Note 1-11

11 The production of IT-related goods has a large ripple effect on the economy as a whole. For cellular phones, for instance, the production inducement coefficient combining production for all industries involved is only 2.27 (2.71 for transport equipment and 2.09 for general machinery). However, the value-added inducement coefficient is high at 3.69 (2.33 for transport equipment and 1.90 for general machinery). (Appended Figure 1-2). The reasons for this are: (1) cellular phones have a high production inducement effect on associated non-manufacturing industries; (2) the value-added inducement effect of non-manufacturing industries is higher than that of manufacturing industries. The production stimulation coefficient of digital electronics overall (including cellular phones, flat-screen televisions, DVD recorders and digital cameras) is also 2.11 whereas their value-added inducement coefficient is 3.09. (refer to White Paper on Manufacturing Infrastructure, FY2003)