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Japan to set up advanced-tech fund with eye on economic security

TOKYO — Japan will establish a 100 billion yen ($875 million) fund to help accelerate research and development of advanced technologies and enhance economic security, Nikkei has learned.

 

The government plans to kick off the fund next year. It will be the country’s first fund dedicated to economic security. Investments will go into artificial intelligence and quantum technology, biotechnology, and robotics — all of which have military applications.

 

Newly elected Prime Minister Fumio Kishida has pledged to double down on economic security. His government hopes to increase domestic tech development in a bid to counter threats from other countries.

 

The fund will be formed under Japan’s New Energy and Industrial Technology Development Organization and the Japan Science and Technology Agency. Other areas — fifth-generation networks, big data and semiconductors — will be included.

 

Funds will be provided to universities and companies to promote research and development, demonstration tests and practical applications in fields the government deems crucial.

 

Japanese Prime Minister Fumio Kishida hopes to stoke more tech development to counter threats from other countries.   © Reuters
 

The fund will likely be co-administered by the Cabinet Office, the Ministry of Economy, Trade and Industry, the Ministry of Education, Culture, Sports, Science and Technology, as well as the National Security Secretariat. It will be included in Japan’s fiscal 2021 supplementary budget to be formed after the general election on Oct. 31.

 

To ensure ample funds can be provided over a longer period, the state budget will be a source for about five years. Kishida has said he aims to correct the “harmful effects that result from deciding public finances on a single fiscal year basis.”

 

With the fund, the government also seeks to prevent outflows of researchers and technology. Although Japan has advanced research infrastructure, it has struggled to keep its talent, partly due to a lack of funds. The country also faces the risk of insufficiently funded companies being acquired by foreign rivals.

 

Last year, the U.S. announced a national strategy to foster 20 key sectors, including AI and semiconductors, as concerns rise over tech leaks to China. A Harvard University professor was indicted in 2020 for accepting U.S. government subsidies while lying about his involvement in China’s Thousand Talents Plan to recruit tech talent.

 

Japan will also work to prepare a law to protect domestically developed technology. The government aims to submit a comprehensive law covering economic security to the ordinary Diet session that will be convened in January. Its main pillar will be the introduction of a system that prevents tech leaks to other countries.

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