Insight – Japanese defence market seeks international collaborators
Like many countries, Japan is undertaking a significant renewal and upgrade
of its defence and security capabilities. The Japanese Government is
spending just under A$370 billion on defence up until early 2024. With the
industry gradually opening to collaborations with overseas partners, this
presents many opportunities for Australian businesses.
Historically, Japan’s defence industry has been the major supplier of the
nation’s Self-Defense Forces. Japan is now spending a higher proportion of
its procurement on foreign systems. New requirements in Japan’s Mid-Term
Defense guidelines mean the Japanese industry has to grow new capabilities
to support the Japanese Self-Defense Forces.
Australia is currently Japan’s sixth biggest source of defence equipment,
having sold roughly A$40 million worth of equipment since the early 2000s.
As a fellow US ally, Five Eyes member and Japan’s most trusted security
partner in the Asia-Pacific region, Australia is well positioned to fulfil
Japan’s capability needs by supplying existing technology and/or jointly
developing unique solutions.
While there are language and cultural barriers, Australian businesses have
an advantage over competitors due to the strong relationship between the
Australian and Japanese Governments and our advanced, niche technologies.
Under the Australian Government’s 2018 Defence Export Strategy, the
Department of Defence and Austrade are increasing resources and assistance
to Australian exporters. This includes a dedicated Defence and Security
Director based in Tokyo, new trade missions and deeper engagement with
Japanese defence businesses.
Collaboration a priority for Japan
The Japanese Government and industry have indicated that international
collaboration in defence R&D and production is an important priority,
to help Japan maintain a defensive edge and spread and reduce costs.
Australian defence enterprises that can demonstrate a deep understanding of
Japan’s capability needs and that are willing to partner with Japan’s
domestic industry and local trading houses will be well positioned to take
advantage of opportunities. Australian companies with experience in
supplying proven, cutting-edge technologies, products and/or services to
the Australian Defence Force and other Western militaries have the
potential to be attractive in market.
Opportunities in the Japanese defence market flow out of the National
Defence Program Guidelines and Mid-Term Defence Program (MTDP), a five-year
capability acquisition plan. The MTDP has allocated approximately A$360
billion to missile defence, cyber, and space and cross-domain warfare
capabilities, all of which offer opportunities for Australia.
Overcoming market barriers
Japan, however, can be a difficult market to access. In addition to
language and cultural differences, there is historical legacy and a largely
protected industrial defence base to contend with. It is also difficult for
external parties to access information on the defence decision-making
This is not to say the difficulties can’t be overcome. Patience and
persistence, a willingness to understand Japanese needs and invest in
relationships, and localised representation and partnership are key to
Businesses that have been successful have dedicated significant time to
thoroughly researching Japan’s capability requirements and invested in
local partnerships and representation. They have also made use of timely,
accurate and tailored information – an area where Austrade can provide
Fostering opportunities in the Japanese market
To explore and better understand the opportunities in Japan’s defence
market, Austrade and the Australian Defence Export Office hosted a trade
mission in November 2019. This mission helped further develop defence
export opportunities in Japan and provided new insights on how Australian
businesses can succeed.
The mission was led by the Australian Defence Export Advocate, the Hon.
David Johnston, and senior ADF capability owners from each service, headed
by Chief Joint Capability Air Marshall Warren McDonald. Eighteen Australian
companies, four defence scientists and defence R&D institutions
promoted their technologies and developed opportunities during the mission.
A key takeaway from the mission was the importance of and opportunities
provided by the shared strategic objectives of our broader defence and
security cooperation with Japanese defence officials, industry
representatives and R&D institutions.
The mission’s flagship event – the Australia-Japan Defence Technology and
Industry Symposium (DTIS) – was held on 22 November adjacent to the
Japanese Ministry of Defense. DTIS attracted over 140 pre-registrations
from over 50 Japanese companies, as well as many Japanese defence uniforms
and officials. The symposium facilitated 21 industry capability
presentations showcasing Australia’s defence technology excellence across a
broad range of fields.
The presence of senior Australian and Japanese officials at the DTIS
networking reception highlighted the importance of the Australia-Japan
defence relationship. The reception was opened by the Australian Defence
Minister, Senator the Hon. Linda Reynolds, and attended by current and
former senior Japanese Government Ministers and defence officials. This
senior level of representation is hard to achieve in Japan, emphasising the
growing enthusiasm from both governments for finding ways to stimulate
greater defence industry collaboration.
Some of Japan’s biggest defence primes, Mitsubishi Heavy Industries and
Fujitsu, also exhibited their future technologies at DTIS and held meetings
with mission participants.
The briefings and panel discussions at the mission revealed some valuable
tips for Australian exporters, including the need to localise business
development work. Companies should consider partnering with or employing
long-term defence insiders who have the native language skills, cultural
and market knowledge, and personal networks to assist with market entry.
A clear insight from DTIS is that Japan is increasingly open to
collaboration with Australia. In particular, Australian companies with
experience delivering to other Western militaries in areas new to the
Japanese defence industry such as cyber are well placed to succeed.
To help explore Japanese defence opportunities, Austrade has appointed a
dedicated Defence Business Development Manager, Mr Hiroshi Ueno, operating
from Austrade’s Tokyo office.
Australian companies interested in entering the Japanese defence and
security sectors should contact Austrade’s Defence, Advanced Manufacturing and Space team.