4. Development of Information in Japan

4.1 An Overview of Industrial Development
Through a two-decade development, Information industry in Japan has become one of the major IT partners all over the world. It is the largest and the most powerful homeland in the world for telecommunication, computers and consumer electronics. Japan has always been regarded as a pioneer of Asia and a model for other countries because of its special way in IT development. however, there is still a contradiction and shortcoming hindering Japan's access to an IT society.

2. Communication Service shows yearly sales.
Source: White Book of Informatization, Japan 1998 Edition.

4.1.1 Rapid development of the information industry in Japan prior to the 1990s
The modern information industry originates form the wireless in the beginning of this century and has developed from semiconductors of the 1950-1960s. In the 1970s-1980s, Japan transformed successfully the electronic technology in vented by the United States to the production of civil appliances and took priorities over the U.S.A. and Europe in its home appliances and automobiles, etc. In the beginning of the 1980s, Japan surpassed Europe and approached U.S.A. in terms of the general scientific technology. In 1993, among 159 items of key technology, Japan had 39 items simultaneously exceeding, 38 items equivalent to and merely 16 items falling behind, the U.S.A and Europe. In the mid 1980s the semiconductor industry in Japan had a 50% share in the global market. Its automobiles, home appliances and construction machinery had a sales price 25-30% lower than those of Europe and the U.S.A in the world market. The main products of Japan were steels and ships in the 1960s, home appliances in 1970s, and automobiles and electronics in the 1980s, all taking the lead in the world. However, by the end of the 1980s, with a wrong strategy of information industry, Japan directed its major research to hyper-computers. In contrast, the United States made much more efforts to develop PCs. Thus in the 1990s, Japan took less participation in the areas of the prevailing PCs, communication products as well as in the reproduced service of information products.
4.1.2 Lagging development of Japanese information industry after the 1990s
By the end of the 1990s, no major computer company of Japan could go beyond the influence of the prevailing economic recession. The more scale a company had in the market of dynamic memory chips, the greater influence it would suffer. Among the six major computer companies in Japan (Hitachi, Panasonic, Sony, Toshiba, Fujitsu and NEC), five companies except Fujitsu showed a negative increase (up to 10.9%) at the first half fiscal year 1998. Meantime, the research and development of the 5th generation computers finally came to end in failure by the end of the 1990s. And the investment by Japanese Information Industry appeared to be gloomy in the United States. In 1999, the five major electronics manufacturers NEC, Hitachi, Toshiba, Fujitsu and Mitsubishi Electric were all caught in a predicament. With their business incomes accounting for 5% GDP, and with their exports 1/4 of the total export volume of Japan, these five companies had brought an immense influence over Japanese economy. They are now managing to work out a plan for restructuring and employment reduction. But they will not choose to reduce employment unless it is out of absolute necessity. Since the establishment of capitalist company institutions in 19th century, there has been a lifelong employment relationship between employees and companies. The director of a company usually regards it very serious a thing to dismiss an employee. Among the five companies, Toshiba and Hitachi have taken the biggest actions to sell out some non-important branches and to develop the overseas market by establishing joint ventures with other countries. Sony Co. also announced its plan in restructuring and employment reduction in this March.
Another major cause why Japan has been 10-15 years lagging behind the United States in the information industry is the fact the Japan has not formed a good mechanism for the development of its information industry. The research institutes, risk capitals and information technology application in the United States have formed a good self-circulating system. And with the assistance of risk capitals, the achievements in research of Silicon Valley, etc. have turned into business and have been put into wide use in commercial activities, with a repay from which it raised funds in the stock market. However, Japan, with the economic development controlled by the government bureaucratic system, has lost its vitality and creativity. Its business management model, such as that of Toyota, couldn't adapt to the current information era.
In addition, telecommunication is the infrastructure of information industry. Being delayed in the development of telecommunication market, Japanese electronic companies had lost the market of mobile phones and communication. The United States, however, started to carry out reformation and break monopolization in 1984, resulting in a dramatic decline of the telecommunication price. In 1996, United Kingdom opened a overall telecommunication market, and corrected the original separation of telecommunication from broadcast televisions, cable televisions and network computers, leading to a comprehensive development via multimedia. In the 1990s, ERICSSON, NOKIA and SIEMENS of Europe jointly worked out GSM system, whereas the United States promoted its CDMA system in the global market. But Panasonic and Sony of Japan, promoting their own cellular phones till 1997, were too late to occupy the market.

4.1.3 Japanese government taking active actions to push forward the development of information industry
Having lost a good chance in the third wave of modernization with the IT revolution as its core, Japan was left behind the United States in IT development. In view of a great contribution of IT industries to the economic growth of the United States in the past years (1/4 above), Japan started to pay much more attention to its IT industry. In order to accelerate IT development and to coordinate and organize the implementation of major informatization projects, in August 1994 Japan established the High-Level Infocomm Society Promotion Ministry (with the Cabinet PM as chief Minister, and the Ministers of Ministry of Posts and Telecommunications and Ministry of Industry as deputy Ministers), including all Cabinet Chancellors as its members. In 1998, Ministry of Posts and Telecommunications published Japan Infocomm Survey, describing the strategies on the development of Japanese Information Industry towards the 21st century. Each of such strategies has a specific object task and an ensured investment. The Japanese Government officials believe that information industry has become the locomotive for economic development. They think also that in the 21st century informatization will greatly promote economic development, while economic power will depend highly on the level of informatization. In order to seek a favorable place in the world economy which is full of keener competitions, Japan has to speed up and upgrade its informatization. In 1992-1996, the investments in information and communication industries showed a linear increase and reached to Yen 4.9 trillion by 1996. In spite of depression, the investment on the research and development of software industry showed a rapidest increase in all the Japanese industries; and the output value of information industry received a considerable growth, reaching high to Yen 16.1 trillion by 1996. Compared with the major developed countries, Japan is still lagging behind to a certain extent.
Based on the experience of the rising the U.S. IT industry, Japan comes to a deep understanding that the environment for enterprise's innovation and investment is crucial to the formation and industrialization of a revolutionary key technology. In the book White Book for Small Enterprises 2000, the three major subjects are IT revolution, fund raising and environment rectifying for innovation.
It highlights that the Japanese Government values the consolidation of fundamental environment to increase its economic vitality, and changes to cultivate the market information and the financial investment environment and to increase the abilities of the market and the private to nourish new technology and industries, rather than to interfere directly or indirectly the arrangement of industries in the past.
After the depression in the mid 1990s, Japanese information industry, especially the investment expenditure of communication technology equipment, has showed a rapid growth and already approach to the United States by 1997. The ICP expenditures include IT hardware, software, service and internal expenditure as well as telecommunication expenditure. They bear so much influence on economy that they can create a batch of production groups, especially the so-called thirds commodities groups as a result of the application and development of the combined IT hardware and software by the competent Japanese enterprises. The traditional Japanese serviceable goods have tended to be widely used to a maximum extent. The information household appliances and information service are becoming rapidly a new hot spot for consumption, and there is now an increased demand for PCs, cellular phones and network service. At present, the propagation rate of Japanese mobile phones ranks the first in the world.

As viewed from the share of ICT industry and service in GDP, Japan takes the second in the members of Organization for Economic Cooperation and Development, ranking next to Korea, in terms of the share of its ICT manufacture in GDP. Among the countries getting approval of patent application from USPTO in 1998, Japan has jumped to the fourth place (ahead of the U.S.A) in terms of the quantity of ICT technical patent applications.
By 2000, the Internet users in Japan had increased by 74% to 47.08 million, with 37.1% growth in propagation rate. There were 11.554 million sets of PCs on sale, surpassing CTVs (10.30 million sets) in number. The propagation rate of Internet in enterprises was high up to 95.8%, 7.2 percent increase than one year before. The E-Commerce market accounted for Yen 47.8. trillion, 2.3 times larger. And 100% government authorities (from central to local) and 61% villages and counties have established network stations. Japan is developing rapidly its information industry, speeding up its social informatization and infiltrating its IT revolution into various fields such as economic, administrative and national life. However, the utilization rate of Internet by Japanese nationals is still relative lower, which, for example, never exceeds 50% in any of the 47 regions including cities. It is 46.9% highest in Tokyo and the areas around, but merely 28.8% in Hokkaido with backward economy.

4.2 Development Features and Trends of Major Products
In spite of recession, Japan still ranks the top second in the world in terms of the production scale of its electronic information industry, which accounts for 1/5 the global output value.

In 2000, Japanese Electronic Industry had an output value of Yen 2.619 billion, 115 higher than the previous year, which accounted for about 17% of the global output value, and among which the ratio of consumers, investments and components was 8:47:45. In the first half 2001, the output value reached to Yen 12.22 trillion, 3.7% decline compared with that in the same period of the previous year. There is a comprehensive raised demand in the enterprise-oriented computer hardware and information system etc. With financial industry as the center, many industries in Japan are reorganizing their enterprises, which is as well an incentive to the enlarged information system market. In addition, computers have been used universally among people at various ages, and there will be a continuous favorable demand in the market of personal-oriented information goods. With the popularization of Internet, it is expected to have a further enlarge e-Transaction market of enterprise-consumer and enterprise-enterprise. The information industry is one of "fewrosperous" industries as listed in Japan Economic News.

4.2.1 Communications
Mobile Communications will still be a main motive force for development of the communication industry in Japan. In the first quarter 2000, Japan maintained a high rate in the access of mobile phones to Internet. There had been a decline in the number of PHS users before. But with improvement of call quality, the PHS market is expected to rise again. According to the statistics at the end 1999, a total number of 57.7 million sets of common cellular phones and PHS had an access to Internet, exceeding the market scale of fixed telephones. Under the pressure of mobile communication market, there was a fiercer price competition among enterprises in the fixed telephone market in Japan.

4.2.2 Industries of semiconductors and electronics
Semiconductor technology has been widely used in all areas of household appliances, etc. Japan has an advanced technology of semiconductors, and in particular, the research and development of its IC has been taking the lead in the world. Japanese IC is characterized by small in size, light in weight and good in quality. Its development LIC is not only used widely in industrial machinery, but also largely in articles of every-day use such as subminiature computers, calculators and game machines. In 1998, Japan had a production volume of Yen 4.3507 trillion in semiconductors.
Computers in Japan have been widely used in various areas, such as research institutes, universities, companies and banks, for information analysis, business handling, and communication, etc. With the development of semiconductor technology, Japanese computers tend to be in small size and with improved performance, and to be used universally in home to a great extent. In 1998, Japan produced 9.9 million sets volume of computers was Yen 3.1295 trillion, in which Yen 2.0934 trillion belonged to PCs, with a 66.9% share Japan exported its computers in great number, mainly to the United States, Germany, the Netherlands and Singapore, etc., and imported computers mainly from The United States, Taiwan and Singapore etc. In 1998, Japan had a total export volume of Yen 3.5030 trillion in its computers, among which the exports to China were Yen 80.80 billion, accounting for 2.3%; whereas the imports from China were Yen 137.00 billion with a proportion 6.65.
In addition, Japan has a highly developed technology in the manufacturing of Robots, and uses the largest quantities of Robots in the world. As a combination of the advanced mechanical and electronic technology, the industrial Robots are used in both large and small factories, mainly for welding, painting, machining, assembling and inspection, etc., which have greatly increased the production effect. By the end 1998, Japan had used industrial machine high up to 412 thousand sets. And in 1998, Japan produced 61 thousand sets of industrial Roots, accounting for Yen 465.4 billion.
4.2.3 Import and Export Trade
There has been a huge favorable balance in Japanese trade. Influenced by the Asian financial crisis in 1998, Japan had a sharp decline in the exports. However, with an economic anabiosis of all Asian countries in 1999, the exports of products in Japan started to climb up, with a favorable balance of US$ 53.00 billion in 1999. Among them, the exports of IC-based electronic components ranked the first, accounting for 43% the total exports value of information products, and computers and consumer products the next. Electronic components ranked also the first in terms of its imports, with a 33.5% share of the total, mainly from the overseas Japanese enterprises, next to which was computer products accounting for 25.6% or so of the total import volume of electronics. In 2000, Japan had a total trade volume of Yen 21.56 trillion in its electronics, among it Yen 7.3 trillion for imports and Yen 14.26 for exports. In the first half 2001, the total trade volume of imports and exports reached to Yen 10.38 trillion, among it Yen 3.90 trillion for imports with 16.9% growth, and. Yen 6.48 trillion for exports with a 4.1% decline, compared with the same period of the previous year. As viewed from the category of the exported products, it is found that from 1996 up to now the IC-based electronic components has been accounting for 60% above of the total export value of electronics, and the electronic components rank also the first in terms of the import value, with a 50% above share, imported mainly from the overseas Japanese enterprises.