Dear readers,
This is the second "miyakodayori" newsletter from MITI/RI.
I picked up some study in the Ministry regarding the IT investment.
I think it is worth sharing with my friends and asking some reaction from you.
Japan is called "Florida in Asia" but we are moving on IT.
Here are my thoughts on the recent trend of capital investment.
IT manufacturers in such industries as electricity, precision machinery, and general machineryare positively increasing their capital investment, both in information -related field and non-information-related field. This may lead to the real economic recovery, which has been long hoped for inside and outside Japan.
Because capital investment accounts for significant part of GDP, it is definitely one of the pillars for the economic recovery. IT is pulling up the capital investment in the many other industries too. Many firms started to invest positively on IT because their earnings showed solid recovery after succeeding restructuring, or they increased and because IT-related demand increased. Some may say it is rather problematic that consumption is stalemated while capital investment is on a rise. I think this is merely the time lag between the two.
Capital Investment Increase in the period of April 1999 to March 2000 (Compared with the period of April 1998 to March 1999) (%)
Capital Investment Increase in April-June 2000 (Compared with the period of April-June 1999) (%)
Share in the capital investment From April 1999 to March 2000 (%)
*1: IT manufacturing industries include electric machinery, precision machinery, and general machinery.
*2: IT infrastructure industry means telecommunication industry. *3: Non-IT industries include all the industries except the above IT manufacturing industries and IT infrastructure industry.
*4: Information-oriented investment includes telecommunication wire cable, fixed telecommunication equipment, general-purpose computers, mid-range computers, investment related to software development and program making (outsourced ones)
*5: Non-information oriented investment includes all the investment except the above Information-oriented investment.
All the above figures are the indices of all industries of final demand components that were calculated at the MITI.
I think that there is still ample room for growth in information-oriented investment in Japan because its share in the entire private capital investment is still relatively small compared with US case.
The chart below is the comparison of US and Japan in the share of information-related investment.
The share of information-related investment* in the private capital investment (%)
*Information-related investment here includes medical equipment and scientific & chemical equipment.
Although capital investment is on the rise, personal consumption have stalemated up to now. Yet, this also may be a chance for Japan.
Robert Shapiro, Under Secretary of Commerce for Economic Affairs, pointed out at our BBL meeting that there is no digital divide, but there is actually a digital lag. Now grandmas and grandpas have to know how to send e-mail to keep in touch with their grandkids. IT equipment is becoming easier to use for everybody. I think that is very promising aspect that there is plenty of room for increase in personal consumption on IT.
