Edited by: Leposava Ognjanoska, International Balkan University, North Macedonia
Reviewed by: Neel Vanvari, Institute for Indo-Pacific Affairs, New Zealand
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With the expansion of the global economy and the development of technology, the concept of economic security has attracted attention, as highlighted at the G7 Hiroshima summit in 2023. Although this is important for policies, it has not yet been clearly defined. This definition cannot be neglected when evaluating policies that ensure that private economic activities are not excessively restricted. Therefore, this study aims to define economic security concerning value, threats and means. This study used literature reviews to analyze eight Japanese and four English studies. Economic security can be defined as the protection of essential values, such as national survival, sovereign independence, and economic prosperity, from threats, including the disruption of critical commodity supplies, the outflow of advanced technologies, and overreliance on other countries This can be achieved through diversifying supply sources and supply chains, diplomatic efforts to maintain a free and open international economic system, stockpiling essential resources, reducing excessive foreign dependence, developing indispensable goods domestically, and preventing the loss of critical advanced technologies. This study also argues that regulatory measures must be necessary and reasonable to eliminate threats to the values that need protection, because restrictions imposed for economic security purposes limit the freedom of business activity. The definition of economic security and the reflections on economic security policy presented in this paper contribute to the broader discussion in international political economy.
Economic security is now positioned as one of the most important international issues: the leaders’ communiqué of the G7 summit held in Hiroshima in May 2023 included economic security as a separate item, stating that “ensuring economic resilience and economic security globally remains our best protection against the weaponization of economic vulnerabilities” (
The Trump administration’s 2017 National Security Strategy in the United States stated that “economic security is national security” (
In this article, economic security is summarized as follows.
This requires diplomatic efforts to maintain a free and open international economic system.
Neither of these official documents clearly states what “economic security” is. Security refers to the protection of assets against threats (
Definition of economic security in official documents of the US, EU, and Japan.
| Documents | Values | Threats | Measures | |
|---|---|---|---|---|
| US | National Security Strategy (2017) | American prosperity and security (p.17) | Economic competition playing out in a broader strategic context (p.17) |
Rejuvenating the domestic economy Promoting free, fair, and reciprocal economic relationship Leading in research, technology, invention, and innovation Promoting and protecting the innovation base Embracing energy dominance (p.18–23) |
| National Security Strategy (2022) | A free, open, prosperous, and secure international order (p.10) |
Competition with the PRC Threat posed by Russia Shared challenges, particularly climate change, pandemics, and economic turbulence (p.12–13) |
Outcompeting strategic competitors (in important emerging technologies such as microelectronics, advanced computing, biotechnology, clean energy technologies, and advanced telecommunications) Galvanizing collective action on global challenges Shaping the rules of the road for technology, cybersecurity, and trade and economics (p.11) |
|
| EU | Joint Communication on a European Economic Security Strategy | Prosperity, |
Resilience of supply chains Physical and cyber security of critical infrastructure Technology security and technology leakage Weaponization of economic dependencies or economic coercion (p.4) |
Investing in EU competitiveness Diversifying supply chains Responding to practices such as economic coercion - Preventing the leakage of sensitive emerging technologies (p.4) |
| Japan | National Security Strategy of Japan (December, 2022) | Peace, security, and economic prosperity (p.30) | Various threats through economic means (p.30) |
Increasing supply chain resilience Protecting critical infrastructure Protecting data and information Fostering and preserving technology Countering economic coercion (p.30–31) |
| Act on the Promotion of Ensuring National Security through Integrated Implementation of Economic Measures | Ensuring security associated with increased complexity of the international situation and changes in socioeconomic structure (Article 1) | Economic activities that harm the security of the nation and its citizens (Article 1) |
The stable supply of specified critical products The stable provision of specified essential infrastructure services Development support for specified critical technologies (Article 1) |
Source: Prepared by author.
This finding raises several questions. What is economic security? What are considered threats to economic security? What, who, and how should these individuals be protected from such threats? Although its definition remains ambiguous, the free economic activities of the private sector have been restricted to security. It is impossible to discuss the rationale for such economic security policies when their definitions are unclear. The economic activities of the private sector may be excessively restricted regarding security (
Although countries have only recently begun to publish official documents on economic security, debates on this concept have been ongoing for more than half a century. Economic security has often been used as a concept related to individual economic difficulties, such as income and employment in the context of domestic social welfare. Such arguments date back to pre-war times (
Therefore, this study aims to define economic security from the perspective of threats, objects and means by reviewing related literature. The review in this paper includes English and Japanese literature. In Japan, economic security has been the subject of active debate on three occasions: at the end of the 1970s, at the end of the 1990s, and in the present day. Interestingly, more relevant literature on national economic security was found in Japanese literature than in English literature, as discussed in Section 2. This can be understood as a result of the fact that Japan has been actively discussing the security aspects of its economic policy under the concept of “comprehensive security” since the 1970s. Section 2 briefly reports the results of the literature review and Section 3 discusses the definition of economic security. Finally, Section 4 presents a brief conclusion.
For the English-language literature, a title search using the keyword “economic security” was conducted in the article database JSTOR in February 2024. The search yielded 275 academic papers, 75 book chapters, and 147 reports. For Japanese-language literature, we searched CiNii Research, a Japanese literature search service, using the keyword “economic security” during the same month. Consequently, 50 books and 662 articles have been published in Japanese. This study reviews eight Japanese and four English language articles from these references for their contribution to the discussion on the definition of economic security, as determined by their titles and abstracts.
The selection of these papers was made on the basis that the quality is sufficient to reflect the novel situations of the policies and to be analyzed from an academic perspective. It should be noted that there is a risk that these articles may not include some concepts that other articles may have mentioned. It is therefore important to be aware of the limitations and update the concepts when there is a recognition of a crucial influence on the study of economic security.
Some previous studies have also attempted to define economic security while mentioning it as a concept in the study of security (
Definition of economic security in English and Japanese literature.
| Documents | Values | Threats | Measures |
|---|---|---|---|
| A. B. Adams (1936). |
Economic threats to domestic individuals, including income and employment | ||
| F. A. M. A. von Gensau and J. Pe1kmans, ed. (1982). |
Political, military, and socio-cultural national interests | N/A | Use of economic policies |
| V. Cable (1995). What Is International Economic Security? |
National safety |
Trade and investment directly affecting defense capabilities Offensive/defensive economic policies: economic sanctions, insecurity of supply of oil and critical minerals Decline in relative economic power Instability in the international economic community (p.306–308) |
N/A |
| D. Ciuriak and P. Goff (2021). |
Sovereignty of the state and life of the people Stability of people’s lives Economic prosperity (p.3–4) |
Risks associated with pursuing opportunities (adverse shocks including natural disasters) Threats from intentional hostile actions (p.3–4) |
Ensuring the ability of the economy to function in the face of potential supply disruptions Ensuring prosperity in an innovation-intensive era of strategic competition (p.3–4) |
| Kaoru Murakami (1997). |
Survival of the people (p.4) | Insufficiency of resources, energy, and food (p.39) |
Stockpiling Saving Diversification of supply sources Complementary diplomacy with resource-rich countries(p.26–38) |
| Yoichi Funahashi (1978). |
Survival of the state Welfare and economic interdependence Political autonomy (p.296–297) |
Economic activities of other countries (p.296–297) |
Maximizing its own economic power (implicit or explicit offensive, deterrent, and defensive power) Minimizing the economic power of other countries (p.296–297) |
| Masataka Kosaka (1978). Keizaianzenhosho no Igi to Kadai (Significance and Issues of Economic Security). In |
Economic lives of the people (p.596–597) |
Disruption of resource supplies and market closures due to military threats and political and economic volatility (p.596) |
Self-sufficient economy Creation and maintenance of a world-wide interdependent - Stockpiling of resources (p.611–614) |
| Yuzo Murayama (2003). |
A domain where economics and security overlap (e.g., leakage of dual-use technologies) (p.57) | Needs to be handled on a case-by-case basis (p.62) | |
| Masaki Hasegawa (2006). Keizaianzenhosho Gainen no Saikousatsu (Rethinking the Concept of Economic Security). |
Survival and independence Economic prosperity (p.113–115) |
Use or deterrent of military force Use of economic means Dysfunction of the international economic system (p.115) |
Military means: attack, threat, deterrence, stationing, and escort by military force. Economic means: reward (aid and assistance), punishment (sanctions), strengthening the country’s economy (self-sufficiency, stockpiling, diversification of supply, etc.) (p.115–116) |
| LDP (2020). Keizaianzenhosho senryaku sakutei ni mukete (Toward the Development of an Economic Security Strategy). | Peace, security, and economic prosperity (p.3) | N/A |
Strategic autonomy: Avoiding excessive dependence on other countries in strategic base industries such as energy, which are difficult to stockpile and substitute and have limited sources of supply. Strategic indispensability: Creating an environment in which the private sector can produce technologies, products, and services that are indispensable to the international industrial structure (p.8–10) |
| Shigeru Kitamura (2022). |
Stability of people’s lives and survival of the nation |
Dependence of key industries on other countries and outflow of technology and human resources (p.92) |
Offensive aspect: economic statecraft (weaponization of economic measures) Defensive aspects: preventing technology outflow, regulating foreign investment, ensuring autonomy (p.93–95) |
| Jun Kazeki (2023). |
Security of the nation and its people National interests such as peace and security and economic prosperity of our country (p.1–4) |
Supply chain fragmentation, technology proliferation, economic sanctions/ coercion, energy and food shortages |
Export control, investment screening, arms transfers, arms domestication, economic sanctions and economic coercion, supply chain diversification and strengthening, engagement policies (p.1–4) |
Source: Prepared by author.
Although there is little English-language literature that clearly defines the values to be protected, a report published in 2021 by the Centre for International Governance Innovation, a Canadian think tank, emphasizes the sovereignty of the state and the lives of its people in the context of the economic dimension of national security (
In addition, almost all Japanese literature from the 1970s to the present has considered the survival of the nation or its people as a value to be protected through economic security. Along with survival, “political autonomy” (
In summary, the previous arguments seem to indicate that the values to be protected in economic security are “survival of the nation and its people,” “independence of sovereignty,” and “economic prosperity.”
Although few studies have clearly defined threats, shortages of resources, energy, food, and other goods essential to people’s lives have often been identified as threats to economic security in both the English and Japanese literature from the 1970s to the present (
Such shortages and supply disruptions of critical commodities are caused by natural disasters, international instability, or pandemics. Supply shortages can also be caused by trade restrictions based on the political intentions of the supplier countries. The latter case, namely economic sanctions or coercion by other countries, has traditionally been recognized as a threat in most English-language studies on economic security (
Some literature also view a decline in relative economic power as a threat to the “survival of the nation and its people,” “independence of sovereignty,” and “economic prosperity” because it undermines relative military superiority (
In addition, key advanced technologies, such as semiconductors, have recently become more important than ever in discussions on economic security. The threat of outflow or dependence on other countries for key advanced technologies did not receive much attention during the 1970s. However, in recent years, advanced technology has become one of the most important issues in the economic security agenda. Particular emphasis has been placed on the issue of dual-use technologies in which the boundary between civilian and military technologies is blurred (
Economic security aims at eliminating or deterring the threats discussed above as much as possible. To deal with disruptions in the supply of critical goods, one of the requirements is to ensure the ability of the economy to function in the face of the risks of such supply disruptions (
However, the isolation of economic security was inconsistent with the original political goal. Self-sufficiency for the “survival of the nation and its people” and “independence of sovereignty” would not allow the country to enjoy the benefits of comparative advantage. This would lead to a situation incompatible with the other goal of economic security, “economic prosperity.” Moreover, the concentration of supply sources within a country ironically increases the risk of supply disruptions due to unexpected events such as natural disasters.
Therefore, conventional discussions of economic security have suggested that self-sufficiency has become “almost impossible” (
In this context, some have emphasized the importance of maintaining a free and open international economic system as a prerequisite for diversifying sources of supply (
Conversely, a country that depends on other countries for critical goods with limited suppliers would not be able to ensure the “survival of the nation and its people,” “independence of sovereignty,” and “economic prosperity” if subjected to economic sanctions or economic coercion by the supplier country. This is the risk of “weaponized interdependence” (
A consuming country should not be overly dependent on other nations for critical commodities that are difficult to stockpile or substitute, to prevent the risk of a choke point of critical resources being seized by a hostile nation (
Simultaneously, improving strategic indispensability is necessary to counter or deter hostile actions by an adversary with offensive capabilities (
However, strategic indispensability is undermined if advanced technologies are leaked to other countries. In addition, as mentioned above, the boundary between civilian and military technologies has disappeared as a dual-use technology. If advanced civilian technology leaks into a hostile country, it may be diverted for military use, thereby increasing the military threat to the countries that originally developed the technology. Therefore, especially in recent discussions, several proposals have been made to prevent technology leakage through export control and investment screening (
If a country does not have the capacity to implement measures stated above, it can be said that its economic security is weak. In this case, the counrty needs to start by building necessary capacity and institutions. First of all, it is necessary to develop the systems and infrastructure to protect the survival of the state and its people, the political and legal systems to protect sovereignty and independence, and the industrial, distribution and financial systems for economic prosperity. In doing so, it is possible to design appropriate systems while taking into account the criteria listed in the definition, such as diversification of resource supply and protection of key technologies. However, even in such a process, it is thought that small states are likely to be influenced by medium-sized states and major powers. In particular, if the policies of medium-sized states and major powers change in areas where capacity is lacking, it is thought that it will be difficult to protect national interests, and that it will be easy to fall into a serious situation in terms of economic security. Thus, the challenges of economic security for small states are distinct from those of medium-sized states and major powers in that the former are more susceptible to the influence of medium-sized states and major powers, and that the process of establishing new national and economic systems is likely to be included.
Based on the most common denominator in the English and Japanese literature, the values, threats, and measures of economic security can be summarized as follows:
This requires diplomatic effort to maintain a free and open international economic system. Additionally, a certain level of stockpiling is necessary as a precaution against temporary supply disruptions. Moreover, as a defensive measure against economic sanctions by potential adversaries, it is essential to ensure strategic autonomy without excessive dependence on other countries for critical commodities that are difficult to stockpile or replace and for which sources of supply are limited. It is also necessary to ensure strategic indispensability to counterattack or deter hostile countries by promoting products and services that are indispensable to the international industrial structure of the country. To ensure strategic autonomy and indispensability, promoting and preventing the outflow of advanced key technologies are important measures for economic security.
However, it is important to recognize that restricting private economic transactions for economic security also restricts economic freedom. Therefore, regulatory measures should be limited to what is indispensable and reasonable for eliminating or deterring threats to national survival, sovereign independence, and economic prosperity. However, there is skepticism about whether such restrictions are truly limited to what is necessary and reasonable in the context of economic security. To ensure that private economic activities are not restricted in the name of security, it is important to clearly define economic security, including its values, threats, and means. It would be gratifying if this study could contribute to the definition of economic security.
NY: Writing – original draft, Writing – review & editing. TS: Writing – original draft, Writing – review & editing.
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