Japan - Country Commercial Guide
Cybersecurity

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2020-10-30

Overview 

As Japan prepares for the 2020 Tokyo Olympic and Paralympic Games, which has been postponed to 2021 due to the coronavirus pandemic, cybersecurity has been given increased attention in response to a rise in frequency and sophistication of cyber-attacks. Such attacks create major concern for the safety of infrastructure sectors such as railways and the data-dependent Internet of Things (IoT) networks and systems.

While the 2020 Tokyo Olympics and Paralympic Games present Japan with particular vulnerabilities and challenges on the cyber-defense front, they also represent a potential opportunity for U.S. exporters and service providers. The Japanese government is increasingly aware of the scope of the potential threats it faces and the lag in its capabilities vis-a-vis the United States and other nations in this field, and has taken steps to address this disparity.

In recent years, CS Japan has observed the rapid rise of American cybersecurity companies doing business in Japan, which indicates the United States has an advantageous position against foreign and domestic competitors. A 2018 report by Japan’s Ministry of Economy, Trade and Industry (METI) identified a shortage of IT professionals at 220,000, which is expected to increase to 360,000 in 2025. This shortage of capable engineers, cyber experts, and security managers have provided an opportunity for American firms that can offer turn-key cybersecurity solutions for small-and-medium-sized enterprises in Japan.

Recent market research indicates a very strong and rapid increase of sales in the Japanese cybersecurity market and a small decrease in on-premise software and security appliances due to the increase of public cloud services. International Data Corporation (IDC) Japan announced in 2020 that the domestic security software market in 2019 was $2.5 billion and will increase by 16% to an estimated $2.9 billion by 2024, while security appliance market is $509 million in 2019 and expected to decrease to $493 million in 2024. IDC mentioned that the market will be impacted in 2020 as the investment appetite by the companies will be reduced due to the COVID-19. The non-profit organization, Japan Network Security Association, announced in June 2020 that the size of the Japanese information security market was $10.5 billion in 2019 and is estimated to be $10.4 billion in 2020.

In April 2018, the leading political party in Japan, the Liberal Democratic Party of Japan (LDP) announced an Emergency Proposal for Reinforcement of Cyber Security Measures. This 119-page report identified issues and measures in all 13 Critical Infrastructure sectors, and an additional three: national security, self-driving vehicles, and quantum computing. The report urged systematic action by all levels of Japanese society to reinforce cybersecurity measures, and advised the Japanese Government to implement systematic measures for all critical infrastructure sectors.

Japan’s National Center for Incident Readiness and Strategy for Cybersecurity (NISC) is the leading agency in the Central Government in forming the national cybersecurity strategy. Additionally, NISC guides all Central Government agencies in establishing and implementing cybersecurity policies and measures. NISC announced its National Strategy for Cyber Security 2019. The new strategy identifies an urgent need for reinforcing cybersecurity measures in all levels of Japanese society and in all aspects of technological development.

The collaborative relationship between Japan and the United States in the areas of cyber-physical systems, cloud, and network security has been a positive influence on market access. The National Institute of Standards and Technology (NIST) continues to engage Japan’s METI and Japan’s Information Technology Protection Agency (IPA) in an ongoing dialogue. The seventh annual U.S.-Japanese Cyber-Security Dialogue conference was held in Tokyo on October 2019. The purpose of this Dialogue is to exchange cyber-security information, align international cyber-security policies, compare national cyber-security strategies, cooperate on planning efforts to protect critical infrastructure, and discuss cooperation in the areas of cyber-security and national defense.

Leading Sub-Sectors 

Due to the underdeveloped framework of digital security in Japan, many Critical Infrastructure industry sectors have been identified and include: 

  • Information and Communication Services 
  • Financial Services 
  • Aviation Services 
  • Railway Services 
  • Electric Power Supply Services 
  • Gas Supply Services 
  • Government and Administrative Services (including municipal government) 
  • Medical Services 
  • Water Services 
  • Logistics Services 
  • Chemical Industries 
  • Credit Card Services 
  • Petroleum Industries 

Opportunities 

Security Days

October 7-9, 2020

Cyber Security World at RISCON Safety and Security Trade Expo

October 21-23, 2020 

Web Resources

The American Chamber of Commerce in Japan and its ACCJ Digital Economy Committee actively advocates on important policy issues. 

CS Japan Contact 

Ms. Yasue Morimoto, Commercial Assistant 

Yasue.Morimoto@trade.gov