[Correspondent’s Column] The Summer of Bureaucrats

"It all comes down to the same thing. We want to restore the pride of the Japanese people. Our mission is to realize that aspiration by building an industrial nation."
This line is spoken by the protagonist, a bureaucrat named Kazakoshi at the then Ministry of International Trade and Industry (MITI), in the 2009 drama "The Summer of Bureaucrats" aired by Tokyo Broadcasting System Television (TBS). Set in the 1950s and 1960s, when Japan was entering its period of rapid economic growth, the drama portrays MITI officials who strategically nurtured the automobile and electronics industries. It shows how bureaucrats of that era worked around the clock, designing policies for the future of the nation’s industries.
These days, it feels as if a new "summer of bureaucrats" is returning to Kasumigaseki, Tokyo’s central government district. The term "industrial policy" is once again being used without hesitation. Unlike the past 30 years, when the focus was on structural reform and monetary easing, the government is now putting front and center policies that provide long-term, strategic support to specific industries. Beyond simply increasing budgets, the entire institutional framework has begun to be reorganized around industrial policy.
Surprisingly, it is the United States that has driven the revival of Japan’s industrial policy. Washington’s push to restructure semiconductor supply chains and its high-tariff policies have jolted Japan’s bureaucracy. As a result, there is a growing sense of urgency that strategic industries can no longer be left unattended under the current circumstances.
The expansion of the budget of Japan’s Ministry of Economy, Trade and Industry (METI) is a prime example. The draft budget for fiscal year 2026, recently submitted to the Diet by the cabinet of Prime Minister Sanae Takaichi, totals about 122.3092 trillion yen (approximately 1,149.9877 trillion won). Of this, the METI budget alone amounts to roughly 2.0444 trillion yen (about 19.222 trillion won), a 19% increase from the previous year.
Excluding defense spending, the core of the increase lies in industrial, technological, and energy transition fields. In particular, 1.239 trillion yen has been allocated to semiconductors and artificial intelligence (AI), 3.7 times more than the year before. This includes an additional 150 billion yen in equity investment and 630 billion yen in research and development subsidies for Rapidus, the "semiconductor alliance" aiming for mass production of cutting-edge chips.
On top of that, 387.3 billion yen in new funding will be injected to develop so-called "physical AI" systems for robotic and machine control, with a total of 1 trillion yen to be provided over the next five years.
The latest shift in industrial policy is not just about bigger numbers in the budget. The Japan Fair Trade Commission (JFTC) recently decided that, in the name of economic security and strengthening national industrial competitiveness, information exchanges among shipbuilding companies will not be treated as cartels or violations of fair competition when they align with industrial policy goals. In effect, budgets, institutions, and competition policy are being reshaped as a single package around industrial strategy.
The way ministries execute their budgets has also changed. METI can now autonomously manage funds through specialized vehicles such as the Green Transformation Implementation Organization (GX Implementation Organization) and the Information and Communications Promotion Organization. This allows it to pursue industrial policy in a more flexible and rapid manner. Instead of routine, fixed allocations, agile execution and strategic responses have become possible.
A recovery in bureaucrats’ confidence is also evident. According to government officials, Japanese bureaucrats are now implementing policies with strong conviction that they can "turn the tables" even in shipbuilding and semiconductors, sectors long viewed as lagging behind South Korea.
Backed by the solid support of Prime Minister Takaichi and the ruling Liberal Democratic Party (LDP), the government and public–private sector are pouring astronomical sums into strategic industries such as Rapidus. Visible results have begun to emerge, exemplified by a recent order placed by Japanese conglomerate Canon for Rapidus products.
Another hallmark of Japan’s industrial policy is its boldness in deciding to provide large-scale support even to foreign companies when it serves domestic industrial development, as seen in its successful bid to host a plant of Taiwan Semiconductor Manufacturing Company (TSMC). In South Korea, such extensive support for foreign firms is, in practice, far more difficult.
The implications for South Korea are clear. Industrial structures cannot be transformed by relying solely on short-term tax credits or temporary increases in support. Like Japan, South Korea needs a structural approach that clearly identifies strategic industries and combines long-term, concentrated budget injections with institutional backing and performance management. The essence lies not just in reallocating fiscal resources, but in a comprehensive overhaul of policies and institutions.
sjmary@fnnews.com Reporter