### 3. The Impact of Ubiquitous Networks on the Japanese Economy

## (1) Developments in evolving advanced information and communications network environments and markets

Against a backdrop of a rapid expansion of broadband and mobile networks in recent years and advances in information and communications technologies, various business and service markets that make use of advanced information and communications network environments have grown rapidly.

The scale of B-to-C e-commerce markets was 1911.7 billion yen in 2003 (a 20.5% increase over the previous year) while B-to-B e-commerce markets reached 77.4 trillion yen (a 67.2% increase over the previous year) (Figures 1-3-15 and 1-3-16).

The number of DVD players shipped exceeded the number of video tape recorders shipped, reaching 5.2 million units in 2003 (a 54.0% increase over the previous year) (Figure 1-3-17). In addition, total domestic shipments of flat-panel televisions including liquid crystal display and plasma display panel(LCD, PDP) televisions are increasing rapidly, reaching 1.77 million units in 2003 (a 47.7% increase over the previous year). Sales of televisions compatible with terrestrial digital broadcasts began in June 2003, and in the half year until terrestrial digital broadcasts began in December of that year, sales were strong at 0.44 million units.

Demand is high in Japan and overseas for the high-performance products concerning which Japanese manufacturers exhibit strong competitiveness, and the value of exports is increasing. The number of units and the value of exports of color televisions other than cathode ray tube units have been increasing over the past several years as a result of higher exports of LCD and PDP televisions (Figure 1-3-18).

The Japanese economy is recovering steadily, supported by increased activity in markets for advanced information and communications devices, increases in capital investment, and growing exports. The real GDP growth rate has improved and the rate was positive for the entire year in 2003 for the first time in three years.

In the future, new business activities, services, and goods that use advanced network environments and meet the needs of consumers will continue to expand in a wide range of markets and will continue to support the Japanese economy and be put to use around the world.

## (2) Current size of ubiquitous network related markets and future prospects

As advanced information and communications network environments develop, industries that will support ubiquitous networks in the future such as information and communications device manufacturing and network services as well as businesses whose use of networks has been limited by various problems with information and communications networks are supposed to create new services using networks and develop new businesses and services, thereby stimulating the Japanese economy.

It is estimated that the scale of the markets supporting ubiquitous networks including infrastructure, network services, information and communications devices, and platforms as well as the markets for services and commerce using advanced information and communications network environments will reach 59.3 trillion yen in 2007 and 87.6 trillion yen in 2010. Compared to 2003, ubiquitous network related markets are expected to be 3.1 times larger in 2010 (Figure 1-3-19). Also, the economic ripple effects (production inducement effects) of ubiquitous network related markets (final demand) on all industries are forecast to reach 120.5 trillion yen in 2010 (Figure 1-3-20).