Figure 3-3-2-1 Market Categorization Frameworks

(Source) Created based on "Global Competitiveness Indicators," MIC (February 2016)

Revolution, the four layers of “terminals/key devices,” “networks,” “platforms” and “services (data distribution)” are seen as related in the following ways.

“Services”: Includes data connected via platform layer, and services provided by utilizing data.

“Platforms”: In addition to the cloud, which provides a basic foundation for storage and processing of data, also includes authentication functions that identify terminals and individuals, and functions that enable various types of data to work together.

“Networks”: Includes data transfer functions, configured from a range of fixed and mobile transmission lines.

“Terminals/Key devices”: Includes sensors and actuators, as well as various other terminals for realizing IoT.

If ICT is considered to be the infrastructure for a wide range of industries and sectors, it is possible to consider the IoT as one format for the provision of ICT to various industries and sectors, where the necessary elements in each layer are connected vertically. Here, we define the target markets by layer (as above), and further, from the perspectives of conventional ICT markets (hereinafter “ICT markets”) and markets growing as a result of developments in IoT (hereinafter “IoT markets”), to the extent that they can be seen and quantified, (Fig. 3-3-2-1), and divide them into the ICT market and the IoT market and consider their scale and growth, as well as new trends and examples, thus create an outlook of future changes in the new (broadly defined) ICT industry as a whole.

### 3. International Comparison of Progress Indicators in IoT

## (1) Framework for Progress Indicators in IoT

Within the IoT society, groups of applications and services that can deliver new values are created, offering convenience, energy savings, business efficiency and other improvements to users. These added values are expected to dramatically improve standards of living, as well as reforming industrial structures, leading to a global restructuring of business and a transition in the source of value.

The Ministry of Internal Affairs and Communications measured changes in regional competitiveness, from market share and share of value of exports, between 2008 and 2015, and published these figures as “Indicators of Global Competitiveness in ICT.” Given the background described above, however, it has now defined “Indicators of Global Competitiveness in IoT.” These indicators are based on the conventional “Indicators of Global Competitiveness in ICT,” but also (1) analyze the ICT industry by dividing it into “Growth markets resulting from developments in IoT (IoT Markets)” and “Conventional ICT markets (ICT Markets),” (2) introduce indicators relating to “Service and product competitiveness” as well as “Potential competitiveness” in the areas of research and development, and finance, etc., and (3) scores the main ten countries and regions in terms of their corporate competitiveness, and calculate overall rank.

## (2) Comparison of Market Share between IoT Markets

Firstly let us take a look at the market share held by Japanese companies in various global markets. While Japan's market share is growing in categories related to IoT markets, it is also shrinking in categories related to ICT markets. A comparison of global market growth rates and Japanese market growth rates shows that the market share of Japanese companies is growing at a faster rate than the global market in categories related to IoT markets.

Looking at the market share of services and products held by companies in the main countries and regions, we can see that Japanese companies have achieved a certain level of share in categories related to the IoT markets. In comparison with 2013, Japanese companies' market share has increased in various sectors, notably "smart factories" and "connected cars (Figure 3-3-3-1)."