Rapid advances are being made in the practical specialist proficiencies and knowledge required in real society. Computer skills indispensable for business activities must be newly acquired on a daily basis. Further, network technology is making the most startling advances of all. To be specific, no matter how trifling this information is asserted to be by academics, if a company does not have personnel who have mastered it, the work of the company is stymied in its entirety. Our recollections of a breakdown in the Mizuho Bank information system causing significant problems some time ago are fresh. This illustrates that the economy does not run solely on the basis of high-level philosophies and theories. Naturally we have experienced in practice to an unpleasant degree the vital nature of factors such as the prospects for the economy and business ethics. However, the phases of business activity in which philosophies and practical technical skills function differ. Whilst both are necessary, that which is currently lacking is US-style specialist knowledge and skills. Whilst a number of companies, including our own, are responding to this lack, the response is, from the perspective of society's needs, far too insubstantial and scant. This is due to excessive regulatory controls.

The following three issues are topical issues in today's Japanese economy. [1] The employment safety net [2] Measures for SMEs and micro-businesses and [3] the expansion of GDP and the taxation base that undergirds the national finances. Service industries, beginning with the education industry, will provide the answer to all three of these issues simultaneously.
Turning firstly to unemployment, as the neo-classicist economists say, the usual mismatch theory will not resolve matters. Those currently unemployed were laid off from the industries in which they worked as a result of restructuring or downsizing. The "new growth industries" are the sectors now employing large numbers of people. In other words, the fact is that the unemployed have to find work in fields where their past careers will be of no assistance. They have not acquired the technical skills and knowledge required by business. The technical skills businesses seek are new because they have only recently been invented; the business models used in management, human resources, accounting and sales are all new. The financing and venture back up touted by the government is insufficient to support these fields. What is needed is the training up of personnel to take on responsibility for the new business models. The point of this article is to ask who is tackling this problem head on. The business promoted by our company is a direct answer to the problem and seeks to respond to the demand in the relevant new growth industries.

(1)Industrial Enlightenment Theory - Towards Quinternary Industries

We have long been told that is it not the "production of goods" that will form the core of industry in the 21st century, as in the past, but "intellectual creativity". Japan has established the Intellectual Property Policy Outline and the Basic Law on Intellectual Property and is continuing to tighten the system protecting the value of intellectual assets. Nonetheless, both government and academe lack definite conviction as to where the core industries are and how they are fostered. My thoughts on the matter are as follows.
Firstly, my understanding of the industrial enlightenment theory is as in Table 2. Current management theory bundles all tertiary industries together. This is the very essence of C.G. Clark's definition, yet there is a gap between the theory and the real situation in today's industrial structure. I divide these industries as below into tertiary, quaternary and quinternary industries.
[1] Tertiary industries are services that store products created by primary and secondary industries for periods of time or transport the same across distance. Airline companies, distribution companies and delivery companies fall within this category.
[2] Quaternary industries handle real data. Real data means information related to goods handled by primary and secondary industries or information related to tangible objects in existence in the world. Most companies belonging to this category use computers, such as travel companies and information searching service providers.
[3] Quinternary industries handle creative information. Creative information is a product of the brain. That which is the province of educational institutions, scientific hypotheses and theories, is creative information. This is the rightful central stronghold of intellectual property. Secondary industry patent rights are no longer the pinnacle of intellectual property. As patent rights cannot continue to exist separate from tangible property, they cannot be given preeminence in our intellectual property policy as production shifts to China and elsewhere. It is the production of absolutely 100% intellectually creative products that we should make the core of our intellectual property policy. These products are not focused on tangibles; both the direct and indirect sections of the business are made up of intellectual information systems. This is the essence of quinternary industries. All products for which the right hand side of the brain is responsible, including the arts, music, painting and animation belong to this category, as do Sony Computer Entertainment (SCE) and Nintendo. Whilst creative information is divided in this way into the scientific and artistic fields, in both cases it is arguable that the thing that becomes the product is not something that exists in the outside world, but creative information from the imagination. Creative information is something the brain has made and which has monetary value. This is the product handled by today's typical service industry.
As my tertiary, quaternary and quinternary industry categories do not yet exist in Japan national policy focus is indeterminate. We must not lose sight of the fact that, no matter what, the core of the service industry is quinternary industries. If one calls the Microsoft operating system to mind its influence is as plain as day. The fact that Microsoft produced world-best results precisely symbolizes that the nucleus of modern wealth has become creative products of the brain. What our country needs to put effort into now is not steel, cars or electricity. Japan has, until now, desired to have world preeminence in tangible products. However, it is no longer the 19th or 20th century; we are now in the 21st century. The core of our nation's wealth has changed so that it is not heavy industry but the creative goods produced by our brains. It is quinternary industry that will become the core of future industry. In the past, the Ministry of International Trade and Industry cultivated industry as a national policy, however that method will be focused on this area in future.

(2)The Quinternary Service Industries of Today

The quinternary service industries of today are those where the brain produces intellectually creative goods, such as education, medical services, welfare and child care. There are more within the administrative services carried out by local governments. Many are in fields where the Council for Regulatory Reform has been doggedly battling for deregulation. If these industries are released from regulatory controls, they will, as in the US and in the UK, become businesses able to respond to consumer needs in accordance with the logic of capitalism.
To illustrate, if joint-stock companies are allowed to enter into service industries such as in the fields of medical services, nursing care and childcare, this will be a significant boost for the Japanese economy. This fact is also discernible from the Cabinet Office's Policy Impact Analysis Report. * According to that report, if the productivity of every hospital was raised to equal that of private sector best practice (mainly of incorporated medical institutions), there would be room for a 20.4% increase in productivity in medical services overall. In the institutionalized nursing care sector management efficiencies including the optimization of scale would increase cost-effectiveness by 15.5% and productivity in child care centers would rise by 33.9%. Whilst at present the total size of the market in these fields is roughly 4.3% of GDP, it is mooted that these productivity increases would leave room for a 0.92% of GDP increase in overall economic productivity.
I wonder how the education sector in which our company is engaged would fare. Whilst there are no statistics available, from my own practical experience I believe that the market is larger than that for medical services, the reason being that education begins at birth and continues as lifelong education. As society develops, the fields with expectations of education also increase. The market is worth 10 trillion yen even now and will no doubt exceed 20 trillion yen in the mid term. This is greater than current sales in the car industry.
There are other service industries, including in the field of welfare, nursing care, security, the environment and public peace and order that local governments are currently undertaking inefficiently as administrative duties. These will no doubt come into the sphere of GDP, as one after another they are opened to the private sector in formats such as Public-Private Partnership (PPP), Private Finance Initiatives (PFI), the private management of public facilities, sub-contracting to private enterprise and transfers to private enterprise. In this manner, the service industries are ever expanding, each with intellectually created services as its essence. These industries will, as quinternary industries, take the place of the current large-scale industries and having acquired citizenship, lead to the revitalization of our nation. Thinking people call it "Japan re-born".

(3)Quinternary Industries and International Earnings and Expenses

Cutting-edge medical treatments born of intellectual services are attracting patients from all over the world. Numbers of patients coming to Japan will make it possible to recover from depleted earnings from travel and tourism. Further, if we have universities training and educating in globally cutting-edge practical technology then large numbers of foreigners will be drawn to Japan, in the same manner as with medical treatments. Moreover, WTO negotiations on the liberalization of occupations such as those of lawyers and patent attorneys are underway. These are also businesses that deal in intellectually creative products or quinternary industries. These industries will surely compensate for the deficits in the tangible goods industries.

(1)Defining the Public Good

At present incorporated educational, social welfare, public service and medical institutions have regulatory protection and pay no tax or have a low rate applied. They also receive subsidies from the state or local government. The rationale for this is that these services are for the public good, which can also be stated as the concept that these services are performed with the public good in mind. There is nothing in this world provided by business to consumers that does not have the public good in mind. Large companies are supported by proportionately large numbers of people. This is because large companies are truly providing for the public good. To be specific, let's look at the magnitude of the services to our lifestyle provided by Toyota cars. It does not follow that because Toyota is a profit-making enterprise Toyota's products are also profitable. The products Toyota provides to the citizenry continue to be purchased because they are of use to consumers. The provision of the products is in itself for the public good, the citizenry does not purchase the products because of the receipt of the subsidy. The fact that the set-up of the company itself is for the public good or for welfare or for education means no more than when the company was established it was based on rules and regulations that expressed a course of events or history that accorded with the law on that kind of entity. From the consumer's perspective, a public service undertaking is one that provides a truly useful product. In the US, university education is even managed by joint-stock companies so that, with US education steeped in profit making, it is inconceivable that a person who has studied at a university run by a joint-stock company would be useless to society.

(2)All Business Formats Should Pay Taxes

In today's Japan, roughly 40% of all markets are government-controlled. Whether set up by the national government or by local government all businesses should pay taxes. In the context of a democratic state, the citizens form the state in order to enjoy freedoms and rights. If these freedoms and rights are valid for all citizens then it goes without saying that all citizens should also bear the corresponding costs. It is accepted that both natural and juridical persons can enjoy human rights. This is an established principle at constitutional law.
All those having rights in a capitalist society should bear the burden of paying taxes. As is laid out in the Corporations Taxation Law Articles 2 and 4, there are far too many corporations to which no tax or a low rate of tax is applied. Law reform should be carried out swiftly so that Japan makes the change to a comprehensive capitalist and globalized social structure. I consider it to be appropriate for our company, even if we implement education carried out by a joint-stock company in a Special Zone, to not receive subsidies and to pay taxes as other joint-stock companies do.

(3)5 Trillion Yen in Tax Revenues from Privatization of New Service Industries

If, with the opening up to private enterprise, education sector sales are 10 trillion yen, consumption tax on those sales will be 500 billion yen. If profits are 10% they will come to 1 trillion yen and if the total taxation rate when corporations and other taxes are levied is 50%, the tax on those profits will be 500 billion yen, making total additional taxation revenues of 1 trillion yen. A great deal of taxation revenue is also expected from a privatized medical sector. If similar figures from other service industries are added in, it is not unreasonable to expect taxation revenues of 5 trillion yen.
The number of new hires that will also have an impact in this regard is significant. Service industries are labor intensive, human resources costs being particularly concentrated in the case of quinternary industries. It follows that, today, when the numbers of unemployed are growing, these industries may become the industries that create the most jobs.
Whilst our company is a small business with sales of around 25 billion yen, we employ around 1,100 regular personnel, 1,500 lecturers and other staff and around 800 casual and temporarily dispatched employees, so that we absorb a great many jobs and the majority of our expenses are for personnel. This is a conspicuous capacity for job creation.

Our company made 8 submissions on 15 January 2003 in response to the 2nd Call for Proposals on Special Structural Reform Zones. We have made a decision that if there is a local government that gains approval even as a Special University Zone our company will run a university through a joint-stock company acceptable to the citizenry, as a model in this field. If numerous other companies watch our success and enter the field, the day is not far away when a vital service industry will rise up to support our national economy, finances and employment. This, at the very least, is the certain journey I now see clearly before me.

*Cabinet Office, 2003, Policy Impact Analysis Report No. 16
"Economic Impact of Regulatory Reforms on Medical, Nursing Care and Childcare Services". http://www5.cao.go.jp/keizai3/seisakukoka.html