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Accepted Paper:
The Impact of Japan’s Economic Security Policy on its Technology and Industrial Policy
Mariko Togashi
(International Institute for Strategic Studies)
This paper assesses the impact of Japan's economic security policy on its technology and industrial policy. This empirical research will take a close look at the policies and trends during the Abe, Suga and Kishida administrations and the recent economic security policy developments.
Paper long abstract:
Economic security policy made Japan’s technology and industrial policy more strategic by either accelerating existing shifts or generating new trends. The magnitude of economic security policy, both in terms of size and pace, is significant. Economic security policy impacted technology policy in four ways: Economic security policy (1) has made the targeting more specific, (2) may bring a step change in Japan’s defence technology R&D, (3) has brought the industry and technology policy closer, and (4) has made international cooperation in the technology area more open but more selective. Japan’s economic security policy is also impacting its industrial policy in three ways: Economic security policy (1) has reinvigorated Japan’s industrial policy, (2) is driving the reshaping of Japan’s industrial policy, and (3) has changed the way how industrial policy supports the industry from specific technologies to the whole supply chain. There are two major implications for other countries’ economic security policymaking. First, Japan’s economic security policy demonstrates that it gives momentum to other policies, implying the potential to break the barriers that other policies have been facing for some time. This calls specific attention to the potential side effects and opportunity costs in economic security policymaking to avoid transferring resources to uncompetitive sectors without knowing so. Second, the way that economic security policy is making technology and industrial policy more strategic in Japan indicates that a country’s leverage is important. Countries should know in which sector they should enhance indispensability and autonomy to allocate resources efficiently.