# Chapter 2

# Transformation of ICT Industries and Society, induced and accelerated by "Smart Revolution"

Section 1

“Smart Revolution” — ICT Paradigm Shift

### 1. Completion of "Ubiquitous Network" Environment and "Smart Revolution"

(1) Internet and mobile phones, which have become a social infrastructure

As shown in Chapter 1, ICT's capabilities as the driving force of the world economic growth have been proven and widely acknowledged. Those capabilities are enabled in the Internet, which has been rapidly deployed in all types of countries — advanced, emerging, or developing. Even the frequently-reported cyber-attack damages that governments or businesses are suffering can be seen as a by-effect of the openness of the Internet which has become an indispensable infrastructure of the social or economic activities in every country in the world. The Internet, as an infrastructure supporting any kind of social activity, plays a role of a driving force to improve the convenience of life or stimulate the economy. On the other hand, mobile phones have been aggressively deployed, in advance of economic growth, in the countries with handicaps such as a low literacy-rate or poor electrical power or other infrastructure, and have been working as the launching power for those countries to take-off from poverty to prosperity. In such a way, mobile phones have gained in their importance as the "first step" to economic growth.

## (2) Completion of ubiquitous network environments

As shown above, ICT has become to play an important role in economic or social growth in a wide variety of fields; particularly, the Internet, which has become a social infrastructure, driven by the dramatic development of the network service environments supported by the advanced ICT technologies such as radio communication technologies or storage technologies, plays an increasingly important role in various fields. The activities of the Ministry of Internal Affairs and Communications, initiated under the concept of creation of ubiquitous network society (anybody or anything promptly connects to the network at anytime and from anywhere), have resulted in the ubiquitous environments: particularly technologies, services, and devices or equipment.

In addition, the following trends in Internet have become obvious: as well as human entities, non-human entities, exchanging information to each other without human interventions, strengthening their mutual connections through a system called M2M which automatically and optimally controls the connections through networks of censors built in equipment, work for the efficient control of social infrastructures or business improvement by utilizing Big Data. It suggests that ICT-based networks, beyond the boundary of communication tools, have become to serve as an infrastructure that assures the foundation of democracy — freedom of expression and freedom of speech, enhances humanities, and helps services and assets in digital form go back and forth beyond borders.

## (3) New trends coming after the completion of ubiquitous network environments — smartization and "Smart Revolution"

Digital information distributed and accumulated in the networks has been dramatically increasing since the Internet became a social infrastructure; the Internet has enabled network-service providers and others to easily generate, collect, and accumulate enormous data of various kinds (Big Data), to analyze and utilize such data for the detection of abnormalities or predictions on the near-future, and to provide services adapted to the individual users' needs or to improve business efficiency; as a consequence, new-types of industries are expected to emerge. In such a way, ubiquitous environments, accelerating the distribution, accumulation, and utilization of enormous data of various kinds, help ICT-network services evolve into the foundation for the knowledge creation. As a conclusion, the combination of ubiquitous network environments and “smartization,” bringing a new-type of ICT innovation called the “Smart Revolution,” enhancing ICT’s functionality as a growth engine or a universal tool, has the potential to change the entire landscape of the social and economic activities in Japan.

### 2. International Discussions: What the Cyber Space should be

The Internet, embracing diversified services including supply chains or communities, can be seen as a new-type of social space (Cyber Space). While the importance or value of such a cyber space has been highly recognized, what the cyber space should be and how it should be regulated is frequently discussed in a variety of international organizations or conferences. Japan has been discussing the topic in bilateral talks with the U.S., the U.K., or the European Commission, and has participated actively in the discussions in multinational meetings.

As for the bilateral talks, Japan finalized the agreement, “Japan-US Trade Principles for ICT Services,” in January 2012, where Japan pointed out, as one of principles, that cross-border information distribution should not be interfered with; in March 2012, in the Japan-US Policy Cooperation on Internet Economy, the principle