The Sanae Takaichi Cabinet said it will push at least 370 trillion yen (about 3,500 trillion won) in combined public-private investment by 2040 for 17 growth-strategy projects promoted as measures to build "a stronger Japan."
According to Japanese media on the 20th, the 17 strategic areas are physical artificial intelligence (AI); semiconductors; drones; shipbuilding, including liquefied natural gas (LNG) carriers; the defense industry; quantum; aviation and space; content; digital and cyber security; nuclear fusion; information and communications; and the ocean. This is the flagship economic policy of the Takaichi administration, which has put forward "responsible active fiscal policy," with a plan to inject national finances to spur private investment and lift the international competitiveness of key industries.
Among them, the Japanese government singled out the physical AI field as a priority task as the next-generation core growth engine and decided 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 submarine 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 generation; cloud; and battery storage. The content industry, including Japanese animation and film, will also be expanded to 20 trillion yen (about 1,897 billion won) annually by 2033, with the aim of raising it to a level comparable to automobile export value.
The Japanese government decided to manage funding for the 17 growth-strategy areas separately from existing expenditures. To help corporations make medium- to long-term investment decisions, it plans to minimize annual budget constraints and create a new expenditure framework that increases predictability. At the same time, it intends to deploy finances within a range in which the ratio of national debt to gross domestic product (GDP) is managed stably.
However, some noted 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 examples such as Elpida Memory, which went bankrupt in 2012, and Japan Display (JDI), which went bankrupt in 2023.