Foundation for Economic Security

Implications for Aerospace and Defense

On Wednesday 11 May, the Japanese Diet passed the Economic Security Law which will take effect next Spring. 

New legislation addresses four key pillars: protecting critical infrastructure, supply chain stability, facilitating public-private cooperation on developing cutting-edge technology, and safeguarding patents on sensitive technologies. 

As the global security environment enters a new stage of uncertainty, there is a concerted effort to support economic development as a foundation for national defense. Japanese national strength is dependent on the vitality and innovative capacity of its economy. The defense industry is the nexus of these two imperatives.

Economic security is a complex socio-economic construct which is influenced by the continuously changing environment of domestic production, international trade, social and cultural norms, political support, market access and efficiencies. It is the overarching focus on external and internal threats of the economy, which is in essence the basis of national security. 

Japan has been a leader in identifying “economic security” as formal government policy, having established an economic division in the National Security Secretariat in 2020, and in 2021 the first government to designate a Minister for Economic Security under the Cabinet Office of Prime Minister Kishida. 

For the aerospace and defense community, however, the main concern is the lack of expertise on the government panel of experts from the military or industry who drafted the bill. Main concerns are overreach, wherein security measures and penalties could discourage innovation and collaboration; and underreach, wherein the essential goal of compatibility with Japan’s allies is not a central focus. Interoperability is imperative and definitions need to be narrowly defined. 

This seminar will examine the historical relationship between Japan’s economic security policy and aerospace and defense industries, strengths and shortcomings of this new law, and clarifications that could emerge this coming year.

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