100 million yen investment in AI, 55 billion yen support for anime and gaming! A detailed look at Sanae Takashi's strong economic ambitions

Prime Minister Sanae Takaichi plans to invest 1 trillion yen in AI research and development, and allocate 55 billion yen to support anime and gaming industries, attempting to turn a national strategic industry from defense to offense to resolve the digital deficit crisis.

Japan Moves Quickly: 100 Million Yen Investment in AI, 55 Billion Yen Support for Content Industries

Known as the “Iron Lady of Japan,” the new Prime Minister Sanae Takaichi has drawn international attention for her tough stance towards the Chinese government since taking office. She also demonstrates strong ambition in technology and cultural industry policies.

On December 19, Sanae Takaichi officially established Japan’s first AI Basic Plan during the AI Strategy Headquarters meeting, aiming to make Japan the most AI-friendly country in the world for development and usage. The government announced it will invest 1 trillion yen over the next five years to support private enterprises in developing domestic AI models and building computational resources.

Beyond hard technology, soft power is also a core part of Takaichi’s cabinet strategy. In early December, she announced that more than 55 billion yen of supplementary budget will be used to strengthen overseas development support for content creators in music, anime, and gaming, and she has met with experts across various content industries.

The government positions the content industry as a national strategic industry alongside semiconductors, setting concrete goals to, through public-private cooperation, increase overseas sales of content to 20 trillion yen, demonstrating a commitment to driving economic growth through this sector.

Digital Deficit Approaching 45 Trillion Yen, Japan Turns from Defense to Offense

The Japanese government’s aggressive investment in AI and content industries may be related to the pessimistic “Digital Economy Report” from Japan’s Ministry of Economy, Trade and Industry.

The report points out that Japan faces a severe “digital deficit crisis” due to over-reliance on overseas digital service platforms and the impact of generative AI technology. It is estimated that by 2035, Japan’s broad digital deficit could reach as high as 45 trillion yen, which would not only erode trade surpluses but also threaten the competitiveness of the nation’s industries.

Image source: Digital Economy Report by Japan’s Ministry of Economy, Trade and Industry Japan’s Ministry of Economy, Trade and Industry estimates that by 2035, Japan’s broad digital deficit could reach as high as 45 trillion yen

Faced with the risk of the system integration (SI) market collapsing due to the AI revolution, Mizuho Bank economist Daisuke Tohkama analyzes that defense is no longer practical. Japan must shift to offense, and its strongest weapon is the content industry.

Data shows that, in 2023, Japan’s content industry market size has surpassed semiconductor exports, with impressive performance in copyright licensing fees and gaming services, becoming a key pillar to fill the international balance of payments gap.

Further reading:
Japan’s 45 Trillion Yen Digital Deficit Crisis: When the AI Revolution Impacts SI Companies’ Survival, Is Content Industry the Biggest Weapon?

Closing the Stable Door After the Sheep Are Gone? Politicians Admit: Japan’s Content Industry Budget Is Insufficient

In terms of industry scale, according to a survey by Human Media, the market size of Japan’s content industry in 2024 has surpassed 15 trillion yen, setting a new record.

Among these, Japan’s 2024 animation overseas sales increased by 26%, and the animation and platform gaming sectors account for over 90%, while live-action film and publishing industries are very small.

Image source: Human Media Japan’s 2024 animation overseas sales increased by 26%, and the animation and platform gaming sectors account for over 90%

However, how resources are fairly allocated remains a major issue. According to Sankei Shimbun, Nobuhiko Ohnoda, Minister of Economic Security, admitted during a parliamentary debate that Japan’s investment in the content industry is indeed insufficient.

Before the Takaichi government’s proposal was announced, Japan’s annual budget for content industry investment was only 25.2 billion yen, lower than South Korea’s 76.2 billion yen and far below China’s 123.8 billion yen and the US’s 617.6 billion yen.

Budget increases, but can the fundamental problems of Japan’s animation industry be solved?

However, while the government loudly announces hundreds of billions in subsidies, industry voices differ. Regarding the large subsidies for the content industry, the community calls for the government to pay more attention to grassroots working conditions.

According to a 2023 survey by the Japan Animation Creators Association (JANICA), animation workers work long hours and have little rest. Additionally, the average annual salary for newcomers aged 20 to 24 is only about 1.966 million yen (roughly NT$400,000), and for workers aged 25 to 30, the average is 2.928 million yen, both below the national median salary of 3.3 million yen for ages 20-29.

Animation workers work long hours and have little rest, with newcomers aged 20 to 24 earning an average of about 1.966 million yen (roughly NT$400,000)

Furthermore, the “Invoice System” launched in October 2023 has added tax pressures on freelancers such as voice actors and animators who mainly work on a contract basis.

This system requires creators with annual revenue under 10 million yen to become taxable entities and absorb consumption tax themselves, or face difficulties in securing contracts. This not only effectively reduces income but also raises concerns about talent drain and industry decline.

Takaichi Strives to Boost the Economy—Can Her Bold Gamble Succeed?

Whether it’s the 1 trillion yen investment in AI or the 55 billion yen support for the content industry, Japan is clearly trying to turn the tide through crisis management investments. By exporting domestic AI technology and strong IP, Japan aims to find new economic growth paths amid the digital deficit crisis, aligning with Takaichi’s “strong economy” policy.

However, the success of these policies depends not only on funding but also on whether they can effectively address low wages and tax issues faced by grassroots talent, and ensure healthy industry growth. Without improving industry fundamentals, this bold gamble may not achieve the grand goal of 20 trillion yen in overseas revenue solely through budget numbers.