items will not yield high value, which naturally leads to limited profit opportunities. at the same time, precisely because of the advance of it, if unique items are somehow produced, they can easily be spread globally. under such circumstances, it becomes very important to produce things unique to japan or things that only japan can produce. i believe that japan has sufficient capability to continue creating unique items, at least in the economic area, and is equipped with several advantages. since world war ii, japanese manufacturers have applied their advanced technologies exclusively to nonmilitary rather than military use. this has been one of the major features distinguishing japan's application of advanced technology compared with the united states and european countries. there is no country other than japan that is more enthusiastic about applying advanced technology to every corner of daily life. examples include not only automobiles, home appliances, ticket vending machines and passenger gates, but also mobile phones with internet and photographic functions and digital cameras. in the context of emerging economies with large populations, people's lives are increasingly affected by new technologies such as it as their economies develop. in this regard, the technologies developed and applied to daily life in japan may make large contributions to emerging economies. this may be particularly applicable to the case of east asian countries, which are geographically close to japan. japanese consumers are said to be among the most demanding in the world. if we can effectively combine japan's technology and expertise, which are approved in the demanding domestic market, with the production capability and local consumer demand in east asian countries, geographical proximity as well as historical and cultural linkage with asian countries will likely work to japan's advantage. we have already seen some signs of such a combination materializing. let me digress a little and touch briefly on a serious question of whether the world economy from the 21st century onward is sustainable in view of the energy and environmental problem. recently, strong interest has been expressed with respect to the development of recyclable energy and the restraint of carbon dioxide emissions. considering the size of the economy and the tempo of growth in asia, it is highly likely that asia will be the first region to face squarely the question of whether or not the global economy is sustainable. measures to deal with the energy and environmental problem should not be considered simply in terms of costs. from the viewpoint of maintaining the sustainability of the global economy in the future, these measures are in themselves a source of value added. as i mentioned earlier, the experience of overcoming the

could help firms to tailor their products to individual tastes at a lower cost and hence make them more affordable. however, there is a caveat here in that lower prices, which on the one hand make products more affordable, will on the other hand lower the investment returns for the providers of the products, ceteris paribus. the key is the degree of demand stimulation from the lower prices. if demand generation is not sufficient, it might be necessary in such circumstances to devise mechanisms that are not completely dependent on market forces in order to provide socially useful products. 3. 4. challenges when population is young and growing meanwhile, in the case of economies enjoying a population bonus, the challenge is to provide the right sort of jobs for the large number of people entering the workforce, who are in many cases, well - educated and technologically adept. when the advanced economies had their population bonus, there were a large number of openings for medium - skilled jobs, where workers could expect to build a career and, with hard work and perhaps some luck, advance into highly - paid management - level jobs. now, with the prevalence of ict, those jobs are becoming scarcer. in order not to waste talent in dead - end low - paying jobs, it has become necessary to provide the right social and economic incentives for prospective employers to employ talented youth for the long term, providing them with the training and opportunities to advance their careers. it is not easy to solve the problem of providing goods and services ( in the case of advanced economies ) and employment opportunities ( in the case of developing economies ) that the market fails to provide on its own. some time ago, before joining the bank of japan, i advocated the creation of socially - oriented investments trusts, where the public sector provides seed capital to socially desirable projects that would not offer adequate returns on capital but could still be run as market - disciplined entities. the idea is yet to be widely accepted, but more and more people seem to be realizing that such a structure might provide a workable solution. 9 3. 5. challenges facing central banks central banks are facing enormous challenges, particularly those of the advanced economies. after stepping in decisively to halt the contagious disruption in the global financial markets and economy following the great financial crisis, central banks of the advanced economies have now exhausted the available options for traditional monetary policy. consequently, these central banks, including the bank of japan, are pursuing the most unconventional policies ever imagined. there is still room