Outsourcing & National Security

The Japanese Diet passed a new bill for beefing up economic security of the country. The focus of the new law is on sustaining the supply chains of key strategic materials and safeguarding key social infrastructure services (such as public utilities, airports, communications) against attacks from overseas. Needless to say, the law seeks to control outsourcing of these key infrastructure related services as it enforces necessary security measures, while these key infrasturacture service providers often outsource their operation to third parties, including foreign entitites.

From Keidanren site

The problem is that the infrastructure service providers may no longer be able to perform all of the services themselves; Tokyo for example outsources water supply meter reading and billing operation to Veolia, a company born in Frnace. The new law will likely create significant demand for compliance related services, as well as market entry by entities connected politically with the conservatives and/or the United States. It is no coincidence that Amabassador Rahm Emanuel appeared at a Keidanren confernce on this topic and called for government, and business, patnership.