Going Global: Getting Defensive with Japan

Back in March, Canada’s Prime Minister Mark Carney visited Japan 🇯🇵 to strengthen our trade, defence and technology relationship with our 5th largest trade partner. At the time of his visit, and as the strategic partnership document that emerged from it attests to, special attention was put towards the potential of a Canada-Japan defence partnership.  

Fast forward a few months and now (June 23-26, 2026), Canada’s Defence Minister David McGuinty is visiting Japan with a contingent of 30+ Canadian companies. A strong focus of this contingent is on defence and military applications, notably in space, quantum computing, autonomous vehicles, cybersecurity, satellites, drones and underwater systems.

I was in Tokyo recently alongside partners at DMZ Japan and the Tokyo Metropolitan government and from my time in Tokyo a couple of defence and innovation related insights emerged:

1. Like Canada, Japan is aggressively increasing spending on defence and related industries to meet a 2% of GDP target, and in Japan’s case, the current administration aims to hit 3.5%. Doing so in Japan has been catalyzed by their perceptions of potential threats in their regional neighbourhood, as well as lessons from Russia’s invasion of Ukraine.Importantly, while Japan’s defence industry has long focused on domestic industrial heavyweights (i.e. Mitsubishi, Kawasaki) the need to innovate more rapidly as has been demonstrated in Ukraine has catalyzed a push for these players as well as the government to work more closely with domestic startups, as well as with international partners like NATO Diana. Foreign startups have proven to be able to make inroads in the Japanese market, for example US drone developer Shield AI whose UAVs are now integrated into Japanese maritime forces.Domestically, the focal point for these activities seems to be the newly established Defense Innovation Science and Technology Institute (DISTI) and related accelerators like Fujitsu’s Accelerator Program for Defence Tech.
2. Beyond this defence-related activity, Japan’s aging population continues to create huge opportunities for engagement across the entirety of Japan’s economy but with emphasis on labour-intensive sectors like healthcare and agriculture. Robots of every kind roamed or rolled the floors at #SushiTech, most looking to address the huge demand for automated solutions to help ease labour shortages. In healthcare this demand extends to wearables, virtual care and diagnostics and related AI applications. And the same applies in #agtech, where the average age of Japan's core agricultural workers is approximately 67 years old. The subsequent appetite for sensors, drones and AI applications is high.

This demand for solutions across Japan’s economy certainly underscores the importance of Canada’s deepened diplomatic engagement. However, as my colleagues in Tokyo noted, breaking into the market requires patience and investment. And even then it won’t be easy as the Japanese market is increasingly busy with foreign startups looking to make inroads. #SushiTech hosted 22 foreign delegations, many with massive national pavilions promoting themselves and their startups as preferred partners.

Finding the right local partner or soft landing is subsequently key. Luckily, organizations like DMZ Japan, JETRO in Canada, Canadian Chamber of Commerce in Japan, are well equipped to help.