Japan can be America's arsenal

I just came back from Andreessen Horowitz’ American Dynamism Summit in Washington, D.C. It was very refreshing to see so many smart people invested in both American reindustrialization and American defense.

One interesting theme I noticed at the conference — and which I was eager to talk about — was U.S. manufacturers building factories in Japan. Many American manufacturers — both startups and big companies — already do lots of sourcing in Japan, but now some are starting to realize that Japan is a good production base as well. That was the subject of my first book, so it’s a topic near and dear to my heart.

So I thought this would be a good time to publish a guest post by Rie Yano, a friend of mine who is a San Francisco-based partner at the Japanese VC firm Coral Capital. Rie’s very timely post is all about how Japan is the perfect place for the U.S. to do lots of defense manufacturing. In fact, I think there are some advantages of Japan that she didn’t even mention — such as the incredible ease of bringing foreign skilled workers into Japan, now that the country’s immigration policy has been reformed. But in any case, it’s a very good post.

The United States faces a defense-industrial problem that money alone can’t solve. Even though reindustrialization is now supposedly an American national priority, there are hard limits to what the U.S. can actually build, repair, and replenish at scale.

Shipyards are backed up for years. Munitions production is thin. Advanced manufacturing talent is aging out faster than it can be replaced. And even when funding is approved, production timelines don’t move fast enough to match today’s threat environment.

Government reshoring initiatives help at the margin, of course. But new industrial capacity in the U.S. takes years to permit, and remain vulnerable to litigation even after regulatory approval.

Meanwhile, China’s mighty industrial machine is firing on all cylinders. While U.S. reshoring efforts ramp up from a cold start, and while U.S. manufacturing relearns how to produce at scale after decades of neglect and stagnation, China is rapidly surpassing the U.S. in the production of ships, submarines, missiles, drones, and ammunition.

To move faster, the U.S. can’t go it alone. It needs a partner — a place where it can manufacture defense equipment while