Facing a multiplicity of financial, structural and demographic woes and battered by the decline in Japan's electronics industry the world's second largest economy is praying the dawning of the digital era will help it out of a prodigious hole.
Happy to sell the latest gizmo to high school girls Japan Inc., it seems, is less keen on utilizing that same technology prowess in business.
Japan wants 100% broadband coverage by 2011
Seeing this as a strain on its international competitiveness, the Japanese government is determined to bring stuffy business practices kicking and screaming into a more dynamic, creative and tech-savvy world.
Japan just might have the PM to prove it. When the country's ruling Liberal Democratic Party recently appointed a self-confessed geek, the 68-year-old Taro Aso, as its leader, the move was hailed as the Second Coming by Japan's multitude of anoraks and manga-besotted otaku.
His victory was the icing on the cake for some in government whom had long battled for a shift to a digital-based economy and the end to the dynasty of the country's generally IT-illiterate bosses.
The dapper, cigar-smoking, LSE educated Mr Aso even gave a major speech in Tokyo's electronics shopping Mecca, Akihabara, where he promised to lift Japan out of it its current woes with digital "soft-power" exports (manga, games and anime) and by pump priming a new digital and ubiquitous computing based economy.
Previous forward-looking PMs had already done their bit years ago when signing up for a very costly national fibre optic network.
Thanks to such foresighted moves, the country now boasts the fastest broadband in the world and is promising to eliminate any existing broadband blind spots by 2011.
Gerhard Fasol who runs an independent ITC consultancy business in Tokyo says that Japan is way ahead of the EU and the US in telecommunications (both fixed net and wireless) because investment levels in Japan are higher. As a consequence there is cheaper warp-speed bandwidth on offer in Japan than elsewhere.
"Since high bandwidth at low prices is the life blood of an IT society - that is precisely the structural advantage Japan has," he says.
The other driving force behind Japan's increasingly digitally focused economy is its advanced mobile internet. This is also where other countries have much to learn, says Japan media expert David Kilburn.
"For most Japanese, the internet means the mobile internet," he says.
As of March this year, about 85% of the country's 108 million mobile phone users were subscribed to mobile internet services. And since the once government-owned telecoms firm NTT DoComo started the mobile internet ball rolling 10 years ago Japan is at the vanguard in exploring this mobile digital space he explains.
"If I restrict my internet life to the laptop, the scene is much less interesting and less innovative," he says.
Internet over 3G is still the most popular network in Japan
On his typical Japanese 3G mobile Mr. Kilburn can watch TV, shop, read any number of newspapers and magazines, take advantage of retail promotions, play games, check train times, routes, maps, pay train/subway ticket charges, and get directions.
"Where does the application end and the new media begin? In Japan this is an increasingly irrelevant question," he says.
So far, Japan, and more specifically NTT, has failed to export this mobile internet success.
While surprised and dismayed at such failure, this was nothing to the reaction of government and industry leaders to the savvier international marketing skills and the more intuitive Apple phones and iPods.
They captured the world's imagination, where the Japanese model failed to, and also captured a huge chunk of Japan's previous market share in such gadgets.
Having missed out on those valuable potential exports, the country now seems determined not to miss its next chance.
Under the aegis of the communications ministry, its leaders are resolved to "make Japan a first-class global digital content super-power".
According to the ministry the main pillar of its strategy is to strengthen and promote collaboration between the public and private sectors. This, they hope, will lead to growth and maximize Japan's international competitiveness.
"We aim for an increase in the value of the digital content market to about 50 trillion yen within the next 10 years," says Maki Usami of the ministry's policy division. The Japanese digital content market was worth 11.45 trillion yen in 2006.
Budgets for such projects dwarf those of other developed countries and include initiatives such as helping to build the world's first truly public ubiquitous computer network - a computer infrastructure that promises to put digitized information everywhere.
Heading up the project is Tokyo University professor Ken Sakamura who, with government aid, is conducting public trials of the ubiquitous network. "It's an infrastructure for the 21st century," he says "that will enable our everyday landscape to guide us, inform us and generally hold our hands in an increasingly puzzling world."
Working from home will help the rush-hour chaos
The ministry has earmarked several billion Yen for the development of these next generation systems it is calling ubiquitous e-Japan -- a place where all physical objects are embedded with microcomputers with communication capabilities, sensors, actuators, and so on, to supply us with location specific information.
"They will operate in a concerted manner, processing, exchanging information with one another within the ubiquitous computing architecture. Making available location-specific information anytime, anywhere, to anyone," says Sakamura.
Obviously such a network will be a boon to teleworkers - another area the Japanese government is keen to promote as part of its digital era mix.
Tokyo hopes to double by 2010 the number of telecommuters, estimated at about 6.74 million in 2005, or about 20% of the working population, who will take advantage of super fast and cheap broadband connections.
Now the government is offering tax breaks to companies who want to start teleworking schemes.
Next on the list to encourage content production is a framework for use and distribution of digital content.
This includes the prevention of copyright infringement something the government feels is essential to make such a "knowledge" based economy pay.
Japan's nation of bloggers, however, insist a new law making those who knowingly illegally download copyrighted material criminals are part of the governments plans to "control the internet" and say it is heavy handed, unworkable, counter productive and authoritarian.
Given the country's vast legion of angry bloggers it is quite possible the establishment will see in the new digital dawn with a bloody nose.
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