assessment are necessary for planning and promoting the measures. In addition, identifying the trends of government environmental policies and analyzing the competitiveness of Japan's businesses and industries would help increase environmental policy options. Based on such understanding, the efforts mentioned in Figure 4-1-8 are accelerating for achieving a new technological and economic paradigm that will support a sustainable development.

## Figure 4-1-8 Efforts Aimed at Green Innovation

○Carrying out technological innovations and systems reforms through long-term policies

○Actively utilizing current technologies being that disseminated in an ICT paradigm that reduces environmental load using information communication technology

○Giving direction for long-term technological innovations through active policy guidance, although both radical and gradual innovation are necessary

○A network-type approach that targets many and various actors is necessary.

○Promoting resource allocation that goes beyond the framework among ministries, and research and development conducted collaboratively among industry, the government, and academia

○Actively promoting collaboration with other countries and securing the pluralism and competition that are essential for innovation

## Column

# Economic Survey of Environmental Industries

When making environmental policies, it is necessary to take the status of the environment technology market into consideration and estimate the future trends of the environment related markets. The Ministry of the Environment has been conducting a new statistical study “The Economic Survey of Environmental Industries” from 2010. This study is intended to continuously review trends of the business confidence of environmental businesses through a survey every six months. The purposes are to utilize the result as basic information for planning policies related to promoting environmental business and assessing the performance of measures. The study contributes to the broader awareness of environmental businesses, and the results are published in order to accelerate the development of environmental businesses.

Asking companies about the current condition of operating environmental businesses, and comparing the responses with the conditions of overall other industries, environmental industries are stronger than other industries in December 2010. The DI (Diffusion Index, indicating the response “bad” minus percentage of response “good”) of environmental industries was higher than that of whole businesses/industries in all categories, including “present,” “in 6 months” and “in 10 years” There is a tendency for DI to be stronger in the “in10 years” category (see figure).

While companies have positive views on the future development of environmental business, the leading industry of environmental business varies from time to time. For example, “at present,” energy-efficient appliances that are supported by the “eco-points system” and high efficiency water heaters that are supported by subsidy programs rank at the top. The eco-points system would end in 6 months, but the trend shows that the DI of other businesses will gradually improve due to the expectations of economic recovery (see table). As for the business prospect in 10 years, the DI of most environmental businesses shows positive figures, and the ratio of companies

## Business Confidence DI of Environmental Businesses

Note: TANKAN (The Bank of Japan's quarterly survey) of business sentiment is a total of all scales and covers all industries. Source: Ministry of the Environment's "December 2010 Economic Survey of Environmental Industries"