This article analyses the strategic shifts in Japan’s geopolitical and industrial posture, driven by the rise of economic security advocates like Sanae Takaichi. As global tensions rise, Japan is moving away from its traditional passive adherence to the international order toward an active strategy of “economic statecraft” and technological sovereignty. Focusing on critical sectors such as semiconductors, artificial intelligence (AI), and cybersecurity, this paper examines Takaichi’s policy proposals through the lens of comprehensive security. We employ a policy scan methodology to dissect the interplay between technological autonomy and alliance interdependence. The analysis highlights that Japan’s new strategy aims to secure supply chains against geopolitical coercion while redefining its role in the US-China rivalry. We conclude by outlining scenarios for regional stability and the potential risks of this strategic hardening.

Introduction

Background

The global security landscape has undergone a paradigm shift, moving from a focus on purely military defence to a broader concept of “economic security.” In this context, Sanae Takaichi, a prominent figure in Japan’s Liberal Democratic Party (LDP) and a former Minister of State for Economic Security, has emerged as a central architect of Japan’s assertive technological strategy. Takaichi advocates for a robust integration of economic policy and national security, arguing that control over critical technologies—specifically semiconductors and cyber capabilities—is as vital as traditional military assets. This shift is motivated by the increasing weaponisation of interdependence, particularly the risks posed by China’s dominance in supply chains and the need for Japan to secure its industrial resilience (Veitas & Delaere, 2018).

Problem Definition

Despite the growing importance of this strategic shift, the analytical frameworks used to evaluate Japan’s economic security often remain fragmented. Traditional international relations theories fail to adequately capture the technical granularities of modern supply chains, while purely technocratic analyses often overlook the high-stakes political incentives driving policy. Furthermore, there is a lack of quantitative or structural notions of “economic security” that can rigorously assess the resilience of a nation’s technological composition against targeted disruptions. This creates a gap in understanding how individual policy components—such as export controls or cyber-defence legislation—interact to form a cohesive security posture.

Limitations of Existing Approaches

Existing literature on Japan’s security policy is insufficient for two primary reasons. First, it frequently treats economic measures and security protocols as separate domains, failing to recognise the “entwined” nature of modern systems where economic losses in one sector can amplify risks in another, similar to vulnerabilities in composed smart contract systems (Priyadarshini & Bartoletti, 2025). Second, current analyses often lack a systematic methodology for scanning and integrating rapid technological advancements into long-term policy strategy, leaving a disconnect between legislative intent and the realities of the technological landscape (Veitas & Delaere, 2018).

Contributions

This paper contributes to the discourse on Japan’s strategic evolution by:

• Applying a structured “policy scan” framework to systematise Sanae Takaichi’s diverse proposals on economic security and technological competitiveness.
• Evaluating the geopolitical implications of Japan’s supply chain hardening through a theoretical lens of “economic security” and system resilience, drawing parallels to robustness in distributed networks.

Related Work

Policy Scan and Technology Strategy

To understand the alignment between societal needs and technological development, Veitas and Delaere introduce the “Policy Scan and Technology Strategy Design methodology” (Veitas & Delaere, 2018). Their work emphasises that accelerating technological advancement disrupts social fabrics, requiring policies that adapt to ill-defined problems. The strength of this approach lies in its ability to integrate “technology developments and availabilities with policy requirements” (Veitas & Delaere, 2018). This paper adapts their methodology to the context of Japan’s national strategy, viewing Takaichi’s doctrine as an adaptive response to the disruptive force of regional techno-nationalism.

Economic Security and System Resilience

The concept of economic security has been rigorously explored in the field of decentralised systems, offering useful theoretical analogies for state-level supply chains. Werner et al. distinguish between technical security and “economic security,” defining the latter in terms of the cost required to compromise a system relative to the profit gained (Werner et al., 2021). Furthermore, Nag et al. analyse the “Multiple Shared Security Providers” problem, demonstrating how fragmentation in security provision (or supply chains) can introduce vulnerabilities where adversaries target the weakest link (Nag et al., 2025). While these studies focus on blockchain ecosystems, their core insight—that interconnected components require a unified security model to prevent systemic failure (Priyadarshini & Bartoletti, 2025)—is directly applicable to analysing Japan’s interdependence with the US and Taiwanese semiconductor industries.

Strategic Infrastructure Control

Control over fundamental infrastructure is a prerequisite for sovereignty. Ahamed analyzes the technological strategy of the Global Positioning System (GPS), noting that while it is a dual-use US military asset, its continuous availability is critical for civilian economic activities worldwide (Ahamed, 2010). This highlights the strategic necessity of owning or securely accessing foundational technologies. Takaichi’s push for Japanese autonomy in space and cyber domains mirrors the strategic logic described by Ahamed, seeking to reduce reliance on external providers that could become points of failure or coercion.

Method and Approach

Framework: Policy Scan and Component Analysis

We utilise a modified version of the “Policy Scan” methodology (Veitas & Delaere, 2018) to analyse Sanae Takaichi’s strategic proposals. This approach allows us to treat political rhetoric and legislative action as data points in an “ill-defined” problem space. The framework consists of three modules:

• Environmental Scanning: Identifying key policy speeches, legislative bills (e.g., the Economic Security Promotion Act), and public statements by Takaichi regarding China and the US.
• Component Composition: Deconstructing the strategy into critical technological pillars: Semiconductors, AI, and Cybersecurity.
• Resilience Evaluation: Assessing the proposed “economic security” measures against a theoretical model of systemic risk, where the goal is to maximize the cost of adversarial action (sanctions, blockades) while maintaining system liveness (economic growth).

Rationale and Design Choices

The choice to view national economic security through a systems-theory lens is deliberate. Just as “DeFi protocols are heavily intertwined” and vulnerable to compositional attacks (Priyadarshini & Bartoletti, 2025), national industries are deeply coupled globally. A qualitative analysis alone fails to capture the structural fragility of these supply chains. By applying concepts of “stake fragmentation” and “unified security models” (Nag et al., 2025), we can better evaluate whether Takaichi’s policies effectively consolidate Japan’s strategic assets or merely displace risk.

Evaluation Plan

The evaluation (presented in the Analysis and Discussion sections) serves as a qualitative simulation. We assess the “viability” of Japan’s strategy by hypothesising scenarios of supply chain disruption. We ask whether the proposed policies create a “permissionless” yet secure environment for Japanese firms or if they impose centralised bottlenecks that reduce efficiency, drawing on the tension between security and open entry discussed in distributed consensus literature (Leshno et al., 2024).

Analysis: The Takaichi Doctrine and Economic Security

Critical Technologies: The New Trinity

Sanae Takaichi’s platform identifies three pillars of modern sovereignty: semiconductors, artificial intelligence, and cybersecurity.

• Semiconductors: Takaichi views domestic chip production not merely as an industrial policy but as a survival mechanism. Much like the “interchain timestamping” ensures security across different ledgers (Tas et al., 2023), Japan aims to establish itself as an indispensable node in the global semiconductor network (along with Taiwan and the US). The strategy involves massive subsidies for domestic manufacturing (e.g., Rapidus) to reverse the fragmentation of Japan’s industrial base.
• Artificial Intelligence: In the realm of AI, the strategy moves beyond development to governance. The approach mirrors the concerns in “Clockwork Finance” regarding automated risks; Takaichi advocates for guardrails that prevent AI from being used for disinformation or cyber-attacks against critical infrastructure (Babel et al., 2021).
• Cybersecurity: Takaichi has famously called for “active cyber defence,” a controversial stance in pacifist Japan. This shift acknowledges that passive defence is insufficient against state-sponsored actors. The logic aligns with the need for “slashable safety resilience” in economic systems, where malicious actors must face tangible penalties (counter-strikes or sanctions) to be deterred (Tas et al., 2023).

Economic Security and Industrial Resilience

Takaichi’s role has been pivotal in operationalising the Economic Security Promotion Act. Her analysis suggests that “economic security” is functionally equivalent to ensuring the integrity of a complex, composed system.

• Supply Chain Protection: The strategy aims to eliminate “single points of failure” (specifically reliance on China). This is analogous to the “Multiple SSP Problem” described by Nag et al., where relying on a fragmented or compromised set of providers lowers the cost for an attacker to disrupt the service (Nag et al., 2025). By “friend-shoring” supply chains to trusted allies (the US, Australia), Japan attempts to move from a “Model M” (fragmented) to a “Model S” (unified/shared) security architecture, thereby raising the cost of adversarial economic coercion.
• Export Controls: Japan has aligned with the US in restricting high-tech exports to China. This acts as a mechanism to deny adversaries the “computational power” necessary to challenge the status quo, similar to limiting validator sets to maintain consensus security (Wu et al., 2019).

Geopolitical Stance: China, USA, and Taiwan

Takaichi’s political stance significantly alters Japan’s diplomatic calculus.

• China: Her policies explicitly identify China as a structural threat to economic security. By advocating for decoupling in critical sectors, she pushes for a “hard fork” in the regional economy, accepting short-term efficiency losses for long-term security guarantees.
• Taiwan: Takaichi is a vocal proponent of closer ties with Taiwan. She views the security of Taiwan’s semiconductor industry as synonymous with Japan’s own economic security (Veitas & Delaere, 2018).
• United States: The strategy deepens reliance on the US security umbrella but seeks to elevate Japan from a junior partner to a co-developer of technology. This is a strategy of “interchain” security sharing, where both nations reinforce each other’s industrial base (Tas et al., 2023).

Discussion: Regional Impacts and Perspectives

Regional Impacts

The implementation of Takaichi’s strategies implies a turbulent transition for East Asia. The “technological strategy” of Japan is no longer neutral; it is an instrument of “geopolitical assertion” (Ahamed, 2010). As Japan hardens its infrastructure, neighbouring countries may be forced to choose between Chinese and US-Japan technology stacks, reducing the interoperability of regional markets. This parallels the “DeFi vs. CeFi” dichotomy, where distinct ecosystems operate with different rules, transparency levels, and security assumptions (Qin et al., 2021).

Scenarios

We propose three scenarios regarding the trajectory of this strategy:

• Strategic Hardening (The Fortress Scenario): Japan successfully re-shores critical industries and creates a semi-autonomous bloc with the US. This maximises “economic security” by reducing the attack surface but raises costs for consumers and stifles innovation due to reduced global competition.
• Strengthened Cooperation (The Mesh Scenario): Japan serves as a bridge, utilising “interchain” diplomacy to maintain trade with Southeast Asia while securing high-end tech with the US (Tas et al., 2023). This requires balancing “permissionless” trade in non-sensitive goods with strict controls on critical tech (Leshno et al., 2024).
• Heightened Tensions (The Fragmentation Scenario): Aggressive export controls and active cyber defence provoke retaliatory measures from China. In this scenario, the “economic security” measures paradoxically lead to greater instability, as the “attack cost” for adversaries becomes lower than the perceived existential threat of Japan’s re-militarisation (Nag et al., 2025).

Limitations and Ethics

A significant limitation of Takaichi’s approach is the assumption that political will can override market efficiencies. As noted in the study of open-source financial rails, systems that ignore economic incentives (like energy consumption or cost) often face viability challenges (Leshno et al., 2024). Furthermore, the ethical risk of “active cyber defence” involves the potential for escalation without clear international legal frameworks, risking a transition from economic competition to kinetic conflict.

Conclusion

Sanae Takaichi’s rise represents a decisive pivot in Japan’s national strategy, moving from passive pacifism to proactive economic security. By treating critical technologies—semiconductors, AI, and cyber capabilities—as integrated components of national defence, her doctrine seeks to secure Japan’s position in a volatile geopolitical landscape. Our analysis, informed by methodologies of system resilience and policy design (Veitas & Delaere, 2018)(Priyadarshini & Bartoletti, 2025), suggests that while this strategy enhances Japan’s resistance to coercion, it inevitably accelerates the fragmentation of the global technology market. Japan is evolving into a “node” that not only processes global transactions but actively validates and secures the rules of the regional order, signalling a new era of geopolitical assertion.

Title Image Courtesy: https://theconversation.com/

Disclaimer: The views and opinions expressed by the author do not necessarily reflect the views of the Government of India and the Defence Research and Studies.

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