Turning Economic Security Policy into a Growth Strategy for Japan - Strong Momentum for Promotion, but Concerns over Long-Term Sustainability -

The Basic Policy on Economic and Fiscal Management and Reform 2026 and Japan’s Growth Strategy clearly position economic security as playing an important role in the Japanese economy. The Basic Policy, which has become the starting point for the budget formulation process, states that the government will “boldly promote the Growth Strategy and ensure economic security.” Under its concept of “responsible and proactive public finances,” the government has linked a growth strategy focused on economic security with budgetary measures, thereby strengthening its previous policy of expanding economic security measures.

Support for economic security policy is detailed in the Public-Private Investment Roadmap. Specifically, for each of the key products and technologies in the 17 strategic fields, the roadmap sets out the scale and composition of required public and private investment, the expected economic ripple effects, and policy packages to realize investment. “AI and Semiconductors” (total public and private investment: 102 trillion yen) and “Digital and Cybersecurity” (55 trillion yen) can be regarded as core fields expected to generate large-scale investment and economic ripple effects. At the item level, fields such as “dual-use technology,” “GX chemicals,” “unmanned aircraft,” and “permanent magnets” are expected to contribute both to strengthening Japan’s strategic autonomy and strategic indispensability in supply chains, as well as promoting economic growth.

The incorporation of economic security into the Basic Policy and Growth Strategy is likely to become a powerful driver of economic security policy. At the same time, there are problems with making growth the sole objective when supporting Japan’s industries, products, and technologies, including those related to economic security. In order to implement economic security as a sustainable and robust policy, Japan will need to set objectives that focus more on economic risks than on growth alone, and further refine and improve its industrial policy.

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