JETRO Invest Japan Report 2022
Chapter3. Recent Government Policies Section1. Basic Policy on Economic and Fiscal Management and Reform 2022

There are structural changes in the environment surrounding Japan, such as COVID-19, Russia‘s aggression against Ukraine, and climate change. Domestically, Japan faces difficulties, including soaring prices for imported resources, a declining population, a low birthrate, an aging population, stagnant potential growth rates, and frequent and intensified disasters. Thus, multiple and compounded challenges, both domestic and international, are piling into Japan simultaneously.

Under these circumstances, it is necessary not merely to get through challenges but also to take advantage of efforts to solve social issues as an engine for value creation. The public and private sectors need to work together and implement prioritized investment and regulatory and institutional reforms in a systematic manner over medium- to long-term, all the while activating the "New Form of Capitalism" to transform the economic and social structure into a more resilient and sustainable one, simultaneously resolving social issues and achieving economic growth. Based on this background, the cabinet decision was made on the Basic Policy on Economic and Fiscal Management and Reform 2022 on June 7, 2022

It sets out the basic guideline for public-private partnership investment in priority investment sectors for realizing a "New Form of Capitalism," including "investment in people," investment in science, technology and innovation, investment in startups, investment in green transformation (GX), and investment in digital transformation (DX).

In particular, "investment in people" will also be a core investment in the foundations common to science, technology and innovation, startups, GX, and DX, which are the systematic and prioritized investment areas toward a "New Form of Capitalism." Combined with increased profits and income through productivity improvement by stimulating private sector investments, autonomous economic growth will be realized.

Chapter 3-1 shows priority investment areas to realize “New Form of Capitalism” set forth the Basic Policy on Economic and Fiscal Management and Reform 2022.The policy aims to execute systematic investments in these priority areas in the medium- to long-run by implementing necessary institutional reforms through plans such as public-private collaboration under the 400 billion yen 3-year package to enhance "investment in people," "6th Science, Technology and Innovation Basic Plan," "Five-year startup development plan," "Clean Energy Strategy," "Digital Garden City Nation Infrastructure Development Plan," and "Priority Policy Program for Realizing Digital Society."