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Japan aims to boost defense industry with 200 startups

Marc Jacob Prosser

To harness advanced technologies and counter the challenges facing the nation’s defense sector, the Japanese government is fostering ties with innovative startups.

Tapping into the country’s rich startup ecosystem in areas such as space technology and satellite imaging could boost defense sector innovation and drive exports.

The Japanese Ministry of Defense (MOD) and Ministry of Economy, Trade and Industry met with about 200 startups in Tokyo in June 2023, with more meetings planned, according to Japan’s Nikkei Asia news magazine.

“The future of defense is algorithmic,” James Angelus, president of the International Security Industry Council in Japan, told FORUM. “Japan’s move towards startups might lead to defense innovation and high-tech exports, especially in realms like digital engineering, agile software and systems-based methodologies.”

Angelus emphasized that a broader transformation is key to the venture’s success.

The initiative is expected to engage startups across technological fields from cybersecurity and space to drone operations and artificial intelligence, Japanese newspaper Yomiuri Shimbun reported.

Tokyo plans to consider the development of defense equipment and the application of advanced technology in the defense field based on its collaboration with startups.

The goals include accessing and integrating advanced technology and strengthening Japanese defense capabilities and industry.

Japan’s defense sector profit margins have historically been slim, and export restrictions on defense products were once prevalent. Nearly 100 companies departed the field in the past two decades. However, government initiatives and legislative reforms are fueling optimism with a focus on increasing defense exports.

Nozomu Yoshitomi, a retired Japan Ground Self-Defense Force major general who now teaches at Tokyo’s Nihon University, said fundamental issues need to be addressed for the startup initiative to succeed.

“The MOD’s prolonged procurement process and the inherent risks associated with the defense business might be unappealing to nimble startups,” Yoshitomi told FORUM.

Further, expanding Japanese defense exports remains challenging due to issues such as a lack of market research, he said.

Yoshitomi underscored the necessity of re-evaluating the government’s relationship with defense companies, as well as its procurement methods and export capabilities.

Marc Jacob Prosser is a FORUM correspondent reporting from Tokyo.

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