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(Photo credit: Mark Montgomery)
(Photo credit: Mark Montgomery)

Japan’s Industrial Security Problem

Arthur Herman

When President Trump and Japanese Prime Minister Shinzo Abe met this week, let us hope their agenda included Japan’s weak industrial security. The inability of Japan’s government and contractors to protect sensitive information undercuts both countries by making it harder to design and produce the advanced weapons systems of the future.

After decades of servicing only the Japanese military, Japan’s defense industry is poised to enter the global marketplace. Many American companies would love to partner with Japanese companies like Mitsubishi Heavy Industries , Fujitsu, NEC and IHI Aerospace on joint defense projects. But Japan’s lack of secure systems for handling sensitive data means those hopes are more or less on hold.

Japan also lacks a coherent system for regulating employment in its defense industry. Its current laws have failed to ensure that workers with access to sensitive information have appropriate training and security clearance.

Industrial security is the cornerstone of a modern defense industry. No government—and certainly not the U.S.—is going to share sensitive data and technology with a foreign counterpart or contractor unless it is sure the information will be safe from prying eyes. Private companies will also continue to reject Japanese partnerships, greatly limiting the capacity of Japan’s defense industry in an era when few firms are capable of producing advanced systems on their own.

Cybersecurity is the key ingredient in protecting defense secrets. The U.S. discovered its importance in the mid-2000s, when Chinese hackers stole classified data from the Pentagon and private companies involved in the production of the highly advanced F-35 Joint Strike Fighter.

But while the U.S. and other nations have stepped up their security in recent years, Japan has lagged. Only 27% of Japanese companies have a designated information-security chief, compared with 70% to 80% of American and European firms. Japan’s defense industry still has no “information sharing and analysis center,” a type of network American and European companies use to share info about cyberattacks and hacks.

Though Japan has signed an agreement with the U.S. to mutually secure military information and has passed a law to protect state secrets from public access, it still lacks an enforceable system for regulating security clearances among government and private personnel. Instead, Japan has relied on U.S. government experts to do spot fixes while waiting for a robust system of its own to develop.

Past collaborations between the two nations show how the U.S. might help bring Japan’s industrial security up to speed. After World War II, Japanese engineer Genichi Taguchi adapted a new American process of statistics-based manufacturing to fit the detail and quality craftsmanship of Japan’s industrial culture. Those manufacturing practices helped Japan develop a powerful industrial sector, able to dominate the sale of cars and electronics in the competitive global marketplace.

“We imported the system,” economist Naohiro Yashiro once observed, “but modified it to the Japanese style.” That is what Japan must now do with industrial security. Its government should adapt best practices from the U.S. and other countries to vet personnel and protect intellectual property and classified information. Naturally, the resulting security regime will correspond to the unique character of Japanese industry.

Securing Japanese industry would not only expand bilateral defense trade between the U.S. and Japan, but would also help both countries build a more secure world by better preparing their armed forces. It’s a goal both the Trump and Abe administrations ought to embrace as soon as possible.

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