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Can Japan Become the ‘World’s Most AI-friendly Country’?

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Tokyo Report | Security | East Asia

Can Japan Become the ‘World’s Most AI-friendly Country’?

As the world faces rapid change and competition over AI, Japan’s step-up is significant for the East Asian region but also the wider world. 

Can Japan Become the ‘World’s Most AI-friendly Country’?
Credit: ID 122478205 © Blackboard373 | Dreamstime.com

The deterioration of security in the Indo-Pacific has generated a great deal of discussion in Japan about the sustainability of the pacificist provisions in its constitution. Not surprisingly, artificial intelligence (AI) has emerged as a key factor in any potential shifting of this position.

One only has to look at the government’s second AI White Paper, which called for Japan to become the “world’s most AI-friendly country.” It further asserted that as the world enters a period of flux – more dynamic in all aspects of technology, services, utilization, and regulation – nations with the best “understanding of AI and the easiest implementation of AI” are likely to prosper. For the Japanese government, this entails strengthening competitiveness, maximizing profits, and minimizing risks. 

While easier said than done, Japan has quickly caught onto the AI zeitgeist, gaining the attention of some of the world’s most important investors. Recently, start-up Sakana AI received backing from Nvidia in a $137 million funding round, pushing the company to a $1 billion valuation in just over 12 months. Microsoft has promised to invest $2.9 billion over two years in Japanese data centers and cloud infrastructure. OpenAI’s Sam Altman has a new office in Tokyo, while Amazon Web Systems announced a 2.26 trillion yen investment into its existing cloud infrastructure in the country. 

Meanwhile, Japanese brands are leading the world in AI deployment. According to one recent report, 82 percent of businesses have implemented full or partial AI solutions and pilots. This compares favorably to 61 percent in the United States, 55 percent in Europe, and 50 percent in Australia and New Zealand. 

A novel policy approach has spearheaded these advances. Last year in a report on Japan’s 2023 AI Strategy, we noted that “minor but notable shifts have characterized a unique national AI identity often at odds with other Western regulatory approaches, making international cooperation challenging.” While soft regulation on ethical considerations has caused some concern, other laws that allow companies to use copyrighted images and other data to train AI models without seeking permission have contributed to a more attractive environment.

What Does It Mean for International Partners? 

The 2024 White Paper made a case for strong ongoing investment in AI research and development (R&D) and focus on digital systems to support AI ecosystems. Three major aspects stand out. First is the call to establish the most active R&D ecosystem for AI implementation in the world. This is an ambitious aim, but one that responds to similar ecosystem changes in the United States, United Kingdom, European Union, and China around investment and integration. In short, the purpose seems to give critical energy to domestic digitization systems while showcasing Japanese means to support investment and growth in AI and associated technologies.

The second is the objective to minimize AI risks to citizens while maximizing benefits. Where the 2023 White Paper focused on establishing the regulatory framework for AI development, the 2024 version is overwhelmingly growth-oriented. In moving in this direction, Tokyo has adopted a minimalist hard law approach to AI ethics in the Diet, seeking to maximize innovation over a “one-size-fits-all obligation or prohibition” in its expansion of capabilities.

This approach has garnered some concern that advocating a governance platform considered too distant from those in the EU and U.S. will hurt Japanese businesses in the global market. According to one account, Japanese AI companies currently risk export restrictions and other limitations in EU and U.S. markets due to perceptions that the regulatory regime in Japan is not stringent enough regarding ethical considerations. 

The 2024 White Paper addressed these concerns by highlighting the government’s adoption of the Hiroshima AI Process, for developing “safe, secure, and trustworthy AI.” Further establishment of an AI Strategy Council and AI Safety Institute is said to underscore the government’s efforts to mitigate the negative perceptions associated with its soft law regulatory approach. In May, then-Prime Minister Kishida Fumio launched a “friends meeting on AI issues” in a ministerial council meeting of the Organization for Economic Cooperation and Development (OECD) to begin a new dialogue framework on governing AI technology. 

The third area of note is the call to strengthen Japan’s industrial competitiveness. Previously, the Ministry of Economy, Trade and Industry (METI) sought to control and regulate sensitive exports. This led to a passive export and investment stance with companies waiting for the government to identify opportunities rather than taking the initiative. The new approach seeks to disrupt this custom, with the specific targeting of dual-use technologies across government. 

The Military Dimension

For the Ministry of Defense specifically, the new focus on industry competitiveness seeks to bridge the still awkward relationship between civil innovation and defense needs. And it has actively sought to liaise with business executives and start-ups to encourage new partnerships with the Self-Defense Forces as part of its Advanced Technology Bridging Research program. Meanwhile, a meeting of Cabinet ministers last year sat to determine a pathway for bolstering defense capabilities in AI and advanced technologies with the offer of new incentives, including tax benefits and subsidies, for R&D. 

Such AI developments all seek to sharpen capabilities underscored in the government’s National Security Strategy (NSS), National Defense Strategy (NDS), and the Defense Build-up Program (DBP). The NSS covers various dimensions of security, including military, economic, cyber, and environmental threats, and promotes collaboration with allies and international organizations to address these challenges effectively. The NDS outlines the roles and responsibilities of the Self-Defense Forces, emphasizing the need for enhanced interoperability with allied forces, modernization of defense technologies, and the development of new operational concepts to address evolving security challenges. The DBP prioritizes the development of specific capabilities, such as missile defense systems, cyber defense, and amphibious operations, while also addressing the need for increased defense spending in response to the dynamic security environment in the Asia-Pacific region. 

Overall, the AI drive and program underscores Japan’s commitment to maintaining a credible defense posture and ensuring national resilience against emerging threats. It also shows a willingness to open pathways to international AI collaboration in platforms such as AUKUS Pillar II and the Australia-Japan-U.S. Trilateral Strategic Dialogue (TSD), where new bandwidth for AI partnership is present.  

As the world faces rapid change and competition over AI, Japan’s step-up is significant for the East Asian region but also the wider world. 

Authors
Guest Author

Adam Bartley

Dr. Adam Bartley is  post-doctoral fellow at the Centre for Cyber Security Research and Innovation at RMIT University in Melbourne and program manager of the AI Trilateral Experts Group, also based at RMIT. He is a Fulbright Scholar and fellow at the Elliot School for International Affairs, the George Washington University, and a former non-resident fellow at the Pacific Forum, Hawaii. He is also the managing editor for Australian institute for International Affairs’ Australian Outlook and is also their weekly columnist for The Week in Australian Foreign Affairs.

Guest Author

Aiden Warren

Professor Aiden Warren is based at the School of Global, Urban and Social Studies at RMIT and is theme leader (national security) at Centre for Cyber Security Research and Innovation (CCSRI). His teaching and research interests are in the areas of international security, U.S. national security and foreign policy, issues associated with Weapons of Mass Destruction (WMD) proliferation, non-proliferation and arms control, and emerging technologies. He is the author of "US Foreign Policy and China: Security Challenges Across the Bush, Obama and Trump Administrations," (Edinburgh University Press, 2021), and "Understanding Presidential Doctrines" (Rowman and Littlefield, 2022).

Guest Author

Charles T. Hunt

Dr. Charles T. Hunt is professor of Global Security at RMIT and a senior fellow (non-resident) at the United Nations University Centre for Policy Research, New York, U.S. His research is focused on global security governance, regional cooperation and civil-military responses to conflict management with recent articles published in Survival, Cooperation and Conflict, International Affairs, International Peacekeeping, and Global Governance.

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