the private sectors.



We will promote computerization and clouding of corporate accounting linked to theelectronic settlement. We will launch follow-ups for the progress of use of Internet banking
by companies.

Promotion of Cashless Society(Remaining Issues)Cashless settlement has yet to progress compared to other foreign countries. Our tasks are
to improve safety and convenience of cashless settlement, streamline administrative
procedures, and expand sales opportunities using big data.

(Major Efforts)
 With respect to the relaxing of an obligation to present documents when using credit cards
at member stores, we will promote cashless settlement by enabling electromagnetic
methods such as e-mails to reduce the cost for the settlement by credit card and improve
convenience of consumers.
While promoting API coordination pertaining to the use of credit card data, by the end of
this year, we will develop environment for facilitating computerization of receipts,
including standardization of formats.

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II. Assignment to build horizontal structures in Society 5.0

II-A. Creation of value source
II-(A)-1. Construction of data utilization infrastructure and system improvement for thorough(exhaustive) data utilization
Social Vision that We Aim at
The creation of a new social infrastructure, data utilization infrastructure, is accelerating throughpublic and private partnerships. With the trigger of intensive work periods until 2020, utilization ofdata possessed by government, municipalities, etc. and data cooperation beyond the boundaries ofenterprises have dramatically advanced, and data of the public and private sectors are used withpeace of mind. Data published according to the needs of direct dialogue with the private sector isprovided in a file format suitable for 100% machine interpretation. The products and services
originating from Japan that utilize data have become international standards and spread to domestic
and foreign markets.
<Scenes from Life/Spot after the Change>(Tourists) Tourists with various needs both in and outside of the country and tourists who willvisit Tokyo at the Olympic and Paralympic Games in 2020 will make a transition without
difficulty, even in complex Tokyo stations by advanced navigation that combinestransportation information and facility information, and they will move smoothly to thevenues and accommodations by transportation.

(National life) Personalized services will be able to be enjoyed in various places, such as
appropriate medical and nursing care services according to individual conditions, customized
products according to consumer's preference, and education tailored to the degree ofcomprehension of students.

(Agricultural site) Even new entrants can harvest delicious and safe crops by making use ofvarious data such as skilled farmer's knowledge, growing conditions and weather without
relying only on experience and intuition. Farms can make more revenue by productivity
improvements and business growth will increase.

(Company) Accuracy and speed of marketing will be improved. The transformation will becreating innovative products and services while realizing zero waste and zero lead timethroughout the development and production processes including some office operations thatare not on job descriptions.

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Major Items Required for Realization
Open system of public data
(Remaining Issues)
 Until now, we have promoted environment development for the provision of data possessedby the national government and local governments. Such includes establishing government
data catalog sites, developing and providing open data packages to local governments, thedisclosure of public data in response to social needs and establishing a data platform
centered on public data that involves a whole society have not progressed.
(Major Efforts)

Public-Private Data Utilization Promotion Strategy Conference is a controller consisting of
public and private experts. Based on the Citizen of the world's most advanced IT nation
creation declaration · public and private data utilization declaration fundamental plan
(Cabinet decision on May 30th, 2017) that is established by the top executive committee
consisting of industry, venture, private experts and related ministries at the conference, we
carry out comprehensive and effective promotions of public and private data utilizat io nsuch as online principle, promotion of open data, promotion of IT in administration ,promotion of BPR, establishment of data distribution infrastructure and ensuringconsistency between government and local measures.
We will conduct public data disclosure as an intensive work period until 2020, focusing on
the following efforts:- In order to provide public data in a highly convenient form while in consideration ofsafety, security and personal information, we will carry out stock picking for grasping
the actual state of public data during this year based on Open Data Basic Guidelines(Decision on Public-Private Data Utilization Promotion Strategy Conference at IT
Comprehensive Strategy Headquarters on May 30th, 2017).
-



Public-Private Participation Round Table to conduct a direct dialogue with the private
sector including venture firms has been held from this fiscal year from time to time.

Mainly in the 8 fields*, we will open up data in a way that will lead to the creation of
new services and solutions to various issues.
(* Priority fields indicated in Public and private data utilization declaration fundamental
plan. (i) Electronic administration, (ii) Health · Medical · Nursing care, (iii) Tourism, (iv)
Finance, (v) Agriculture, Forestry and Fisheries, (vi) Manufacturing, (vii) Infrastructure,
Disaster prevention, Disaster reduction etc. (viii) Transportation.)
Regarding the map data of the registry office, as a part of measures to promote the utilizat ionof public and private data, we will consider to be able to start providing data by 2021, anddecide specific conditions and contents during this fiscal year.
We will promote the utilization of weather information in many industrial fields such as

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electric power, tourism, distribution, insurance, agriculture through meteorologicalbusinesses promoting consortium by industry, academia and government. In order to create
a new solid meteorological business, we will promote the release of basic weatherobservation and forecast data, and review necessary systems during the current fiscal year.
While positioning the universe as a big data infrastructure, regarding government satellite
data (excluding those pertaining to security uses), we will open it up free of charge anddevelop concrete disclosure methods etc. from the user's perspective based on international

trends and others.
Regarding oceanographic information which is required wide area coverage, real time
property and convenience, we will promote the development of Marine situation display
system, which is one of the foundation of aggregation, sharing and provision of marine
information in Japan's marine situation grasp (MDA) to promote the use in many industrial
fields such as shipping, fishing, development of renewable energy, etc.

Regarding the corporate information that began the operation in January this year, we will
expand the posting information on recognized information and aim for one million postingsby the next fiscal year.
We will prepare for an examination environment where the staff of local public entities canacquire skills necessary for open data, and establish coordination/intermediary function
between local public entities holding data and private enterprises utilizing it during thecurrent fiscal year.

Acceleration of data distribution and utilization in industry and individuals(Remaining Issues)
Data cooperation and utilization beyond the boundaries of enterprises and industries are
not fully advanced due to citizens’ vague concerns about privacy protection, difficulty ofunderstanding the merits of data collaboration and utilization, and the lack of clarity of data
usage authority.

(Major Efforts)
To facilitate clarification and sharing of data usage authority through business conclusionof appropriate contracts, we carry out the utilization of contract guidelines and others
concerning data usage authority formulated in May of this year. At the same time, we willorganize points to be noted for each field through dialogue with the industry during this

year and promote development into individual fields.
To enhance the convenience of data users and promote expansion and revitalization of thedata distribution market, we will support the establishment of a framework for democratic
guidance during this fiscal year for the formulation and promotion of voluntary rules among
private enterprises.

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Provisional

As for PDS (Personal Data Store), which is a mechanism to promote the distribution andutilization of personal data under individual involvement, information banks, data trading
markets, etc., we carry out the Public Private Partnership Demonstration Project. At thesame time, we will examine the ways of institutional systems to ensure reliability, fairness
and transparency under individual involvement, and obtain conclusions this year.

We will begin disseminating information to promote data utilization such as theannouncement of case examples based on the cases that are from private enterprises andothers that concern the handling of personal information and anonymous processing
information during this fiscal year.

Intellectual property and standardization strategy that promotes data utilization(Remaining Issues) Since the concern about unauthorized use of data and the response to conflicts overintellectual property use are serious, data collaboration and utilization far beyond theboundaries of companies and industries are not fully advanced, and it is a challenge toconstruct an intellectual property system that appropriately adjusts to the interests involved
in using data.
The standardization system of public and private sectors has not covered new businessmodel that combines goods and services and the diversification of standardization activities.

(Major Efforts)
Regarding development of the Copyright Act stipulations that limit copyright with a viewto new businesses utilizing big data, prohibition of unauthorized acquisition, use andprovision of data, and the establishment of an Alternative Dispute Resolution (ADR)
system to adjust the interests of intellectual property and enhancement of evidence
gathering procedures for intellectual property lawsuits, we will take necessary measures
including revision of related laws as soon as possible. Also, we will further advance theprocess and product of AI on the intellectual property system.
We will consider the strategic and organic cooperation methods on standardization between
public and private sectors, including the commander tower function (Chief Standardization
Officer (CSO)) for acquiring international standards. In the meanwhile, we will strengthen
the public and private framework for standardization through rapid international
standardization in important areas such as automatic driving, smart factories, IoT, etc.,
collaboration between international standards and regulations, and a study aiming at theamendment of Industrial Standardization Act.

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II-(A)-2. Drastic strengthening of education and human resources
Social Vision that We Aim at
While the required abilities and skills are constantly changing, the thickness of human resources
capable of continuing Lifelong relearning is born. With the progress of combining IT with every
industry, everyone who works in Japan will be having IT power. All business people will beacquiring IT power according to their needs and the Japanese society will become the one that
continues to create added value by utilizing IT power.
<Scenes from Life/Spot after the Change>(IT experts) They used to develop a sales management system in an old programming
language (COBOL etc.) at IT vendors, but in the mid-thirties they acquired new technology
by e-learning (big data such as Python and programming languages compatible with AI).
Also, they have led the development of a new system that can provide customized customer
services at an IT user company (which is their new workplace) and they are playing activeroles at comparable salaries to those of overseas IT human resources.

(Small and medium-sized companies) The ryokan executive who was suffering from thedecrease in sales solicited employees to retrain in the latest customer service techniques byutilizing the data at the social class lecture. By fully utilizing the system that made all
information such as the preferences of the visitor visible, they provide courteous service suited
to the needs of their customers, and achieve customer satisfaction and increased sales.

(Youngster) Inspired by programming classes at elementary school, this person went to acollege engineering department with an eager to design by himself/herself, a society that is
10 years into the future with automated traveling vehicles and robots integrating into daily
life. After studying not only information and mechanical engineering but also other fields
such as business administration, he/she founded a venture company. This person has beenpushing for collaborative research with major companies.

Major Items Required for Realization
Presenting the compass of what to learn(Remaining Issues)
 It is necessary for the industry-government-academia to work together to strengthen Japan's
IT power; however, since it is not sufficiently visualized as to how much talent is necessary
in each field, there is no indication of a compass to which the industry-governme nt-

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academia should aim for in common.
(Major Efforts)
In order to clarify the necessity of human resources and the situation of mismatched labor
required under the 4th industrial revolution such as data / AI personnel consisting of
security, data scientists, AI · IoT etc., we will establish a mechanism to grasp IT humanresources’ supply and demand at an early stage.



To clarify abilities and skills required for IT human resources based on the prospect of
supply and demand of human resources, we will revise the indicator (IT skill standard)
which clarified and systematized necessary practical abilities. Additionally, we will
formulate new skill standards focusing on IT human resources who are capable ofresponding to new technologies and development methods that are becoming mainstream
IT skills during this fiscal year.

Practical education through industry-government-academia(Remaining Issues)
 There is not a sufficiently established mechanism that provides services based on the needsof the industry from suppliers (university, vocational school, private enterprise etc.) thatprovide education and human resource development.


There is no well-developed environment for practical learning due to lack of real data on
actual issues faced at the company's offices or work sites, and lack of resources such as
lecturers who are familiar with actual business challenges.
Although ministries and agencies are engaged in education and human resource
development for improving IT capabilities, each effort is vertically structured and isdifficult to spread them out horizontally in ministries and agencies.

(Major Efforts)
While continuously grasping the needs of the industry, we work on making efforts ofindustry-academia cooperation through college consultation bodies by university
stakeholders to share information at the practical level with industry representatives andthe regional industry core human resource training project by vocational schools. Also inorder to make these efforts cross-functional, we will examine the public and private
consortium by industry and the educational circles, establish it by the end of this fiscal year
and start the approach.

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Strengthening university mathematics and data science education, and engineering education
reform, etc.
(Remaining Issues)

In Japanese engineering education, faculty members are assigned to each specialized areaof the department and it has become a vertically divided structure. Therefore, it is becoming
difficult to build a flexible educational system that matches the modern era, such as
education that combines the department of informatics and the department of mechanics.



The importance and necessity of mathematics/data science education are increasing beyond
the field; however, only some students in the sciences have learned and there is little
opportunity to learn it without boundaries.

(Major Efforts)
 Regarding engineering education system reform, we will examine the specific way toreform the system such as the drastic review of the vertical division structure of eachdepartment or the flexibility of the length of study such as bachelor / master's 6-year
continuous education, etc., during the current fiscal year. We will carry out this plan in thenext fiscal year and aim for full-scale implementation in fiscal 2019.
We organize a center in the university which becomes the base for implementing fullycovered mathematical and data science education at the university that goes beyond thespecial field of the arts and sciences. Then, we prepare a standard curriculum and model
teaching materials that will be a nationwide standard and disseminate it to other universities.



For compulsory programming education at the elementary school level (from fiscal year2020), endeavors such as utilization, evaluation and further improvement of digitalteaching materials that can be learned with enjoyment at school sites with the collaboration
between industry and education fields will start from this Autumn and in full-scale
deployment from the next fiscal year.

A society where anyone can relearn(Remaining Issues)
 Even if employed voluntarily attempts to learn for skill development, there are financial
and temporal obstacles, and accessibility is not necessarily easy.
Because abilities and skills which employees have acquired have not been adequately
assessed in companies' recruitment and benefits, there is insufficient incentive forrelearning.

(Major Efforts)
Regarding the advanced levels of vocational training courses centering on IT / data fields
provided by private business operators for business people, we will establish the28

Provisional“Certification System for Fourth Industrial Revolution Skill Acquisition Course (tentativename)” certified by the Minister of Economy, Trade and Industry during this fiscal year.
Also, we will consider the application of professional, practical education and training

benefits for this system.
Regardless of age and occupation, it is important for various human resources to acquirebasic IT / data skills through various opportunities. We will take measures to support
individuals in order to enrich "relearning" of motivated business people.

In order to demonstrate the skills of workers effectively, we will clarify the content of jobs
and abilities and promote fair evaluation based on them. Also, we will take measures thatcan establish the entire benefit system such as wage systems based on the evaluation assoon as possible.

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II-(A)-3 A virtuous cycle system that creates innovation and ventures
Social Vision that We Aim at
While changing from a capital-intensive economy to a knowledge-intensive economy,
Japanese society will also involve wide range of society groups such as enterprises and investors
centering on academic and national research, and development corporations, which are bases ofknowledge and human resources. As a result, excellent research, development and venture will becreated voluntarily and continuously by the entire society. A virtuous circle will be realized in which
the fruits of innovation will be invested into the next creation (R&D investment to 4% or more of
GDP by 2020).
<Scenes from Life/Spot after the Change>(University · R & D corporation) We will step into new management that is funded by us,
leading investment instead of the traditional management that carries on activities within agiven financial source under the leadership of presidents(Researcher) Researchers who have true motivation and abilities will be appreciated, excellent
young researchers will be able to secure research funds and posts, and the research results will
be cited by researchers worldwide.

(Company / Investor) We will quickly obtain innovative technology that is difficult to gain on
our own through large-scale collaborative research with universities that are assertive inindustry-academia collaboration and investment to R&D oriented ventures.

(Entrepreneur) Graduating from school and finding employment in a company is not common
but options of entrepreneurship will become more common, and a success story connecting
creative ideas and seeds to business will be produced one after another regardless of the agegroup.

Major Items Required for Realization
Promoting incentives and self-acquired resources for strengthening the core function ofacademia.
(Remaining Issues)
Industry-academia collaboration incentives for universities and researchers are inadequate,
and the secretariat system development for collaboration is not progressing. Also, the ways for selfacquired funds necessary for a full-fledged industry-academia collaboration are also limited.

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Furthermore, integrated reform of the administrative expense grant and competitive funds areunderway. It does not lead to a virtuous circle of voluntary industry-academia collaboration centeredon academics, and it is limited to small-scale collaborative on through researchers’ individ ua lconnections.
(Major Efforts)
From this fiscal year, we will develop the data that can compare and evaluate the activities
of industry-academia collaboration at each university. By announcing it annually, it will encourage
the companies to consider cooperating parties and lead to investment.
As for the rule that we reflect the results of achievements of industry-academia cooperation
based on the quantitative KPI set by each university as a standard to the prioritized allocation ofsubsidies for operating expenses that will be carried out from this year, we will strengthen thedissemination of evaluation results. Also, we will inform the best practices through evaluating
university efforts such as personnel system reform in which faculty and staff engaged incollaborative research are appropriately evaluated and supported regarding benefits and theenvironment.
With strong authority under top management, we will organize excellent researchers beyond
the department, and build a new system in the next fiscal year to centralize management of industryacademia-government collaboration with specialized human resources such as commercializat io n
and intellectual property.
To spread new application models for further effective use and improvement of the appealof university-owned assets, we will formulate a system review policy within this year. Also, in orderto activate donation of land and stock to universities, we will examine concrete measures andsystems based on the results of grasping the actual status of acceptance during the fiscal year.
Focused investment in bases and human resources that support Japan’s major industries(Remaining Issues)Japan is relatively weak to investing actively in research and development compared toother countries. To maintain our technological innovation capabilities at the world's top
level, with securing R&D investment, the keys will be concentration on high priority areasand secure core resources such as investment in information communication infrastructureaccompanying the rapid increase in data volume and human resources who are responsiblefor innovation.

(Major Efforts)
Regarding government investment in R&D, we aim to make it 1% of the GDP, while
maintaining consistency with the economic and fiscal rehabilitation plan. Also, based on
Public/Private R&D Investment Strategic Expansion Program (tentative name), which was31

Provisional

decided to be established in the next fiscal year, we will guide each ministries' measures

towards areas which promote private R & D capital.
Aiming to become the center of excellence of the world, we are gathering top domestic andoverseas researchers under the superior management of an organization leader. In order tocreate innovation in collaboration with industries including ventures, we will concentrate
on resources to a small number of bases in the next fiscal year. Moreover, we will examine
current efforts and consider organizing bases in industries that can aim for the world's top

in the future.
We are considering strengthening an internationally dominant, academic information
communication base that includes a supercomputer capable of accelerating AI development
and big data processing. We also make it possible to utilize companies and others working

on collaborative research beside universities.
We will secure a stable research environment for young researchers by promoting
excellence young researcher projects so that aspiring talent can aim to become researchers.
Also, we will establish measures to accelerate the improvement of human resources andhuman resource system reforms at universities during the next fiscal year.
The living and working environment of foreigners has been improving and the immigratio nsystem concerning highly-skilled foreign professionals is becoming very open. Under theslogan Open for Professionals, we will make external communication while collaboratingwith diplomatic missions abroad, JETRO, etc.

Acceleration of voluntary and continuous creation of venture(Remaining Issues) Since the risk money supply system (money invested in high-risk, high-return by investors)
to ventures is weak, large-scale funds to compete globally are lacking. It is also difficultfor ventures to gain access to government procurement and it has not been able to boost
their growth.
(Major Efforts)
 We consider strengthening fund functions such as M & A of ventures by large enterprises.
Also in order to further increase innovation development results of national research anddevelopment agencies, we will consider the way of further utilizing their investment
businesses after paying attention to ensure sound operations and finances. We will draw
conclusions during this fiscal year.
To promote investments by institutional venture capital investors and improve theinvestment environment, we will develop intellectual infrastructures such as guidelines onfunds market value evaluation and investment model contracts, and we will start thedemonstration during this fiscal year.

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ProvisionalIn order to make use of patents in flexible collaborative research and lead to the creationof venture, we will build a model to be owned independently by universities during thisfiscal year.

We will start trials to promote the utilization of R & D oriented SMEs and ventures ingovernment procurement in this fiscal year.

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II-B. Mechanism to boost maximization of value
II-(B)-1. Establishment of regulatory sandbox

Social Vision that We Aim at
A society that enhance the convenience of daily life through generates innovative products& services and by securing opportunities to test the products of innovation including rapid
development of AI, Big Data, Distributed Ledger Technology, automatic flight, automatic traveling.
<Scenes from Life/Spot after the Change>(Companies) A startup company with an idea of innovative business model will test a new
business model utilizing AI, Big Data, etc., under the framework of sandbox. Since its test
has been successful, regulatory reform is realized, and new services and products will beoffered.

(Households) A local venture company will devise a service that makes life easier based on a
new communication method. For instance, this service mutually refers to recipe data and daily
usage data accumulated in refrigerators and microwave ovens in the home. It suggests newrecipes according to your preferences and order missing ingredients automatically from asupermarket in the neighborhood. Even though current regulations did not assume a newcommunication method, it will immediately start the test because of the sandbox. We will also
check the empirical data together. The service will be delivered promptly due to our
corporation.

(Seniors) Lifestyle support robot will check health condition data of seniors. If there is any
abnormality, the data will be automatically sent to the family doctor, and it will realize older
adults to manage their health easily.

(Finance) Usage costs of electronically recorded receivables and the time for bank visitscompared to the usage of bills will be lower due to distributed ledger technology. Small andmedium-sized companies' financing will also be smoother.

Major Items Required for Realization
Establishment of regulatory sandbox by each project(Remaining Issues)In order to link the results of innovation to the creation of new added value, it isindispensable to accumulate the actual proof for trials. However, unless actual proof is done,34

Provisional

it is not possible to acquire necessary data, and the reality is in a vicious circle that wecannot sufficiently prove to the regulatory authorities the specific needs of success methods
to follow.
(Major Efforts)
As an effort on a project basis, based on the agreement of participation after limit in gparticipants and periods and explaining the contents of demonstration and risks, we will
establish the new framework that allows to try first as a fundamental idea that is not boundby the existing framework.

Efforts to promote demonstration of near-future technology such as automatic traveling andsmall unmanned aircraft in national strategic special zones(Remaining Issues)
Many institutional restrictions are imposed on individual demonstration projects. Also many
complicated procedures are required for preliminary regulation on verification and prioradjustment with related organizations.
(Major Efforts)
To carry out demonstration experiments of near-future technologies such as automatic traveling,small unmanned aircraft (drone) etc. promptly and smoothly in the National Strategy Special Zone,
we will quickly realize the creation of a regulatory sandbox system to fundamentally review
relevant preliminary regulations and procedures.

II-(B)-2. Regulatory reform, Simplified administrative procedures, integrated promotion of IT

Social Vision that We Aim at
According to Basic Program on Reducing Administrative Burden (March 29, 2017 Subcommittee for
Administrative Burden Reduction, Council for Promotion of Regulatory Reform ） , the administrative
procedure cost will be reduced more than 20% in principle by March 2020 and the businessenvironment that is the most flexible to perform in the world for domestic and foreign companies
will be provided. Companies will be relieved from unnecessary concerns due to administrative
procedures and will be concentrating on added value creation activities that are main businesses.
Administrative procedures will be brought online in a way that is easy for operators to use, font andformats will be shared, and the information which was submitted once cannot be required twice(once only).
In addition to establishing a corporation, paying social insurance premiums, etc., procedures tomultiple organizations will be unified (One-stop procedure system).

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Provisional<Scenes from Life/Spot after the Change>(Small and medium-sized companies) With regard to the information submitted to a ministry,agency, etc., the same information will not be requested from another ministry or agency, sothat it will not be troubled by vertically-divided administration. For example, even whenpeople apply for multiple subsidies, it will be enough to fill in the same matter once.

(Entrepreneurs) When an entrepreneur creates a venture company, as long as they enter
important matters for establishing a corporation on a smartphone by Q&A method, allapplication information that is for the legal affairs bureau, the tax office, the labor standards
supervision department, the pension office, etc., will be sent by online.

Major Items Required for Realization
Transition from administrative procedures of administrative perspective to public service ofbusiness person viewpoint(Remaining Issues)
 Many current procedures have been simply replaced with online procedures, and there is apossibility that new systems such as big data, corporate numbers, national identification
number, AI and other technological innovations, have not been fully utilized. Since thehorizontal structure is not developed in ministries to carry out projects, improving theconvenience of users has not been worked on yet, and the one-stop (unified) proceduresystem is not carried out either.
(Major Efforts)
 We will reduce the time (administrative procedure costs) that business operators work inorder to conduct administrative procedures by 20% in principle, in areas with substantial
business burden such as procedures for licensing and social insurance by March 2020.


Each ministry and agency will formulate plans for the promotion of medium and long term
e-administration including the on-line administration of administrative procedures by the
first half of next year. It will include the direction of response to cross-cutting issues suchas collaboration between government offices systems and corporate information.

To enable users to process online and one-stop at the time of establishment of thecorporation, considering utilization of private cloud services, we will examine from all
viewpoints. These viewpoints include the way to confirm the articles of incorporation, theseal stamp notice, the external cooperation API, etc., with public and private unity, andobtain a conclusion during the current fiscal year.

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Provisional

Trade procedures regarding the total optimization to realize shortening of the residencecargo time, we will set up a public-private consultation system that government officials
and private enterprises meet to examine from a general point of view such as institutio na land technical aspects. We will draw a conclusion during the current fiscal year.
In order to realize a prompt and efficient trial with a general point of view such as aguarantee of procedure at court, we will promptly consider the measures to promote IT
conversion. Such includes procedures related to judgment from the user's perspective whileconsidering the circumstances of other countries, and will draw conclusions during thecurrent year.

Regarding Blockchain Technology, we will begin verification in fields such as government
procurement by the end of this fiscal year. We will investigate from the operation ruleaspect toward utilization of a sandbox system and the promotion of efficiency by smart
contract. We will formulate plans for the realization of innovative electronic administratio nby the next fiscal year.
We will operate a one-stop application system (venture support platform) that can speedily
utilize government support measures by thinking in an entrepreneurial perspective fromthis fiscal year. We will examine the once-only function of basic corporate information thatcollaborates with corporate information and development to subsidies. We will obtain
direction in this fiscal year.

We will reduce the test burden on chemical substance assessment, promote a super certified
office system with high-pressure gas security and encourage i-Construction to utilize ICTat construction sites. Then we will realize the shortening of inspection days (1/5) ofconstruction work and reduction of inspection documents (1/50) by the on-site
implementation of state-of-the-art technology.

II-(B)-3. Strengthening earning power (Transformation of corporate governance reform from aplan to reality)
Social Vision that We Aim at
Companies properly deal with changes in the business environment under a strengthened
management system and are managed from the viewpoint of improving corporate value over the
medium and long term, without regard to overly short-term perspectives. Investors conduct deepand constructive dialogues with companies and encourage sustainable growth. As a result,dynamic enterprise management becomes possible and the capital market will be vitalized as aplace to raise funds.
<Scenes from Life/Spot after the Change>

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Provisional(Corporate and institutional investors) A considerable number of companies that adopt theirfiscal year-end at the end of March hold general shareholders meetings in July, and ourcompany held a general shareholders meeting in July for the first time. The schedule
enabled us to do a financial closing duty comfortably with margin time. Contents of thedisclosure documents could be communalized and the documents could be electronicallyprovided. As a result, we could interact more with investors towards the generalshareholders meeting and felt strong response.

(Board of Directors · Corporate management team) The management functions andsupervisory functions of our Company's board of directors dramatically improved byscouting the person who served as the president and chairman of another company as an
outside director. As a result, our company could decide to sell the business that could nothave been divested while being positioned as a non-core business under the new
management strategy because the business was from the department to which the former
CEO used to belong. On the other hand, our company could acquire the other company's
healthcare business to enhance its core business.

(Citizens) In addition to adequate information disclosure on business results and strategies,
citizens’ interest in companies that actively participate in providing ESG (environment,
society, governance) information that indicates efforts to protect the global environment has
increased. As a result, citizens invested a part of an asset portfolio in these companies.

Major Items Required for Realization
Promotion of constructive dialogue between companies and investors(Remaining Issues)

Effective stewardship activities by institutional investors are not necessarily carried out.
Publication of exercise results of voting rights by institutional investors is insufficient.
Also, there are indications that there is concern about the transparency of the exercise of
the right to vote and stewardship activities by the asset owner are not sufficiently done.

Regarding the disclosure that is the basis for dialogue between companies and investors,
it is pointed out that the information necessary for discussion is not disclosed enough andthat disclosures are spread over multiple documents, making it difficult for investors tounderstand. It is also pointed out that quarterly disclosure is one of the factors that cause
companies and investors to be too short-term oriented. The general meeting ofshareholders, which is the central place of dialogue, also concentrates in a short period oftime, making it difficult for investors to talk about the general meeting proposal with38

Provisionalsufficient information and time. The importance of providing information in response tochanges in the business environment surrounding enterprises is also increasing.
(Major Efforts)
 Through discussion and examination at the follow-up meeting of stewardship code andcorporate governance code (hereinafter referred to as “follow-up meeting”), we willencourage institutional investors to implement measures for effective stewardship
activities, including strengthening governance and control of conflicts of interests,
enhancing disclosure of the exercise results of voting rights, and monitoring of

investment companies by asset owners.
Regarding electronic provision of documents dispatched to a notice of calling of ashareholder’s meeting, we will examine at the subcommittee established at theLegislative Council and obtain a conclusion.



We will also promote information dissemination, dialogue and investment methods
including the disclosure that contribute to improving corporate value in the medium- andlong-term with ESG elements in mind.
Regarding the integrated disclosure of business reports and securities reports, the relevant
government ministries and agencies will accelerate their joint discussion on institutionalarrangements, clarification and dissemination of the way of standardization, lawinterpretation and any other necessary measures for items that have similar or related
contents and can be standardized among different disclosure schemes. They will set fortha plan within this year.
In the Financial Council, listening to opinions from diverse related parties, we willconsider comprehensively issues about the way of information disclosure that not only
ensures adequate and fair disclosure of information, but also contributes to constructive
dialogue between listed companies and investors, including management strategies andgovernance information of listed companies. Efforts will be carried out sequentially from

this year and from the issues for which we develop an actual plan.
Regarding quarterly disclosure, while examining the pros and cons of mandatory
disclosure, we will investigate issues and measures for further elimination of duplicate
disclosure and for further enhancement of its efficiency and obtain an interim conclusion
around next spring.

Strengthening the management system(Remaining Issues)
 There are indications that corporate governance reform has remained in perfunctory

response to principles such as the corporate governance code.
Board of Directors meeting faces challenges such as insufficient discussion about the39

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future management strategy and occasional difficulty in finding appropriate candidates
for an outside director. In addition, there are indications that fairness and objectivity are
not sufficiently secured in nomination of management candidates and training of
successors and that appropriate incentives for managements including performancelinked rewards are insufficient.
There is a practice that retired presidents/CEOs act as counselors/advisors and takeparticular roles in their companies. There is a case that the retired presidents/CEOs
exercise an opaque influence on corporate management, and there are concerns that it
may impede proper governance function.

(Major Efforts)
 Through discussions and examination at the follow-up meeting, we will encourage listedcompanies to leverage their efforts in relation to election and dismissal of CEOs in theobjective, timely and transparent manner. We will also encourage the organization ofboard of directors with necessary qualities and diversity, management of the board of
directors focusing on strategies, appropriate evaluation for these efforts, etc.


We will promote dissemination of Practical Guidelines on Corporate Governance
Systems (CGS Guidelines) (drawn up by the Ministry of Economy, Trade, and Industry,
March 31, 2030). We will analyze and publish the status of utilization of nomination
and remuneration committees at companies, the status of recruiting of former
managements as outside directors and the status of introduction and disclosure ofincentive rewards, etc. during this fiscal year.

We will create a system to disclose name, position, status, etc. of directors/CEOs whotake office as counselors, consultants, etc. at the Tokyo Stock Exchange Co., Ltd. aroundthis summer. The new system will be implemented at the beginning of next year.

Facilitation of business restructuring(Remaining Issues)
 Bold business judgment is not necessarily done sufficiently in companies, and companies
concentrate their efforts on maintaining present status rather than on making changes. As
a result, companies have continued to hold businesses with low profitability and have notmade progress in reviewing their business portfolio and shifting management resources tobusiness segments that are likely to have growth potential and to be profitable.
(Major Efforts)


We will examine related systems for measures to promote bold business restructuring
such as agile shift of business portfolio and take institutional measures next year.

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II-(B)-4. Public services and Private liberalization of assets
Social Vision that We Aim at
Through the utilization of the Concession System (The scale of PPP / PFI is expanded to 21
trillion yen in the decade of 2013 to 2022. Of these, the utilization of the Concession System is 7
trillion yen) that entrust management to the private sector while the country and local governments
are holding ownership of public facilities, private participants that have diverse knowledge on all
infrastructure in Japan such as roads, airports, water supply and sewage systems will constantly
enter on the premise of public-private dialogue. As a result, Japanese society will have succeededin achieving both improvements on the service level and efficiency.
<Scenes from Life/Spot after the Change>(The airport) Due to the free layout of the airport facilities, it will be reborn as a more
comfortable and convenient service such as being able to enjoy eating and drinking/shop p ing
after security check-in until right before departure with a send-off guest.

(Water supply and sewage system) While financial resources and staff of local public entities
are short, the aggressive introduction of state-of-the-art technologies such as sensors andsystems by the private sector, cost prevention and long-term appropriate renewal investment
improvement services, etc., are being conducted on the premise of appropriate monitoring by
local governments.

(Road)There will be improved attractiveness in the parking area, and the number of new users
is increasing due to the knowledge of private enterprises, the setting up of restaurants that use
local resources, the exhibition of goods, and the holding of various kinds of events.

Major Items Required for Realization
Expanding the introduction of Concession System in a growing field where demand is growing(Remaining Issues)

As for the Concession System, bold reforms progress in a short period of time includin gvarious law amendments, clarification of legal interpretation and formulation of guidelines.



As a result, the airport field has achieved the goal which had set up during the concentration
strengthening period until last year; however, in the future, issues on institutional andoperational aspects will emerge to expand horizontally further based on precedent casesand expand introduction in new fields such as passenger terminal facilities for cruise ships.

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Provisional(Major Efforts)


We will plan to select concessionaire of around seven airports in Hokkaido (New Chitose
Airport, Hakodate Airport, Kushiro Airport, Wakkanai Airport, Memanbetsu Airport,
Asahikawa Airport, Obihiro Airport), by 2019 by considering the viewpoint of sightseeing
strategies such as wide area tourism round route formation.

Regarding the Concession System, we will newly establish Passenger Terminal Facilities
and MICE Facilities for Cruise Vessels as a priority area that we put intensive effort in, andwill formulate precedent cases.
To make Concessionaire who is not a designated manager possible to allow certain third
parties to utilize within the scope of the purpose of establishing public facilities, we willtake necessary legal measures at the next ordinary Diet session.

Expanding the introduction of the Concession System in maturity fields where demands are
decreasing such as the declining population(Remaining Issues)For local public entities that utilize the Concession System such as public facilities, themerit is not necessarily realized by switching from the conventional ordering method, andthe horizontal deployment has not progressed.

(Major Efforts)
 This is regarding special support for municipal bonds pertaining to projects that introduce
the Concession System. When we carry out the advanced redemption with the aim ofoperating rights, we will take necessary legislative measures at the next ordinary Diet

session to support project formation by municipality in the field of water supply and sewage.
To organize a precedent case in the water supply business, we will consider measures suchas providing grants and subsidies only for certain projects that we work on before domestic
achievements of the Concession System are confirmed. Also regarding the introduction ofthese mechanisms to eliminate the new burden of municipality, we will consider it inparallel with the enforcement situation of the supplementary budget for 2016 as well.

Development of the promotion structure and measures for the operation(Remaining Issues)
 In promoting a mechanism for transferring essential elements of business between public
and private sectors, there is a need to be trusted by private enterprises that will be the leadersof the government. Although it is required that a system that should be improved andrefined based on private enterprises’ opinion as well as government, it is insufficient.

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Provisional(Major Efforts)
At the time of contract with the burden of warranty collateral, the refund of considerationof operating rights, and the purchase of necessary assets at the expiration of contract, we
will consider the way to be present by the end of July this year. This consideration is sothat the manager of the facility can promise a certain payment to the concessionaire whencertain conditions are satisfied and will take necessary measures by the next ordinary Diet
session if necessary.

In promoting PFI business, we will consider the functions and authorities of the Cabinet
Office and the appropriate way of organization to exercise its authority (including thecomposition of external neutral specialized agencies) based on examples from othercountries. We will take necessary measures by the next ordinary Diet session if necessary.

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III. Construction of a regional economic virtuous circulation system(Medium-sized enterprises Small and medium enterprises, Service Industry, Agriculture, Forestry,
Fisheries, Tourism, Sports, Culture and Art)
Social Vision that We Aim at
With the active circulation of people, things, money and data inside and outside the region,
small and medium-sized manufacturers, agriculture, forestry and fishing industries, service
operators such as tourism, food and beverages, retail industries and the like, sports, culture, and Artrelated industries, will have increased added-value and productivity. Companies that lead the region
will have become the foundation of a virtuous circle in the entire region, and growth industries
taking advantage of the characteristics of the region and the employment of good quality, etc. will
have been created. In this way, the virtuous circle of the regional economy will have beenmaterialized. The number of small and medium-sized enterprises and small enterprises thatgenerated profits will have doubled to 1.4 million, while the growth rate of labor productivity inservice industry will also have doubled (2%) by 2020. In this way, the improvement of value-added
and productivity of individual business operators and the virtuous cycle of regional economy will
have been progressing at the same time.
<Scenes from Life/Spot after the Change> (Agriculture, Forestry and Fishing Industries) These industries will have been performing
optimum operations and direct transactions with end users making use of data related to thegrowth situation, weather, market conditions, and the like, without relying on the experience or
intuition. High productivity will have been realized.
(Tourist destinations) Town development companies established by local volunteers and DMOs
(Destination Management/Marketing Organization) will have improved the landscape andregenerated regional resources, including empty shops and Japanese traditional houses byobtaining funds and management support from regional banks and funds. Personnel who havework experience in IT area as well young workers will have been playing active roles,
successfully revitalized the city and improved the productivity of individual business operatorsby analyzing tourist data. The city will have been bustling with tourists from home and abroad
throughout the year.

(Provincial cities) In a collected effort from local governments and local enterprises, a conceptof “stadium-arena” will have been developed, which serves as an exchange base where various
generations gather, not only for watching fascinating sports but also for concerts, healthpromotion and other purposes. Provincial cities will have utilized private investment andexpertise to efficiently develop and operate attractive facilities. Provincial cities will also havebrought in the users of the stadium-arena to shopping districts and tourist facilities by introducin g
coupons from the town walking application.

(Retailers) Retails business owners who have little knowledge about IT will have introduced
cloud services encouraged by their external tax accountants (from several thousand yen a month).
Sales and purchase data will have automatically generated from the POS cash register and order
receiving/ordering system via the cloud service, which will have made their accounting and tax
returns tasks easier. Retail business owners will have reorganized items and optimized prices
through data analysis and AI, which will have led the development of new services with higher
customer value.

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Major Items Required for Realization
Advancement of introduction of IT and data utilization, etc. to improve added value andproductivity in the industries in the region(Remaining Issues)
 There are issues such as installation cost or lack of human resource and expertise related tothe introduction of IT and the utilization of data. Furthermore, there is a delay in thedevelopment of a business environment and opening useful data that encourage workers tocreate ingenuity at the work site and also to allow an added-value of the entire value chain
to be improved.
 Consequently, the delay has caused a lack of the advancement of the introduction of IT and
the utilization of data and a lack of initiatives to increase added value and productivity ofsmall and medium-sized enterprises and industries of agriculture, forestry, fishing, tourism,
sports, culture and art, and the like. This lack has caused a failure of local business operators
to fully exert their "original strengths" of being capable of making business decisions thatare flexible and rooted in the region.
(Major Efforts)<Medium-sized enterprises, Small and medium-sized enterprises, Small enterprises and Service
Industry> Promoting the utilization and introduction of IT, IoT and robots in work sites by providin g
professional support to more than 10,000 companies by the end of this fiscal year aiming
at creating new services and value-added making use of data of small and medium-sizedenterprises and other entities.
 Studying methods for further dissemination of IT cloud services among small and mediumsized enterprises and other entities, and reaching a conclusion by the end of this year inview of collaboration with management innovation support organizations and otherorganizations.
<Agriculture, Forestry and Fishing Industries> Launching the "Agricultural Data Platform" by the end of this year to enable farmers toutilize and share various data by opening up information held by public institutions andother organizations, including agricultural data, maps, and weather information. Promoting
this initiative for the implementation of data-oriented agriculture of high added-value andhigh productivity.
 Advancing reorganization of the production material industry and other activities, with anaim at reducing prices of agricultural production materials and strengthening theinternational competitiveness of agriculture and production material related industries.
Advancing the reorganization of the businesses and industries that includes drastic
rationalization of intermediate distribution, in order to restructure the distribution andprocessing of agricultural, forestry and fishery products and the like.
<Tourism, Sports, Culture, and Art>
 Conducting statistical surveys on a full scale beginning next year on the number of visitors
and the amount of consumption by prefecture, aiming at increasing the level ofsophistication of tourism marketing utilizing data. Promoting the conversion of existing
business models of the accommodation industry through utilization of ICT andcollaboration among accommodation facilities.
 Constructing a "Sports Open Innovation Platform (tentative name)" to advancedemonstrations at sports sites and commercialization related to the utilization of AI, IoT,
big data and vital data in the sports industry.

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Supply of funds for growth and utilization of human resources and expertise(Remaining Issues) When regional business owners work on a new project or management improvement, it isdifficult for them to introduce IT and to utilize and obtain necessary human resources andexpertise within their capacity in terms of management resources and knowledge.
 Due to the shortage of human resources, business owners can hardly cope with new
business development and demand increase or meet diversifying needs, and so on. With
the aging of business owners, smooth business succession is an urgent issue.
 In order to support the initiatives of business owners such as identifying issues andimproving the management, it is a challenge for regional financial institutions and otherinstitutions to enhance their financial intermediary function further, for example, by
providing business operators with support in term of funds, human resources and expertisethat are necessary for the growth of such businesses, according to the needs and issues ofsuch business operators.
(Major Efforts)<Medium-sized enterprises, Small and medium-sized companies, Small enterprises and Service
Industry> Advancing the supply of equity funds as well as hands-on support through joint venture
funds of regional financial institutions and the Regional Economy Vitalization Corporationof Japan (REVIC) or the Development Bank of Japan Inc. (DBJ).
 Strengthening the initiatives, including the supply of risk money through collaboration
between DBJ and regional financial institutions, the transfer and the penetration ofexpertise by dispatching experts from REVIC to regional financial institutions, and thehuman resource support through the use of Japan Human Resources Co., Ltd.
 Advancing the dissemination of "Benchmarks for the Banks’ Financial Intermediary
Function", "Benchmarks for Local Companies" and "Guidelines for Personal Guarantee
Provided by Business Owners" among business operators, and the disclosure of the usage
situation by financial institutions, in order to promote loans not excessively dependent oncollaterals or personal guarantees, and to encourage the initiatives to improve productivit yof both financial institutions and business operators.
 Providing support to business operators in preparation for early and systematic businesssuccession (pre-support) and providing support to business successors in management
innovation triggered by business succession (post support) for the next 5 years set as theintensified implementation period. Furthermore, introducing a method of making acomprehensible diagnosis of business succession.
 Creating model cases in the region to promote side jobs or side businesses that will leadthe securing of diverse human resources and the establishment of businesses.
 Studying issues faced by companies that dispatch or accept human resources, workers andthe market with a view to utilizing human resources of large companies and other entities
with abundant latest knowledge, and reaching a certain level of conclusion by the end of
this fiscal year regarding necessary implementation policies including incentives andacceptance know-how.
<Tourism, Sports, Culture, and Art>
 Installing academic courses in about 30 graduate schools and universities by 2019 byproviding assistance in the development of programs specialized in service management
such as tourism. Establishing MBA programs in tourism at two graduate schools in the next
fiscal year. Educating human resources specialized in management as well as professionals
through these measures.

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Provisional
Working on the planning and sales promotion of destination-based optional tours as wellas the establishment of a "Regional Guide System" through the revision of the Licensed
Guide Interpreters Act and Travel Agency Act.
<Agriculture, Forestry and Fishing Industries> Advancing management improvement and human resource matching, etc. in cooperation
with the economic world of the region in the agricultural sector, and launching Agricultural
Management Seminar, which provides the opportunity to learn business management inearnest while working on a farm, in around 20 prefectures in this fiscal year..
Regional revitalization, and spread thereof to the entire region(Remaining Issues) From the viewpoint of "regional revitalization" and "spreading the regional revitalizatio nto the entire region", there is a lack of policy support targeting a wide range of businesses
including not only the manufacturing industry but also the service industry. This has
prevented the creation of highly feasible industries and high-quality employment to someextent.
 Domestic and foreign tourists are concentrated in specific areas and not sufficiently
distributed and expanded all over the country. Amid the situation, the challenge is how toincrease the current level of preservation and utilization of tourism resources.
 In each region, involvement of a wide range of stakeholders from such as culture, art andsports industries is inadequate to create attractive tourism destinations utilizing a wide
range of resources in the entire region.
(Major Efforts)<Medium-sized enterprises, Small and medium-sized enterprises, Small enterprises and Service
Industry>
 By utilizing the Regional Future Investment Promotion Act, focusing on support measures
to the projects that lead the regional economy for advancing the supply of risk money
making use of the regional creation promotion grant scheme, the taxation system, theRegional Economy Vitalization Corporation of Japan (REVIC), the Organization for Smalland Medium Enterprises and Regional Innovation and other measures, and also foradvancing data utilization in the region, at the same time further advancing the measuresthat include new support measures. Furthermore, establishing a collaboration framework
among related ministries and agencies, for example, by excavating projects in a collected
effort therefrom, aiming at providing support to about 2,000 companies in 3 years.
<Tourism, Sports, Culture and Art>
 Realizing the stadium-arena concept at 20 additional locations by 2025, which will become
an initiator of economic revitalization making use of the bases where a community orbustling is created, by holding not only sports events as the core but also music events andhealth promotion events.
 Promoting initiatives to increase the appeal of tourism resources, including the opening ofcharming public facilities and infrastructure such as the Akasaka Palace and the Kyoto
State Guesthouse and the Katsura Imperial Villa to the public in a bold manner, theregeneration and utilization of Japanese traditional houses and other old buildings in 200
locations by 2020, branding of national parks including 8 major national parks, themultilingualization and night programs of traditional performing arts and sports events.
 Providing support in terms of information, human resources and finances in order to form
100 world-class DMOs nationwide by 2020 which will serve as the control tower of tourist
destination management along with the above-mentioned powerful tourism resources, andpromoting the formation of a tourism region from all the aspects. Improving the47

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environment to receive foreign tourists in terms of accommodation, CIQ, transportation,communication, payment settlement, medical treatment and other aspects, at the same timeworking on the sound diffusion of vacation rental services. Working for the greater inboundtourism demand by strategic relaxation of visa requirements and development ofpromotional activities based on the strategies that vary depending on target country.
 For making time that adults and children can face each other, considering the actual
situation of each region, and considering the way to escape confusion in teaching field,
promoting diversified school holidays by designating "Kids Week" for each district
beginning next fiscal year, promoting the acquisition of paid vacation during school
holidays, and securing diverse activity opportunities at the same time advancing theinitiatives to promote collaborations between public and private sectors.
 Working on the improvement of the function being the center to provide cultural property
owners and administrators with consultations in a centralized manner, and also reviewing
the cultural asset preservation system from the view of sustainable utilization of thereof, inorder to advance further public opening and utilization of cultural assets.
<Agriculture, Forestry and Fishing Industries>
 Achieving 1 trillion yen in export value of agricultural, forestry and fishery products andfood by2019 through promoting the export of agricultural, forestry and fishery products
and the like by the Japan Food Product Overseas Promotion Center (JFOODO).
 Developing 12 bushmeat model districts nationwide that incorporate a series of processes
from capture of birds and beasts, transportation to processing next fiscal year.

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