This article intends to demonstrate the development of Japan‟s next-generation robotics as a clear case in challenging the Military-industrial Complex (MIC) literatures. Moreover, in contrary to the conventional wisdom, this article highlights that the postwar self-imposed weak military structure as a major structural factor in shaping the formulation and evolution of Japanese capitalism, especially the adoption and utilization of industrial policy in promoting „strategic‟ industries. Thus, this article redefines industrial policy as a product of market/structure failure mentality of Japanese elites. It intends to create artificial military market incentives to support further development of Japan‟s next-generation robotics industry toward highly dual-use purposes. When countries have been vigorously developing military robots with ambitions to dominate global markets, Japan, as the robot kingdom, is almost absent in this dynamic new game. The weak military structure has made Japan‟s robotics industry heavily concentrate on manufacturing purposes and have weaknesses in military applications for decades. However, from the 1990s the government has been utilizing industrial policy to create artificial military markets by providing civilian grounds in such as disaster rescue, surveillance, health care, and agriculture to develop military robotics technologies with two strategies. One is to redirect robotics R&D toward tri-use technology (industrial, service, and military) and the other is to diversify robotics applications into military applications. In sum, the findings of this article attempt to identify the overall structure which defines the shifts of Japanese political economy as well as its grand strategy in the 21st century.