Defense Chief Koizumi Takes Aim at Japan's Drone Deficit

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Defense Minister Shinjiro Koizumi on Wednesday inspected a Nagoya-based manufacturer developing domestically produced drones, as Japan moves to strengthen a fragile production base.

Drones have become a critical weapon in modern warfare, yet Chinese-made models account for roughly 90% of Japan's domestic market. The government is now working to make it easier for startups to enter the sector, including by urging state-backed financial institutions that have long restricted investment in weapons-related businesses to rethink their policy.

Building for the Drone Age

Koizumi visited Prodrone, a maker of industrial drones. As he toured the company's facilities, where large cargo drones and other models were on display, the firm also showed the defense minister a newly completed attack drone.

Prodrone is working to develop fully Japanese-made drones using domestically sourced key components and plans to promote dual-use systems that can serve both civilian and military purposes in a crisis.

"Having a domestic production base for unmanned systems is indispensable, and the government will support investment and work to bolster supply chain resilience," Koizumi told reporters after his tour.

Russia's invasion of Ukraine has seen drones used on a scale of millions, with countries now racing to secure supplies. The Japanese government regards the weapon, especially when paired with artificial intelligence, as central to modern warfare.

Tokyo plans to include the strengthening of the domestic production base in revisions to its three key security documents, including the National Security Strategy, which it aims to update by the end of the year.

According to the Ministry of Economy, Trade and Industry, Chinese-made drones dominate the civilian market, accounting for about 70% of the global share. In Japan, Chinese products make up 91% of the market, while Japanese-made drones account for just 3%.

Defense officials are concerned that if supplies were cut off, the country's ability to sustain combat operations could be directly affected.

Funding the Gap

For startups, a major obstacle has been financial institutions' reluctance to back companies involved in weapons-related businesses. At a Lower House Security Committee session on May 12, Koizumi said such investment restrictions had made it harder for startups with weak financial foundations to enter the business.

"Even as we review our policy on defense equipment, government-affiliated financial institutions are continuing to respond as they always have," he said, singling out the Development Bank of Japan by name.

In response, the bank revised its loaning rules and investment for weapons-related businesses by May 19, effectively abolishing the restrictions in principle.

A bank official said investing in weapons had long been considered socially problematic, but noted that the latest decision reflected changes in the international security environment and revision of Japan's Three Principles on Transfer of Defense Equipment and Technology.

Prodrone CEO Shunsuke Toya welcomed the move after Koizumi's visit. "This is an extremely significant decision," he told reporters. "For small manufacturers producing goods that serve the national interest, support from government-affiliated financial institutions is enormously reassuring."

The desire for peace in Japan has often translated into an almost reflexive aversion to anything military—a habit that has seeped deep into the foundations of the defense industry.

One ruling party lawmaker well-versed in security policy said Koizumi's public naming of the development bank appears to have had an effect.

"The environment supporting Japan's defense industry is beginning to change from the ground up," the lawmaker said.

Author: Taisuke Nanjo, The Sankei Shimbun

(Read this article in Japanese)

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