HIKONE, SHIGA PREF. – A quarter of a century has passed since March 1991, when the Japanese economy plunged into a recession triggered by the bursting of the bubble boom. The economy has since been effectively at a standstill, with the average annual growth of gross domestic product standing at a mere 0.9 percent in real terms. Yet we are now enjoying a far more convenient and comfortable lifestyle compared with the past.
For years my profession has required me to send manuscripts to publishing companies and newspapers. Until the early 1980s, the normal procedure was to handwrite the manuscripts and send them by registered express mail. After the mid-1980s, fax machines installed in offices sent the manuscripts through telephone circuits instantaneously as long as they were not too voluminous. Toward the end of that decade, small fax machines for home use became available for about ¥100,000, and word processors relieved authors from the chore of writing by hand.
It was in the early years of the past quarter century that the Windows operating system developed by Microsoft Corp. enabled authors to write on a personal computer. Initially, the manuscript for a book was saved on a floppy disk, which in turn was sent to the publisher through the postal service. After the mid-1990s, the use of email rapidly became popular, enabling the author to send not only the manuscript but also all sorts of data as attachments by email in real time. A galley proof would be converted into a PDF file and sent back to the author.
When I started using email, I was bothered by the simple question of why the service was free. Before email made its debut, it cost me several hundred yen to mail my manuscript to the publisher either in its original form or on a floppy disk. My telephone bill would go up when I sent many pages by fax. In short, the postage and telephone charges would go up in proportion to the distance. Some time ago, many people used to send Christmas cards to other countries in mid-November by surface mail in order to avoid more costly airmail postage. This was indicative of the high costs of communications for households and businesses.
Why is email free of charge? The answer is that there is no charge for the use of the internet via the communications satellites of the U.S. Defense Department, which brings down to zero the marginal cost of sending each email. This contrasts with the postal service, the marginal cost of which cannot be zero because it requires manpower for mail delivery, and the telephone service, which has no marginal cost but charges large amounts of money for the use of telephone circuit lines.
With access to web search engines provided by Google, Yahoo and others, anybody can obtain all sorts of information easily and without charge. That includes a celebrity’s date of birth and career history, a list of hotels and restaurants in a tour destination, how a baseball game is shaping up at any given point in time and breaking news stories. Or, if you give the computer the time that you want to arrive at your destination, it will inform you, free of charge, all public transport connections to minimize your travel time. Moreover, there are huge numbers of applications that can be downloaded to your smartphones without charge.
Decades ago, it was common to find encyclopedias, dictionaries and other books filling the bookshelves of a living room. But they have become useless and obstructive because any kind of information can now be obtained on the internet.
As many as 6 million high school students the world over have registered for “massive open online courses” (MOOCs), which are managed mainly by prominent American universities. Since the marginal cost of these courses is zero, participants do not have to pay tuition. In September 2013, a 17-year-old high school student in Ulaanbaatar, Mongolia, who had taken part in a MOOC offered by the Massachusetts Institute of Technology achieved perfect scores in every subject, and was granted tuition-free admission.
Big strides made by information and communications technology (ICT) are the primary cause of our lifestyle becoming more convenient and comfortable over the past quarter century. In addition to making the internet easier to use, ICT has also contributed greatly to progress in medical science during the past 25 years. Significant advances have been in such areas as endoscopy, laparoscopy and cataract surgery.
During the 1990s, Japan’s electronics industry made as great a contribution to the nation’s economic growth as automakers. In the latter half of that decade, the electronics sector alone had a trade surplus close to ¥10 trillion a year. After the turn of the century, however, it started showing signs of decline and its trade balance turned into the red in 2013. Statistics for that year showed that electronics components and devices scored a trade surplus of ¥2.9 trillion, but trade in finished electronics products incurred a deficit of ¥3.7 trillion.
When the ICT revolution was still in its infancy, Japan effectively dominated the global electronics industry, which appeared to augur well for the economy. However, the situation ended up taking a completely different direction. Facing increasingly tough competition from Apple Inc. of the U.S. and Samsung Electronics of South Korea, Japanese manufacturers were forced to withdraw from the global market for tablets and smartphones. And over the past two to three years, Apple and Samsung have been losing steam and are being chased by Huawei Technologies Co. and Xiaomi Inc., both of China.
It would be no exaggeration to say that the main culprit of Japan’s economic doldrums during the past quarter century is the stagnation of its electronic equipment manufacturers.
At present, the auto industry continues to drive the economy. But we need to beware of the risk of complacency. If, for example, Google takes the lead in developing the basic software for autonomous self-driving cars, the auto industry could face the same fate that befell the electronics sector.
Takamitsu Sawa is a distinguished professor at Shiga University.
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