UK tech firms urged to seize Japan investment deal

Intralink has urged UK technology companies to pursue opportunities arising from a new Japan-UK investment agreement, pointing to growing commercial interest between the two countries.

Richard Lyle, Deputy Managing Director of Japan at Intralink and President of the British Chamber of Commerce in Japan, said the agreement could encourage more UK businesses to seek funding, customers and partnerships in Japan.

He linked the deal to a broader run of agreements between London and Tokyo, adding that Japanese investment in Britain is expected to focus on areas including clean energy, particularly hydrogen and offshore wind, in line with the UK’s renewable energy goals.

Japan’s investment relationship with the UK has shifted over the past three decades, Lyle said. Earlier waves were associated with manufacturers such as Toyota, Nissan and Sony setting up operations in Britain. Current priorities, he said, are moving towards infrastructure, energy and property.

At the same time, Japanese industry is trying to strengthen its position in strategic technologies. Lyle said the country wants greater self-reliance in fields such as semiconductors, clean energy and artificial intelligence, but faces domestic constraints that create openings for overseas partners.

Strategic sectors

That demand could be relevant for British technology groups working in software, research and science-led industries. The agreement may help UK companies attract investment from Japanese corporates, sell into the Japanese market and work with Japanese businesses expanding in Britain.

Defence is one of the sectors drawing increasing attention, according to Lyle. He described a shift in approach in Japan as companies look abroad for collaboration in areas linked to national resilience and security.

“The trading relationship between the UK and Japan has been growing rapidly, with this deal the latest in a series of agreements in recent years, emerging from the Hiroshima Accord. Investments in the UK will be in areas such as clean energy, including hydrogen and offshore wind, helping the UK achieve its renewable energy targets,” Lyle said.

His comments suggest the latest agreement forms part of a wider effort to deepen economic ties. He said the bilateral relationship is stronger than at any point in his three decades of work in Japan.

“This new, deeper collaboration is a natural progression, and the trading relationship feels stronger now than at any point in my long experience of working in Japan to foster business links between the two countries.

“Japan has always been a major investor in the UK, but the relationship has transformed since the 1990s, when traditional Japanese manufacturers such as Toyota, Nissan and Sony established operations there.

“Today, Japan’s priority is to invest more in infrastructure, especially energy and property. The country is also determined to become self-reliant in emerging technologies, including semiconductors, clean energy and AI. Limitations in its domestic capabilities mean it urgently needs support from friendly nations such as the UK to fill technology and supply chain gaps in these critical sectors.

“This demand, boosted by the new agreement, represents a significant opportunity for UK tech companies to secure strategic funding from Japanese corporates, sell their technologies in Japan and do business with Japanese companies as they expand their investments in the UK. Essentially, there is a major opportunity to bring together the UK’s strengths in software, scientific advancement and R&D with Japan’s prowess in hardware and advanced manufacturing,” he said.

Market entry

Lyle said British businesses often hold back from entering Asian markets because they see them as difficult to navigate. He argued that Japan now offers a more accessible opening for UK companies willing to commit time and develop a local strategy.

He pointed to British groups already active in the market, including Tokamak Energy and Octopus Energy through its joint venture with Tokyo Gas. He also said the Japanese government wants to double foreign direct investment by 2030 and is encouraging more overseas companies to establish a presence in the country.

Another area he highlighted was defence-related technology, where Japan’s changing security outlook is shaping demand for external collaboration, including in cyber security, quantum computing and space-related work.

“Defence has been a sensitive subject in Japan since World War II. The country has a pacifist constitution and defence contractors here do not openly talk about their work.

“But with growing geopolitical tensions, and with the country feeling it can no longer rely on the US, there is a need for greater self-reliance. Japanese companies, perhaps ironically, are increasingly looking for overseas collaborations to achieve this, including in advanced technology areas such as cyber security, quantum computing and space innovation.

“Japan is also looking to double its foreign direct investment by 2030, with the government keen to encourage overseas companies, including those from the UK, to enter the country. Many UK firms have already done so successfully. Fusion energy company Tokamak Energy is one example, as is Octopus Energy through its joint venture with Tokyo Gas,” he said.

Intralink’s message is that the commercial case for entering Japan has strengthened, even if old assumptions still deter some companies.

“Entering Asian markets is perceived as challenging and there is a tendency among UK companies to regard them as just ‘too difficult’. However, the prospects now on offer in Japan are too good to be missed. A growing number of UK companies are demonstrating that, with the right strategy and approach, the opportunities are well within reach,” Lyle said.