Section 5 Developing and Introducing Applications This section discusses ways to develop and introduce applications to achieve the goals set out in Section 4. Section 6 discusses promoting network infrastructure upgrading to support these applications. 1. Principles While developing and introducing applications, it is important to adhere to the following principles. 1) Maintaining the Vigorous Cycle while Improving Network Infrastructure Applications and associated network infrastructure form the core for developing full-scale info-communications infrastructure. Creating demand by developing and ushering in applications will, in turn, promote enhancements in the network infrastructure. Similarly, the betterments made to network infrastructure will accelerate the development and implementation of new applications. To actualize this scenario, it is necessary to put into action a plan to ensure that a vigorous cycle arises. 2) Creating an Environment which Harnesses Creativity and Innovation It is important to develop and bring in applications in a form which makes best use of the network infrastructure and responds to a variety of real needs. We anticipate telecommunications and broadcasting will converge in future, facilitating the institution of applications that could not be envisioned with the conventional framework. It will be important to review obsolete regulations and practices constraining both the public and private industry, and to create an environment where innovation in both sectors is nurtured and embraced. On the other hand, users are expected to contribute to the creation of a social environment in which intellectual assets of information are actively and effectively used through network infrastructure. 3) Pioneering Links with Terminal Equipment Development Terminal equipment development shall accompany advances in applications to foster complete utilization of network infrastructure. Applications will only begin to benefit Japanese citizens as a whole when inexpensive and easy-to-use equipment is available. In the dawning era of multimedia, by using a single machine that incorporates maximum compatibility with a variety of applications, costs can be kept down and ease of use enhanced. The greatest possible benefits can be provided by working to promote close cooperation between the development and introduction of applications and terminal equipment. 4) Securing International Cooperation The current evidence underscores the probability that this infrastructure advancement will develop on an international scale in the future. Accordingly, we need to cooperate with other countries, commencing in the preliminary stage, to work out applications which will benefit the broadest possible spectrum of users, and where such applications may be used on a global scale. The United States, member states of the EU, South Korea and Singapore and other nations as well are beginning to recognize the far-reaching importance of these developments. Japan should be active in contributing to any international collaborative efforts that may arise. 2. Developing and Introducing Applications The private sector, using its own creativity and skills, should develop and introduce business-related applications. During the network's preliminary stage, however, it is likely that such applications will be ushered in too slowly in the private sector, causing a further delay in improving network infrastructure. If this assumption is correct, the government should play a leading role in triggering future development, particularly with regard to the evolution and introduction of public applications. In this way, it can pave the way toward actualizing the information-oriented society of the future, and at the same time, stimulate market demand to a considerable degree. 1) Accelerating the Development and Introduction of Public Applications The government's current practices regarding budgetary allocations and public investment have been widely and earnestly discussed recently. Considering the government's salient role in promoting and bringing well-matched applications into play, and the need to develop new social infrastructure, it is strongly recommended that the budgetary allocation for the following fields be made more flexible and given a high priority: a. Promoting the development and introduction of public service applications Public service applications including medical and health care, education, and welfare services applications should be vitalized and made available. b. Supporting the development of advanced applications Assisting advanced pilot model projects The government should assist pioneering new technologies and demonstration projects to develop new applications. Examples of such projects already launched include: "Pilot Model Project for New Generation Communications Network" and "Program for Enhancement of Regional and Life-related Info-communications Infrastructure." Such assistance should be given to the projects conducted on a regional basis by local governments, public utilities and other public bodies, using the network system. This will clarify how new applications are used in practice and will also serve to enhance demand. Supporting the private sector "R&D Facilities for Broadband Telecommunications Network" have been established through funding by grants and interest-free loans provided through the Industrial Investment Special Account. Utilizing these facilities, the private sector is able to develop and introduce business-based applications. It remains necessary, however, to further improve the range of assistance given to promising and pioneering private sector efforts to develop novel applications. c. Fostering basic wide-use technologies Basic and widely used technologies should be generated in such fields as network-related and terminal-related applications as well as information resource development and utilization. d. Promoting network use in government services To ensure greater efficiency in administrative procedures and to enhance administrative services, information-based applications should be designed to improve certification procedures and government public relations services. This should result in a shift to on-line processing of administrative services and to paperless documentary exchange between different organizations. A database comprising administrative information should be accessible and contain a directory service coordinating all government ministries and agencies. 2) Developing Information Resources a. Developing and spreading the use of databases To fully utilize the various applications possible, it is vital to ensure the advancement, improvement and adoption of databases, including video software. Japan's fiscal 1991 video software imports exceeded exports by about ¥32.6 billion. Japan's database market was worth about ¥216 billion in 1991. The U.S. market in the same year was valued at about ¥1,276.1 billion (at 1991 exchange rates). This is partly the result of a shortage in human resources and facilities in Japan essential to producing video software and partly because of the delay in creating administrative information databases. Future development and wider utilization of video software will require an improved production and distribution environment, including human resource training and facility enhancement. We will also need to promote technological developments which contribute to the usability of databases for both information providers and users, reduce maintenance costs, and establish common user systems for the expected array of databases. It is also necessary to establish a cross-referenced directory service to link all subsequently constructed databases. b. Facilitating information access and processing When broadband, interactive info-communications is introduced, it will be essential for users to easily and accurately select their needs from among a large volume of information flowing out from a diverse range of information systems. A system which allows free editing and processing of such information, based on the requirements of users, should be established. There are two approaches to establishing such a system. The first approach is what is referred to as the "information refrigerator" system, where all information is accumulated at the terminal. The second approach advocates on-line retrieval, where information is accumulated at a central storage location. It is worthwhile to promote research and development from both perspectives. c. Protecting personal information As the number and use of applications increases, large quantities of personal information will tend to accumulate and be distributed. We will require necessary measures to ensure information environment changes caused by improved info-communications will not endanger consumer benefits. Such measures will include protecting individual privacy, confirming information authenticity, preventing information misuse, and preventing information theft. The development of information resources will be hampered if such measures are not implemented. 3) Improving the Application-Use Environment a. Reforming the existing socio-economic system Innumerable applications are being introduced to our society to improve Japanese industry, economy and the national standard of living. We must review regulations and business practices in the fields of education, medical and health care and commerce, in assessing both network enhancement and utilization. It is also paramount to promptly examine the establishing of new rules for governing electronic funds transfer using the network and information assets protection through the network. b. Establishing verification technologies and systems Transactions using advanced communications networks need to be confirmed in a variety of ways. The transmitter of electronic information must be identified ('Identification'), and the transmitted information must be confirmed to have been sent in a complete form ('Integrity') and to have reached the addressee ('Non-repudiation'). It is critical to establish integrated basic rules and to develop encoding technologies for this purpose. We also need to ensure compatibility with an electronic version of the conventional personal identity seal registration system. c. Promoting standardization Promoting standardized communications procedures on protocols will help achieve functional communications and lead to the development and widespread use of an exhaustive range of applications. Standardization including international activities must be further promoted to maintain the interconnectivity and interoperability of each system which utilizes specific applications depending on their characteristics. We need to review the current standardization system in order to promote effective standardization while maintaining private sector enthusiasm for product development and competition to develop de facto standards.