The Development of Tokyo's Digital Industry
According to data released by the Tokyo General Affairs Bureau, the nominal gross domestic product of Tokyo in 2019 was 11.57 trillion yen, accounting for 20.7% of the total in Japan, and the actual economic growth rate decreased by 0.5%. Compared to the gross domestic product of major countries, it ranks behind Indonesia and exceeds the Netherlands. In terms of economic activity, the growth rate of real estate in Tokyo's gross domestic product was 2.9%, with a contribution increase of 0.4 percentage points; The growth rate of the information and communication industry is 3.2%, with a contribution increase of 0.3 percentage points; The growth rate of mining and manufacturing industries is -4.3%, with a decrease of 0.3 percentage points in contribution; The growth rate of wholesale and retail industry was -1.4%, with a decrease of 0.3 percentage points in contribution. In the segmented fields, wholesale and retail industries (25.4648 trillion yen, accounting for 22.0%) have the largest proportion, followed by real estate (14.4048 trillion yen, accounting for 12.5%), professional, scientific and technological, and business support services (13.3971 trillion yen, accounting for 11.6%).
(1) Information and Communication Industry
The scope of information and communication industry includes "communication industry", "broadcasting industry", "information service industry", "Internet related service industry", "video/audio/text information production industry", "information and communication related manufacturing industry", "information and communication related service industry", "information and communication related construction industry" and "research", with a total of 9 industries. The information and communication industry activity index in Tokyo in 2021 has increased compared to 2020. The market size of the information and communication industry and its related industries reached 108.5 trillion yen in 2019. From the changes in the number of enterprises and employees in Tokyo's information and communication industry, the number of enterprises was 22000 and the number of employees was 849000 in 2016. Among them, the "information service industry" has the largest number of enterprises and employees. There are a large number of companies in the "software industry", and compared to Japan as a whole, Tokyo's "image/audio/text information production industry" has the highest proportion in the country, reaching 61.6%. The nominal output value of Japan's information and communication industry in 2020 was 51.0 trillion yen, a decrease of 2.5% from the previous year (52.3 trillion yen).
According to the Japanese Information and Communication White Paper, 5G, as a comprehensive ICT foundation that includes multiple networks in the IoT era, is expected to have a greater social impact than traditional mobile communication systems in improving business efficiency and creating new services through its application in various industrial fields. From the perspective of 5G application scenarios envisioned by enterprises, "indoor production and manufacturing sites" are the most common in the "manufacturing industry", while "service development (entertainment, etc.)" is the highest in the "information and communication industry", "service industry", and "commercial logistics industry". In terms of enterprise size, both large and small enterprises have the highest level of "service development (entertainment, etc.)". From the perspective of the utilization of digital technologies such as IoT and AI in enterprises, "already imported" accounts for 14.9%, while "not yet imported but with import plans" accounts for 11.5%. From the composition of the imported systems and services, "monitoring" has the highest proportion, accounting for 30.8%. In addition, based on the utilization of cloud services by enterprises, 70.4% of them answered "currently in use" in 2021. In terms of usage, the proportion of "file storage and data sharing" is the highest, at 61.0%.
The total amount of scientific and technological research expenses in Japan in 2020 (including research expenses of companies, non-profit organizations/public institutions, universities, etc.) was 19236.5 billion yen, of which research expenses of enterprises were 13860.8 billion yen. In the research expenditure of enterprises, the research expenditure of the information and communication industry is 349.7 billion yen (25.2%). In recent years, research expenditures in the information and communication industry have shown a continuous decline or remained the same as in previous years.
(2) E-commerce
In 2021, the market size of consumer oriented e-commerce (BtoC EC) in Japan expanded to 20.7 trillion yen (compared to 19.3 trillion yen in the previous year and 19.4 trillion yen in the previous year, a year-on-year increase of 7.25%). In addition, the market size of Japanese inter enterprise e-commerce (BtoB EC) increased to 372.7 trillion yen in 2020 (334.9 trillion yen in the previous year, 353.0 trillion yen in the previous year, a year-on-year increase of 11.3%). In 2019, the domestic BtoC EC market size in Japan was 19.4 trillion yen, and the domestic BtoB EC market size was 353.0 trillion yen. The market size in 2021 has exceeded that of 2019.
In 2020, as a response to the spread of the novel coronavirus, Japan called on people not to go out unnecessarily and recommended the use of e-commerce, which led to significant growth in product sales. However, with the decline in the number of tourism services, the overall service sector declined significantly. The overall size of the BtoC EC market in Japan in 2020 has decreased compared to the previous year. In addition, the BtoC EC conversion rate was 8.78% (an increase of 0.7 percentage points from the previous year), and the BtoB EC conversion rate was 35.6% (an increase of 2.1 percentage points from the previous year), showing an upward trend.
In Japan, the number of companies selling goods overseas through cross-border e-commerce (EC) is rapidly increasing. With the development of IT technology, translation and related procedures have become simpler, and the rapid depreciation of the yen has also brought benefits. More and more Japanese small and medium-sized enterprises are beginning to enter cross-border e-commerce. According to statistics from the Japanese Ministry of Economy, Trade and Industry, cross-border e-commerce targeting only China and the United States grew to a scale equivalent to about 10% of Japan's exports to both countries in 2021. Cross border e-commerce is expected to become an opportunity for Japanese small and medium-sized enterprises to move towards globalization. According to a survey by the Japan External Trade Organization (JETRO), the proportion of small and medium-sized enterprises using or considering cross-border e-commerce has reached 48%, which is about 10 percentage points higher than large enterprises. In 2021, cross-border e-commerce sales targeting individual Chinese consumers increased by 10% year-on-year, reaching 2138.2 billion yen. Sales to the United States increased by 26%, reaching 1222.4 billion yen, which is equivalent to about 10% of the export value of Sino US trade statistics. China and the United States are regarded as the two major countries for cross-border e-commerce in Japan. Due to the fact that the transaction volume of cross-border e-commerce must exceed 200000 yen to be reflected in trade statistics, the overall sales revenue is not clear, but it seems to have grown into a market of a certain scale.
At present, the sales momentum towards overseas markets is even stronger. BEENOS, the largest cross-border e-commerce support company in Japan, has data from over 3000 companies in Japan. Statistics show that sales from January to June 2022 (in Japanese yen) increased by 80% compared to the same period in 2020, reaching 3.7 times that of five years ago. The significant increase in sales in Southeast Asia, Europe, and North America is due to the depreciation of the Japanese yen. The exchange rate of the Japanese yen against the US dollar continues to decline, and Japanese products priced in various currencies are becoming increasingly cheaper. According to BEENOS' statistics, based on the effective exchange rate, the unit price from January to June 2022 only increased by 4% compared to January to June 2020. In the context of rising prices, the price competitiveness of Japanese products has increased compared to products from other countries. According to BEENOS statistics, 26% of US cross-border e-commerce users have increased their frequency and amount of purchasing Japanese products.
The analysis of Japan's economic and financial white paper shows that if more and more Japanese small and medium-sized enterprises engage in overseas business, it is expected to improve their profitability. Enterprises that have started exporting tend to show an improvement in production efficiency compared to those that have not yet started exporting. According to a survey by the Organization for Economic Cooperation and Development (OECD), compared to other countries, the proportion of Japanese small and medium-sized enterprises using e-commerce is 22%, which is lower than the world average (31%) and ranks relatively low.
(3) Digital finance
Due to the global pandemic of COVID-19, the world has suffered an unprecedented economic blow. Where and how to stand up again, and what kind of society to build for the future, are urgent issues facing cities around the world today. The answer given by Tokyo is' sustainable recovery '. The goal is not to return to the society before the COVID-19 epidemic, but to flexibly respond to people's values and social changes. Among them, economic reconstruction is positioned as an important issue. The highly anticipated concept is the "International Financial City Tokyo" proposed by the Tokyo Metropolitan Government. The idea is that, considering that the financial industry accounts for about 10% of Tokyo's gross domestic product and has a wide-ranging impact on other industries, Tokyo's growth can be achieved by activating its finance.
Revitalize finance with 'green x numbers'. In the International Financial City Tokyo Concept 2.0, the particularly important keywords are "green" and "digital". The three pillars of specific measures are to build a financial market that can contribute to solving social problems (Tokyo Green Finance Initiative), use financial technology and other technologies to achieve financial digitization, and attract practitioners in various financial related industries such as asset utilization.
Coping with the climate crisis is one of the most important challenges facing the world today. Under the policy of significantly reducing greenhouse gas emissions such as carbon dioxide proposed by governments around the world, Tokyo regards environmental measures as investments in economic growth. The actions of "halving carbon emissions" by 2030 and "zero carbon Tokyo" by 2050 have already begun. In this trend of decarbonization, there has also been a trend between investors and the market to use corporate environmental measures as an important benchmark for investment judgment. The trend led by ESG investment has also affected enterprises, and many companies have begun to shift towards environmentally friendly business policies. Tokyo actively promotes the development of the Tokyo green finance market by improving the information platform for corporate ESG initiatives and providing support for external evaluations of issuers such as green bonds (enterprises, groups, etc.) to obtain fees. In addition, the activation of sustainable finance for small and medium-sized enterprises has been strengthened, attracting individual investors, spreading decarbonization measures and technologies overseas, and attracting and cultivating high-level talents to promote sustainable finance. Through these measures, the aim is to build a strong financial market that is attractive to investors, businesses, and financial institutions around the world, while achieving a virtuous cycle of "environment" and "economy", with the goal of transforming Tokyo into a green city selected by the world.
With the continuous advancement of technology, digital transformation has penetrated into every aspect of people's lives. The same is true in the financial industry. In order to improve the convenience of financial services and create new and attractive digital financial services, financial digitization is an urgent task. Japan still has a lot of room for improvement in financial digitization. In order to activate the financial industry and elevate Tokyo to an international financial city, it is essential to have financial talents and enterprises with rich knowledge and technology. By offering preferential policies such as reducing the initial fees for fintech companies entering Tokyo, Tokyo requires the government to re-examine its tax system and various policy regulations, and create an attractive business and living environment.
(4) Tokyo's Digital Economy Competitiveness
According to the "Global Digital Economy City Competitiveness Development Report (2022)" by our research group, the overall ranking of digital economy competitiveness of major cities in the world shows that Tokyo has dropped from 4th to 7th place globally (see Table 2). The evaluation indicators for urban digital economy competitiveness include economic and infrastructure competitiveness, digital talent competitiveness, and digital innovation competitiveness.
表1 全球主要城市数字经济竞争力总体排名情况
表1 全球主要城市数字经济竞争力总体排名情况 | |||||||
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单位:分 | |||||||
排名 | 城市 | 经济与基础设施竞争力 | 数字人才竞争力 | 数字创新竞争力 | 总得分 | 上年排名 | 国家 |
1 | 纽约 | 93.2 | 67.5 | 84.8 | 81.8 | 1 | 美国 |
2 | 首尔 | 79.7 | 78.2 | 67.3 | 75.1 | 5 | 韩国 |
3 | 伦敦 | 75.8 | 70.3 | 75.7 | 73.9 | 2 | 英国 |
4 | 洛杉矶 | 82.0 | 63.0 | 74.1 | 73.0 | 8 | 美国 |
5 | 波士顿 | 80.7 | 64.1 | 70.8 | 71.9 | 6 | 美国 |
6 | 新加坡 | 89.5 | 58.2 | 66.7 | 71.5 | 3 | 新加坡 |
7 | 东京 | 80.3 | 55.7 | 76.8 | 70.9 | 4 | 日本 |
8 | 旧金山 | 84.7 | 60.8 | 66.9 | 70.8 | 7 | 美国 |
9 | 北京 | 81.4 | 52.7 | 74.8 | 69.6 | 12 | 中国 |
10 | 芝加哥 | 80.7 | 63.0 | 62.0 | 68.6 | 11 | 美国 |
10 | 香港 | 86.8 | 57.5 | 61.6 | 68.6 | 9 | 中国 |
数据来源:本课题组。 |
Table 1 Overall Ranking of Digital Economy Competitiveness of Major Global Cities
Tokyo still maintains a leading position in digital innovation. According to the report of our research group, the competitiveness of digital innovation includes the intensity of urban research and development, the number of patent applications, and the depth of typical digital applications (such as healthcare, transportation, education, employment, etc.). Tokyo ranks second in this indicator, only behind New York (see Figure 1).
Figure 1 Score of Global Urban Digital Innovation Competitiveness Index
Digital productivity, which refers to the ratio of digital input to output, will become the key to future urban competition. From Figure 2, it can be seen that Tokyo is located in the upper right corner, and the 13 cities in the upper right corner are all high input and high output cities. This is closely related to the flourishing development of digital technology. Therefore, it can be expected that Tokyo will continue to lead in the development of the digital economy in the future.
Figure 2 Digital input-output correlation of each city
Development of Digital Technology in Tokyo
After 3G, in order to avoid the coexistence of multiple technologies, the world communication standards have always been formulated by the industry as a whole in terms of specifications and standards. At the 2021 Japan US summit, the two countries confirmed their policy of investing $4.5 billion in 6G research and development in the future. Japan hopes to no longer use electrical signals in communication and instead use optical signals, transforming the NTT Group IOWN concept technology that can reduce power consumption into the 6G standard. In addition, the Japanese Ministry of Economy, Trade and Industry is conducting discussions on incorporating measures to promote the selection of large-scale production base locations into economic strategies for batteries that have mastered the two keys of green environmental protection and digital technology. Japan's global share in the semiconductor industry is only about 9%, but many products in related equipment and materials fields have the highest global share. In order to maintain the competitive advantage of these strategic commodities, Japan's current task is to maintain and expand semiconductor production domestically. As Japan's workforce gradually decreases, there is an urgent need to utilize digital technology to actively promote digital transformation in both the public and private sectors.
(1) Innovative Optical and Wireless Network (IOWN)
NEC and NTT in Japan are advancing the development of fiber optic cables with a transmission capacity four times that of the current one. With the gradual practicality of the new generation communication standard 6G and Internet automobile technologies, it is expected that the global communication business volume will increase dramatically in the future. Japanese companies are in a leading position in the development of next-generation optical fibers. As the new generation of fiber optics is expected to become the protagonist behind new communication services, the number of negotiations between large technology companies such as Google in the United States and Japanese companies is also increasing.
In the autumn of 2021, NEC and Sumitomo Electric Industries jointly developed a submarine optical cable that can accommodate 32 new generation fibers known as "multicore fibers". In the past, optical fibers were single core with only one optical signal channel, while the new generation of optical fibers developed by NEC and others have four cores. It is expected that the transmission capacity of each fiber optic cable will reach four times the current capacity, which is around 80 Terabits per second. The amount of communication information within the same time can increase fourfold. If converted to newspapers, the amount of information that can be transmitted per second is equivalent to about 30 million days of newspapers.
The thickness of the new generation fiber optic cable is only 0.125 millimeters, which is similar to that of a human hair. Previously, due to interference with the light signal leaked from the adjacent channel, accurate transmission was not possible. Now, by improving the glass materials used around the channel to prevent light signal leakage, NEC has been promoting development with practicality as the goal, and is expected to push towards practicality in the mid-2020s. The new generation of fiber optic cables will mainly be used for submarine cables. Currently, there are about 500 cables worldwide with a total length of 1.3 million kilometers, which can orbit the Earth more than 30 times. Submarine fiber optic cables are the core part of the communication infrastructure responsible for 99% of international communication, and American technology companies such as Google are pushing forward the construction work on their own. NEC holds 30% of the world market share in the production and laying of submarine cables, ranking second in the world, only behind SubCom in the United States, which holds 40% of the market share. The use of next-generation fiber optic submarine cables is expected to play a supporting role in the practical development of new communication services in the future. One of the services is 6G, which is believed to be 1000 times faster than the current mainstream communication technology 4G and 10 times faster than the high-speed communication standard 5G.
NTT is discussing the practical implementation of a new generation of optical fiber with four channels, called IOWN, in order to realize the concept of a new generation communication platform using autonomous optical technology. Imagine establishing relevant technologies by 2025 and introducing them into the backbone networks and data centers connecting major cities such as Tokyo and Osaka in the 2030s. NTT will design a new generation of fiber optic cables with the same thickness to facilitate replacement with existing ones. The head of the cutting-edge media department of the company stated that international standardization will be promoted from around 2025.
One of the cases of taking full advantage of the large capacity and low latency as the advantages of IOWN is the Internet car connected to the network in real time. Cisco Systems (CISCO), a large network equipment enterprise in the United States, predicts that the number of Internet vehicles will grow at an annual rate of 30% in the future. NTT is working with Toyota to develop a communication platform for Internet vehicles. Internet cars aiming at autonomous driving require detection and avoidance of surrounding dangers without delay. To achieve this, the new generation of optical fiber will play an important role. The performance of optical fibers has been continuously improving before the emergence of the new generation of optical fibers. According to data from the American research firm TeleGeography, the capacity of each fiber optic cable was 20 terabits per second in 2020, which is more than 30 times that of 20 years ago. However, current fiber optics are becoming increasingly difficult to further increase capacity. The reason is that if the capacity is further increased, the laser used for communication will become too strong, which may cause the fiber to melt or the signal to be unrecognizable. Regarding the room for improving the performance of current optical fibers, Tatsuo Saito, Director of Sumitomo Electric's Institute of Optical Communications, pointed out that "for data transmission over distances of 1000 kilometers or more, 30-40 terabits (1.5 to 2 times the current) may be the limit.
(2) IoT network utilizing low orbit satellites
Rakuten Mobile has invested in AST SpaceMobile, a low Earth orbit (LEO) satellite company, with plans to expand wireless service coverage to the Japanese population. Now, the operator is collaborating with the University of Tokyo to expand the coverage of IoT devices and services through an LTE based LEO satellite network. The focus of this work is NB IoT, which does not require a large amount of spectrum resources and is very suitable for low-power devices that intermittently send small amounts of data, such as smart meters and sensors.
The plan is to establish an IoT network using LEO satellites to achieve 100% geographic coverage and provide long-range connectivity for existing NB IoT devices, achieving what it calls "IoT hyper coverage", and identifying new use cases for connecting NB IoT and LTE device services. Rakuten stated that by establishing satellite networks, low-cost IoT services will become possible for areas such as mountainous regions, remote islands, or the sea that are typically not covered by networks.
This network is capable of directly collecting data from IoT sensors, similar to AST Space Mobile's target for smartphones. AST's investors also include Vodafone, American Tower, Cisneros, and Samsung. The idea is based on a revenue sharing model, which enables seamless roaming between terrestrial cellular networks without the need for specialized hardware. In March 2019, the company launched its first satellite, initially focused on 4G, followed by 5G. Rakuten stated that it will collaborate with SpaceMobile, headquartered in the United States, to cover approximately 4% of the Japanese population that the operator's ground mobile network cannot reach.
In the new research and development project, Rakuten is focusing on building an LTE based satellite communication network through collaboration with SpaceMobile. Rakuten and the University of Tokyo will conduct research and development to stabilize and optimize LTE satellite communication, and develop and deploy NB IoT software for LEO. These partners will jointly investigate use cases and conduct IoT hyper coverage experiments. Rakuten's new joint research and development plan will continue from November 2022 to the end of March 2025. The research activity belongs to the "Beyond 5G R&D Promotion Project" theme of the National Institute of Information and Communications Technology (NICT) in Japan. Not long ago, Rakuten started a separate project under NICT's Beyond 5G project, collaborating with partners Nagoya University and Japan's Oki Electric Industries Co., Ltd. to explore the technology of next-generation autonomous mobile networks.
(3) Battery
The Japanese Ministry of Economy, Trade and Industry aims to cultivate 30000 talents by 2030 in order to enhance the competitiveness of the battery industry. In Japan, Panasonic Energy, which operates battery business, has about 20000 employees. A senior official from the Japanese Ministry of Economy, Trade and Industry stated that the goal for the future is to train an additional 30000 talents. The popularization of pure electric vehicles (EVs) and renewable energy cannot be separated from batteries. Against the backdrop of the rise of Chinese and Korean enterprises, Japan will ensure raw materials and strive to gain a 20% global share. The Japanese Ministry of Economy, Trade and Industry has released the final plan to enhance competitiveness, proposing to cultivate 30000 talents in the entire supply chain, including materials. It is expected that in the field of batteries, 18000 skilled personnel will be needed to undertake factory manufacturing, and 4000 technical personnel will be needed to engage in battery cell design and other related fields.
In order to cultivate talents, cooperation will be carried out in the Kansai region with Panasonic, Kyoto University, Industrial Technology Research Institute, and others. In addition to introducing battery related courses in industrial high schools and vocational colleges, courses on operating battery production equipment will also be launched at the Kansai Center of the Industrial Technology Comprehensive Research Institute. In the final plan, it is also proposed to increase the global battery production capacity of Japanese domestic enterprises by 10 times, that is, 600 gigawatt hours. By 2030, the production capacity of 600 gigawatt hours is expected to account for 20% of the global share. The approximate standards for the required resources will also be clarified. Lithium requires 380000 tons per year, nickel 310000 tons, cobalt 60000 tons, graphite 600000 tons, and manganese 50000 tons.
The Japanese Ministry of Economy, Trade and Industry has decided to support Honda and Nissan in the development of a new generation of solid-state batteries for pure electric vehicles (EVs). Approximately 151 billion yen will be provided to the decarbonization field through a 2 trillion yen fund, of which 120.5 billion yen will be invested in the development and reuse of high-performance batteries and raw materials with high energy density, and the remaining 30.5 billion yen will be used for the development of new generation motors. Honda strives to achieve the technology of mass producing all solid state batteries while reducing carbon dioxide emissions. Nissan and GS Yuasa will also develop high-performance all solid state batteries. Panasonic Energy, Mazda, and APB are also striving to achieve twice the current energy density with their own batteries. Sumitomo Metal Mining and Idemitsu Xingchan will study decarbonization during the battery manufacturing stage. In the field of reuse, the Ministry of Economy, Trade and Industry will support JX Metals, JERA, which is jointly invested by Tokyo Electric Power Holdings and Chubu Electric Power, and Sumitomo Chemical. Regarding the new generation of motors, Nippon Electric and Denso will respectively promote their development. By 2030, increase electricity efficiency by over 85% compared to before.
(4) Semiconductor
Japan will establish a new research institution called the "New Generation Semiconductor Manufacturing Technology Development Center" (tentative name) by the end of 2022. Collaborating with the Institute of Integrated Industrial Technology, the Institute of Physical Chemistry, the University of Tokyo, and others, we will establish a base that will flexibly utilize equipment and talent from the US Semiconductor Technology Center (NSTC) for research and development. As a research and development base for the window between the two countries, we aim to set up experimental production lines with the goal of establishing mass production of next-generation semiconductors for quantum computers and other applications in Japan as early as 2025.
The new research institution will also attract business participation and conduct research in three areas: semiconductor design, manufacturing equipment, and material development and production line establishment. If it enters the stage of mass production, it will provide technology to domestic and foreign enterprises, and cooperate with enterprises with common values, including Taiwan, China and South Korea. The governments of Japan and the United States will promote research through financial support. Japan will allocate 1 trillion yen in research and development expenses over the next 10 years, and the US Senate has also passed a bill to provide subsidies equivalent to 7 trillion yen for semiconductor production and research. From the perspective of cutting-edge semiconductor production capacity among various companies, TSMC is leading, followed by Samsung Electronics and Intel. In terms of manufacturing equipment and materials that are indispensable for mass production, Japanese companies such as TEPCO Electronics, SCREEN Holdings, Shinetsu Chemical Industries, and JSR have competitiveness.
Future prospects of Tokyo's digital economy
(1) Concept of Digital Countryside Urban Country
At the end of 2021, the Japanese government held a "Digital Countryside City National Concept Implementation Conference" at the Prime Minister's Office, summarizing the overall situation of current measures. Propose to build the foundation of high-speed communication standard 5G and increase the penetration rate from the current 30% to 90% by 2023. In addition, starting from 2022, we will cultivate 2.3 million talents to popularize digital technology in local cities in Japan within 5 years. This concept will enhance the vitality of Japan's local areas through infrastructure construction such as 5G and data centers, striving to promote the digitization of local cities and eliminate the gap with big cities. Regarding the current measures, numerical targets have been set for the construction of information and communication infrastructure and talent cultivation.
In the field of 5G, the setup of mobile communication system base stations will be accelerated. In order to widely utilize new generation services such as autonomous driving and remote surgery, it is necessary to establish data centers in local cities in Japan that can process large amounts of data at high speeds. We plan to build over 10 bases in the next 5 years. In order to ensure the supply of digital talents, it is planned to promote data science and artificial intelligence (AI) education in universities and other institutions. We will also encourage the promotion of vocational training and "recurrent education" for social individuals to relearn. Vocational training for departing employees will also be focused on the digital field.
In 2022, Japan plans to deploy over 10000 digital promoters to teach elderly people how to handle administrative procedures through smartphones and digital platforms. The original plan of about 3000 people will be increased by more than three times. Promote the digitization of Japanese society in both software and hardware aspects. Mobile agent stores and citizen centers will be equipped with promoters. Provide assistance for basic operations of smartphones and the use of administrative services such as personal identification cards. Strive to reach a total of 10 million people who have received assistance by 2025.
At present, most of them are promoted by employees of mobile phone stores. In the future, the Japanese government will establish relevant systems and consider recognizing qualifications. We will also dispatch talents to support digitalization to local autonomous bodies. The concept of a digital rural urban country also proposes the idea of avoiding the widening of the "digital gap". The purpose is to strengthen the support system and avoid widening the gap between cities and regions, as well as between young and elderly people. The Japanese government has included relevant funds of 3.08 billion yen in the 2022 budget estimate.
(2) Revitalizing the Strategy of Semiconductor Digital Industry
The Japanese Ministry of Economy, Trade and Industry invited industry professionals to hold a strategic seminar in March 2021 and released the "Semiconductor Digital Industry Strategy" in June of the same year. Japan has ensured investment in cutting-edge factories and subsidies for upgrading existing equipment by supplementing its budget. The roadmap outlined by Japan is to support the strengthening of manufacturing foundations and the mass production of new generation technologies in the second half of the 1920s, and to revitalize cutting-edge technologies by the 1930s based on optoelectronic fusion technology. The subsidy from the Japanese Ministry of Economy, Trade and Industry has become a driving factor for TSMC to build a factory in Kumamoto Prefecture. However, not only does it include TSMC's planned production line with a line width of 20 nanometers, but Japan has also included attracting more cutting-edge bases in its vision.
In the past 20 years, the funding required for semiconductor technology development and cutting-edge factory operations has significantly increased. The Japan Institute of Industrial Technology established the "Cutting edge Semiconductor Manufacturing Technology Alliance" in 2021. Introducing cutting-edge production equipment at the base in Tsukuba City, Ibaraki Prefecture, with the aim of jointly developing a new generation of semiconductor technology. Japan has manufacturing equipment companies such as Canon and Tokyo Electronics participating, and TSMC and Intel have also become sponsoring members.
TSMC, the world's largest semiconductor foundry, and Sony Corporation have finalized the general framework for jointly building a new semiconductor factory in Kumamoto Prefecture, Japan. The total investment amount reaches 800 billion yen, and it is expected that the Japanese government will provide up to half of the subsidy. We will utilize TSMC's cutting-edge technology to launch the production of essential computing semiconductors (logic semiconductors) for automobiles and industrial robots before 2024. Japan will ensure cutting-edge technology and stable production capacity through the construction of new factories. Many semiconductor manufacturers in Japan have fallen behind in the large-scale investment competition required for cutting-edge semiconductor production, and logic semiconductors using the latest technology have been produced by companies such as TSMC. Japan will resume domestic manufacturing of cutting-edge products by accepting direct investment from TSMC. The new factory is located adjacent to Sony's image sensor factory in Juyang cho, Kumamoto Prefecture, and is planned to be put into operation before 2024. The produced semiconductors are used for signal processing collected by image sensors and in automobiles.
Sony will also provide assistance in the form of preparing factory land. The intention is to steadily purchase logic semiconductors embedded in image sensors. In the field of sensors used in smartphones and other applications, Sony holds half of the global market share and has factories in Kumamoto and Nagasaki prefectures. The sensor part that collects light is independently manufactured, but the logic semiconductor that processes image data is manufactured by companies such as TSMC. These cutting-edge semiconductors are also indispensable to Japan's industrial foundation. Japan's competitive automotive industry in the world requires higher performance semiconductors in the context of autonomous driving and electrification. In addition, smart factories that collect data such as images and videos to improve manufacturing process efficiency must also process electronic information at a faster speed and with greater processing capacity.
However, building factories alone is not enough to continue the semiconductor business in Japan. The Semiconductor Industry Association of America pointed out that the cost of building cutting-edge semiconductor factories in Japan and operating them for 10 years is 20% higher than in South Korea and nearly 30% higher than in China. The main reason is that other countries have strengthened their preferential policies for the semiconductor industry. In addition, it is necessary to establish a platform for competing with enterprises from other countries.
(3) Digital transformation in the medical field
Recently, Japan has accelerated its digital transformation in the medical field. With the "my number card" that every Japanese citizen has, they can receive various medical and welfare services, and doctors can also perform authentication operations required to provide medical services, achieving a one card system for all services. The digital transformation in the medical field mainly includes the following three aspects.
1. Create a national medical information platform
Expanding the network of online qualification confirmation systems, in addition to receipts and specific health check information, there is also medical (including nursing) information such as vaccination, electronic prescriptions, autonomous physical examinations, and electronic medical records. A nationwide platform has been created for sharing and exchanging all medical information.
2. Standardization of electronic medical record information, etc
It is necessary to unify the form of electronic medical records from the perspective of ensuring information quality, improving convenience and accuracy when sharing and exchanging medical information. In addition, it also includes discussing the optimization of treatment plans through standard electronic medical records, electronic medical record data, etc., and applying them to the development of emerging medical technologies such as AI, effectively applying them to the development of new drugs.
3. Digital transformation of adjusting diagnosis and treatment remuneration
From the perspective of effectively utilizing digital talents and reducing system costs, utilizing digital technology can significantly improve the efficiency of diagnosis and treatment compensation and related adjustments, thereby reducing the operating costs of the entire medical insurance system.
The relevant legal measures regarding the use of medical information will also be followed up in the future. As the foundation for the future digital transformation of healthcare, the establishment of a national medical information platform, standardization of electronic medical record information, and digital transformation of diagnosis and treatment compensation adjustments will help to respond to emergencies such as infectious diseases and promote comprehensive digital transformation of healthcare.