Information and communications technology (ICT) has made quite remarkable strides during the past quarter of a century since 1991.
If the conventional wisdom that economic growth is driven by innovations stands, the dramatic revolution achieved by ICT should have resulted in remarkable growth for the Japanese economy. The fact is that the economic growth rate during the past 25 years has averaged less than 1 percent per year in real terms and remained negative in nominal terms.
By 1997, Japanese banks were able to dispose of the huge nonperforming loans they had accumulated in the early 1990s following the bursting of economic bubbles. Those loans resulted from sustained declines in real estate and stock market prices. In those years, ITC equipment permeated rapidly into the Japanese economy. Still, the economy was unable to regain its growth power.