fits in these areas. Conversely, few corporations tended to target or benefit from investments for cooperation or communications with external entities (Figure 2-1-1-2).

### b. Impact on corporate performance from ICT adoption and

## organizational change and human capital efforts

We measured on an 18-point scale the ICT investment benefits in terms of management improvements — such as improve accuracy and speed of decision making by top management, improve satisfaction levels of existing customers, develop new customers, and improve work productivity per employee. We then analyzed how management improvement scores changed relative to the degree of ICT adoption as well as the extent of organizational change / human capital efforts.

The analysis indicated that the greater ICT adoption and the more organizational change / human capital initiatives taken, the higher a corporation would score on overall management improvements. What this suggests then is that in order to obtain the greatest management improvements from ICT investment, it is important not only to actively pursue ICT adoption but also to carry on organizational change / human capital efforts (Figure 2-1-1-3).

### c. ICT contributions to the bottom line

When it came to profits, 52.6 percent of all respondents said that profits had increased from three years ago and 16.1 percent of all respondents said that ICT had contributed to the profit increases. By sector, manufacturing led the way in the percentage of corporations who said ICT contributed to increased profits. Manufacturing also led the way in ICT contributions to sales.

The fact that a mere 16 percent of corporations replied that ICT had helped their bottom line, in terms of sales or profits, indicates that not many corporations are realizing business performance improvements through ICT usage and that gaps exist between sectors in tying ICT to bottom-line improvements (Figure 2-1-1-4).

## (3) Potential of ICT investment / use and application

If corporations that are less than enthusiastic about adopting ICT and organizational change / human capital initiatives were to more actively engage with these, could this potentially boost Japan's economic growth? This section makes a rough estimate of the potential impact on the Japanese economy if corporations that have been slow to adopt ICT and organizational change / human capital initiatives were to take on these initiatives and improve their business performance.

For the simulation, we calculated the base economic growth rate using a production function model. InfoCom Research Inc.'s "2013-2016 Economic Forecasts" was used for predicted values of the growth rate of IT capital stock and the FY 2014 real GDP growth rate.

We estimated how much the real GDP growth rate would expand from this baseline if all industries were to adopt effective ICT and organizational change / human capital initiatives. The estimates found that the real GDP growth rate would increase by 0.5 percent over the baseline predictions. In other words, assuming all other circumstances are the same, we can expect that implementing effective ICT adoption and organizational change / human capital initiatives would push the real GDP growth rate up by 0.5 percent compared to if these measures were not taken (Figure 2-1-1-5).

Figure 2-1-1-2 ICT investment purposes and benefits

Set as a target ■ Set as a target and saw results Target achievement rate (right axis)