Japan Eyes ¥370 Trillion Roadmap for 17 Strategic Sectors

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The Japanese government has released a draft roadmap calling for more than ¥370 trillion (about $2.3 trillion) in public and private investment by fiscal 2040 across 17 strategic sectors emphasized by the Sanae Takaichi administration.

The plan aims to strengthen Japan's position in products and technologies where it already has an advantage, with the goal of becoming indispensable in global supply chains. By securing key roles in these chains, the government seeks to achieve both economic security and sustained economic growth.

The draft was presented at a joint meeting of the Council for Japan's Growth Strategy and the Council on Economic and Fiscal Policy and will be incorporated into the upcoming Growth Strategy. It also outlines investment targets and spillover effects for 62 products and technologies derived from the 17 strategic fields.

At a joint meeting, Prime Minister Takaichi said the government will introduce an "investment framework for a strong and prosperous Japan" to promote public-private investment aimed at supporting growth.

Ahead of the annual budget formulation process, she also stated that there would be no upper limit on ministry budget requests in order to ensure that "truly effective investment support measures can be included." The framework is set to be adopted starting with the fiscal 2027 budget.

The government aims to develop and supply products and technologies that help address global challenges while strengthening Japan's presence in supply chains where it is considered "indispensable."

Semiconductors and Economic Impact

In the area of advanced and next-generation semiconductors—key components for physical AI, which uses artificial intelligence to autonomously control robots—investment in semiconductor development is projected to reach up to ¥68 trillion (about $420 billion) by fiscal 2040. The overall economic spillover effect is estimated at ¥443.3 trillion ($2.7 trillion).

An official from the secretariat of the Japan Growth Strategy Headquarters said that "AI is an engine that accelerates all 17 fields," adding that Japan's ability to secure market share in semiconductors—a core component of AI systems—will be key to the future of the Japanese economy.

Energy Security and Perovskite Solar Cells

From an energy security perspective, the plan allocates an estimated ¥4.1 trillion ($25 billion) in investment for next-generation solar cells by fiscal 2040. Among these, perovskite solar cells are lightweight, thin, and flexible, allowing them to be installed in a wide range of locations.

Notably, iodine—the main raw material—is produced in large quantities in Japan, ranking the country as the world's second-largest producer, raising the possibility of a more domestically sourced energy supply.

Kazuto Suzuki, a professor at the University of Tokyo's Graduate School of Public Policy and a member of the Japan Growth Strategy Council, noted that prioritizing economic rationality alone could lead to dependence on specific countries, while avoiding such dependence would require purchasing at higher costs from abroad, potentially constraining growth.

However, he added that if Japan can secure overwhelming market share, it would allow for freer pricing, arguing that "security and growth should be pursued simultaneously, not separately."