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The public and private sectors should make a concerted effort to build a “Japan-inspired information technology society” through use of the nation’s cutting-edge technology, according to the government

With the rapid diffusion of broadband services in Japan and a slowdown in a U.S.-led IT boom, “Japan is shifting from a ‘catchup’ phase to playing a leading role” in developing the IT sector on a global scale, the government said in a white paper released Friday.

Information and Communications in Japan: White Paper 2003 was put out by the Public Management, Home Affairs, Posts and Telecommunications Ministry. The ministry has drawn up the paper annually since 1973.

Japan has more advantages in technology, and information and communications infrastructure, than the United States, with broadband services provided at the lowest cost and fastest speed in the world, it says.

The paper says Japan leads the world in use of mobile Internet services, with the cell phone Internet compatibility rate standing at 79.2 percent as of September, followed by South Korea at 74.9 percent and China at 33.9 percent.

“It will be important for Japan to achieve a society that utilizes those technologies in which it excels over other countries, such as optical communications, mobile communications and intelligent home appliances,” it says.

But Japan lags behind the U.S. in the utilization of IT at companies, and firms here make less investment in IT than U.S. firms do, it says.

The proportion of IT investment to total capital investment in Japan came to 29.4 percent in 2001, compared with 42.9 percent in the U.S.

On a volume basis, IT investment in the U.S. was 66.6 trillion yen in 2001, up by a factor of 6.1 from 1990. In Japan, investment grew by a factor of 2.5 to 25 trillion yen in the same period.

Japanese companies view IT investment as nothing more than a “means of improving efficiency,” while U.S. firms recognize it as a “source of growth and stronger competitiveness,” it says.

Compared with U.S. companies, according to the paper, Japanese firms see limited effectiveness in IT in terms of sales expansion and heightening of added value.

The firms are slower than their U.S. counterparts to introduce IT strategies, making their operational coordination of IT systems less efficient. Japanese firms also demonstrate a lack of communication between sections, it says.

The report says Japanese companies make fewer efforts to optimize the effectiveness of IT investment compared with U.S. companies. There is a big gap between the two sides in regular quantitative verification of cost-effectiveness after introduction of IT strategies, it says.

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