Data Stories: The Cost of Developing Japan’s F-3 5th-Generation Fighter

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By Aaron Lin, Senior Market Analyst

Japan’s F-3 program is one of the largest fighter development programs outside the United States, and a lot is riding on it for Japan. But how much budget space is there for defense research & development (R&D), and for the F-3 in particular? Annual R&D allocation as a proportion of the defense budget has hovered around 2-3% of the total defense budget for past 20 years. Since 2012, when Prime Minister Shinzo Abe came into office, R&D as a proportion of the defense budget has been 2.58%, dipping below $1 billion in some years.

Developing the F-3 will be immensely expensive. The Japanese government recently estimated development would cost about $13.7 billion. The real cost will likely be much higher, especially considering that Japan plans to incorporate what it sees as 6th-generation technologies that haven’t been fully developed yet. As a point of historical reference, actual development costs for the F-2 fighter were anywhere from 75-100% higher than various Japanese estimates. It is crucial that Japan get a foreign partner to shoulder some portion of the development costs, lest the F-3 crowd out R&D budget space for other important development efforts like ballistic missile defense, unmanned aircraft, and directed energy. The charts below assume actual F-3 development will cost 75% more the $13.7 billion estimate. The distribution of spending is based on previous US experiences developing clean-sheet fighter designs. Considering the urgency of the program, the charts also assume a 2021 program start date in the middle of the upcoming Mid-term Defense Program.

Use the selector at the bottom to adjust Japan’s share of development costs to see how much of the annual R&D budget allocation it would consume

Getting a foreign partner to substantially invest in a plane that it may never fly is not an easy proposition. An upcoming data story will look at Japan’s options to expand defense R&D investment to help fund F-3 development.

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