The Sanae Takaichi Cabinet said it will pursue at least 370 trillion yen (about 3.5 quadrillion won) in combined public and private investment by 2040 for 17 growth-strategy projects promoted as policies to build "a stronger Japan."
According to Japanese media on the 20th, the 17 strategic fields are physical artificial intelligence (AI); semiconductors; drones; shipbuilding, including liquefied natural gas (LNG) carriers; the defense industry; quantum; aviation and space; content; digital and cybersecurity; nuclear fusion; information and communications; and oceans. This is the flagship economic policy of the Takaichi administration, which has put forward "responsible proactive fiscal policy," aiming to inject national finances to spur private investment and raise the international competitiveness of key industries.
Among these, the Japanese government picked the physical AI field as a priority task as a next-generation growth engine. It plans to invest 10.5 trillion yen (about 996 billion won) by 2040. It also plans to invest a total of 29 trillion yen (about 275 trillion won) across three areas—next-generation wireless communications, optical communications, and undersea cables—to build communications infrastructure essential for AI proliferation.
In addition, it will promote activation of public-private investment in resource development such as rare earths; drone development and production; Nuclear Fusion Power; cloud; and battery storage. The content industry, including Japanese animation and film, will also be expanded to an annual scale of 20 trillion yen (about 189.7 trillion won) by 2033, with a policy goal of raising it to a level comparable to automobile export value.
The Japanese government decided to manage the funding for the 17 growth-strategy fields separately from existing expenditures. To help corporations make mid- to long-term investment decisions, it aims to minimize annual budget constraints and establish a new expenditure framework that improves predictability. At the same time, it plans to inject finances within a range where the ratio of national debt to gross domestic product (GDP) is managed stably.
However, some noted that it is difficult to be optimistic about the performance of growth industries such as AI and semiconductors. Nihon Keizai Shimbun cited past failures of government-led industrial policy, pointing to Elpida Memory, which went bankrupt in 2012, and Japan Display (JDI), which went bankrupt in 2023.