National Strategies to Foster Innovation in Japan:

Achievements and Shortcomings of the Basic Plans

William A. BlanpiedGeorge Mason University

Asian Science and Technology ForumArlington, Virginia

May 25, 2006

Outline of Presentation

• Japanese Government Reform and Reorganization since 2001

• The First and Second Science and Technology Basic Plans (1996-2006)– Achievements– Shortcomings

• The Third Science and Technology Basic Plan (2006-2011)

Critical Events (I)

• November 1995: S&T Basic Law– Unusual for Diet to take initiative in drafting legislation

• June 1996: 1st S&T Basic Plan– Emphasis on improving research infrastructure, particularly in

universities

• April 2001: 2nd S&T Basic Plan– Emphasis on reorientation or “reform” of research system

• April 2006: 3rd S&T Basic Plan– Further reform of the research system; continuity with the 2nd Plan– Additional emphasis on creative younger people

Critical Events (II)

• January 6, 2001: government reorganization– Creation of MEXT– MITI becomes METI– Cabinet Office created, with CSTP created within Cabinet Office

• March 31, 2001: adoption of 2nd Basic Plan by CSTP• April 1, 2001: government laboratories became Independent Administrative Institutions

– Example of AIST and “new” AIST– Autonomy from METI; radical reorganization of research facilities– Facilitation of cooperation with industry

• April 1, 2004: national universities granted “corporation” status– National University Corporation Law (July 16, 2003) refers to “management autonomy and

independence”

Critical Events (III)

• 1998: Law to permit creation of Technology Licensing Organizations (TLOs)

• 2000: Law granting Intellectual Property (IP) Rights to university professors– “Japanese Bayh-Dole Act”

– NB: US Bayh-Dole Act gives rights to universities, not professors; similar to provision for AIST in Japan

Key Provisions of the 1st Basic Plan• Government to invest 17 trillion yen for research over five-

year plan period• Introduction of system of limited-term appointments for

researchers in national research institutes;• Creation of 10,000 post-doctoral research positions by the

year 2000;• Measures to facilitate university-industry research

cooperation;• An increase in the proportion of research support awarded

on a competitive basis as opposed to more traditional formula-based funding;

• Promotion of public understanding of science and the “establishment of a national consensus on science and technology.”

Principal Objectives of 2nd Basic Plan

• Government to invest 24 trillion yen in research over five year plan period, or .86 percent of GDP growth over that period

• Adopting a strategic approach to government research investments (i.e., establishing research priorities)

• Building a competitive research environment• Enhancing the independence and mobility of young

researchers• Improving the research evaluation system• Utilizing research outcomes by promoting cooperation among

the academic, industrial and government research sectors• Promoting Regional Innovation• Enhancing communications with society

Adopting a strategic approach to government research investments

• Priority areas– Life Sciences– Information Technology– Environment– Nanotechnology/Materials

• Promotional Areas – Energy– Manufacturing Technologies– Social Infrastructure– Frontiers.

Commonalities and Distinctions

• Commonalities and continuities– Limited term appointments/mobility– Emphasis on competitive research– Academic-industry cooperation

• 1st Plan aimed to expand university research system• 2nd Plan also aimed at reorientation

– Significance of the CSTP

• 3rd Plan continues to aim at reform, particularly of personnel system– Emphasizes innovation– Emphasizes cooperation with other Asian nations

Significance of 2nd Plan for Japanese Science Policy

• Prior to January 2001, no possibility for Japanese Government to formulate a coherent, effective science policy– Science policies formulated by separate ministries and agencies

• Creation of CSTP within Cabinet Office has provided tools to formulate and implement such a policy– CSTP has exerted budgetary discipline– CSTP has used 2nd Basic Plan to help set its agenda

• Significant MEXT and METI initiatives intended to help implement 2nd Basic Plan

• 3rd Plan emphasizes role of, and primacy of, CSTP

Achievements of the 1st and 2nd Plans: Budgetary goals

• 17.6 trillion yen for research during five year period of 1st Plan

• 21.65 trillion yen for research during five year period of 2nd Plan– .86 percent of actual GDP growth

0

10

20

30

40

50

60

1982 '84 '86 '88 '90 '92 '94 '96 '98 '00 '02

Year

Germany

Japan

U.K.

France

U.S.

%

Go

vern

men

t-fu

nd

ed

R&

D E

xp

en

dit

ure

s

/ T

ota

l R

&D

ex

pen

dit

ure

s

Govt. R&D Budgets as Percentage of Total R&D Budgets

Most Significant Issues: a Biased Selection

• Increasing the competitiveness of the research system

• Utilizing research results through better links among academic, industrial, and government research facilities

• Establishing an effective and fair research evaluation system

• Increasing the independence and mobility of young researchers

Trend in Competitive Research Funding

0

1,000

2,000

3,000

4,000

5,000

6,000

1991 1993 1995 1997 1999 2001 2003 2005

100 Million Yen

Special Coordination Funds for Promoting Science and Technology

Health Sciences Research Grants

Global Environment Research Fund

Basic research promotion systems utilizing special public institutions

Systems established during the Second Plan

Other systems established during the First Plan

Grants-in-Aid for ScientificResearch

Target values in the Second Plan term

Pre-First Plan First Plan Second Plan

FY

0

1,000

2,000

3,000

4,000

5,000

6,000

1991 1993 1995 1997 1999 2001 2003 2005

100 Million Yen

Special Coordination Funds for Promoting Science and Technology

Health Sciences Research Grants

Global Environment Research Fund

Basic research promotion systems utilizing special public institutions

Systems established during the Second Plan

Other systems established during the First Plan

Grants-in-Aid for ScientificResearch

Target values in the Second Plan term

Pre-First Plan First Plan Second Plan

FY

0

1,000

2,000

3,000

4,000

5,000

6,000

1991 1993 1995 1997 1999 2001 2003 2005

100 Million Yen

Special Coordination Funds for Promoting Science and Technology

Health Sciences Research Grants

Global Environment Research Fund

Basic research promotion systems utilizing special public institutions

Systems established during the Second Plan

Other systems established during the First Plan

Grants-in-Aid for ScientificResearch

Target values in the Second Plan term

Pre-First Plan First Plan Second Plan

FY

0

1,000

2,000

3,000

4,000

5,000

6,000

1991 1993 1995 1997 1999 2001 2003 2005

100 Million Yen

0

1,000

2,000

3,000

4,000

5,000

6,000

1991 1993 1995 1997 1999 2001 2003 2005

100 Million Yen

Special Coordination Funds for Promoting Science and Technology

Health Sciences Research Grants

Global Environment Research Fund

Basic research promotion systems utilizing special public institutions

Systems established during the Second Plan

Other systems established during the First Plan

Grants-in-Aid for ScientificResearch

Target values in the Second Plan term

Pre-First Plan First Plan Second Plan

FY

Sample Achievements: Technology Transfer

• Between 1998 and May 2004, 37 Technology Licensing Offices were established to facilitate the commercialization of university research results. The number of patent applications filed by TLOs in Japan and abroad increased from 310 in 1999 to 1,619 in 2002.

• The number of joint research projects among universities and private firms almost doubled in 5 years, from 2,362 in 1997 to 5,264 in 2001.

• The number of start-up companies created to commercialize university research results increased from 315 in 2000 to 800 in 2003.

• New university-based centers:– Tohoku University New Industry Creation Hatchery Center – Kyoto University International Innovation Center

Number of University-Industry Research Centers

Number of center for joint research

0

10

20

30

40

50

60

70

Cumulative total of centers

Cumulative total of centers 3 8 13 18 23 28 33 38 43 47 49 52 53 56 61 62

(Number established annually) 3 5 5 5 5 5 5 5 5 4 2 3 1 3 5 1

FY1987

FY1988

FY1989

FY1990

FY1991

FY1992

FY1993

FY1994

FY1995

FY1996

FY1997

FY1998

FY1999

FY2000

FY2001

FY2002

Pre-1st Plan 1st Plan 2nd Plan

Number of center for joint research

0

10

20

30

40

50

60

70

Cumulative total of centers

Cumulative total of centers 3 8 13 18 23 28 33 38 43 47 49 52 53 56 61 62

(Number established annually) 3 5 5 5 5 5 5 5 5 4 2 3 1 3 5 1

FY1987

FY1988

FY1989

FY1990

FY1991

FY1992

FY1993

FY1994

FY1995

FY1996

FY1997

FY1998

FY1999

FY2000

FY2001

FY2002

Pre-1st Plan 1st Plan 2nd Plan

Number of University-Industry Research Projects

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Cases 57 161 216 260 385 576 694 819 1,035 1,153 1,251 1,315 1,441 1,602 1,876 2,109 2,484 3,173 4,191

FY1983 FY1984 FY1985 FY1986 FY1987 FY1988 FY1989 FY1990 FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001

Pre-First Plan First Plan Second PlanCases

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Cases 57 161 216 260 385 576 694 819 1,035 1,153 1,251 1,315 1,441 1,602 1,876 2,109 2,484 3,173 4,191

FY1983 FY1984 FY1985 FY1986 FY1987 FY1988 FY1989 FY1990 FY1991 FY1992 FY1993 FY1994 FY1995 FY1996 FY1997 FY1998 FY1999 FY2000 FY2001

Pre-First Plan First Plan Second PlanCases

Trends in University-initiated Start ups

2nd Plan

0

20

40

60

80

100

120

140

160

Num

ber

of s

tart

-ups

est

ablis

hed

Number of start-ups annually established

28 11 14 23 30 57 113 118 135

Up to1994

1995 1996 1997 1998 1999 2000 2001 2002

Pre-1st Plan1st Plan

*Companies total is 614 as of August of 2003

2nd Plan

0

20

40

60

80

100

120

140

160

Num

ber

of s

tart

-ups

est

ablis

hed

Number of start-ups annually established

28 11 14 23 30 57 113 118 135

Up to1994

1995 1996 1997 1998 1999 2000 2001 2002

Pre-1st Plan1st Plan

*Companies total is 614 as of August of 2003

Mobility and Independence of Young Researchers

• Least impressive achievement of either 1st or 2nd Plans– Many rewarding short term (five year) postdoc

positions created– What happens (happened) then?

• Dead weight of university seniority system– “How can I energize my young bears and tigers?”

(Arima)• Reformation of university human resources

system assigned a high priority in 3rd Plan– But details lacking

Firms Hiring PhDs and Postdocs

4.6%

5.1%

3.7%

5.6%

6.3%

6.2%

29.0%

26.1%

31.0%

9.5%

12.1%

15.6%

18.1%

21.6%

21.2%

12.9%

18.9%

19.3%

44.8%

41.0%

37.8%

75.7%

66.8%

63.3%0.4%

0.7%

0.6%

1.4%

1.5%

1.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Doctorate students

Post-doctorates

Hiring every yearHiring almost every yearHiring occasionallyS eldom hiringNo hiring

(2002)

(2001)

(2000)

(2002)

(2001)

(2000)

Intersectoral Mobility

3rd Basic Plan

• Chapter 1 – Basic Ideas

• Chapter 2 – Strategic Priority Setting in S&T

• Chapter 3 – Reforming the S&T System

• Chapter 4 – S&T to Be Supported by Society and the Public

• Chapter 5 – Role of the Council for Science and Technology Policy

Chapter 2 – Strategic Priority Setting in S&T

• Reiterates four priority areas and four promotional areas of 2nd Plan

• More active steps to increase competitiveness of system

Chapter 3 – Reforming the S&T System (I)

• Workforce policies– More opportunities created for young people

– 25 percent women in S&T workforce by 2011

– Utilize talents of retired researchers

– Welcome qualified foreign researchers• Including Chinese? Koreans?

– Create 30 new Centers of Excellence• 93 such centers were created between 2002 and 2004

• Carrot/stick to shake up university academic seniority system?

Chapter 3 – Reforming the S&T System: International Cooperation

• “As well as continuing to improve the prior international frameworks . . The government will strengthen ties of S&T with Asian nations to fulfill the role that is expected of Japan from both within and outside the country, in view of international situations, i.e., the geographical and environmental accessibility, the rapid improvement of the S&T standards, and the increasing closeness of economic relations.”

Chapter 3 – Reforming the S&T System: International Cooperation

(cont.)

• To this end, “the government will implement a policy dialogue called ‘Asian Region S&T Ministerial Summit’ (tentative name) at a high level including ministers involved in S&T nations based on the existing government-to-government dialogue and interaction by researchers.”

Chapter 5 – Role of the Council for Science and Technology Policy

• CSTP asserts its primacy over the government – and to some extent the non-government S&T system in Japan

• Limitations to the authority of the CSTP – and the government ministries– Public research facilities gained a large degree

of autonomy on April 1, 2001– National universities gained analogous

autonomy on April 1, 2004

Issues for Further Exploration

• Models of Technology Transfer in Japan• Efficacy of Evaluation – personal and institutional• Government Laboratories as Independent Administrative Institutions

– Positive and negative factors after three years– AIST as a model for national universities?

• National Universities as largely autonomous organizations– Relationship to implementation of Basic Plan– Positive and negative factors

• Efficacy of the CSTP and government ministries in view of the autonomy of government laboratories and national universities

• Desirability of periodic evaluation of achievements and shortcomings of Basic Plan, such as 2004 NISTEP analysis

Acknowledgements

• Japan Society for the Promotion of Science– Six week senior postdoc, autumn 1997– Six week senior postdoc, spring 2003

• NSF– Appointment as Tokyo Office Director, July 1999-

August 2002• NISTEP

– Host during spring 2003 postdoc– Participation in helping to plan and to attend September

2004 international workshop on assessment of Basic Plans