There have been series of significant reforms of the Japanese science and technology policies since the 1990s. These reforms have been driven by several factors. First is the view—widely shared and supported—that investment in science and technology will be vital to the long-run economic growth of Japan. Supporting this view is the revitalization of economic growth driven significantly by the growth of information technology and biotechnology industries in the United States. Second is the recognition that underinvestment in research infrastructure in national universities and public research institutes over the long run were having negative effects for Japan. The ratio of government research funding to gross domestic product (GDP) in Japan in 1994 was 0.59 percent, compared with 0.88 percent in the United States.

In the chapter on Technology Policies in Japan, Professor Akira Goto and Kazuyuki Motohashi provide an overview of how Japanese technology policy has changed in response to the economic and technological challenges of the 1990s. They describe Japan’s 1995 “Basic Law on Science and Technology,” as well as the policy changes, which revamped the R&D tax credit, reformed technology policy as regards small and medium enterprises (SME), and addressed the corporatization of national universities and research institutes and the promotion of their links with industry. They conclude that the enactment of the Basic Law and the university reform are likely to have long-lasting impacts on the Japan’s national innovation system, since they involve significant institutional changes.

In the chapter on Reform of University Research System in Japan: Where Do They Stand? Ryuji Shimoda reviews the trends and current issues surrounding the reform of the university research system. He concludes that budget increases have helped universities improve the research environment that had deteriorated over the 1980s and early 1990s. He also notes that the corporatization of national universities has given an unprecedented degree of freedom to university administrators. These reforms already appear to be improving research results, have created a more competitive environment, and are promoting greater industry-university cooperation. Shimoda also points out four emerging issues for Japanese faculty and researchers, university and industry leaders, and policymakers: These are—

  • Maintaining the diversity in university research in the environment of the increase of competitive research funding and the strategic prioritization of S&T research by the government. This question is related to the role of institutional appropriations.

  • Managing competitive funding by funding agencies. Currently these agencies have only very limited professional staffs, with the evaluation function being delegated mainly to outside experts.

  • Managing competitive funding by national university corporations given multiple sources of research funding.

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