Japan’s government will permit tests of self-driving cars on public roads starting in 2017, with the aim of having the technology ready by the 2020 Olympics in Tokyo.
Japanese Prime Minister Shinzo Abe made the decision after meeting the head of Toyota Motor Corp and other executives, who hope the technology could help the Japanese automotive sector grow.
"Investment holds the key to higher productivity and based on this investment we can take the lead in sparking the next industrial revolution," Abe said on Thursday.
American tech giant Google is currently ahead of the game in the driverless car domain, but Japanese car makers including Toyota, Nissan and Honda hope to catch up.
Their aim is to have a product ready by 2020 that would allow the driver to switch to autopilot mode. The automakers want to use the Tokyo Olympics to promote their products.
Although the Japanese government doesn’t plan to offer subsidies to the firms to help the development, Abe’s support will make it easier to push through the plans for trials of the technology on public roads.
Japan, which has been bouncing in and out of recession for decades, hopes that focus on innovation will finally spur sustained economic growth.
Abe will also ease regulations to allow small drones to deliver packages in three years, which could encourage innovation in another field that Japan has lagged behind in recent years.