In December 2022, the Japanese Government published a new National Defence Strategy, which further prioritised the threat of neighbours China, N Korea and Russia, and consequently increased the budget by 20% to a record 114.4 trillion Yen ($863 billion) for the next financial year from April, with a target of doubling it to 2% of GDP by 2027. Growth areas include military facilities, warships and submarines.

Also in Dec 2022, Japan, Italy and Britain announced the Global Combat Air Programme (GCAP) collaboration to develop, by 2035, a next generation jet which would combine the British-led Tempest project with Japan’s F-X programme. This represents a huge opportunity for British Defence Contractors at all levels of the supply chain to collaborate and achieve mutual success with new Japanese partners.

It is often said that Japan is unique. In defence, with procurement prices double or even triple the home country price, no formal countertrade requirement, and an industrial base which is reluctant to export, I can confirm that it really is! 27 years in Japan have taught me that Japan is unlikely to transform to Western defence procurement norms in the medium term, but it is changing faster than ever in the last decade….but still at glacial speed.

Although now theoretically possible for foreign companies to contract directly with JMoD, it is impossible for new-comers, so finding success through partnership with a manufacturer or Trading Company is the recommended model. Finding a like-minded, right-sized partner is the key.

The new Defence Strategy includes provisions for the sustainment of the Japanese supply chain, allowing defence companies to make larger profits, and so become more significant business divisions in predominantly consumer goods-producing company Board Rooms. It has been difficult for Defence Divisions to get any attention when delivering only 5% of the turnover.

1. Choose your partner carefully, taking advice from local advisors who know their reputation and history. Take advantage of DSEI Japan in Tokyo in March 2023 to conduct market research and instigate some initial relationships.
2. Demonstrate long-term commitment to Japan by setting up a legal entity, at least a virtual or temporary serviced office and staffing appropriately.
3. Be patient – relationship and trust building, and campaigns can take 3-5 years.
4. Learn how to conduct business the Japanese way – one cultural faux pax can lose the bid!
5. Under-promise and over-deliver; that way you will not cause your customer or partner to lose face, a calamitous event in Japan.