ABSTRACT
Technical change, the IT revolution lies behind the developments that are fundamentally changing the economy of Japan and of its trading partners. In this section, we discuss the nature of the IT/E-business revolution. We shall see that the transformation is far greater than simply the development of new technologies and their application to production processes in the IT industries. The revolution influences what is being produced, where it is being produced, and how it is being produced. It affects many conventional industries and service activities. It is a driving force in the global reallocation of production of many products from the advanced countries to the less-developed countries and, particularly, to East Asia.
