Surviving in the Digital Transformation Era; Technical Trends and Issues from the Perspective of The Telecommunication Technology Committee

1.1 TTC overview

The TTC is certified by the Ministry of Internal Affairs and Communications of Japan to standardize information and communication technology (ICT). The purpose of this organization is to contribute to standardization in the information and telecommunications field and to promote the spread of standardization by creating standards related to information and telecommunications networks.

TTC is a members-only organization in which 95 companies, including the NTT Group, information and telecommunications companies, and information technology (IT)-related companies, participate. Members can participate in standardization activities by participating in working groups (WGs) and can also participate in seminars and events for free or for a fee. Members actively interact with each other through activities of the WGs and other events.

1.2 TTC standardization activities through WGs

The TTC has 18 WGs that are organized in 5 technical fields. This organization is based on the layered structure of a telecommunications network. The WGs gather information on related technologies and hold discussions related to standardization. In addition to the WGs, there are sub-WGs, ad hoc groups, and liaison committees (Fig. 1).

Fig. 1. Organization of WGs in TTC (as of June 2019).

The Telecommunications System Committee of the Ministry of Internal Affairs and Communications has decided to refer upstream activities concerning all study groups (SGs)^*1 (excluding SG3 and SG9) and the Telecommunication Standardization Advisory Group (TSAG)^*2 of the International Telecommunication Union - Telecommunication Standardization Sector (ITU-T)^*3 to TTC. These activities include deliberating in advance on Japanese contribution letters (proposal documents), drawing up a Japanese response policy, and, if necessary, submitting proposals to the Telecommunications System Committee. In addition, the TTC is recognized as a qualified standardization organization that ITU-T can exchange information with; ITU-T can also use TTC documents as a reference in ITU-T standardization documents, according to ITU-T Recommendations A.5^*4 and A.6^*5. WGs within the TTC conduct these activities.

1.3 TTC standardization examples

Here, two examples of standardization addressed by TTC in 2018 are introduced. The first example concerns immersive live experience (ILE), which is represented by NTT’s Kirari! technology. ILE enables real-time transmission of sports events and entertainment performances to remote locations and provides an ultra-realistic live experience. Service scenarios and frameworks of ILE were standardized based on a proposal from Japan.

The second example is an international standard that defines design, test, and evaluation methods and quality standards for countermeasures against soft errors, which are malfunctions of terrestrial communications equipment caused mainly by cosmic rays. A soft error is not an error that permanently causes the device to fail, but a temporary failure that can be recovered by, for example, restarting the device. It has recently become possible to measure the effects of soft errors on telecommunications equipment by using a compact accelerator-driven neutron source. Consequently, design and evaluation indices of soft errors were required. This is an example of Japan’s proactive proposal that embodies the strategy of the standard is not to follow; it is to make.

2.1 Benefits of standardization from a business perspective

Standardization provides many benefits as part of a business strategy. By ensuring compatibility and consistency through standardization, companies can improve production efficiency. Standardization also leads to cost reductions through mass production and simplification. Furthermore, the early adoption of standardization technology will lead to first-mover profits and license income. Finally, it is possible to create an ecosystem in which technologies and business models become more prevalent, competitiveness increases, and ultimately all stakeholders benefit.

In this way, the opening of the market promotes social trade, and the establishment of rules to meet the environment and standards leads to improvements in safety and security.

Not only is safety guaranteed for users, but a variety of companies participate in standardized specifications, and a variety of products are available on the market, which broadens the range of choices. Standardization is therefore a strategy that benefits all stakeholders (Fig. 2).

Fig. 2. Benefits of standardization from a business perspective.

2.2 Strategic use of standards

Standards are classified into three categories: de jure, forum, and de facto, and they need to be strategically used for different purposes.

(1) De jure standards

De jure standards are established by formal standards organizations, for example, the ITU. The TTC is also classified as an organization that develops de jure standards. De jure standards have great impact on global markets and developing countries, but because of the involvement of national administrations, deliberation and coordination may take time.

(2) Forum standards

Forum standards can be formed through the efforts of multiple companies or organizations to speed up the development of standards. Representative examples of such organizations are the Internet Engineering Task Force (IETF)^*6, the Institute of Electrical and Electronics Engineers (IEEE)^*7, and the World Wide Web Consortium (W3C)^*8. Forum standards are disadvantageous for small businesses and developing countries because standardization is influenced by power relationships centered on developed companies.

(3) De facto standards

De facto standards, also known as market-driven standards, are standards that are adopted widely by an industry and customers. One example is typified by the Windows operating system.

It is important that standardization is carried out strategically in consideration of the balance between the areas of cooperation that are open to the market through standardization and the areas of competition that are not standardized in terms of improving competitiveness.

2.3 Standardization as the role expands

In this age where the market has matured and customer needs have diversified, it is more difficult to create innovative services, and it is not easy to keep up with the changes that are accelerating with the development of ICT. Until now, the worldwide trend has been to develop technologies that make the best use of existing management resources and then to standardize and commercialize them. However, as many companies feel that creating services on their own is time consuming and costly, they have shifted to an open innovation system in which they create services beyond the confines of their company and have been moving to a user-oriented development system in which we think about services based on user issues and the way the services should be. As a result, the role of the TTC has been shifting from technology to marketing in corporate support (Fig. 3).

3.1 Digital transformation and Sustainable Development Goals (SDGs) required for enterprises

The evolution of technologies such as the Internet of Things, big data, and artificial intelligence (AI), which affect the way society should be (i.e., a modern, well-functioning society), has accelerated cross-industry collaboration, and the transformation of the industrial structure has been remarkable. The digital transformation (DX) is progressing; this refers not only to the digitization of existing businesses but also the transformation of business models using digital technology. Achieving the United Nations SDGs has become a common practice in global markets, and Japanese companies also face an urgent need to promote activities to achieve them (Fig. 4).

Fig. 4. DX and SDGs required for enterprises.

3.2 Reality of Japanese companies in the global market

Japanese companies face a difficult situation in the global market. About 30 years ago, there were 32 Japanese companies in the top 50 in the world market capitalization ranking, but in 2018, there was only 1, Toyota. In contrast, the United States had 32 companies in the ranking. IT companies are on top, and the rise of Chinese companies is obvious (Table 1).

Table 1. Comparison of world market capitalization rankings.

3.3 Trends at the Consumer Electronics Show (CES) 2019

Samsung from South Korea won numerous Innovation Awards at CES 2019, topping the list of companies with the number of wins. CES is the world’s largest consumer electronics trade show and is held annually in Las Vegas, US. Japan had little presence at the event, including exhibition booths. Many of the exhibits from other countries featured combinations of existing technologies such as robots and beauty appliances that were popular in Japan some years ago, but with sensors and other advances. Innovation is not only about developing cutting-edge technology but also about combining existing technologies and reworking them in innovative ways.

3.4 Trends in ITU-T participating companies

The membership of ITU-T, which is a representative de jure standardization organization, has increased significantly in recent years. More than half of the participating companies are in the traditional IT communication field, involved in areas such as quantum communication, digital currency, MVNO (mobile virtual network operator), and over-the-top (OTT). However, insurance companies and those in the automobile industry are also participating, and the range of fields represented by the participating companies is expanding. Since 2017, 4 companies in Japan (Canon, Murata Manufacturing, Softbank, and Internet Initiative Japan) have joined ITU-T, in addition to 13 companies in China and 15 in the US. China leads the number of ITU-T contributions by country, with 27%, followed by South Korea with 11%, the United States with 10%, and Japan with 4%. In China, companies as well as the government actively participate in standards activities.

3.5 Global responses to SDGs

No Japanese company has been selected as one of the 50 leading companies in the world that support SDGs. The overwhelming majority are in the United States, and half are in Europe. In Asia, companies in Hong Kong and Singapore are most prominent. By industry, there are many medical, infrastructure, and chemical manufacturers. As Japan is lagging behind other countries in SDG efforts, it can be expected that the formulation of SDG rules will proceed mainly through the efforts of Europe and the United States.