ICT Overview

To cope with the worldwide outbreak of the coronavirus from early 2020 onwards, the Japanese government has been calling on people to voluntarily refrain from going out unnecessarily or attending group events. This led to local governments and businesses introducing telework, implementing online learning, and relaxing regulations related to online medical care. In the manufacturing, infrastructure, and construction industries, which center on work on-site, production activities are being carried out through remote control of machine operations. In the field of education as well, there are ICT solutions to improve the efficiency of school work, and AI to provide the best learning according to the level of understanding of each student. In this way, digitalization has begun to progress in these areas that used to lag behind.

The role of the ICT market in promoting the digitalization of society as a whole is very important. The nominal GDP of Japan's ICT industry is 44.2 trillion JPY (8.7% of all industries), ranking next to the commercial (61.4 trillion JPY) and real estate (59.4 trillion JPY) industries (See Figure 1).

Industries in Japan are becoming more efficient and adding more value with the accelerating digital transformation enabled by the development of ICT infrastructure and digital technology. In this process, the integration of cyberspace and physical space is being facilitated. Going forward, people's activities are expected to move from physical space to cyberspace, and there are high expectations for the use of ICT infrastructures, such as the 5th generation mobile communication system (5G), and digital technologies such as cloud computing and quantum computing.

5G is expected to support digital transformation in a variety of industries and sectors. The government aims to realize this through policies such as "Society 5.0," a social system that highly integrates cyberspace and real space, and the “Beyond 5G Promotion Strategy”, which drives the digital transformation facilitated by 5G. The increase of about 20% in the budget (MIC standards) for implementing 5G-related policies, from 128.4 billion JPY in 2019 to 157.1 billion JPY in 2020, is also part of this. As a result of these 5G technology initiatives, Japan is expected to rank third in the global 5G service market in 2025, after China and the U.S. (See Figure 3).