The Institute of Geoeconomics (IOG) conducted a survey on economic security among 100 Japanese companies and published its results, marking its second implementation following 2021.
The main investigation surveys 100 Japanese companies (including research organizations) that are considered by the IOG to play a critical role in the realm of economic security, as well as be susceptible to changing economic security dynamics. In questionnaire form sent out and answered during November 2022 and January 2023, the investigation focused on issues and risks related to economic security, practical efforts being made, the impact of ongoing US-Chinese tensions on their business, and what they hoped the government would provide in terms of support or intervention.
A summary of the survey results is as follows. Key data on the survey results (bulletin version) can be found here. Researcher comments on the survey results have been published in “API Geoeconomics Briefing” and has also been published on Japan Times.
• On new measures after the enactment of the Economic Security Promotion Bill, many companies selected “the establishment of specialised departments” and “strengthening efforts toward advanced technologies”. Currently, more than half of companies surveyed have a compliance system in place for the extraterritorial application of US- and Chinese regulations (this marks a 15% increase from last year).
• Nearly 80% of respondents named “strengthening cyber security” as part of new measures toward the conventional management of technology, export management, and the prevention of technology leaks. On human resources interacting with advanced technological information, approximately half of surveyed companies “understand and manage in-house human resources for each department”.
• The largest increase in economic security measures from the previous year’s survey was the “transferring of production bases”, followed by the “strengthening of information management” (both with an increase of ca.10%).
The Expanding Impact of US-Chinese Confrontation
When surveyed on the “most important issue” for the promotion of economic security with multiple choice answers, the top response was “uncertain US-China relations” at 72.2%, and over half of those surveyed chose “preparations assuming Taiwan Strait crisis” at 50.6%. “Increasing costs from sanctions against Russia due to the situation in Ukraine” was at 27.1%, and “increasing costs from responses to potential Taiwan Strait crisis” was at 18.6%.
The impact of Russia’s Invasion of Ukraine
This survey also included questions regarding the impact of Russia’s invasion of Ukraine and the sanctions that followed.
Increasing Awareness of Economic Security
Progressive Efforts for Economic Security
Percentage Increases in Many Specific Corporate Measures
In addition to ongoing tensions between the US and China that has been of continual concern, the prolonged situation in Ukraine, and the recognition that the Taiwan Strait crisis is critical has increased the uncertain nature of the world. Domestically, the Economic Security Promotion Bill has been enacted. The era of globalisation, where economic rationality guided each company’s business development, is coming to an end. Japanese companies, despite their struggles between security and economic activities, risks and costs, are taking a step forward in the direction of concrete initiatives.
Click here for the results of the first survey (released on December 24, 2021).