UK innovators urged to embrace trade opportunities stemming from new Japan-UK investment agreement

The newly announced UK–Japan investment deal opens significant opportunities for British tech companies, according to Richard Lyle, Deputy Managing Director of Japan at international business development consultancy Intralink. He says the agreement reflects a deepening economic relationship between the two countries, with growing demand in Japan for UK expertise in clean energy, AI and advanced technologies.

Lyle urged tech innovators to put aside the misconceptions that have often deterred UK companies from entering Asian markets and instead embrace the new opportunities on offer. In addition to his role at Intralink, Lyle is President of the British Chamber of Commerce in Japan and has worked in Tokyo to nurture business links between the two countries for 30 years.

He said: “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.”

He continued: “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 we saw traditional Japanese manufacturing companies such as Toyota, Nissan and Sony establishing operations in the UK.

“Today, Japan’s priority is to invest more in infrastructure – especially in 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’s a huge opportunity to bring together the UK’s strengths in software, scientific advancements and R&D with Japan’s prowess in hardware and advanced manufacturing.”

Lyle cites defence as a sector of particular interest: “Defence has been a sensitive subject in Japan since World War II. The country has a pacifist constitution and defence contractors here don’t openly talk about their work. But, with growing geopolitical tensions and the country feeling it can no longer rely on the USA, there’s a need for more self-reliance and Japanese companies – perhaps ironically – are increasingly looking for overseas collaborations to achieve this, including in advanced tech areas such as cyber security, quantum computing and space innovations.

“Japan is also looking to double its foreign direct investment by 2030, with its 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.”

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