Digital Technology In Japan

1355 Words6 Pages
The effect of digital technology on Japan's economic growth Introduction New economy describes parts of the economy where innovative thinking and new technologies are used. The new economy is a result of shifting from a manufacturing economy to a service one. Other factors that helped shape the new economy are globalization and the development of the internet. The use of the internet in particular is a major player in the development of the new economy and it has benefited economic growth and productivity. The first notable impact of digitalization on economic growth is the creation of new jobs. It has created a positive externality by reducing unemployment and providing people with new jobs. New jobs mean using more labor force, hence generating…show more content…
It is worth mentioning that digitalization affected low income countries more than high income ones. This can be related to the fact that low income countries have limited capital and resources and are less capable in innovating and sustaining a competitive advantage. Therefore, this breakthrough in economy, and the development of the internet gave these countries a chance. The internet is available almost everywhere and is relatively cheap, which gave low income countries a chance to step up their game and become more productive. Smaller businesses as well were given the opportunity to enter new markets through the usage of digital technology. In other words, ICT has facilitated the entry into new market segments. Every country has some form of a relationship between its usage of digital technology and its economy. This relationship can either be positive or negative. This paper will discuss the relationship between Japan's utilization of digital technology (ICT) and its economic growth. The Ministry of Internal Affairs and Communication (MIC) has formed a council in February, 2013 to study the numerous policies regarding ICT, including the usage of ICT as one of the main factors of boosting the growth of Japan's…show more content…
Using ICT in the creation of new industries has produced countless of new jobs in Japan. New jobs mean less unemployed people in the country. It also meant that people needed to learn new skills to perform their jobs. The need for new skills stemmed from the introduction of ICT. However, it is worth mentioning that digitalization does not automatically guarantee increase in economic growth (GDP) and decrease in unemployment rates. The following graphs will demonstrate these facts. • Figure 3 Shows GDP growth in Japan between 1980-2018 As seen from the above graph, Japan's current GDP % has dropped drastically since 2010. It has decreased by almost 3%. This comes to show that despite being a world leader in Technology and ICT today, Japan's GDP still managed to drop down and hasn't been increasing that much in the last 3 years. Although digital technology has had many positive impacts on Japan and its economic growth, it did not necessarily improve its growth. Other factors should be taken into consideration. • Figure 4 shows Japan's unemployment rate between
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