If Japan could use an economic security strategy, shouldn’t Australia consider one also?

Few nations have the unbridled economic potential of Australia, endowed with seemingly endless natural resources from coal and iron ore to gold and rare earth elements, or our world-leading yet comparatively underdeveloped bread baskets, yet for one reason or another, we seem determined to not realise this potential.

This has meant that Australia’s economy has become relatively unique among many of the global “developed nations”, being widely characterised by a largely undeveloped and uncomplex sectors, like the export of raw resources, energy, agricultural produce, real-estate speculation, and a niche group of services from the “knowledge economy”.

This comes despite Australia being one of a select group of nations who have quite possibly benefited the most from the post-Second World War, American-led global order, where America’s security guarantee provided the stability for an explosion of global economic wealth and prosperity through waves of globalisation.

In stark contrast to this reality, one of Australia’s contemporaries, Japan, pursued a vastly different approach to economic development, which has seen the comparatively small island nation emerge from the devastation of the Second World War to become one of the world’s great economic, industrial, political and increasingly strategic powers once again.

This shift has been driven in large part by the rise of the People’s Republic of China as a new contender to the title of the Indo-Pacific and the world’s economic, political and strategic hegemon.

In response, many nations, including both Australia and Japan, have seen a marked shift in priorities as national security and great power competition has once again become the global norm.

On the economic front, the lingering impact of the COVID-19 pandemic, coupled with ongoing conflicts in Europe and the Middle East, have reinforced the importance of economic and industrial security in an increasingly dangerous period of global history.

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This reality, combined with Japan’s experience during the Second World War has seen a growing chorus of experts calling for Japan to consider the development of an economic security strategy, leading this charge is Rintaro Nishimura of Washington-based The Asia Group in a piece for Lowy’s The Interpreter, titled Japan would benefit from an economic security strategy.

An overarching, coherent plan

Nishimura begins his advocacy with a single, eerily familiar statement, “An overarching, single document is the logical next step for a government that sees economic security as part of national security.”

Upon reading that, my initial thought was of the late Jim Molan’s repeated advocacy for a comprehensive Australian National Security Strategy in the vein of America’s own quadrennial National Security Strategy, the last of which was handed down by the Biden administration in October 2022.

While Australia has, in the past few years, made progress on this, with the 2020 Defence Strategic Update and 2020 Force Structure Plan, and more recently, the 2023 Defence Strategic Review and supporting 2024 National Defence Strategy and restructured Integrated Investment Program, little in the way of progress seems to have been when it comes to our nation’s economic security.

Bringing me in a roundabout way back to Nishimura’s thesis, which he explained, saying, “Economic security has become an established concept in the present era as the return of great power competition muddles the line between security and economic issues. Governments are increasingly engaged in areas that had once seemed more the domain of private enterprise, particularly in acquisition and control over critical and emerging technologies.”

This serves as an important point of framing and context behind Nishimura’s push for Japan to establish a comprehensive economic security strategy, with Nishimura adding, “Japan has in many ways been a frontrunner in economic security policy in recent years, understanding its relative shortages vis-à-vis the United States and China, and marshalling resources to enhance domestic capacity and promote cross-border cooperation with like-minded partners.

“As the geopolitical situation deteriorates and countries increasingly look inward to generate national power, and with industrial policy increasingly a proxy of such debates, the Japanese government needs an overarching approach.”

Importantly, Japan isn’t alone in facing these challenges, as the COVID-19 pandemic, Black Summer Bushfires and the war in Ukraine and the Middle East have demonstrated in recent years, Australia, for all of its economic potential, is incredibly vulnerable to the impact of both domestic and global shocks.

While Australia has seen efforts to reshore a host of manufacturing industries and initiate a period of reindustrialisation in the country via initiatives like the Albanese government’s Future Made in Australia Bill, the scale and scope of what Nishimura is proposing dwarfs the rather mediocre efforts and ambition of the Future Made in Australia policy.

Unpacking this proposal, Nishimura detailed, “Having a coherent, authoritative document would also present a more consistent picture of Japan’s economic ambitions. For domestic audiences, it would connect seemingly dispersed policies being pursued by ministries and agencies across government under a common objective (such as subsidies under 5G promotion or corporate tax relief for manufacturing in sectors designed to promote chip production).”

He added, “For foreign audiences, having a comprehensive economic strategy document would assuage concerns about the intention behind measures such as mass subsidies and export controls, which some may perceive as antithetical to cooperation toward maintaining and strengthening a free and open economic order.”

However, Nishimura is clear to highlight that preparing such a plan isn’t without its own unique challenges and complexities, particularly given the nebulous and almost ethereal nature of what constitutes the concept of “Economic Security” and accordingly, how that understanding will inform the development and implementation of an economic security strategy.

Nishimura stressed this, saying, “A lack of clarity surrounding the scope of Japan’s economic security policies is also making life hard for corporate Japan. While larger companies have started to establish economic security units within their businesses, many are unsure what constitutes economic security.”

Going further, Nishimura added, “This was illustrated by a Japan Chamber of Commerce and Industry survey last year showing about 75 per cent of firms only had a slight understanding of the concept. Setting out a government direction on economic security would enable strong coordination between the public and private sector to respond swiftly and aptly to the fast-changing state of affairs.”

Somewhat helpfully, Japan has taken some of the ambiguity out of the question of what constitutes “Economic Security”, with the nation’s revised 2022 National Security Strategy, defining it as “Economic security is to ensure Japan’s national interests, such as peace, security, and economic prosperity, by carrying out economic measures ... Japan will coordinate ideas on necessary economic measures and execute these measures comprehensively, effectively and intensively to enhance Japan’s self-reliance and to secure the advantage and indispensability concerning our technologies and others.”

Time for Economic Security Act?

In an effort to steadily boost its economic security, Japan implemented the Economic Security Promotion Act, which established four central pillars for establishing supply chain resilience, securing critical and essential infrastructure, developing cutting-edge technologies and the protection or “non-disclosure” of patents.

This legislative and regulatory framework is supported by the Japanese Ministry of Economy, Trade, and Industry’s Economic Security Action Plan which emphasises the three P’s: promote (industry), protect (industry), and partner (with foreign countries).

Nishimura detailed the importance of these overlapping plans, saying, “Taken together, the two documents present a clear desire to protect and develop Japan’s indigenous industrial and technological output, while partnering with like-minded countries in areas where Japan lacks or is incapable of addressing challenges alone.”

These two plans establish a legislative and regulatory framework upon which a similar Australian model could be established, with two additional priorities and something that is clearly missing from the Japanese document, the commercialisation and export factors to help in-build economies of scale and broader industrial expansion as a result of the policy shift.

Obviously a one-for-one rip-off of Japan’s approach is not appropriate and accordingly, “Australianising” such a policy and strategy would be essential to guaranteeing its success, as is a necessary review of existing legislative and regulatory barriers that exist across state, territory and Commonwealth jurisdictions to increase our competitiveness.

But all of this is a case of putting the cart before the horse or may indeed prove unnecessary if Australia develops and commits to implementing a comprehensive National Security Strategy.

Final thoughts

Despite the rhetoric and lofty ambition highlighted by both sides of the political debate, this all paints a fairly gloomy picture for the average Australian, no matter the demographic group in which they fall, but especially the younger generations.

Declining economic opportunity, coupled with the rapidly deteriorating global and regional balance of power and the increased politicisation of every aspect of contemporary life, only serves to exacerbate the very reality of disconnection, apathy, and helplessness felt by many Australians.

This attitude is only serving to be compounded and creates a growing sentiment that we are speeding towards a predestined outcome, thus disempowering the Australian people and, to a lesser extent, policymakers, as we futilely confront seemingly insurmountable challenges with little to no benefit and at a high-risk/reward calculation.

Taking into account the costs and implications, it is therefore easy to understand why so many Australians, both in the general public and within our decision-making circles, seem to have checked out and are quite happy to allow the nation to continue to limp along in mediocrity because, well, it is easier than having lofty ambitions.

If both Australian policymakers and the Australian public don’t snap out of the comforting security blanket that is the belief in the “End of History”, the nation will continue to rapidly face an uncomfortable and increasingly dangerous new reality, where we truly are no longer the masters of our own destiny.

Our economic resilience, capacity, and competitiveness will prove equally as critical to success in the new world power paradigm as that of the United States, the United Kingdom or Europe and we need to begin to recognise the opportunities presented before us.

Expanding and enhancing the opportunities available to Australians while building critical economic resilience, and as a result, deterrence to economic coercion, should be the core focus of the government because only when our economy is strong can we ensure that we can deter aggression towards the nation or our interests.

Get involved with the discussion and let us know your thoughts on Australia’s future role and position in the Indo-Pacific region and what you would like to see from Australia’s political leaders in terms of partisan and bipartisan agenda setting in the comments section below, or get in touch at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..