Japanese Businesses Expanding Space-Related Operations; Government Making Plans to Increase Public Support
This striking trend includes automakers, banks and other businesses with no prior connections to space. Startups are also joining the field one after another.
However, competition is increasingly fierce, and for now the United States and China are the frontrunners. Japanese companies in the field will not flourish without cooperation between the public and private sectors.
New possibilities
In June, Honda Motor Co. became the first private company in Japan to successfully launch and land a reusable small rocket. To do this, the company used technology it had cultivated for projects such as developing self-driving vehicles.
Honda R&D Co., a subsidiary of the automaker, was in charge of research and development of the reusable rocket. In an address given in Tokyo on July 8, Honda R&D President Keiji Otsu said emphatically, 'Space is a place of new possibilities.'
Major companies in such fields as telecommunications and financial services are enhancing their space-related operations, and a growing number of startups are entering the field.
According to research by the Spacetide Foundation, a general incorporated entity for promotion of space development, the number of startups in the space development field in 2025 was 109, an increase of about 40% from three years ago.
¥260 trillion market
With space being used more and more in fields such as national security and telecommunications, related industries are expected to grow rapidly. The global market size for space businesses is predicted to exceed ¥260 trillion in 2035, about triple what it was in 2023.
According to the Cabinet Office, the number of rocket launches conducted by the United States in 2024 was 153, while China had 66, putting those two countries at the head of the pack for use of space-related technology. Japan conducted only five launches last year.
Many of the American rocket launches were for commercial purposes, as more than half were made by Elon Musk's company SpaceX, which uses reusable rockets to minimize costs.
Cost and speed vital
One issue that Japanese companies face is the high cost of conducting rocket launches.
Mitsubishi Heavy Industries Ltd. aims to bring the cost of launching a rocket down to about ¥5 billion — half what it has been up to now — with its new primary rocket model, the H3, which it developed in cooperation with the Japan Aerospace Exploration Agency.
The government's Basic Policy on Economic and Fiscal Management and Reform, approved by the Cabinet in June, stipulates that the nation's space development policies should be enhanced. It sets a goal of boosting the size of the domestic market to ¥8 trillion in the first half of the 2030s, double what it was in 2020.
A senior official of an economy-related government entity pointed out that victory in space development goes to whoever is fastest. Thus whether Japan wins or loses in this field will come down to the speed at which projects can be commercialized.
Spacetide's Representative Director Masayasu Ishida said, 'Many countries all over the world, not just the major ones, are trying to cultivate space-related industries. It is essential also for Japan to stimulate demand and acquire human resources, technologies and investment.'
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