Economic Security andEmerging Technology: Japan’s
Perspective for Pursuing aTechnology Alliance
Mr. Jun Kazeki

Executive Advisor, GRIPS Alliance*This paper is derived from a presentation the author gave at a NEXT Alliance Conference
workshop on November 5-6, 2022, in Annapolis, MD.

Introduction
This article discusses challenges and opportunities related to economic security policy andemerging technology by reviewing policy developments in Japan with an eye toward pursuing atechnology alliance between the United States and Japan. The paper is composed of three parts.
The first part introduces recent economic security policy developments in Japan. The second part
focuses on promoting research and development (R&D) of emerging technology within theframework of Japan’s Economic Security Promotion Act of 2022. Finally, the third part explores
possible next steps for pursuing a technology alliance.

2Mr. Jun Kazeki

Recent developments in the Economic Security Policy of Japan
Recently, the foundation of national security is expanding into economic and technological fields
due to rapid technological innovation and significant geopolitical changes. In many countries,
vulnerabilities in supply chains are becoming clear due to severe competition for technologicalsupremacy, the COVID-19 pandemic, and Russia’s invasion of Ukraine. There are many otherdisruptive challenges and external risks in the current world economy. In this regard, the Japanese
government has recently strengthened its economic security policy as a high priority as stated ingovernment-wide documents, namely the Basic Policy on Economic and Fiscal Management andReform of 2021 1 and 2022 2, the Integrated Innovation Strategy of 2021 3 and 2022 4, the Growth
Strategy 2021 5, and the Grand Design and Action Plan for a New Form of Capitalism 2022 6.
Japan intends to secure autonomy and gain superiority in certain areas, as well as deepen
cooperation with likeminded countries to maintain and develop international order based on
fundamental values and rules. Japan aims to strengthen its ability to know, protect and promotecritical technologies through a holistic, whole-of-government approach. "Know" means to identify
chokepoints in global supply chains with multiple suppliers. "Protect" means to prevent diversified
technology acquisition activities via export controls, investment screening and other protectivemeasures. "Promote" refers to R&D promotion in various fields of critical emerging technology.
While economic security is a relatively new area of focus in Japan, free and fair trade remains anessential part of government policy. In fact, the government-wide documents emphasize that Japan
will seek to expand a free and fair economic order and further strengthen the rules-based
multilateral trading system to build resilient supply chains and a robust global economy despite
challenges such as climate change and a digital economy. Investments in GX (GreenTransformation) and DX (Digital Transformation) as well as the promotion of startups are also

“経済財政諮問会議.” 内閣府ホームページ, https://www5.cao.go.jp/keizai-shimon/.
“Basic Policy on Economic and Fiscal Management and Reform 2022.” Cabinet Office, June 2021, https://www5.cao.go.jp/keizaishimon/kaigi/cabinet/2022/2022_basicpolicies_en.pdf.
3“統合イノベーション戦略 2021.” Cabinet Office, June 2021, https://www8.cao.go.jp/cstp/tougosenryaku/togo2021_honbun.pdf.
4“Integrated Innovation Strategy 2022.” Cabinet Office, 2022, https://www8.Cao.go.jp/Cstp/Tougosenryaku/togo2022_honbun_eiyaku.pdf.
5“Action Plan of the Growth Strategy.” Cabinet Secretariat, June 2021, https://www.cas.go.jp/jp/seisaku/seicho/pdf/ap2021en.pdf.
6“Grand Design and Action Plan for a New Form of Capitalism ~Investing in People, Technology, and Startups~.” Cabinet Secretariat, June
2022, https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/pdf/ap2022en.pdf.
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Economic Security and Emerging Technology: Japan’s Perspective for Pursuing a Technology Alliance 3

important elements for a comprehensive growth strategy, together with the economic security
policy in the Grand Design for a New Form of Capitalism.

R&D for emerging technology and Economic Security Promotion Act
As committed by Prime Minister Kishida as Chairperson of the newly established Council forEnhancing Economic Security in November 2021, a bill for enhancing economic security wasprepared. After the second meeting of the Council, an Economic Security Promotion Bill waseventually submitted to the Diet and passed on May 11, 2022. The Economic Security Promotion
Act is composed of four pillars: 1) supply chain resilience, 2) security of core infrastructure, 3)
public-private cooperation for developing advanced technology, and 4) a non-published patent
system. Because economic security challenges are quite broad and even though certain measures
have already been implemented or are to be developed in the future such as export controls andinvestment screenings, the government of Japan chose these four pillars as a way to makesubstantive legislative progress in a quick and comprehensive manner in these important areas.
This article focuses on the third pillar related to advanced technologies, but the other areas are also
important. The first pillar is to strengthen supply chain resilience of critical goods and materials
vital to economic security. The scope of products is expected to be designated by cabinet ordinanceby the end of 2022. The second pillar is to ensure the security and reliability of core infrastructurearound fourteen areas, including electricity, gas, telecommunication and water, and is expected toenter into force by November 2023. The fourth pillar is to prevent leakage of critical technologies
while promoting innovation by establishing a non-published patent system like that in otheradvanced countries and is expected to enter into force by May 2024.
As previously mentioned, the third pillar focuses on sharing technological information andestablishing a framework to foster advanced technologies in Japan. In fact, the implementation ofthis pillar has already advanced in parallel with the first pillar of supply chain resilience. The first
and the third pillars entered into force in August 2022 and their statutory basic guidelines wereauthorized as Cabinet Decisions on September 30, 2022.

4Mr. Jun Kazeki

The Cabinet Decision called “Basic guideline for research and development on key technologies
identified” explains details regarding a fund allocation mechanism by funding agencies through astatutory framework of the “Council” composed of responsible government officials, affiliateorganizations and relevant researchers. Such public-private cooperation is expected to develop
critical technologies in the framework.
The basic guideline further elaborates the role of a statutory think-tank that is supposed tocontribute to a R&D vision for the Council through various studies and surveys on key
technologies from the perspective of social sciences, international relationships, science andtechnology, innovation, and national security.
Under a trial project during 2021-2022 about the think tank’s future functions, the Cabinet Officeidentified twenty key areas of emerging technologies such as AI, advanced computing,semiconductors, quantum, cyber, advanced surveillance sensors, robotics, hypersonics, advanced
materials, space, maritime, medical and life sciences, and biotech. Since then, the first version ofa Japanese R&D vision was published on September 16, 2022 that focused on 1) maritime
technologies, 2) space and aerospace, and 3) cross-cutting areas such as cyber and biotechnology.
In total, 27 subsets of specific breakdown technologies in these three areas were identified as thefirst step candidates for fund allocation.
The R&D vision will be further updated in coming years. At this stage, 250 billion yen is available
for funding agencies in the supplementary budget for fiscal year 2021, and the budget will beexpanded to 500 billion yen according to the Basic Policy on Economic and Fiscal Management
and Reform of 2022 in June. 7

In this section, see, for example, a series of documents by the government of Japan; 経済安全保障推進会議｜内閣官房ホームページ,
https://www.cas.go.jp/jp/seisaku/keizai_anzen_hosyo/index.html; 経済安全保障法制に関する有識者会議（令和４年度～）｜内閣官房ホームページ, https://www.cas.go.jp/jp/seisaku/keizai_anzen_hosyohousei/4index.html; “第 3 回経済安全保障重要技術育成プログラムに係るプログラム会議,” 内閣府ホームページ, https://www8.cao.go.jp/cstp/anzen_anshin/program/3kai/3kai.html.
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Economic Security and Emerging Technology: Japan’s Perspective for Pursuing a Technology Alliance 5

Next Steps for a Technology Alliance
The latest version of the US National Security Strategy was released on October 12, 2022, while
Japan just released its new National Security Strategy on December 16, 2022. In this regard, it isa good time to consider how each ally’s strategy for advanced technology development can benefit
from collaboration with the other.
Historically in Japan, science, technology and innovation policies are developed through a “seedscentered” approach, while defense technology and equipment policies have been developed
through a “needs-centered” approach. Yet, the first National Security Strategy of Japan in
December 2013 after the establishment of the National Security Council referred to these policies
in both ways to some extent by encouraging the strengthening of technological capabilities
including dual-use technology, the strengthening of cybersecurity, space and maritime fields, thestrengthening of defense production and technology bases, and the formulation of the Three
Principles on Transfer of Defense Equipment (finalized in April 2014). However, in the years since
the development of that National Security Strategy, a strategic integrated approach has becomemuch more important given the subsequent international developments including a rapid growthof emerging technologies, military-civil fusion, concerns about supply chain disruptions by various
factors such as COVID-19, and most recently Russia’s invasion of Ukraine.
In this regard, the Japanese government is trying to develop economic security policy in a more
holistic manner, where in the context of R&D an integrated examination and matching of bothseeds and needs of emerging technologies are more and more important in the dual-use context for
both military and civil use. Furthermore, this aspect is recently characterized as “multi-use” forboth public use and civil use in the broader context of the economic security policy.
In order to move forward on R&D collaboration and an innovation alliance between the UnitedStates and Japan, the avenue of economic security policy is crucial. It is necessary to grasp theoverall movement from a big picture perspective through various discussions between bothgovernments, related organizations, think tanks, academia, and industry. This will help policy
makers and stakeholders conceptualize the overarching challenges and opportunities, and thenadvance each discussion with mutual trust while paying attention to priorities and resource6Mr. Jun Kazeki

allocation and avoiding duplication and vertical division. More specifically, I suggest thefollowing three points.
First, both sides should recognize that reliable counterparts reside not only at a government levelbut also at national funding agencies and other institutions, with a view to enhancing
communications at various levels on this growing subject of economic security and emerging
critical technologies. Science, technology and innovation policy experts in Japan at the expert
group of national security have proposed utilizing a national research and development agency asa hub to invite participation of researchers from universities and the Acquisition, Technology &Logistics Agency (ATLA) of the Ministry of Defense. Furthermore, think tanks in the UnitedStates and Japan can facilitate broader track 1.5 (i.e., government and non-government entities)
through studies and surveys with experts of both science, technology and innovation and national
security from a perspective of developing sustainable research methodologies and flexible
networks of experts. Such activities will also foster a human resources ecosystem in both countries.
Secondly, both sides should further develop mutual trust and deepen understanding of the systems
for the protection of confidential technology information. As noted above, Japan has established amechanism of public-private partnerships and statutory councils for key identified technologies
where certain information protection measures have been prepared as a first step. Furthermore, ina broader future context, during the course of deliberations over the Economic Security Promotion
Act of Japan, the importance of a more advanced security clearance system was emphasized. The
supplementary resolutions of both legislative houses included the issue as a matter of consideration,
recognizing the importance of such a security clearance system for facilitating international R&D
collaboration. 8Thirdly, while both sides pursue a technology alliance through R&D promotion policies, theyshould also consider further collaboration between officials and experts on certain protection
policies such as export controls, investment screenings and strengthening research integrity.
International collaboration has been done more or less via regimes and other ways to identify key

See as reference: Cabinet Office of the Government of Japan, 経済安全保障推進法の審議 ・今後の課題等について, Cabinet Secretariat,
July 2022, https://www.cas.go.jp/jp/seisaku/keizai_anzen_hosyohousei/r4_dai1/siryou3.pdf.

8Economic Security and Emerging Technology: Japan’s Perspective for Pursuing a Technology Alliance 7technologies and sectors, in particular in the area of strategic export controls. Moreover, economic
sanctions are also a matter of reference in multilateral coordination. In response to Russia’sinvasion of Ukraine, allies and like-minded countries implemented aligned sanctions in various
areas including financial and trade sanctions. Export bans on certain emerging and foundational
technologies such as semiconductors and quantum computing have also been implemented. It isworth considering the implications of such measures from the perspective of economic security
and emerging technology, with an eye toward improving multilateral policy coordination.
Overall, a whole-of-government and holistic approach involving public-private partnerships andtrack 1.5 networks are keys to success for both sides. 9 The subject is an important unfinishedbusiness, and continued dialogue among the allies and with other partners is necessary to makeneeded progress.

Mr. Jun Kazeki wrote in his own personal capacity. The views and interpretations expressed bythe author are solely his own.
_______________________________________________________________________________________________________The US-Japan NEXT Alliance Initiative is a forum for bilateral dialogue, networking, and the development ofjoint recommendations involving a wide range of policy and technical specialists (in and out of government) tostimulate new alliance connections across foreign, security, and technology policy areas. Established by
Sasakawa Peace Foundation USA with support from the Nippon Foundation, the goal is to help improve thealliance and how it serves shared interests, preparing it for emerging challenges within an increasingly complex
and dynamic geostrategic environment. Launched in 2021, the Initiative includes two overlapping lines of effort:1) Foreign & Security Policy, and 2) Technology & Innovation Connections. The Initiative is led by Sr. DirectorJames Schoff.

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See as reference GRIPs GIST seminar; “第 105 回 GIST セミナー「経済安全保障と先端・重要技術」,” GIST,
https://gist.grips.ac.jp/events/2022/09/105gist.html, https://gist.grips.ac.jp/events/2022/94f4fe87990c92f1bddd3f89e9e096b99ecaf03e.pdf (Page52).
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