In a bid to bolster its defence industry, the Japanese government is supporting startups working on emerging technologies with defence applications. This initiative comes as Japan seeks to revitalise its defence sector to meet growing security challenges. While Japan is renowned for its technological prowess in consumer electronics and automobiles, it’s now turning its focus to the defence industry.
This shift signals a promising future for Japanese defence capabilities. The country is on track to become one of the world’s leading defence spenders. Prime Minister Fumio Kishida’s government is committed to having the world’s third-largest military budget by 2027, driven by increasing threats in the region.
Japan’s Defence Budget Expansion and Strategy
Japan recently requested a nearly 12% increase in its defence budget, totalling a record US$52.5 billion for the 2024 fiscal year. Over the next five years, the nation’s government plans to spend US$315 billion, effectively doubling its annual defence expenditure to around US$68 billion. Japan’s strategy revolves around addressing regional challenges, particularly from China and North Korea. The country aims to enhance its military capabilities to respond effectively to these threats.
Japan’s defence industry is undergoing significant changes. Unlike other sectors dominated by Japanese conglomerates, the defence industry is becoming more open to startups. This shift is attracting Western arms suppliers, resulting in the relocation of their Asian headquarters to Japan. Japan’s defence market is set to grow, encouraging startups to focus on defence-related technologies. These efforts align with the government’s plan to produce arms independently, rather than just co-producing them with allies.
Japan’s New Defense Approach
Japan’s approach to defence is evolving. The government is lifting restrictions that previously hindered its defence industry’s growth. This includes pursuing collaborations with international partners and improving the country’s defence technology base. Japan’s defence industry is poised to take on a more significant role in global defence efforts, with a focus on self-reliance and export promotion.
Tokyo is expanding its security cooperation with countries like the United Kingdom, Australia, India, and the Philippines, diversifying its defence partnerships. This aligns with the U.S. government’s efforts to enhance defence collaborations among its allies in the Indo-Pacific region. As part of these collaborations, Japan is working with the United Kingdom and Italy on the “Global Combat Air Programme (GCAP)” to develop its next-generation FX fighter aircraft. This initiative involves various defence and technology companies from both countries. Japan’s defence industry is undergoing a significant transformation, positioning the nation as a key player in regional security.
