The world is facing one of the worst crises in recent times. The international order that was tirelessly built up over the years following World War II is being greatly destabilized by growing friction between the United States and China, Russia’s invasion of Ukraine, and other critical developments. Amid this instability, the tariff policies set out by the US have the potential to severely affect the free trade systems that have become the foundation of prosperity for so many countries. Global environmental problems also require urgent attention. Meanwhile, Japan must address a great number of structural and complex challenges, including an aging population, declining birthrate, and limited natural resources and energy.

In such unstable and uncertain times, it is Keidanren’s mission to confront each daunting challenge head-on and devise concrete solutions. Accordingly, in December 2024, Keidanren published “FUTURE DESIGN 2040,” providing a vision for Japan’s society in 2040 and necessary policy proposals.

Fiscal 2025 marks the beginning of Keidanren’s efforts toward achieving that vision. Keidanren will draw up a road map for realizing “FUTURE DESIGN 2040” and will devote its utmost efforts to facilitating Japan’s growth as a science and technology-oriented nation and trade and investment-oriented nation as well as its development as a fair, equitable, and sustainable society. Keidanren will swiftly respond to the present crises while, from a mid- to long-term perspective, assigning priorities to the required measures and steadily working toward the realization of a virtuous cycle of growth and distribution.

This means pursuing efforts in five specific fields of policy.

Firstly innovation. Keidanren will continue to engage in measures key to growth, including Digital Transformation (DX), Green Transformation (GX), and the promotion of startups. In addition, Keidanren will establish Committee on Science and Technology Strategy to chart a path that Japan must follow to become a science and technology-oriented nation. To this end, the Committee will develop comprehensive and seamless strategies for education, basic and applied research, social implementation, and enhanced industrial competitiveness.

Secondly, integrated reform of the tax, fiscal, and social security systems. In order to ensure the sustainability of the social security system, Keidanren will strongly call for comprehensive reforms of benefits and burdens - in particular, effective approaches to the latter including taxation - while also emphasizing the perspective of Japan’s fiscal consolidation.

Thirdly, regional revitalization. Keidanren aims to achieve the “New Regional Bloc Concept”, which divides Japan into around eight regional blocs. By prompting each region to formulate a vision toward economic development, it will promote broad collaboration over wider areas that will overcome the current barriers of municipal governments.

Fourthly, labor reform aimed at increasing productivity. To allow for the sustainability of wage increases no less than the pace of inflation, improving and increasing corporate productivity is of paramount importance. To achieve this, it is vital to facilitate smooth labor mobility and fundamentally review working hours legislation such as the discretionary labor system.

Finally, economic diplomacy. Maintaining and enhancing a free and open international order based on the rule of law is crucial for Japan to become a trade and investment-oriented nation. Based on this, Keidanren will call on the government to collaborate with like-minded nations and demonstrate greater leadership in the formation of rules. Alongside these approaches, Keidanren will set up Committee on the Global South to enhance cooperation with the Global South nations achieving remarkable progress, while also actively engaging in private-sector economic diplomacy that draws on Japan’s soft power.

In order to pursue such approaches in these five fields, it is essential to secure an affordable and stable energy supply. Keidanren will engage in giving more concrete shape to, and steadily implementing “The 7th Strategic Energy Plan” of Japan.

Given the severe times we are facing, it is crucial for companies to pave a way that Japan needs to follow as front-runners for the future. I will always keep an eye on global trends while valuing both the “medium- to long-term perspective” and the “perspective of Japan in the world”. With these principles in my mind, Keidanren will strive to fulfill its responsibilities to future generations. Continued support and cooperation from all member companies will be vital to this endeavor.