# ICT — Keystone of Economic Growth Strategy, and Its Expansion into the Global Market

Section 1

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## Road to Success driven by ICT

### 1. ICT and Economic-growth and Development — How ICT drives it

In Japan, ICT has been studied as a driving-force of economic growth. At the same time, globally, keywords beginning with the “IT Economy” that emerged in 2000, “IT Economy,” “Broadband Economy,” and “Internet Economy” have recently attracted much attention as the driving force of the world economy. On the other hand, in the emerging countries or the developing countries, ICT is reportedly functioning as an engine of progress for democracy as well as the economy.

### 2. Two Paths in ICT-driven Economic Growth

Generally, ICT induces the following two direct effects on the economic development:

## I CT industries drive the economy through their growth in production and job-creation

ICT industries, which consist of telecom-services, telecom-equipment production (information-infrastructure-equipment or terminals), and applications/contents, pull the economy through approximately 10% of domestic production they represent and production/employment inducement. In addition to the growth in the consumers' demand for telecom services/equipment, the growth in the internal investments and technology innovation in their own industries, which would be induced by the demand growth in corporate sectors due to the ICT employment as described below, will contribute to the enhancement of the industries' economic-driving force. As the US network-related corporations have shown, ICT industries where drastic technical innovations frequently take place have strong potential to create new businesses.

## ② ICT introduction/enhancement in user corporations drive the corporate innovations and productivity improvement

Innovations by ICT in variety of products and services will create new types of products and services which could help ICT-user-corporations enhance their competitiveness, acquire new domestic/international customers, and create high added-value; in addition, those corporations could improve their labor productivity through streamlining the process of production/service-delivery enabled by the ICT investments, which means that they are able to supply more products/services in

### 3. Internet Economy Attracting Attention

The prediction that Internet will create a new market through its user-population growth — over 2 billion worldwide at present — and its acceptance as an social infrastructure, has been frequently discussed and studied around the world.

### 4. ICT, for Easing Constraint-Conditions and Problem-solving for Japan

ICT's innovation-inducement power should not be limitedly used for economic growth; it can serve as a driving force for easing the fundamental constraint-conditions that Japan is facing, such as the ageing society with a declining birth-rate, the budget deficits, declining labor population, and decline of local-economies, in addition to various other problems.

### 5. Developing Countries' Ascent from Poverty and ICT's Role

In developing countries, ICT is playing a critical role for the first-step of the ascent from poverty, as well as in promoting economic growth and solving other problems in the developed countries

### 6. How ICT Contributes to Japan's Economic Growth

ICT is expected to, as a GPT (General Purpose Tool) available in all fields, contribute to economic growth and play the role of a driving engine, in all types — developed, emerging, developing— of countries (refer to Figure 1-1-6-1). Digital Agenda, EU's ICT strategy, clearly describes in its introduction, the relation of ICT to growth as follows, saying that ICT is indispensable for us to work “smart”: “Faced with demographic ageing and global competition we have three options: work harder, work longer or work smarter. We will probably have to do all three, but the third option is the only way to guarantee increasing standards of living for Europeans.”

Also, Japan is required to utilize ICT in a similar way.