Japan needs to take the quantum-technology leap
[Author: Wakana Asano, API Takano Fellow]
From the World War II race for an atomic bomb, to the Cold War race for nuclear and space technologies, and now the global AI race, each technological frontier has reshaped the geopolitical landscape. Today, similar to AI, quantum technology is drawing attention for its rapid development and far-reaching implications.
With a massive potential market, and expectations for commercialization within five years, global competition is intensifying. Quantum advancements, from computing and communications to object-detecting sensors, carry immense potential to transform both commercial industries and national defense.
So what is quantum technology? All matter, including the human body, is composed of atoms, which themselves are made up of quantum particles. These particles exhibit both wave and particle properties and behave according to the unique laws of physics that govern the quantum realm at the nanoscale, where one nanometer equals one-millionth of a millimeter. At this scale, quantum technology leverages quantum mechanics to dramatically enhance computing, sensing and communications. Quantum computers can solve complex problems and perform optimizations that are extremely difficult for classical computers. Their potential applications span cryptography, materials science and logistics.
In 2023, China announced public investments in quantum technology totaling $15.3 billion. In the U.S., more than $3.8 billion in public funding has been allocated under the National Quantum Initiative Act and the CHIPS and Science Act. Private-sector momentum is even stronger: U.S. tech giants like NVIDIA and Apple plan to invest $500 billion in quantum-related fields over the next four years, while IBM has committed $150 billion over five years. The European Union is investing $7.2 billion in its Quantum Flagship program.
Japan, too, is ramping up its quantum research. The government has allocated ¥1.05 trillion (roughly $7.4 billion) to next-generation semiconductor and quantum computing R&D. Institutions such as RIKEN, the University of Tokyo, Fujitsu and Hitachi are actively involved. Critically, however, Japan trails other advanced countries in commercialization and private-sector investment. Without active industry involvement, it is difficult to accelerate innovation, adapt to user needs and scale globally. Otherwise, quantum technology risks remaining confined to research labs when public financial support reaches its limits.
Japan’s quantum market is projected to grow from around $197 million in 2023 to more than $2.87 billion by 2032. This market includes hardware, software, algorithms, cloud-based services, optimization tools, simulation and machine learning, spanning sectors from pharmaceuticals to defense. To unlock the full potential of this quantum market and energize its economy, Japan must develop concrete use cases, implement them, build funding ecosystems and establish regulatory frameworks.
Japan’s national quantum strategy, led by the Cabinet Office, is built on five pillars: technology development, international collaboration, industrialization and innovation, intellectual property and standards, as well as talent development. Japan has long excelled in physics and engineering, and its sustained investment in quantum research has kept it competitive globally. Japan also contributes actively to shaping global regulatory norms. However, industrialization and innovation remains the least developed pillar. While the strategic vision is clear, commercialization mechanisms are weak, and despite recent emphasis on globalization and startups, execution remains limited.
Why has Japan struggled to industrialize its quantum research? Partly, the answer lies in its historical industrial model. Since the Meiji era, Japan has centered its growth on manufacturing, favoring hardware-centric, standardized and risk-averse systems. These characteristics supported mass production but hindered swift adaptation to emerging technologies like quantum. This structural inertia still affects how Japan responds to rapidly advancing fields.
For investors and firms to enter the uncertain quantum market, they need strong investment signals and compelling business cases. Yet current policies lack specificity. The government’s Fusion Domain Roadmap outlines areas such as logistics, pharmaceuticals and finance, but lacks measurable targets or clear implementation models. Academic and bureaucratic actors dominate discussions, while voices from the business side remain scarce. Although there has been some engagement with venture capitalists and startup founders, they are rarely given a role in shaping or executing policy. As a result, Japan’s strategy remains more aspirational than actionable.
To make progress, Japan’s government, industry and academia must strengthen collaboration, translate policy into actionable business strategies and focus on practical implementation. Crucially, the national roadmap should be reframed for corporate and venture-capital stakeholders. Organizations like Keidanren and startup support groups should be enlisted to accelerate pilot programs and define key performance indicators.
End-users in fields like logistics and finance are often absent from policy design forums, leaving discussions abstract. Policymakers must focus on specific sectors, test new ideas through public-private partnerships and present practical examples. Japan also needs dedicated investment vehicles for deep-tech fields like quantum. Unlike the U.S., which has agencies like the Department of Energy and NASA to act as early customers, Japan lacks major institutional demand drivers.
Public-sector support is therefore vital to stimulate demand and financing. Japan must redesign existing funding models or create new co-investment frameworks to ensure long-term capital flow. History shows that breakthrough technologies, such as nuclear power, the internet and artificial intelligence reshape military and economic power and global order. Quantum technology, with its vast potential and foundational nature, is likely to do the same.
Despite the fact that Japan has made important progress, it remains in a reactive position compared to global leaders. Public understanding of quantum technology is limited, and discussions remain focused on research rather than application. The core challenge lies in commercializing technology and fostering innovation. As other countries mobilize private investment, Japan’s quantum strategy must pivot from a research-driven model to a business-focused one.
By strengthening public-private partnerships and shifting policy emphasis toward real-world deployment, Japan can turn its scientific excellence into economic success. With its deep research base and advanced policy design capabilities, Japan has the potential to lead Asia in shaping the quantum future.
(Photo Credit: Shutterstock)
[Note] This article was posted to the Japan Times on July 9, 2025:
https://www.japantimes.co.jp/commentary/2025/07/09/japan/japan-quantum-technology-leap/
Geoeconomic Briefing
Geoeconomic Briefing is a series featuring researchers at the IOG focused on Japan’s challenges in that field. It also provides analyses of the state of the world and trade risks, as well as technological and industrial structures (Editor-in-chief: Dr. Kazuto Suzuki, Director, Institute of Geoeconomics (IOG); Professor, The University of Tokyo).
Author
Wakana Asano
API Takano Fellow
Wakana Asano is an API Takano Fellow at the International Institute of Strategic Studies-Asia (IISS-Asia) in Singapore. Her work focuses on science and technology policy, economic development, and Global South-North cooperation.
Disclaimer: The opinions expressed in Geoeconomic Briefing do not necessarily reflect those of the International House of Japan, Asia Pacific Initiative (API), the Institute of Geoeconomics (IOG) or any other organizations to which the author belongs.
