Director’s Take: Ten Recommendations for Revitalizing Japan’s ICT Sector

The new Abe administration has appropriately made revitalizing Japan’s economy its top priority and ICT must be an important part of this. A successful strategy will require not only investments in new technology, but also attention to the effective management of ICT policy, especially with respect to the Internet, which already accounts for nearly four percent of Japan’s economy – the equal of Japan’s vaunted automotive sector.

Below are ten areas that require the attention of the new government – in sum, they represent a road map to positioning the Internet and the ICT sector generally as the leading edge of Japan’s economic recovery.

  1. Full deregulation and convergence of telecom and broadcasting — Japan needs to undertake a full-scale rewrite of the telecom and broadcasts law along the lines taken by other major OECD economies; this has yet to occur; it should be the starting point for the Abe government’s efforts to strengthen the base of Japan’s emerging Internet Economy.
  2. Establish a “national communications commission” like the UK’s OpCom and Korea’s KCC to strengthen transparency and regulatory consistency in administration of the ICT sector. So far, this kind of initiative along with efforts to consolidate ICT promotion authority in one ministry has been stymied by bureaucratic rivalries within the government.
  3. Rapidly implement the recently passed legislation to create a “national ID” for tax and pension payments and expand to cover all national and local government services. This reform needs to be accompanied by a fundamental rethinking of how the national and local governments deliver services to citizens — other countries, e.g. Korea, have gone a long way down this path; Japan is just beginning.
  4. Empower Japan’s CIO (Chief Information Officer) to reform and consolidate the way the national government procures ICT, based on a comprehensive strategy for the ICT sector.  Japan’s first CIO was named last year, but to succeed, the new CIO needs a staff, a budget and a mandate to change the way Japan buys and uses ICT.
  5. Open up spectrum allocation to competition. The Abe government has tabled legislation to introduce spectrum auction to Japan, leaving it virtually alone among OECD countries in this regard. While the merits of spectrum auctions might be contested, there is no argument that Japan needs more competition and transparency in the allocation of spectrum. It also needs a more proactive policy with respect to the use of unlicensed spectrum. Current efforts to reallocate “white space” to this purpose are stalled.
  6. Introduce a privacy law – an advisory committee is set to make concrete proposals in June; however, it remains unclear how much progress they will make; Japan is significantly behind the US and the EU in this area – and the lack of a domestic privacy framework is undercutting the ability of its companies to offer cloud services internationally.
  7. Get more Japanese local content online – apart from some recent modest revisions to the Copyright Law to allow short-term “caching” of copyrighted material by search engines, etc., there are still significant gaps in Japan’s copyright framework for the Internet, e.g.cloud storage by individuals of music and other content.  Additionally, TV and the production companies continue to drag their feet on licensing local content to (largely foreign) distributors and aggregators; this is a competition policy problem as much as it is an intellectual property issue.
  8. Nondiscrimination between data services located in and out of Japan – there was agreement in principle last year between Japan and the US to honor this, but the job of updating regulations and administrative practices in this area is only starting and international opinion spurred by the NSA scandal is moving in the opposite direction.
  9. Education and immigration – how do you develop the next generation of ICT engineers and managers in the context of an ageing population; clearly the answer is more ICT education in the school and changes to the immigration law to allow more skilled engineers into Japan to work in the ICT field; however, there is still no clear government strategy or policy in these areas.
  10. Standards: Open Collaboration not Closed Competition – there is greater awareness today that Japan-only standards don’t work for the global Internet – but there is as yet no  broad effort to make harmonization a priority.  The slow progress on IPv6 adoption is a classic example: the “Galapagos Island” syndrome remains a challenge for the future of Japan’s Internet Economy.

For a more detailed discussion, see the chapter on the “Internet Economy” in the 2009 American Chamber of Commerce in Japan White Paper, “Charting a New Course for Growth: Recommendations for Japanese Leaders.”

See also an ACCJ-Keidanren joint paper released in October 2012 outlining steps the US and Japan might take together to promote the Internet Economy in the Asian region.

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Jim Foster
Jim Foster
Director Keio International Center for the Internet and Society
Professor Foster is interested in the intersection of technology and policy with a particular focus on how regulatory frameworks impact on innovation and growth. He is also active on global Internet governance issues, especially as they related to privacy, security and competition policy concerns.
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