### 3. Objective verifications

Based on the categorization of ICT economic contributions in the previous paragraphs, in the following paragraphs we verify ICT's contributions to our macro economy to this point using objective data. Note, however, because of constraints on data availability, the following verifications do not completely cover the ICT economic contributions categorized above. Refining these verifications is a future topic.

## (1) ICT investment's contribution to growth in labor productivity

We begin by looking at how much ICT capital goods have contributed to labor productivity growth rates by industry. Figure 5-1-3-1 below provides a breakdown of contributing factors to labor productivity growth rates over the 2000—2013 period for all industries, for the manufacturing industry, and for the service industry. In the manufacturing industry, further ICT capital goods contributed 0.15 percent of the 3.18 percent growth in labor productivity over the period. In the service industry, further ICT capital goods contributed 0.14 percent of the 0.32 percent growth in labor productivity over the period. Thus, ICT capital goods were a positive contributor to labor productivity growth rates in both the manufacturing and service industries (Figure 5-1-3-1). These data indicate that ICT investment lifts labor productivity regardless of the industrial sector.

## (2) ICT investment's contribution to economic growth

Next, we looked at how much ICT investment contributes to our country's economic growth. Figure 5-1-3-2 below measures the contributions of production factors to economic growth using a growth accounting method with capital split into "ICT capital" and "general capital" categories. "ICT capital services," which reflect the increase in ICT capital stock through ICT investment, contributed 0.40 percent over the 1990—1995 period and 0.69 percent over the 1995—2000 period to our economic growth rate. These data indicate that ICT investment has been a major contributor to the growth of Japan's economy since the 1990s. ICT capital services contributed 0.27 percent over the 2000—2005 period and 0.34 percent over the 2005—2010 period, remaining a positive, although somewhat smaller, contributor. For the 2010—2013 period, ICT capital services contributed 0.19 percent of the 0.97 percent total economic growth rate (Figure 5-1-3-2).

Because of declines in the labor force population, labor services have been a negative contributor to economic growth since 1990 onward. ICT capital services, conversely, have consistently been a positive contributor to economic growth since 1990. This suggests that ICT investment plays a role in supporting economic growth in a society with a declining population.

Figure 5-1-3-1 Contribution of ICT capital goods to labor productivity growth rates by industry

(Source) "Study on Economic Analysis of ICT," MIC (2015)

Figure 5-1-3-2 ICT capital services' contribution to economic growth

-1.5	1990-1995	1995-2000	2000-2005	2005-2010	2010-2013
Labor services	-0.52	-0.35	-0.50	-0.40	-0.06
General capital services	1.08	1.20	0.67	-0.36	0.27
ICT capital services	0.40	0.69	0.27	0.34	0.19
Other (TFP)	0.47	-0.70	0.75	0.75	0.57
Economic growth rate	1.43	0.84	1.20	0.33	0.97

(Source) "Study on Economic Analysis of ICT," MIC (2015)