Legislation, Expectations and Concerns

Summary

In the revised National Security Strategy, released in December last year, the government highlighted the importance of beefing up defense equipment manufacturing and technology bases as scores of companies leave the sector due to low profitability.

Legislation has been passed or is under consideration to provide direct financial support to companies working to diversify supply chains, boost exports, streamline manufacturing processes, strengthen cybersecurity, and conduct business succession.

The Defense Production Base Reinforcement Law and other legislation provides for the state to “nationalize” production facilities if firms cannot continue operations due to financial difficulties.

Questions abound:

• Does the Defense Production Base Reinforcement Act provide subsidies for promising projects from among the five types of equipment that can be used in the global market?
• Will the government support the development of new defense equipment for the global market based on international standards that meets operational needs of the Self-Defense Force?
• What incentives is the government giving to startups willing to enter the defense market, and how would this affect current contractors?
• To what extent can company management support the investment of additional management resources in the defense business sector required for the above efforts?
• Can the public and private sectors work together to come up with concrete proposals and ideas on how to avoid reputational risk issues?
• Are there lessons to learn from other countries’ defense industrial base, such as South Korea?

There are other means to build capacity, such as foreign direct investment and a restructuring of the industry itself to be more efficient and competitive.

This webinar will explore these questions with distinguished speakers from government, industry, and the policy community.

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