Daniel Manning 
Former Special Advisor to the Minister of Defense, Yoshiaki Wada, delivers a speech at the Strengthening Japan Through Its Defense Industry symposium, June 21, Chiyoda Ward, Tokyo (©Sankei by Yuki Kajiyama).
As geopolitical tensions intensify, Japan's defense industry finds itself at a historic inflection point. A recent symposium, Strengthening Japan Through Its Defense Industry (Nihon o tsuyoku suru boei sangyo), brought together key political leaders, defense experts, and industry insiders to confront the urgent need to revitalize Japan's defense production capacity.
The message was clear: Japan's ability to deter threats and assert strategic autonomy depends on the industrial engine that equips its Self-Defense Forces.
A Shifting Strategic Landscape
Former Special Advisor to the Defense Minister Yoshiaki Wada, one of the speakers, opened his lecture with a blunt appraisal of the regional security environment. China and Russia now field a combined force of over one million troops and nearly 1,000 naval vessels, dwarfing the joint capabilities of Japan and United States forces in the region.
While military effectiveness cannot be measured by numbers alone, Wada warned against underestimating the threat. "We must learn from Ukraine," he stated. "What we once thought unthinkable can become reality."
The symposium framed Taiwan as a potential flashpoint, with major repercussions for Japan. A Chinese military operation could cripple sea lanes vital to Japanese energy and food supplies. "A Taiwan contingency is not just Taiwan's problem," Wada stressed. "It's a Japanese problem, and a global economic one."
Defense Industry as National Power
Against this backdrop, Liberal Democratic Party lawmaker and former defense minister Minoru Kihara reminded the audience that Japan's defense posture rests on two pillars: Self-Defense Forces personnel and defense equipment. "Without advanced, domestically-produced equipment," he noted, "even the most skilled troops cannot fulfill their mission".
This view has gained institutional traction. The 2022 revision of Japan's National Security Strategy explicitly defined the defense industrial base as part of defense power itself.
Still, Kihara acknowledged that for many Japanese firms, defense remains a peripheral business — underfunded, undervalued, and politically sensitive. In some cases, reputational risk has even driven companies to exit the sector.
Industry Challenges: Structure, Incentives, and Expectations
Nobuaki Miyama, former Director-General of the Acquisition, Technology and Logistics Agency, identified three main challenges confronting Japan's defense sector. They included structural weakness, global supply chain disruptions, and low profit margins.
Unlike the US, Japan has no pure defense contractors. Most firms treat defense as a side business, making them highly vulnerable to shifting market and political conditions. Moreover, the historical focus on domestic demand has bred a monocultural procurement model. "Until recently," Miyama said, "the only customer was the Japanese government."
While government policies like the Act on Enhancing Defense Production and Technology Bases and export promotion initiatives are steps forward, Miyama emphasized that these are like vitamins, not staple nutrition. "What's truly needed," he argued, "is stable, long-term procurement. That's the rice of the industry."
A Dual Mandate: Self-Reliance and Global Integration
Keio University Professor Ken Jimbo addressed the broader strategic reorientation of global defense economies post-Ukraine. "The assumption that wars are short and tech-driven has collapsed," he said. "We are now in an era of prolonged, hybrid conflicts where industrial resilience is critical".
This demands a rebalancing between responsiveness and sustainability. Countries like Germany and Poland are boosting defense budgets and rebuilding stockpiles. Meanwhile, the EU is promoting joint procurement schemes. Elsewhere, the US faces its own defense-industrial bottlenecks, as seen in its struggles to meet the demand for Ukraine and Israel.
Jimbo also stressed that Japan must navigate a difficult trade-off: maintaining domestic production for self-reliance, while deepening international industrial cooperation to accelerate innovation and expand market access. "The key," he said, "lies in licensing, joint development, and supply chain integration, not autarky."
The Manufacturer's View: Mitsubishi Electric
As an industry representative, Masahiko Arai of Mitsubishi Electric highlighted his company's bold steps to meet rising demand. These include over ¥70 billion (approximately $450 million USD) in new investments and plans to expand its defense workforce by 1,000 employees.
Arai outlined three strategic pillars for revitalization:
- Domestic Readiness – Expanding production and maintenance capacity in anticipation of a surge in defense contracts.
- Geopolitical Engagement – Positioning defense exports as tools of diplomacy and regional security.
- Global Collaboration – Building resilient supply chains through joint development with partners and allied nations.
"Our industry can't remain inward-looking," Aarai said. "We must think strategically, globally, and long-term."
Beyond Profit: Rethinking Value
Throughout the symposium, participants returned to the same core question: how to make defense a strategically attractive and commercially viable sector. The current system's low profitability, often below 3%, discourages investment and talent acquisition. Environmental, social, and governance (ESG) concerns, meanwhile, have made defense a reputational liability for some firms.
But speakers pushed back against the idea that defense should be judged by civilian commercial metrics alone. "This is not just another business," said Kihara. "National security is at stake. So is sovereignty. And in the end, it's the difference between deterrence and defeat."
As the presentations noted, Japan's defense industry is no longer just a supplier — it is a strategic actor. Ensuring its survival and competitiveness in today's security environment will require more than subsidies or reforms. It will require a national consensus on the vital role of defense manufacturing in preserving Japan's peace, autonomy, and prosperity.
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Author: Daniel Manning
