Manufacturing
Government Initiatives

Over the last few years, unpredictable events such as the COVID-19 pandemic and geopolitical instability have forced Japan to strengthen its supply chain. In response to this pressure, the Japanese government is considering various policies, including visualization and cooperation for initiatives targeting all businesses that utilize digital technology. ¹⁷

The Ministry of Economy, Trade ブラック ジャック ランキングndustry (METI) believes that it is vital to optimize the entire supply chain, through data sharing that goes beyond the traditional fixed and transactional relationships. To strengthen the resilience of the supply chain, the government is considering measures such as creating use cases with foreign-affiliated companies in Japan to promote data collaboration between companies. METI is also promoting investments into digital transformation, through tax systems and subsidies that incentivize digital transformation.¹⁸ The new taxation system for promoting digital transformation investment provides tax credits and special depreciation for digital-related investments that utilize cloud technology.¹⁹ The subsidy for promoting productivity improvement in manufacturing, commerce and, services provides support for capital investment aimed at developing innovative services ブラック ジャック ランキングmproving manufacturing processes.²⁰ These incentives are expected to promote digital transformation among both Japanese and overseas companies.

To achieve carbon neutrality by 2050, the Japanese government has formulated the Green Growth Strategy Through Achieving Carbon Neutrality in 2050, and is working to transform the industrial and socioeconomic structure. Under this strategy, 14 sectors have been designated as priority sectors with potential for growth, which include sectors related to manufacturing, including automobiles and storage batteries, semiconductors, ships, food, aircrafts, and carbon recycled materials. Particularly, ブラック ジャック ランキングhe automobile sector, the Japanese government has set targets related to electrification and decarbonization of automobiles, increase of the production capacity and implementation of storage batteries, and development of charging infrastructure (Figure 6).

To achieve these goals, the Japanese government has introduced subsidies to promote the introduction of clean energy vehicles²² ブラック ジャック ランキングs supporting the introduction of CEVs, charging facilities, and hydrogen stations.²³ These subsidies also apply to vehicles sold by foreign-affiliated companies in Japan. For example, new vehicles sold by Tesla (United States) are eligible for CEV subsidies with some exceptions.²⁴ With the support of the government, the number of alternative fuel vehicles, including electric vehicles, has been increasing steadily (Figure 7). These trends are expected to result in further expansion of the market.

The Japanese government is incentivizing investments toward the promotion of green transformation ブラック ジャック ランキングhe material industry (iron and steel, chemicals, paper and pulp, and ceramics and cement), which has a particularly high CO2 emission rate among manufacturing industries.²⁶ Specifically, the government has established the project to support the transformation of energy and manufacturing processes in industries where emission reduction is difficult. It supports capital investment for the transformation of manufacturing processes (transformations for innovative electric furnaces, chemical recycling, the biorefinery industry, etc.) and fuel conversion projects for private power generation facilities, and has allocated 220 million USD* (32.7 billion JPY) in its FY 2024 budget.²⁷ Furthermore, to reduce CO2 emissions ブラック ジャック ランキングhe supply chain, a package of measures is identified as a future direction, including compensation for the purchase of decarbonized products based on the Green Transformation Value, which allows each company to quantify the environment friendliness of its products for its end consumers, measures to encourage the provision of decarbonized products with consideration of the entire product life cycle in sharing services, and institutional measures to promote preference for products with high Green Transformation Value.^{28, 29} The government plans to promote the implementation of the green transformation value system for public procurement and to provide incentives for introducing the system in sectors such as the automobiles and building materials.³⁰ These are some examples of government subsidies ブラック ジャック ランキングnvestment plans to promote green transformation, which are also applicable to foreign-affiliated companies in Japan.

With several foreign-affiliated companies in Japan having manufacturing and processing bases ブラック ジャック ランキングhe Kanto region (the central region of Japan which includes the Greater Tokyo Area) (Figure 8), the national and local governments have been making efforts to attract both Japanese and overseas companies from a wide range of industries to local regions, including manufacturing, in order to promote regional revitalization.

As part of tax incentives for strengthening local business facilities, companies that meet certain conditions are eligible for preferential treatment when they establish, expand, or relocate (with certain exceptions) their head office functions (offices, research institutes, training institutes, etc.) to a regional city outside the Greater Tokyo Area (Figure 9).

Local governments and economic blocs have started setting up incentives for foreign-affiliated companies in Japan. An example of such an incentive by a local government is the Greater Nagoya Initiative ブラック ジャック ランキングhe Chubu region (the central region of Japan consisting of nine prefectures). The initiative positions a region with a radius of approximately 100 km around the city of Nagoya (extending into the Aichi, Gifu, and Mie Prefectures) as a single economic zone and promotes international economic exchange by attracting companies, technologies, human resources, and information from around the world. The incentive specifically contributes to the expansion of manufacturing companies in Asia and Europe into the Japanese market by inviting them to Japan, providing business matching services, along with legal and financial support for business expansion.³³

An example of collaboration between a foreign-affiliated and Japanese companies under the Greater Nagoya Initiative is the collaboration between TOGO SEISAKUSYO (Japan), a manufacturer of precision spring accessories for automobiles, and SCHERDEL (Germany). SCHERDEL and TOGO SEISAKUSYO collaborated to make up for each other's technological shortfalls, including solving the labor shortage at TOGO SEISAKUSYO and providing opportunities for SCHERDEL to introduce manufacturing parts to Japanese automakers. As another example, Juken Kogyo (Japan), a manufacturer of small precision plastic parts, and Hummingbird Scientific (United States), a manufacturer of sample holders used ブラック ジャック ランキングransmission electron microscopes (TEM), are collaborating ブラック ジャック ランキングhe sale and manufacture of sample holders.³⁴

Other examples include the establishment of a joint semiconductor manufacturing facility in Yokkaichi City, Mie Prefecture by KIOXIA (Japan) and Western Digital (United States)³⁵, and the relocation of Gestamp Automoción's (Spain) Japanese subsidiary to Matusaka City, Mie Prefecture following the establishment of a factory ブラック ジャック ランキングhe same city.³⁶ ブラック ジャック ランキングhis way, a number of foreign-affiliated manufacturing companies are making use of incentives from local governments to invest in and expand into local regions.