Chapter 2€¦ · tionnaire surveys covering citizens and companies results. Figure 2-1-1-1 Scope...

The utilization of big data holds the key to data-driven economic growth and social reform. This section pays attention to “innovation creation” brought about by data distribution and utilization and outlines initiatives and challenges, the balance between the utilization and pro-

tection of data and international conformity of data utili-zation. It also covers a wide range of data including business-to-business data, focusing on data categories and sectors in which Japan has competitiveness and sorts out data utilization and industrial competitiveness.

1. Definition and Scope of Big DataFurther progress in digitalization, advanced networks

and IoT development through smaller and cheaper IoT devices such as smartphones and sensors are paving the way for us to efficiently collect and share big data includ-ing location information and action history provided through smartphones, information on Internet and tele-vision watching and consumption behaviors and mas-sive data gained through miniaturized sensors.

Big data has attracted attention in recent years par-ticularly because data for distribution has expanded to cover not only traditional virtual (cyberspace) data in the ICT field but also real data provided through IoT de-velopment and new ICT tools, and business-to-consumer and business-to-business data.(Figure 2-1-1-1)

While various views exist about how to classify big data, this paragraph pays attention to data generated by individuals, business and government sectors and classi-fies big data into the following four broad categories.

1) Government: “Open data” provided by national and local governmentsOpen data has had a lead as big data. The Basic Act on

the Advancement of Utilizing Public and Private Sector Data, described later, calls for strongly opening public information owned by national and local governments as data.

2) Business: Digitalizing and structuralizing knowhow (called “digitalized intelligence”)Digitalized intelligence is interpreted as data other

than personal data owned by industries or companies from agriculture and infrastructure management to business services. In the future, various knowhow and accumulated knowledge in various areas and industries and familiar personal intelligence are assumed to be digitalized.

3) Business: M2M (Machine to Machine) streaming data (called “M2M data”)M2M data includes IoT device data in production sites

and sensing data (including strains, vibrations, and types and weights of passing vehicles) from IoT devices installed on bridges. M2M data and digitalized intelli-gence in 2) are positioned mainly as industrial data from the viewpoint of information generation and utilization. Particularly, B2B data is expected to demonstrate Ja-pan’s competitiveness and enhance industrial power.

In this chapter, digitalized intelligence and M2M data are collectively called “industrial data10.”

Section 1　Expanding Distribution and Utilization of Data

Recent years have seen dramatic growth viable in electronically processed data represented by “big data,” improve-ment in computer processing capacity and technological innovation in artificial intelligence and other areas. These developments are based on data. It is expected that data utilization will lead to productivity improvement and new demand exploration that have been overlooked, contributing to economic growth and innovation promotion. This chapter reviews the present situation including challenges for data distribution and utilization and project a path for utilizing data while eliminating fears among citizens and promoting companies’ consciousness reform based on ques-tionnaire surveys covering citizens and companies results.

Figure 2-1-1-1 Scope of this chapter

Chapter 2 Chapter 3Chapter 1

Open data

Personaldata

Companies’expectations on data

utilization

Eliminating personal fears andawareness gaps betweenconsumers and companies

Cross-border datadistribution, progress ininternational discussions

Promoting open datainitiatives

Industrial data

M2M

Digitalizationof knowledge

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4) Individuals: “Personal data” involving attributesPersonal data include personal attributes, movement/

action/consumption history, wearable device data and other personal information, as well as human traffic and product information that has been processed to prevent

specific persons from being identified. Therefore, this chapter interprets “personal data” as including not only personal information as clearly defined by law but also other personal related information having close to law-defined personal information.

2. Progress in Data Distribution and UtilizationThis paragraph focuses on progress in data distribu-

tion and utilization and ongoing structural changes to-ward the advent of the age of big data utilization.

(1) Explosive Expansion in Data Distribution VolumeNetwork data traffic volume has dramatically in-

creased. As for data traffic in Japan, broadband service (FTTH/DSL/CATV/FWA) users’ total download traffic has rapidly increased since 2014. The latest available year-on-year growth came to 52%. Japan’s mobile com-munication traffic has scored a 1.3-fold annual increase, with total download traffic growing 35% year on year.

(2) Progress in Technological Innovation to Increase Data Processing SpeedDigital network development and IoT progress

through smaller and cheaper IoT devices such as smart-phones and sensors have allowed big data to be efficient-ly collected and shared. Furthermore, cloud computing has allowed even low-capacity computers to conduct massive data processing, accelerating the creation of added values and innovation through data utilization.

Data flow through the centralization and decentraliza-tion of data has made progress in promoting this trend more efficiently. Data centralization includes machine and deep learning of big data aggregated on a cloud-based environment, representing a typical data intensive society in which the aggregation of high-quality data for learning leads to a competitive advantage. Data decen-tralization mobilizes not only cloud computing but also edge computing using deep learning to process data in

an optimum manner meeting value density in prepara-tion for solving the problem of massive data in the IoT age (Figure 2-1-2-1).

(3) Diversification of Data CategoriesAs shown above, data are classified into four broad

categories. A further breakdown of the four categories indicates very various data. Recently, structuralized data have systematically increased and been used for discov-ering new scientific knowledge and creating new busi-nesses. In the future, various and massive non-structur-alized data will be accumulated on a real-time basis and connected with each other through networks in line with IoT development. It is expected that these data will be analyzed to dramatically change social systems.

Such expectation is behind the open data policies for opening public sector data, which have made progress

10 The Report of the Study Group on Data and Competition Policy (July 2017, Japan Fair Trade Commission Competition Policy Research Center, hereinafter referred to as “Study Group Report”) interprets data collected by various sensors on equipment, human bodies, soil and other tangible objects as “industrial data.”

http://www.jftc.go.jp/cprc/conference/index.files/170606data01.pdf

(Source) “Survey Research on Secure/Safe Data Distribution and Utilization,” MIC (2017)

Figure 2-1-2-1 Data centralization and decentralization

Networks

DataData

Apps Apps

Data

Internet

Terminals Terminals

DataData

Apps Apps

Data

DataDataApps

Networks

Apps

Edge computingSeveral

hundredmilliseconds

Severalmilliseconds

Fasterprocessing

Decentralizedprocessing

Apps

Apps

Implementation infrastructureImplementation

infrastructureImplementation

infrastructure


Figure 2-1-2-2 Data traffic and storage cost trends

R² = 0.9798

R² = 0.919

0.01

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1.00（$）

1,000

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Monthly traffic volume (PB) Storage cost (per GB)

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in the government sector in Japan and other countries. The reduction of data distribution costs has exerted par-ticularly great influences on data processing speed (Fig-ure 2-1-2-2).

(4) Growing value of data distribution and utilizationFinally, this paragraph checks the merit and signifi-

cance of data distribution and utilization. The merit and

significance are often discussed from the viewpoint of “digital economy” as a new stage of the so-called Inter-net economy. Digital data is non-competitive and the marginal cost for copying data is close to zero. It does not deplete. Therefore, the accumulation and utilization of data can become a source of competitiveness, making contributions to economy.

3. New Data Distribution and Utilization Trends(1) Development of New Data Utilization and Distribution

ModelsAlthough data have traditionally been distributed

mainly from ICT industry business operators to con-sumers, new relations between ICT utilization industry business operators and consumers will be generated in the future, with various stakeholders mediating services and data distribution. Various “things” belonging to the ICT utilization industry will mediate between consum-ers and ICT industry business operators through net-works, leading to the distribution of M2M and other non-personal data. Such change will dramatically trans-form data distribution between individuals and compa-nies.

Data distribution can be divided into three stages – data ‘provision,’ ‘distribution’ and ‘utilization.’ At pres-ent, data providers usually provide data to user compa-nies directly or through data aggregators. If data are provided through data aggregators, however, data pro-viders may not be able to know final data users. Then, new distribution models are being proposed (Figure 2-1-

3-1).Specifically, new approaches for the utilization of per-

sonal data including personal information in which per-sonal data providers’ involvement and satisfaction are enhanced are being proposed, including a “personal data store (PDS) 11” and an “information bank12.” In these models, data providers put their data under their own control and provide their data as necessary at their own will. In addition, a “data marketplace13” has ap-peared providing data trade places between data provid-ers and users and places for mediators who aggregate and process information opened by data providers and open or provide processed data to users. These new data distribution and utilization models not only integrate the same type of data dispersed at various industries and companies but also collect data chronologically and combine various types of data horizontally to increase the value of data.

(2) Specific Forerunning Cases for Data Distribution PromotionA breakdown of the abovementioned present models

11 A personal data store is a system for data providers to accumulate and manage their own data and aggregate data owned by others and control the provision of their data (and transfer control on their data) to third parties.

12 An information bank uses PDS and other systems to manage personal data under contracts with data providers and provide these data to third parties (other business operators) after judging the adequateness of the provision on behalf of the data providers based on conditions desig-nated by the data providers in advance.

13 A data marketplace (data trade market) is a system that mediates between possessors of data and those willing to use the data, allowing them to make data trading deals.


Figure 2-1-3-1 Data distribution and utilization models

Manufacturers Financialinstitutions

Retailers Othercompanies





Companies, etc. Companies, etc. Companies, etc.

CompaniesHumans

Sensors, etc.

Data aggregators, etc.

Database

Companies, etc.

○ × ×Third party-providedprocessedinformation, etc.

Directprovision /collection PDS

Consumers manage their personal data and control distribution

Opening

Provision

Aggregation,management,

etc.

CompaniesHumans

Sensors, etc.

Data marketplace

Present New distribution models

Catalogues,portal sites, etc.

Making data provision arrangements and conducting mediation

Personal data store (PDS) Data marketplace

Prov

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by type of data and area indicates that data service pro-viders collect, analyze and process data to add value to

services or pave the way for other companies to provide data (Figure 2-1-3-2).

4. ITAC (IoT Acceleration Consortium) InitiativesThe government, industry and academia sectors have

established the IoT Acceleration Consortium (ITAC) to promote their utilization beyond the bounds of compa-nies and industries in response to the advent of the IoT/big data/AI age. ITAC has been developing IoT technol-

ogy, utilizing IoT and implementing proposals for resolv-ing policy challenges. In this respect, it has created a data distribution promotion working group to vitalize data distribution transactions beyond the bounds of ar-eas and industries.

This section summarizes citizens’ consciousness (tol-erance and resistance) about data provision, Japanese companies’ awareness and their gaps based on recent

cases and questionnaire and interview surveys covering companies and citizens.

1. Need for Developing Environment for Safe/Secure Data Distribution and Utilization

This paragraph outlines legal systems for promoting and paving the way for data distribution and utilization in foreign countries, and the status to develop a data utiliza-tion environment in Japan as the revised Act on the Pro-tection of Personal Information, the Basic Act on the Advancement of Utilizing Public and Private Sector Data and other laws.

(1) Institutional Measures in JapanJapan has continuously considered an institutional en-

vironment for data distribution and utilization. ICT de-velopment has paved the way for collecting and analyz-ing enormous data, enabling personal data utilization that had not been assumed at the time of the enactment of the Act on the Protection of Personal Information.

This has led to three challenges -- (1) the emergence and expansion of so-called gray zone data that is difficult to be classified as personal information or other data, (2) the need for developing an environment for the adequate utilization of big data including personal data, and (3) the cross-border distribution of massive data amid the globalization of business operations. In response to these challenges, the Act on the Protection of Personal Information was revised in 2015 and the revised act was put into force in May 2017. Later, the Basic Act on the Advancement of Utilizing Public and Private Sector Data was enacted to set forth basic principles for promoting the utilization of public and private sector data. On open data, its Article 11 provides: “The State and local public entities are to implement necessary measures to enable

Section 2　Problems in Distribution and Utilization of Data

Figure 2-1-3-2 Major data utilization cases

Data type, area Case Outline

Location information

NTT Docomo Inc. “Mobile Space Statistics”

NTT Docomo’s “Mobile Space Statistics” processes its mobile phone customers’ location information into anonymous demographic data for provision to business operators, local governments, etc.

Vehicle driving information

Toyota Motor Corp.Telematics Service

The company processes big data, including vehicle locations, speed and driving conditions, collected and accumulated through its telematics service, into traffic information and statistical data that are used for improving traffic, providing map information and preventing disasters.

Sony Assurance Inc.Telematics Insurance

Since 2014, the company has acquired and analyzed customers’ sudden acceleration and braking data to decide whether their driving is safe or not and refund insurance premiums to safer drivers.

Human body information

Docomo Healthcare, Inc. “Moveband 3,” Omron Healthcare Co. “Wellness LINK”

These companies collect physical activity data (including travel distance and sleeping hours), and body height and weight data from people wearing wearable terminals for their visualization services, and analyze these data and provide them to medical institutions for lifestyle modification services.

Financial information

Hitachi, Ltd.“Financial API Linkage Service”

The service allows personal asset management service users to use their Inter-net banking IDs for seeing and controlling information on their multiple bank accounts.


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citizens to easily use Public and Private Sector Data held by themselves via the Internet or any other advanced information and telecommunications network while en-suring that the rights and interests of individuals and corporations, national security, etc. are not damaged.” Under this law, more data is expected to be made open to public.

A. Revised Act on the Protection of Personal InformationIn September 2015, the revised Act on the Protection

of Personal Information was enacted. The revisions in-clude the clarification of the definition of personal infor-mation, the introduction of an anonymously processed information system, a requirement for confirming and recording the provision of personal information to third parties, the establishment of the Personal Information Protection Commission and the addition of new provi-sions on the provision of personal data to third parties in foreign countries. Although Japan had not had any inde-pendent specialized organization empowered to super-vise the handling of personal information, competent ministers’ authorities to supervise personal information handling business operators have been unified and transferred to the Personal Information Protection Com-mission, resolving such problems as overlapping super-vision and unclear competent agencies. Another key point is that the revised law defines personal information processed into anonymous data as “anonymously pro-cessed information” and allows the anonymous data to be utilized for purposes other than originally intended ones or provided to third parties without consent from original data providers. The anonymously processed in-formation system aims to promote personal data utiliza-tion including data transactions between business opera-tors and linking data and is expected to contribute to creating new businesses and services and improving the convenience of people’s life.

B. Basic Act on the Advancement of Utilizing Public and Private Sector DataIn December 2016, the Basic Act on the Advancement

of Utilizing Public and Private Sector Data was enacted, promulgated and implemented. Under the recognition that Japan should further develop the environment that contributes to solving problems faced by Japan, such as responses to rapid progress in the decline of birth rates and the aging of population, by utilizing a wide variety and a great deal of information that is circulated via the Internet and other advanced ICT networks, the law aims to comprehensively and effectively promote measures for the appropriate and effective promotion of public and private sector data utilization and thereby contribute to realizing a society in which citizens can safely live free of anxiety and in a comfortable living environment.

(2) Present Domestic Discussions and Government PolicyIn line with the abovementioned legislative actions,

Japanese government agencies have proceeded with discussions on data distribution and utilization.

A. Declaration to be the World’s Most Advanced IT Nation and Basic Plan for the Advancement of Utilizing Public and Private Sector DataOn May 30, 2017, the Declaration to be the World’s

Most Advanced IT Nation and Basic Plan for the Ad-vancement of Utilizing Public and Private Sector Data was formulated. This document covers the earlier Decla-ration to be the World’s Most Advanced IT Nation and a basic plan as stipulated in the Basic Act on the Advance-ment of Utilizing Public and Private Sector Data, calling for promoting priority measures toward 2020 for eight priority areas -- electronic administration, health/health-care/nursing care, tourism, finance, agriculture/forest-ry/fisheries, manufacturing, infrastructure and disaster prevention/reduction, and transportation.

B. Growth Strategy 2017On June 9, 2017, the Cabinet decided on the Growth

Strategy 2017 as a new strategy. The strategy points out that thorough data utilization is one of the keys to put-ting technology innovation achievements of the fourth industrial revolution into society to dramatically increase productivity and that future investment should be accel-erated in developing data infrastructure as new social infrastructure. It thus calls for developing data utiliza-tion infrastructure. The strategy also refers to the Basic Act on the Advancement of Utilizing Public and Private Sector Data and the Basic Plan for the Advancement of Utilizing Public and Private Sector Data, seeking to com-prehensively and effectively promote the utilization of public and private sector data mainly in the abovemen-tioned eight priority areas.

C. Comprehensive IoT Strategy14

The Information and Communications Council of the Ministry of Internal Affairs and Communications com-piled a comprehensive IoT strategy15 in January 2017. It points out that Japan should learn lessons from its fail-ure to get on the wave of the ICT revolution as the third industrial revolution and achieve such economic growth as seen in the United States through ICT investment ex-pansion and should take all possible policy measures to survive global competition under the ongoing fourth in-dustrial revolution. The strategy then summarizes mea-sures for four layers – terminals, networks, platforms and services (data distribution).

14 In addition, the Industrial Structure Council of the Ministry of Economy, Trade and Industry released an interim report by a decentralization strategy working group of its information economy subcommittee in November 2016, citing the realization of hybrid data distribution systems under data portability, information bank and other approaches as one of the major issues and calling for initiatives to create a new data distribu-tion system based on individuals and promote data collaboration through the clarification of data ownership.

15 The third interim report by the Information and Communications Council on “new information and communications policy toward the IoT/big data age” (the 23rd request for recommendations in 2015).

http://www.soumu.go.jp/menu_news/s-news/01tsushin01_02000216.html

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2. Open Data Initiatives and Problems at Local Governments(1) Open data initiatives and challenges

Local governments that have already been promoting open data initiatives have been increasing. In the latest survey, 230 (20.8%) of 1,104 local governments answered that they were promoting such initiatives. If those con-sidering such initiatives or collecting information on them are included, the percentage share rises to 40.8%16(Figure 2-2-2-1). Among types of data being pro-vided or considered for provision, public facility informa-tion was cited most frequently (by 68.3% of respondents). Those citing information on disaster prevention, tour-ism, education and healthcare/nursing care/welfare ar-eas increased substantially from three years earlier. As problems with promoting open data efforts, the clarifica-tion of specific use images and needs was cited by 69.2% and the materialization of data providers’ effects and ad-vantages by 61.5%, indicating increases from three years earlier.

3. Present Situation and Problems for Companies(1) Data Utilization Situation and ProblemsA. Industrial Data17

Japanese companies lag behind foreign firms in utiliz-ing industrial data aggressively or to some extent for developing or providing services. Among the four coun-tries, the United States indicates a particularly high per-centage share of companies utilizing industrial data (Figure 2-2-3-1).

B. Personal DataNext, companies’ utilization of personal data for ser-

vice development and provision has made less progress than their utilization of industrial data in all four coun-

tries, indicating that personal data utilization is still in transition (Figure 2-2-3-2). Japanese companies utilize slightly less personal data than foreign companies. Among challenges and barriers against handling and utilizing personal data at companies, the most frequently cited challenge is great incident risks or social responsi-bility accompanying personal data management. Partic-ularly, Japanese companies cite the challenge more fre-quently than foreign firms, indicating their sensitivity to the challenge. Japanese companies also cite shortage of data handling human resources far more frequently than foreign firms.

16 According to a survey by the Cabinet Secretariat, local governments implementing or planning open data initiatives accounted for about 32% of the total (as of February 2017) (reference data for the second meeting of the open data working group of the data distribution environment development study panel)

17 The Report of Study Group on Data and Competition Policy (July 2017, Japan Fair Trade Commission Competition Policy Research Center, hereinafter referred to as “Study Group Report”) interprets data collected by various sensors on equipment, human bodies, soil and other tangible objects as “industrial data.”

http://www.jftc.go.jp/cprc/conference/index.files/170606data01.pdf


Figure 2-2-3-1 Data utilization for service development and provision (industrial data)

16.48.3

41.0 34.3 31.7

35.4

22.3

28.430.2 40.4

25.3

36.3

20.1 24.019.2

22.933.1

10.5 11.5 8.7

0

20

40

60

80

100（%）

Japanese ordinary companies(N=364)

Japanese ITAC companies(N=157)

UK companies(N=96)

German companies(N=104)

Utilizing data aggressivelyalready

Utilizing data tosome extent

Failing to utilize data but considering utilizing data

Having no plan toutilize data

US companies(N=95)

(Source) “Survey Research on Present Status of Regional ICT Utilization.” MIC (2017)

Figure 2-2-2-1 Implementation of open data initiatives at local governments

61 71

230

10.2

23.9

40.8

0

10

20

30

40

50（%）

0

50

100

150

200

250

FY2012 survey（n=895）

FY2013 survey（n=733）

FY2016 survey（n=1,104）

Number of local governmentspromoting initiativesPercentage share of localgovernments promotinginitiatives

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4. Awareness Gaps between Consumers and CompaniesThis paragraph looks into factors for worries about

the provision of consumers’ personal information or data and analyzes awareness gaps between individuals and companies based mainly on their surveys.

(1) Factor Analysis of Consumers’ InsecurityWe collected and analyzed comments on companies’

utilization of personal information for Internet services and found numerous key words and their relevance (Figure 2-2-4-1). Remarkable words related to the key word of “insecurity” include “leaks,” “outflow” and the meaning of “worries,” indicating consumers’ general worries about information leaks as incidents. Many con-sumers call for enhancing companies’ security control, some of which are deleting information after a certain period of time and providing veto power to consumers, suggesting needs for data deletion rules and an opt-out system.

Meanwhile, respondents who tolerate companies’ uti-lization of personal information to some extent say they tolerate such utilization in order to receive more conve-nient, better services. Indications are that they decide on their provision of personal information or data based on benefit they receive in exchange for the provision.

Consumers’ comments are accompanied by precondi-tions including the provision of necessary information such as purposes for data utilization, advanced notifica-tion and confirmation to users, and companies’ security and data control, suggesting that personal data utiliza-tion is established under confidential relationships be-tween consumers and companies. Remarkable key words in comments on the provision of personal infor-mation in exchange for services include “no choice” and “unavoidable.” Out of 1,438 comments, 339 comments or 24.6% contained such key words. These comments indi-

cate that consumers, while being “insecure,” use ser-vices under the awareness that they “inevitably” provide their personal information.

(2) Comparison between Individuals’ Awareness and Companies’ AwarenessMatching between individuals’ and companies’ views

about the handling of personal information or personal data may be important for developing their confidential relationships. In the big data age, however, companies utilizing personal information tend to view such informa-tion as their proprietary asset, and consumers generally interpret personal information as their personal asset. Consumers and companies thus have an awareness gap (Figure 2-2-4-2).

Comparison between key points given priority by indi-viduals providing personal information to companies and by companies acquiring such information from indi-viduals indicates that individuals emphasize “ensuring security.” Research results in present and past white pa-pers on information and communications in Japan show that individual attention has grown more interested in ensuring security. Companies for their part give priority to acquiring appropriate consent to data provision. Com-panies are thus required to increase their accountability in response to consumers’ requests. How about informa-tion companies should provide to individuals when pro-viding and collecting personal information or personal data? There is also a gap on this point between individu-als and companies, as is the case with the abovemen-tioned priorities. Generally, both companies and indi-viduals frequently cite “purposes for data utilization,” while individuals growingly give priority to “means to ensure security,” “method to delete data” and “opt-out policy” (Figure 2-2-4-3).


Figure 2-2-3-2 Data utilization for service development and provision (personal data)

12.9 13.1 18.729.5 28.9

33.6 28.6

35.2

30.5 30.9

31.447.6

32.9 23.229.9

22.110.7 13.2 16.9

10.3

0

20

40

60

80

100（%）

Japanese ordinary companies(N=357)

UK companies(N=95)

Japanese ITAC companies(N=168)


US companies(N=91)

Utilizing data aggressivelyalready

Utilizing data tosome extent

Failing to utilize data but considering utilizing data

Having no plan toutilize data

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Figure 2-2-4-2 Key points given priority for data collection and provision (Japan/comparison between individuals and companies)

40.1

16.4

21.2

38.6

11.615.6

11.5 10.0

7.0 12.86.1 3.92.6 2.7

0

20

40

60

80

100(%)

Individuals(N=1030)

Companies(N=616)

Incentives for data provision (merits including services)Explain outline of data-handling organizations / companiesSpecify types and categories of dataPurposes for utilizing dataAppropriate data handling methodsAcquiring appropriate consent to data provisionEnsuring security


Figure 2-2-4-1 Awareness about services utilizing personal information (text analysis results)

Comments (negative attitude toward information provision)

Comments (positive attitude toward information provision)

Shopping

Internet

Convenient

Inevitable

Utilizing

Utilizing

Services

Using

Shopping

Largefirms

Registering

Utilizing Having

Self

Taking

Individuals

Questionnaire survey

Responsibility

Website

Insecure

Worrisome

Concerned

Personal information

Information

ProvidingLeaks

ControlOutflow

Individuals

ResponsibilitySpecifying

Control

Strict

Rigorous

Thorough

Information

Personal information

InsecurityGreat Feeling

Leaks

Information

I am concerned about the provision of personal information, but I think that the convenience of using the Internet surpasses any negative aspects.In the case of online shopping sites, etc., information provision is unavoidable to some extent. I do not care if the company takes security measures to avoid information leakage.We provide personal information and receive services. It is just a game of give and take.I think as the provision of personal information depends on confidential relationships, any decision on what Internet service to use is up to consumers. If I use a service at my own risk, the utilization of personal information may be natural.As far as we use services, some risks may be inevitable.

It may be unavoidable to provide personal information to some extent, but I am afraid that the information I provide may be used illegally for advertisement mails or otherwise leaked.Although services are convenient, I am concerned that my information might have been leaked.I feel anxious because I cannot check how strictly our personal information is managed.It depends on what kind of personal information is utilized for what purposes, but I fear any wrongful use.No one may be able to identify specific individuals with name and age information alone. If I am requested to provide my address and telephone number, however, I may be very insecure in consideration of leaks or resale. Security should be carefully controlled.While the provision of information may be inevitable, I am worried about leaks. I want personal information to be deleted after some period of time.I am very insecure. I want to have the right to veto the utilization of my personal information.

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The previous section reviewed Japanese challenges focusing on the awareness of local governments, compa-nies and consumers about data distribution and utiliza-tion. As noted in Section 1, data distribution and utiliza-tion have become a global trend. As cross-border data

distribution increases, international discussion on data distribution and utilization is making progress. This sec-tion overviews the present and future situations of such international discussion.

1. Current Status and Problems for Cross-border Data DistributionThis paragraph summarizes the present situation and

problems for cross-border data distribution.

(1) Growing Cross-border Data DistributionThe cross-border distribution of data is attracting at-

tention in addition to that of humans, goods (trade) and money (finance). Border-crossing data here widely range from information to search, communication, transaction, videos and business-to-business data. Ac-cording to an analysis by the McKinsey Global Institute, cross-border data traffic has explosively grown thanks to the construction of the web linking countries, compa-nies and individuals. From 2005 to 2014, cross-border data traffic increased some 50-fold from 4.7 terabits per second to 211.3 Tbps, according to the institute.

As for data traffic across the Japanese border, both inward and outward traffic between Japanese and for-eign Internet service providers has increased dramati-cally. Particularly, inward traffic expanded some 50-fold from 2004 to 2016, scoring the same growth as the abovementioned global traffic (Figure 2-3-1-1).

An international questionnaire survey covering com-panies indicates that those implementing outward data provision account for about 70% of U.K. and German companies, for about 60% of U.S. companies and for

about 40% of Japanese companies. Particularly, more Eu-ropean companies’ provide data outward (Figure 2-3-1-2).

(2) Regulations and Other Legal Systems Regarding Cross-border Data TrafficWhile massive data are distributed across borders

amid the globalization of companies’ business opera-tions, some foreign countries have established and im-plemented legal systems for data localization to regulate cross-border data distribution for such purposes as (1) privacy protection, (2) domestic industry protection, (3) national security and (4) law enforcement and crime in-vestigations.

Data localization is designed (1) to restrict data trans-fer themselves or (2) to control data transfer for possess-ing it domestically and keeping data collected from cus-tomers (including company-owned data) (Figure 2-3-1-3).

(3) Companies’ Responses to Data LocalizationWhile data localization regulations have been intro-

duced in some countries for their respective purposes or reasons, any new regulations seriously affect compa-nies’ global business operations. Companies are re-

Section 3　Broadening International Discussion


Figure 2-2-4-3 Information given priority for consent to personal data provision and utilization

65.8

57.6

46.6 46.242.6

38.333.9 33.1

26.9

51.3

20.1

34.4

24.216.8

11.213.5 13.5

6.7

74.1

34.1 45.4 34.6

17.5 28.6 15.418.2 16.2

0

10

20

30

40

50

60

70

80（%）

Individuals (N=1030) Ordinary companies (N=616) ITAC member companies (N=185)

Purp

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(Source) Prepared from “Japanese Internet Traffic Aggregation and Estimation,” MIC

Figure 2-3-1-1 Data traffic between Japanese and foreign ISPs

25

1,222

14

354

0

200

400

600

800

1,000

1,200

1,400

Sep Oct Nov May Nov May Nov May Nov May Nov May Nov May Nov May Nov May Nov May Nov May Nov May Nov May Nov

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Traffic between Japanese and foreign ISPs (in) Traffic between Japanese and foreign ISPs (out)

(Gbps)


21.4

44.5 38.646.510.8

6.5 15.111.9

7.8

6.517.2 11.9

7.3

5.5

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20.5 23.7

0

10

20

30

40

50

60

70

80

90

100(%)

No data provision in the past and at presentData provision done in the past but no provision at presentOnly inward provisionOnly outward provisionBoth inward and outward provision

Japanese ordinarycompanies(N=354)


UK companies(N=93)

US companies(N=92)

Figure 2-3-1-2 Companies’ cross-border data provision


Figure 2-3-1-3 Data localization

①Restricting data transfers themselves ②Controlling data transfers to domestically keep data

Country A Country B

Headoffice

DBDB

Branch

Country A Country B

Headoffice

DBDB

Branch

Companies in Country A are banned from directly collecting data of residents in Country B

(individuals’ own consent is required).

Datatransfer

SynchronizationSynchronizationServer installation

requirement

Individuals

Datatransfer

Individuals or devices, etc.

Data is required to be kept in Country B (Data kept in Country B may be banned from being transferred)

●Example: EU general data protection regulation (GDPR)●Mainly personal data is regulated for protecting domestic

citizens’ privacy.

●Regulation is designed primarily to promote domestic industry or ensure national security.

●Data (including those other than personal data) collected in a country must be kept domestically.

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quired to improve their awareness of such data localiza-tion regulations as the European Union’s general data protection regulation (GDPR) and take responses to them.

An international questionnaire survey on companies’ awareness of data localization effects on their business operations indicates that more than a half of companies

including Japanese firms are concerned about such reg-ulations (Figure 2-3-1-4). Particularly, nearly 50% of U.S. firms are concerned very much, suggesting their strong attention on these regulations from the viewpoint of business continuation. Given that the GDPR is limited to the EU, nearly 20% of U.K. and German companies are optimistic.

1. Comparing International Infrastructure for Data Distribution and Utili-zation

We here understand Japan’s position from the view-point of international comparison anew and summarize relevant challenges. We have assessed Japan’s position from the viewpoints of individuals and companies. The assessment is based on three indicators for individuals – “individuals’ understanding about data provision,” “willingness to use services utilizing personal data,” and “individuals’ security about companies” 18 – and two indi-cators for companies – “ambition to utilize industrial data” and “ambition to utilize personal data” (Figure 2-4-1-1). Indicators for Japan are lower than for other coun-tries. Japan’s gap with other countries is particularly wide for individuals’ “willingness to use services utiliz-ing personal data” and companies’ “ambition to utilize personal data.” These indicators may be interdependent, suggesting that Japan’s gap with other countries may narrow as consumers’ interest in such services and will-ingness to use such services grow in line with progress in companies’ positive utilization of data.

Section 4　Future Outlook Compilation and Recommendations

18 Individuals were questioned about how they feel about a case in which companies utilize personal data for service provision after processing data provided by individuals into anonymous data. They were asked to select one from five alternative answers – “very secure,” “relatively se-cure,” “not so secure,” “not secure” and “uncertain.”


Figure 2-4-1-1 International comparison regarding data distribution and promotion environment

0

20

40

60

80

100

Individuals’ understandingabout data provision

Individuals’ willingnessto use services utilizing

personal data

Individuals’ securityabout companies

(regarding informationprocessing, etc.)

Companies’ ambitionto utilize data

(personal data)

Companies’ ambitionto utilize data

(industrial data)

US UK Germany Japan


Figure 2-3-1-4 Companies’ awareness of data localization

9.920.7

47.2

15.2 9.9

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24.5

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29.6 24.113.2

25.8 28.2

0 7.5 10.6 14.10 3.8 9.1 2.85.6 1.42.8

13.8 3.8 1.5 2.8

0

20

40

60

80

100(%)

We don’t knowOptimisticSomewhat optimisticNot particularly concernedConcerned somewhatConcerned very much

Japanese ordinarycompanies(N=616)

Japanese ITACcompanies(N=181)

US companies(N=107)

UK companies(N=107)


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2. Recommendation Regarding Future OutlookInternational comparison regarding data distribution

and utilization in the previous paragraph allowed us to know Japan’s position among developed countries and find challenges for Japan. Given that data distribution has various aspects, it is important to measure indica-tors quantitatively from multiple viewpoints. Progress in frameworks and international talks to quantify the eco-

nomic value of cross-border data distribution taken up in Section 3 may be interpreted as the first step to this end. Such viewpoints and initiatives are expected to increase understanding about new values created through the combination of networks, data and industrial competi-tiveness and promote economic contributions (Figure 2-4-2-1).

(Source) White Paper on Information and Communications 2016

Figure 2-4-2-1 New values created by networks and data

Real world

Utilization services

AI

Big data

Analysis based on data

Cyberspace

Control based on analysis

resultsSending of data

Feedback to the real worldSocial issues

Automated driving

Automated drivingSmart

factoriesSmart

factoriesHealthcareHealthcare

EMSEMS

Laborshortage

Laborshortage Increase of

medical costIncrease of medical costResource

depletionResourcedepletion Increase of

care burdenIncrease ofcare burden

Creation of new valueSolution of issues

Sensing DigitalizationConversion and extraction of data

IOT

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