telework through society, thereby ensuring a good work-life balance for workers and revitalizing local economies. As part of these efforts, the government also indicates its intention to promote “furusato telework” which allows people to work in local areas where they live.

### b. State of initiatives by enterprises and other organizations

We developed a general view of the state of ICT-based initiatives by enterprises to promote labor participation from the results of a survey given to domestic enterprises that participate as monitors. The most common initiative taken was “training ICT personnel,” followed by “satellite offices.” When asked about their intentions to launch new initiatives in the next 5 years, enterprises indicated they had high expectations for telework and several other initiatives. However, sector-specific results revealed that 1 challenge is to further promote telework among enterprises outside of the ICT industry (Figure 1-2-3-1).

When asked about specific outcomes of these initiatives, more than 50 percent of the enterprises implementing initiatives (37 percent of all respondents) answered “diversification of working arrangements and workstyles.” This result suggests ICT does contribute to working environment improvements and transformations. In addition, around 30 percent of the enterprises implementing initiatives said the initiatives helped “hire new employees,” which suggests ICT does contribute to the expansion of job opportunities. How ICT can be used, in detailed and specific ways, to foster labor participation and counter the shrinking labor pool, which is a bottleneck to the long term growth of our economy, will be an increasingly important issue in the coming years.

### c. Overview of economic contributions

Enterprises can reduce the amount of labor needed to generate the same levels of production and added value, and simultaneously boost productivity, by adopting and using robots, AI, and other forms of ICT. ICT adoption and application is expected to also help speed up work operations and improve accuracy. For example, in operations that require pattern recognition that computers excel at, substituting ICT and pairing skilled human capital with ICT will raise enterprise productivity and create employment for skilled ICT workers.

While ICT-driven labor force improvements are recognized to raise enterprise productivity, there are many theories on how ICT take-up will affect the status of employment. Nevertheless, the opinion that ICT is a main factor in the bifurcation of employment and will replace routine work operations has been verified repeatedly and is widely shared.

Figure 1-2-3-1 Enterprise initiatives to promote labor participation using ICT, and the promotion outcomes

Primary industry sectors + mining (N=47) Manufacturing industry (N=129)

Energy and infrastructure industry (N=134) Commerce and distribution industry (N=103)

ICT industry (N=129) Service industry (N=78)

(Source) "Study Report on a Structural Analysis of the ICT Industry in the IoT Era and Verification of ICT's Multifaceted Contributions to Economic Growth," MIC (2016)

### 4. Demand-side enhancements: (3) Creating demand with new goods and services

Supply enhancements without shoring up demand will not foster economic growth. Weak demand is a serious problem for Japan’s economy. Accordingly, the following paragraphs consider the creation of goods, services, and businesses, along with ICT-driven consumption, from the perspective of ICT creating and revitalizing new demand.

## (1) ICT-derived goods, services, and businesses

### a. Overview of economic contributions

ICT is the source of new market creation, as innovative goods and services are developed and marketed one after another. What sets ICT goods and services apart is, as each goods or service spreads extensively through the market for a time, new derivative goods and services are created that use the original product or service as a