JETRO Invest Japan Report 2024
Chapter3. Recent Government Measures Section1. Basic Policy on Economic and Fiscal Management and Reform 2024

Aiming to make strategic investments in areas such as green technologies, digital, and economic and energy security

The wages have risen to the highest level in 33 years and corporate capital investment is at an all-time high in Japan, despite the growing need to address economic security and strengthen international competitiveness amid the increasing uncertainty in the international situation. Under these circumstances, the Basic Policy on Economic and Fiscal Management and Reform 2024 was approved by the Cabinet in June 2024.

The Basic Policy states that the government will improve income and productivity based on wage increases and review fiscal reconstruction plans with the cooperation of both the public and private sectors in order to realize the "transition to a new growth-oriented economic stage." It also includes the Economic and Fiscal Revitalization Plan covering the period up to 2030 and has set a target of a "nominal gross domestic product (GDP) of 1,000 trillion yen" by around 2040. In addition to stabilizing prices, the goal is to take measures to address the population decline that is expected to accelerate after 2030, as well as to overcome deflation and move to a new economic stage.

Moreover, it states that the public and private sectors are to work together for increase in wages and investment to realize a growth economy driven by them. Particularly, as to investment, it suggests that the both sectors cooperate to make strategic investments in areas such as green technologies, digital, science, technology and innovation, and economic and energy security, taking a long-term perspective. It has also identified eight items as the direction of the government's economic and fiscal policy and its specific measures. From the viewpoint of promoting investment in Japan, we will take up herein the following items among them: "Responding to social issues through increasing investment and implementing innovative technologies in society" (Chart 3-1) and "Responding to social issues through building startup networks and improving connectivity overseas" (Chart 3-2).

Chart 3-1: Responding to social issues through increasing investment and implementing innovative technologies in society
No.	Outline	Plans
1	Digital Transformation (DX)	Developing a database for public basic information and promoting its use Developing quasi-zenith satellites and utilizing satellite data for organizing geospatial information and promoting their wider use and social implementation Promoting DFFT (Data Free Flow with Trust), strengthening Japan's AI competitiveness, and ensuring its safety in an integrated manner Exploring legislative measures for mass production of next-generation semiconductors, etc. Promoting digital government; digital transformation (DX) for health, long-term, and child care; DX for education; DX for transportation and logistics; DX for disaster risk reduction; and DX for tourism
2	Green Transformation (GX) and Energy security	Developing the national strategy for GX by the end of FY 2024 and revising the Strategic Energy Plan, etc. Promoting energy conservation, expanding the deployment of renewable energy, utilizing nuclear power, and implementing low-carbon hydrogen and its derivatives in society Realizing and implementing the Pro-Growth Carbon Pricing Concept, among other actions Realizing the AZEC(Asia Zero Emission Community) initiative and developing technology for domestic marine resources
3	Development of Frontiers	Implementing measures under the Space Technology Strategy, providing support through the Space Strategy Fund, and exploring the possibility of revising Act on Launching of Spacecraft, etc. and Control of Spacecraft Implementing measures based on the Ocean Development Strategy, building an MSIL (MDA Situational Indications Linkages) business platform, and strengthening the command function for ocean policy
4	Promotion of Science, Technology and Innovation	Promoting R&D in such fields as fusion energy, quantum technology, AI, biotechnology, materials, semiconductors, 6G, and health and medicine, among other actions
5	Promoting Japan as a Leading Asset Management Center	Developing the Asset Owner Principles Promoting the Special Zones for Financial and Asset Management Businesses by leveraging the National Strategic Special Zones Exploring the possibility of raising the iDeCo (individual-type defined contribution pension plan) contribution limits, among other actions

Source:

Based on "Basic Policy on Economic and Fiscal Management and Reform 2024—Realizing a Growth-oriented Economy Driven by Wage Increases and Investment" (June 2024) by the Cabinet Office

Chart 3-2: Responding to social issues through building startup networks and improving connectivity overseas
No.	Outline	Plans
1	Supporting startups and building their networks	Developing human resources for startups and enhancing entrepreneurship education Giving shape to the Global Startup Campus Initiative Supporting startups through public procurement and expanding opportunities for matching between the government sector and startups Invigorating M&A toward diversifying exit strategies and submitting swiftly a bill that permits the reduction of financial debts through a majority vote
2	Leveraging overseas vitality	Expanding a free and fair economic zone as well as maintaining and strengthening the rules-based multilateral trading system Promoting trade DX, encouraging Japanese companies to expand their operations overseas, revising the Infrastructure System Overseas Promotion Strategy with a focus on 2030, and improving broad-based connectivity with the Global South Implementing the Priority Program for Attracting Foreign Direct Investment, etc. for an achievement of the target of "100 trillion yen" in inward foreign direct investment by 2030 at an earliest date Establishing the UHC (Universal Health Coverage) Knowledge Hub in Japan, promoting the international expansion of health and long-term care, including medical inbound, and contributing to the Vaccine Alliance, among other actions Supporting the content industry in doing business overseas (e.g., training creators, luring shooting crews to Japan, and developing guidelines for regulation on transactions) Developing systems for acceptance foreign nationals
3	Promoting the EXPO 2025 OSAKA, KANSAI, JAPAN	Securing participating countries for the 2025 EXPO; constructing the venue; demonstrating, implementing, and showcasing technologies that help solve social issues; and building national momentum

Source:

Based on "Basic Policy on Economic and Fiscal Management and Reform 2024—Realizing a Growth-oriented Economy Driven by Wage Increases and Investment" (June 2024) by the Cabinet Office

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