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By Takashi Shiraishi / Special to The Yomiuri Shimbun
13:02 JST, June 10, 2022
The Diet has voted into law a bill to enhance Japan’s economic security, which I greatly welcome. The legislation has four major pillars: securing stable supply chains for specified important materials, conducting prior screenings to ensure the security of core infrastructure facilities, supporting the development of advanced technologies, and keeping secret patents whose disclosure would harm national security.
Why does the new law have four pillars? Why does Japan now need such a law? Before we get to that, what exactly is economic security?
To put it simply, the goal of economic security is to ensure through economic means the safety of the country and its people; safeguard information, technologies and industries that are deemed extremely crucial to the national economy; and protect the liberal international order that has ensured Japan’s security, prosperity and freedom since the end of World War II.
There are a variety of policies other than the four pillars related to economic security.
Therefore, the recently enacted law serves as a basis for broadening policy initiatives to attain the purpose of economic security.
So far, Japan has implemented international economic cooperation projects having many security implications ranging from energy and food security to security export controls, among others. The new law can be regarded as a precursor to be followed by a set of security-related policy approaches in the areas to which little attention has to date been paid.
Why has there been an increase in the public’s interest in economic security in those areas mentioned above?
Main cause: China
The first reason is the rise of China coupled with its great-power behavior.
Since the end of the Cold War, with globalization accelerating cross-border transactions of people, goods, money and information and expanding supply chains, China, for its part, has used its domestic market as a lever to lure massive direct investments from abroad. China has also forced foreign companies operating on its soil to transfer technologies and has even stolen technologies to strengthen its military, industrial and technological might, challenging the liberal international order.
Moreover, China has tried to force its will on other countries by increasingly putting economic pressure on foreign countries, including restrictions on rare earth exports to Japan in 2010 and on imports of wine and coal from Australia since 2020.
Another reason is the reduced power of globalism and marketism that alternatively gives much greater importance to the role of nations in the industrial and science and technology spheres. Against this background, the United States and its allies have imposed a string of economic sanctions against not only “rogue states” such as Iran, North Korea and Russia, but also China for their abuse of human rights and theft of intellectual property, to prevent their companies from achieving global domination, and to maintain technological superiority over China.
So now, why does the new Japanese law have four pillars: specified important materials, core infrastructure facilities, advanced technology development support and secret patents? There are a few reasons.
First, the law for the promotion of economic security reflects the fact that the network-connected cyberspace has grown so immensely since the beginning of the 21st century that the boundary between war and peace has become increasingly blurred.
The world witnessed the first case of network-centric warfare during the Gulf War of 1991. In Japan, people and things are now closely connected in cyberspace in a phenomenon called “Society 5.0.” As a result, safeguarding infrastructure, including electricity and water systems, rail and air transportation, finance and so on has become a matter of urgency.
Second, the ongoing science and technology revolution makes it widely understood in the world that leading emerging technologies are the key to ensuring security and prosperity in the 21st century. Such technologies include quantum technology, artificial intelligence, biotechnology, nanotechnology, advanced materials and brain-machine interfaces, among others. The West and China have been investing huge amounts of money in these fields.
Third, what now matters is the nature of leading emerging technologies. They can be used for either civilian or military purposes, depending on who uses them and for what reason. Let’s suppose that a team of researchers develops a cyborg for civilian use. This technology could be easily converted by other groups for military use. In a nutshell, it is unknown who will eventually use the cyborg for what purpose.
Fourth, in Japan, the United States and European countries, the center of research and development in science and technology has already shifted from state-run institutions to universities and private enterprises. This means that the Japanese government, for its part, should know what groups of what universities or companies are carrying out what kinds of research. In cases where the Japanese government makes a big investment in research activities involving national interests, there must be measures in place to prevent researchers from being headhunted by foreign research institutes, or their companies from being acquired by foreign entities.
The development and social implementation of leading emerging technologies cannot be done without semiconductors. Semiconductors are the foundation of leading emerging technologies. The same holds true for rare earths and batteries.
As such, it is clear what thinking is informing the formulation of the economic security law comprising the four pillars: stable supply of specified important materials such as rare earths, semiconductors, batteries, medicines, among others; the safety of core infrastructure facilities; advanced technology development support; and secret patents.
Prepared for challenges
What challenges is Japan expected to face from now on? As I mentioned earlier, the new law is a conduit for implementing policy initiatives to ensure the security of Japan. When Japan encounters a new threat to its economic security in the future, it will have to further refurbish its economic security toolbox.
Leading emerging technologies are something whose actual end use and end users are unknown. To put it another way, how each technology will finally be used will be entirely up to the imagination of each end user. This means that the starting point is to ingeniously imagine what you want to have or see it coming into existence. Speaking from a science and technology policy viewpoint of “seeds” and “needs,” the challenge is how to nurture promising seeds out of nascent technologies, while giving due consideration to how to use such technologies in terms of economic security, even without knowing exactly what possible needs will emerge. To that end, Japan needs innovative policies that are different from existing ones.
The liberal international order exists on the basis of “trust.” Japan cannot ensure its economic security on its own. It is fundamental for Japan to collaborate with trustworthy countries, corporations and research groups abroad in each of the related economic security areas such as supply chain reorganization, joint research, inbound investment, and technological cooperation. As a prerequisite for such collaboration, Japan needs to develop science and technology prowess that is attractive enough to motivate foreign countries, corporations, and research teams to work with it.
What research institutes and teams are working on leading emerging technology projects, with what amount of money and funded by whom? What countries do those research institutes they are collaborating with belong to? What institutes do those teams belong to? How significant are the research projects being undertaken in terms of security implications? What kinds of technology should be advanced for the sake of ensuring the security of Japan? Currently, there exists no domestic think tank tasked with providing an overview of research activities across Japan.
The basis of science and technology policies is to “know,” “protect” and “nurture.” What should be done above all else for Japan’s science and technology policies is to more systematically “know.”
Takashi Shiraishi
Shiraishi is the chancellor of the Prefectural University of Kumamoto. Previously, he was the president of the National Graduate Institute for Policy Studies from 2011-17 and the president of the Institute of Developing Economies, Japan External Trade Organization, from 2007-18.
