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The Japanese defense industry is the part of the
Japanese economy
The economy of Japan is a highly developed social market economy, often referred to as an East Asian model. It is the third-largest in the world by nominal GDP and the fourth-largest by purchasing power parity (PPP). It is the world's seco ...
responsible for the procurement of military technology, primarily for the nation's own
Self-Defense Forces, largely due to a strict policy on national
export
An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
s.
Postwar history
Following
Allied occupation of Japan
Japan was occupied and administered by the victorious Allies of World War II from the 1945 surrender of the Empire of Japan at the end of the war until the
Treaty of San Francisco took effect in 1952. The occupation, led by the United States w ...
after the
Second World War
World War II or the Second World War, often abbreviated as WWII or WW2, was a world war that lasted from 1939 to 1945. It involved the vast majority of the world's countries—including all of the great powers—forming two opposi ...
, major economic, social and governmental reforms were implemented to change and rebuild Japan. Among these changes included the creation of
Article 9 of the Japanese Constitution
is a clause in the national Constitution of Japan outlawing war as a means to settle international disputes involving the state. The Constitution came into effect on 3 May 1947, following World War II. In its text, the state formally renounces th ...
, dismantlement of Japan's military, and abolishing military production and
zaibatsu
is a Japanese term referring to industrial and financial vertically integrated business conglomerates in the Empire of Japan, whose influence and size allowed control over significant parts of the Japanese economy from the Meiji period unt ...
in an effort to
demilitarize Japan. However, with the outbreak of the
Korean War
, date = {{Ubl, 25 June 1950 – 27 July 1953 (''de facto'')({{Age in years, months, weeks and days, month1=6, day1=25, year1=1950, month2=7, day2=27, year2=1953), 25 June 1950 – present (''de jure'')({{Age in years, months, weeks a ...
, U.S. troops garrisoned in Japan had to move to the Korean Peninsula for war: depriving Japan of its defenses. With this dilemma U.S. occupation authorities encouraged (or pressured) Japan into rebuilding its own military force: leading to the establishment of the
National Police Reserve
The , or NPR, was a lightly armed national police force established in August 1950 during the Allied occupation of Japan. In October 1952, it was expanded to 110,000 men and renamed as the . On July 1, 1954, it was reorganized as the Japan Groun ...
and later the
Japan Self-Defense Forces. Around 1952, Japanese manufacturers began repairing and maintaining equipment for U.S. forces in Asia, and later in 1954, Japan's defense industry began to manufacture and arm the newly established JSDF with U.S. designed weapons. Former zaibatsus, such as
Mitsubishi and
Sumitomo, made their return to the defense industry. Furthermore, the 1954 Mutual Security Assistance Pact allowed Japan to receive military aid in the form of funds, materials, and services from the United States. The agreement further served as the basis for Japan to purchase and/or develop U.S. weapons under license as per the
.
Following accusations that Japan was supplying napalm for U.S. forces during the
Vietnam War
The Vietnam War (also known by other names) was a conflict in Vietnam, Laos, and Cambodia from 1 November 1955 to the fall of Saigon on 30 April 1975. It was the second of the Indochina Wars and was officially fought between North Vietnam a ...
, the
Three Arms Exports Ban was implemented in 1967 to prevent arms export to countries who fit any of the three criteria: countries in the
Eastern Bloc, countries under an arms embargo by the
United Nations Security Council
The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...
, or countries that are currently involved in, or likely to be involved in an international conflict.
In July 1970, then-
Defense Agency
The is an executive department of the Government of Japan responsible for preserving the peace and independence of Japan, and maintaining the country’s national security and the Japan Self-Defense Forces.
The ministry is headed by the ...
director general
Nakasone Yasuhiro established five objectives for the defense industry:
[
# to maintain Japan's industrial base for national security
# to acquire equipment from Japan's domestic research and development and production efforts
# to use civilian industries for domestic arms production
# to set long-term goals for research and development and production
# to introduce competition into defense production
By the late 1970s, indigenous suppliers had developed and produced aircraft, tanks, artillery, and major surface and underwater naval combatants for the JSDF. Highly sophisticated weaponry, such as the F-15J, ]P-3C Orion
The Lockheed P-3 Orion is a four-engined, turboprop anti-submarine and maritime surveillance aircraft developed for the United States Navy and introduced in the 1960s. Lockheed based it on the L-188 Electra commercial airliner.[Keidanren
The is an economic organization founded in May 2002 by amalgamation of Keidanren (, Japan Federation of Economic Organizations, established 1946; name sometimes used alone as abbreviation for whole organization) and Nikkeiren (, Japan Federatio ...]
) was instrumental in defense production; negotiating with the Defense Agency and coordinating activities among defense firms, disseminated defense information and informally limiting competition by promoting agreements between companies. Nearly 60% of Japanese defense contracts were awarded to five large corporations: Mitsubishi Heavy Industries
is a Japanese multinational engineering, electrical equipment and electronics corporation headquartered in Tokyo, Japan. MHI is one of the core companies of the Mitsubishi Group and its automobile division is the predecessor of Mitsubishi Mo ...
, Toshiba Corporation
, commonly known as Toshiba and stylized as TOSHIBA, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. Its diversified products and services include power, industrial and social infrastructure syste ...
, Mitsubishi Electric Corporation
, established on 15 January 1921, is a Japanese multinational electronics and electrical equipment manufacturing company headquartered in Tokyo, Japan. It is one of the core companies of Mitsubishi. The products from MELCO include elevators an ...
, Kawasaki Heavy Industries
(or simply Kawasaki) is a Japanese public multinational corporation manufacturer of motorcycles, engines, heavy equipment, aerospace and defense equipment, rolling stock and ships, headquartered in Chūō, Kobe and Minato, Tokyo, Japan. It is ...
, and Ishikawajima-Harima Heavy Industries Corporation. The mid to late 1980s saw an increase in indigenous production and joint development with the U.S. as larger portions of the defense budget
A military budget (or military expenditure), also known as a defense budget, is the amount of financial resources dedicated by a state to raising and maintaining an armed forces or other methods essential for defense purposes.
Financing milit ...
were allotted to procurement. There have been calls for the relaxation of the arms export ban. In 1988, a secret memorandum circulated among defense contractors estimated that lifting the export ban would result in Japan capturing 45% of the world's tank and self-propelled artillery market, 40% of military electronic sales, and 60% of naval ship construction. The arms export ban was never lifted and by the post-Cold War era Japan's defense industry began to stagnate due to a combination of decreasing military budget, arms export ban and increasing research and development cost while maintaining a static R&D budget.
The defense industry began to revitalize when Prime Minister Shinzō Abe
Shinzo Abe ( ; ja, 安倍 晋三, Hepburn: , ; 21 September 1954 – 8 July 2022) was a Japanese politician who served as Prime Minister of Japan and President of the Liberal Democratic Party (LDP) from 2006 to 2007 and again from 2012 to 20 ...
took office a second time in 2012. Abe's defense policy called for an increase in military capabilities for Japan to better defend itself and its American ally in the face of growing Chinese influence and military buildup. To this end, the military budget began to increase from 2013 and onward, while reforms were implemented to coincide with Abe's defense policy. Two of the most important reforms for the defense industry included the lifting of the self imposed arms export ban in 2014 and the establishment of the Acquisition, Technology & Logistics Agency (ATLA) in 2015.
Challenges and potentials
Although Japan's defense industry produces the majority of Japan's military technology and is recognized for its quality, the defense industry has historically faced head winds that prevented it from obtaining substantial growth. These headwinds include high production cost, low unit production, small domestic market, export ban, limited R&D budget and general pacifist views in Japan.
Production
Despite producing and supplying arms to one of the most powerful and expensive military forces, Japan's defense industry remains to be a small sector in the nation's overall manufacturing output. Due to the small economy of scale within the defense industry, local manufacturers that produce arms for Japan do not prioritize arms production heavily for revenue. Japan's top manufacturers rely on less than 10% of their revenue from defense contracts. The small profit return and small development in engineering skill contributes to a lack of growth; which leads to expensive production, an increased dependency on foreign defense contractors and/or companies pulling out of the defense sector; which in turn hurts the defense industry even more. To offset some of the problems, in 2013 Japan began to participate in international technology cooperation with other countries beyond the United States, such as the United Kingdom
The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Europe, off the north-western coast of the European mainland, continental mainland. It comprises England, Scotlan ...
and Australia. Japan's re-entry into the international arms market would allow Japanese manufacturers to establish more customers to further increase revenue and lower unit cost. The establishment of ATLA further benefits the defense industry by enhancing the efficiency of R&D, project management and procurement of military technology. One other potential for the Japanese defense industry's growth is through the usage of dual-use technology
In politics, diplomacy and export control, dual-use items refers to goods, software and technology that can be used for both civilian and military applications. . Japan possesses a vast array of advanced civilian technologies that have military application. Through ATLA, the Ministry of Defense
{{unsourced, date=February 2021
A ministry of defence or defense (see spelling differences), also known as a department of defence or defense, is an often-used name for the part of a government responsible for matters of defence, found in state ...
(MOD) has actively sought research collaborations with various research institutes, universities and companies to utilize advance civilian technology.
FS-X program
The FS-X program highlighted some of the struggles the Japanese defense industry faced.
The program originally aimed for the development of an indigenous fighter jet to succeed the Mitsubishi F-1
The Mitsubishi F-1 is a Japanese swept-wing, single-seat, twin-engine supersonic strike aircraft that was in service with the Japan Air Self-Defense Force (JASDF) from 1978 to 2006. It was Japan's first domestically designed and built supersoni ...
. Japanese defense contractors sought for domestic development to develop skills in manufacturing future aircraft and to preserve Japan's aviation industry. However, under U.S. pressure, the program switched to a jointly developed fighter based on the F-16.
The program drew criticism in Japan due to the government bowing to U.S. pressure. Japanese defense contractors and lawmakers were irate that the U.S. would gain access to advanced Japanese technology through the deal and local industries would not be able to profit as much compared to domestically developing the aircraft. There was also the belief that a domestically designed fighter would be superior to a modified F-16 design.
Further criticism was drawn from delays in the F-2's production, high production cost (about four times more expensive than a Block 50/52 F-16), and reduction of units from 141 aircraft to 94.
X-2 Shinshin
The development of the Mitsubishi X-2 is to help develop technologies and knowledge needed to produce a sixth-generation stealth fighter to succeed the Mitsubishi F-2. The X-2 made its historic maiden flight on 22 April 2016, cementing Japan as the fourth country in the world to fly their own stealth jet. The X-2's development is seen as a sign of Japan's aerospace and defense industry's revitalization. The MOD emphasized that the procurement of the future stealth fighter will be led by Japan, but international collaboration is still a possibility.
Arms export
For Japan, the benefits of exporting arms to another country includes improving economy of scale in the defense industry, lowering unit cost of the product and strengthen international relationships. Following the end of the self imposed ban in 2014, Japan began to promote its arms to the international market and has attracted a number of countries interest in Japanese arms. Japan secured its first export on 17 July 2014 by supplying gyroscopes to the U.S. to develop PAC-2 missiles for Qatar. On 13 May 2015, Japan hosted its first military trade fair. Despite the efforts, Japan continues to struggle with securing a major export deal. One issue Japan faces when exporting arms is the product's high unit cost and unique domestic requirements that might not be favorable for outside customers. In this regard, some have noted that Japan's defense industry suffers from Galápagos syndrome
is a term of Japanese origin used in business studies to refer to an isolated development branch of a globally available product. The term is used as an analogy to a part of Charles Darwin's ''On the Origin of Species''. Darwin encountered in t ...
. Another issue Japan faces is its lack of experience in exporting arms, exporting untested products and facing major competition against established suppliers. There is also hesitation for Japanese companies to participate due to arms sales representing a small amount of revenue and/or fear of reputation damage at home by being labeled as "merchants of death".
SEA 1000 Future Submarine Program
Japan's unsuccessful attempt at exporting the Sōryū-class submarine
The ''Sōryū''-class submarines (''16SS'') are diesel-electric attack submarines. The first boat in the class entered service with the Japan Maritime Self-Defense Force in 2009. The design is an evolution of the , from which it can most easily ...
to Australia highlighted Japan's major weaknesses in exporting arms to another country. The project, worth A$50 billion to replace Australia's ageing fleet of Collins-class submarines, could have been Japan's first major arms export since lifting the export ban in 2014, but it ultimately lost to French firm Direction des Constructions Navales Services (DCNS) with their proposal on a conventionally powered variant of the Barracuda-class submarine. Some major weakness shown was Japan's lack of experience exporting arms and competition against more experienced competitors. Initially, Japan enjoyed an advantage over other competition (with some speculation that the Sōryū-class has been pre-selected) because of the close relationship between then-Australian Prime Minister Tony Abbott
Anthony John Abbott (; born 4 November 1957) is a former Australian politician who served as the 28th prime minister of Australia from 2013 to 2015. He held office as the leader of the Liberal Party of Australia.
Abbott was born in Londo ...
and Prime Minister Shinzō Abe to bolster Australian-Japan strategic relationship and U.S. backing on selecting the Japanese submarines. Following dwindling public support, in February 2015 Tony Abbott announced a competitive evaluation process which pitted Mitsubishi Heavy Industries
is a Japanese multinational engineering, electrical equipment and electronics corporation headquartered in Tokyo, Japan. MHI is one of the core companies of the Mitsubishi Group and its automobile division is the predecessor of Mitsubishi Mo ...
(MHI) and Kawasaki Shipbuilding Corp. (KSC) against more experienced French firm DCNS and German firm ThyssenKrupp AG
ThyssenKrupp AG (, ; stylized as thyssenkrupp) is a German industrial engineering and steel production multinational conglomerate. It is the result of the 1999 merger of Thyssen AG and Krupp and has its operational headquarters in Duisburg a ...
(TKMS). One major requirement for the submarine program is that the submarines are to be built domestically to support local industries and jobs. Japan was initially reluctant to build submarines overseas and transfer technologies to Australia to aid in the future submarine's development. DCNS and TKMS agreed to the Australian government's demand for domestic production, which coincided with public interest. Another issue Japan faced was the Sōryū-class inability to meet Australia's submarine requirement. It has been pointed out that the Sōryū-class has a shorter range and speed than the Collins-class, Japanese submarines possess a shorter service life than Australia's, and there are uncertainties on whether the Sōryū-class can be modified for Australia's requirements. Ultimately, Japan's loss highlighted the country's over-reliance on political support from Tony Abbott (which ended with Malcolm Turnbull
Malcolm Bligh Turnbull (born 24 October 1954) is an Australian former politician and businessman who served as the 29th prime minister of Australia from 2015 to 2018. He held office as leader of the Liberal Party of Australia.
Turnbull grad ...
replacing him), inability to appeal to the Australian public, and inexperience exporting arms, allowing overseas production and modifying domestic weapons for foreign customers.
References
{{DEFAULTSORT:Defense Industry Of Japan
Industry in Japan
Japan