The 2025 Information & Communications White Paper

Japan's Ministry of Internal Affairs and Communications (MIC) has published the "Reiwa 7 (2025) Information and Communications White Paper," presenting a critical analysis of the nation's digital landscape. Framing 2025 as a "quarter-century mark" in the 21st century, the white paper establishes its central thesis: digital technology has evolved from a mere tool into a fundamental form of "social infrastructure," as essential as roads, electricity, and water.

This transformation brings both immense opportunities and unprecedented challenges. The white paper outlines the deep penetration of digital services in daily life and business, the explosive advancements in Artificial Intelligence (AI), and the growing dominance of foreign tech giants. It contextualizes these digital trends within a broader landscape of pressing national and global issues, including geopolitical instability, intensifying natural disasters, and Japan's severe demographic decline. The document serves as a stark warning and a call to action, arguing that Japan must urgently address its digital vulnerabilities and strategically leverage technology to solve its most critical social and economic problems.

The white paper is structured into two main parts:

• Part I (Special Feature): An in-depth look at the expanding role of "Digital as Social Infrastructure," covering its penetration, the challenges it creates, and its potential for solving societal issues.
• Part II (Current Status and Issues): A detailed review of the current state of Japan's ICT market and the corresponding policy initiatives undertaken by the MIC.

Part I: The Expanding Role of Digital as "Social Infrastructure"

1. The Deep Penetration of Digital into Society

The white paper begins by quantifying the extent to which digital tools have become indispensable in Japan.

• Ubiquitous Connectivity and Device Shift: The primary means of accessing the internet has decisively shifted to smartphones. This trend spans all age groups, with a remarkable 78.8% of individuals in their 60s now using smartphones as their main internet device in 2024. This highlights that digital access is no longer a phenomenon limited to the young.
• Dominance of Social Media and Cloud Services: Social media platforms are deeply integrated into the lives of most Japanese citizens. In 2024, YouTube usage reached 88.3% of the total population (and 71.2% among those in their 60s), while X (formerly Twitter) is used by 50.3%. In the corporate world, the adoption of cloud services has become standard practice, with utilization doubling in the last decade to 80.6% of businesses. This signifies a fundamental reliance on digital platforms for communication, entertainment, and business operations.
• The Internet as a Primary News Source: The internet has surpassed traditional media as a key source of information. In 2024, 46.8% of people cited internet portals and aggregators (non-newspaper sites) as their most-used source for text news, a significant increase from 31.6% in 2014. For all age groups up to 50, the internet is now considered the "most indispensable" information source. Social media, particularly YouTube, is used as a news source by approximately 30% of people across all generations, indicating its growing role in shaping public discourse.
• The Trust Deficit: Despite its ubiquity, a critical challenge remains: the low level of trust in online information. The survey data shows that while usage is high, the credibility of the internet (27.0%) lags far behind that of television (58.2%) and newspapers (59.9%). This "trust deficit" is a core tension that underpins the later discussion on disinformation.

2. The AI Revolution: A Double-Edged Sword for Japan

The white paper dedicates significant attention to the "explosive progress" of AI, identifying it as a field of fierce global competition with profound implications for Japan.

• Global AI Trends: The world is witnessing two parallel developments in Large Language Models (LLMs). On one hand, there is a race to build ever-larger, more powerful models, such as OpenAI's o1 and the Chinese startup DeepSeek's DeepSeek-R1. On the other hand, there is a growing trend towards developing smaller, highly efficient models like Microsoft's Phi-4, which are suitable for on-device or specific-purpose applications. This dual trend is rapidly changing the technological frontier.
• Japan's Lagging Position and Catch-Up Efforts: The document frankly assesses Japan's position as lagging behind global leaders. The "Global AI Vibrancy Tool" (2023) ranks Japan 9th, trailing countries like the US, China, the UK, and South Korea. However, the paper also highlights a surge in domestic efforts to develop sovereign AI capabilities. Key examples include:
  • A model based on Meta's Llama 3.1, with enhanced Japanese language capabilities, developed by AIST and Tokyo Institute of Technology.
  • "Takane," an LLM developed by Fujitsu in partnership with the Canadian AI startup Cohere.
  • Models from Japanese companies like CyberAgent and Preferred Networks, whose PLaMo-100B reportedly surpasses GPT-4o in Japanese language performance.
• The Critical Adoption Gap: Despite these development efforts, Japan faces a significant AI adoption gap.
  • Individual Use: Only 26.7% of individuals in Japan have experience using generative AI services. This is dramatically lower than in the US (68.8%), Germany (59.2%), and China (81.2%). While this represents a threefold increase from 2023, the gap with other nations is widening. Adoption is highest among the youth, with 44.7% of those in their 20s having used generative AI.
  • Corporate Policy: A mere 50% of Japanese companies have established a formal policy regarding the use of generative AI. This figure reveals a stark divide between large corporations (56%) and small-to-medium enterprises (SMEs), where only 34% have a defined policy. This lack of strategic implementation at the corporate level, especially among SMEs, is a major barrier to realizing AI's productivity benefits.

3. Economic Vulnerability in the Digital Domain

The white paper paints a concerning picture of Japan's economic standing in the global digital economy.

• Dominance of Foreign Platforms: A chart comparing the revenues of global tech giants (Amazon, Apple, Google, Microsoft) with Japan's largest companies (Toyota, NTT) starkly illustrates the scale of foreign dominance. These overseas platform providers have grown exponentially by leveraging data and establishing powerful ecosystems.
• Low Market Share and a Growing Trade Deficit: Japan's share in key global ICT markets is minimal. For instance, in the domestic smartphone market, Apple holds a commanding 59% share. In the global market for ICT goods and services, Japan is increasingly becoming a net importer. This has resulted in a large and growing trade deficit in both:
  • Digital Services (e.g., cloud computing, software licenses, online advertising): A deficit of -6.7 trillion yen in 2024.
  • ICT Goods (e.g., smartphones, PCs): A deficit of -3.4 trillion yen in 2024.

This economic dependency represents a significant strategic vulnerability for the nation.

4. Confronting Overlapping National Crises

The white paper stresses that these digital challenges do not exist in a vacuum. They are compounded by a set of severe, overlapping crises facing Japan.

• Geopolitical Instability: Global tensions, exemplified by conflicts in Ukraine and Gaza, are increasing geopolitical risk and impacting supply chains and cybersecurity.
• Climate Change and Natural Disasters: Japan is experiencing an intensification of natural disasters, with a clear trend of more frequent and severe rainfall events. This places enormous strain on physical and digital infrastructure.
• Demographic Crisis: Japan's aging and shrinking population is its most profound long-term challenge. The working-age population is projected to decline by 26.2% between 2020 and 2050. This is fueling severe labor shortages and accelerating the depopulation of rural areas, leading to further population concentration in major metropolitan areas like Tokyo.
• Economic Stagnation: Japan's labor productivity continues to lag behind other developed nations, ranking 26th out of 38 OECD countries in 2023. This sluggishness hampers its ability to compete globally.

Key Challenges and Strategic Imperatives

Based on this analysis, the white paper outlines four principal challenges that Japan must urgently address to secure its future in the digital age.

1. Ensuring a Reliable and Sovereign Digital Infrastructure: With the demand for data, computing power, and electricity soaring due to AI and digitalization, Japan's over-reliance on foreign technology and infrastructure is a major concern. The high concentration of data centers in the Tokyo and Osaka regions also poses a resilience risk. The imperative is to build a robust, secure, and sovereign digital foundation to support the economy and ensure national security.
2. Navigating the New Challenges of AI: While AI is a source of innovation, its risks are widespread, including biased outputs, intellectual property infringement, and misuse for malicious purposes. Given Japan's lag in adoption and development, a dual-pronged strategy is required: aggressively promote AI innovation and industrial application while simultaneously establishing robust governance and risk management frameworks.
3. Combating Disinformation and Misinformation: As the internet becomes the main channel for information, the proliferation of false and misleading content poses a direct threat to social cohesion and democratic processes. A comprehensive strategy is needed, combining regulatory measures, the development of counter-technologies, and a national effort to improve digital literacy among citizens.
4. Strengthening Cybersecurity: Cyberattacks are growing in sophistication and frequency, fueled by global instability. Protecting critical infrastructure and personal data requires a holistic, multi-stakeholder approach that enhances government capabilities, fosters public-private partnerships, strengthens international cooperation, and raises public awareness.

The Path Forward: Digital Technology as a Solution

Despite the daunting challenges, the white paper concludes on a hopeful note, positioning digital technology as the key to solving Japan's most pressing societal problems.

• For Economic Revitalization: Strategic use of digital technology, especially AI, is essential for boosting productivity and enhancing Japan's international competitiveness. The nation must focus on developing its strengths and securing a competitive edge in next-generation digital infrastructure and key services.
• For Regional Revitalization: Digital tools offer a lifeline to Japan's depopulating rural regions. They can enable remote work, deliver high-quality education and healthcare, optimize agriculture, and maintain essential services, thereby improving the quality of life and creating new economic opportunities outside of major cities.
• For Disaster Resilience: Digital technology is critical for building a more disaster-resilient society. This includes advanced early warning systems, real-time information dissemination, and ensuring the robustness of communication networks and digital infrastructure during and after disasters. A public survey included in the paper shows that "preparedness for natural disasters" is a top-priority social issue (62.1%) for the Japanese people.

Part II: ICT Market Status and MIC Policy

The second part of the full white paper provides a more granular look at the current state of Japan's ICT sector and the specific policies the Ministry of Internal Affairs and Communications is implementing. This section covers a wide range of topics, including:

• Trends in the ICT industry, telecommunications, broadcasting, and content sectors.
• Policies related to spectrum allocation (radio waves), ICT devices, and platform governance.
• Initiatives in AI, cybersecurity, and digital utilization.
• International ICT strategy and the future of postal services.

In essence, Part II details the concrete actions the government is taking to address the challenges and seize the opportunities outlined in Part I, forming the policy backbone of Japan's national digital strategy.

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