In the Nikkei newspaper,
University of Tokyo professor Noriyuki Yanagawa wrote an article titled, “With
IT Development, Investment will also Change.” This is a very important point.
His argument is as follows.
1. IT
such as the Internet, applications, social networking, etc., is already
becoming the base of an energized sharing economy and block chain. Google and
Amazon, etc., have developed open source AI and related services.
2.
These new technologies are infrastructure that stimulates investment. New types
of infrastructure like this are important, and IT and AI are the engines that
produce the new infrastructure, the infrastructure of infrastructure.
3.
Private sector companies are responsible for the new infrastructure, and have
the characteristic of encouraging change and development. The strategy is to
increase investment in superior new infrastructure, and thus increase the
number of businesses that use it.
This theory could lead to the
reform of public economics. Infrastructure such as roads, airports, water,
electric power, etc., which are public assets, have not been run as businesses,
but as a fulfillment of the “public” role of national and local governments,
charitable corporations, etc. Tax revenues and fees for usage covered the
costs.
The new infrastructure is
provided by purely private companies at no charge. By using economies of scale,
they receive revenues from derived business, as well as from big data such as
customer information.
As a supporter of this,
Professor Yanagawa has higher expectations for large corporations than for
venture companies. I also believe that, rather than depending on venture
companies because it’s a new field in Japan, it is more realistic to treat it
as infrastructure with large-scale investment from large companies.
However, one problem is that
both IT- and AI-related infrastructure cross national borders, and as
restrictions can’t be imposed on foreign investment, powerful global companies
tend to dominate. Another point is that national power can’t compete. This is
another reason why the concept of public economics as being based on measures
put into operation by sovereign nations must be reconsidered.
On the other hand, “the
failure of the markets” as described in public economics is another topic for
discussion here. The issue is how to overcome greatly reduced investment in
infrastructure. Professor Yanagawa also mentioned that the decline in capital
investment due to infrastructure utilization will lower the total economic
demand. I want him to analyze this as part of the study of economics.
Reaching across industries is
one of the characteristics of the new infrastructure. This is because new rules
different from conventional sector-specific business laws are required.
In order to maximize the
welfare of these new infrastructures, the recommended policy is to promote
investment and broaden the benefits of utilization.
The government must break
down the vertical divide, and decide on measures for the easing of regulations
and rules for the promotion of utilization. Tax measures to promote investment
in and use of the new infrastructure will also be effective.
On the other hand, targeting
measures to cultivate certain fields through subsidies are likely to fail.
Rather, it seems better to encourage private investment by making the
government itself a leader of demand.
For this reason, a
comprehensive strategy is required. The government offices of IT and
Intellectual Property are in charge of hardware/software strategy, and
Professor Yanagawa and I participate, but we really want a different strategy
theory to encourage new infrastructure investment.
