Many of the barriers to collaborative R&D that European nations are working to overcome, such as cultural and language differences and competing national interests, do not inhibit U.S. collaborative ventures. While acknowledging that transnational collaborations can lead to administrative confusion and the waste of resources, several participants asserted that European countries have built a viable framework for collaborative R&D. EC nations have forged a consensus on the technological areas most vital to future industrial competitiveness and are allocating their R&D support accordingly.

Japan

Government-led cooperative R&D in Japan has evolved through three stages since 1950. During the 1950s and 1960s, the country's efforts focused on creating the science and engineering foundation for economic development. Initially, government support for R&D was directed to individual firms, which contributed between 50 and 70 percent of project funds.

To stimulate research efforts, some participants noted, the government created a network of trade organizations, the Engineering Research Associations. With government support and guidance, the associations organized collaborations among small and midsize companies to address common technical barriers. Industrial trade associations remain an important feature of collaborative R&D in Japan. During the 1970s, the focus of government-led collaborations changed. Efforts were directed at elevating the performance of Japanese companies in technology generation. Collaborative projects were designed to refine advanced technologies. The specific goals of each collaborative venture were developed by the government in close consultation with the trade associations.

The third stage of Japan's government-led collaborative R&D efforts came as Japanese companies began to dominate world markets for many high-technology consumer products. This current phase of Japanese government-industry research focuses on the development of next-generation technologies. One recent initiative is the government-funded Key Technology Center (KTC) program, which has provided support for more than 60 projects since 1985.

The Key Technology Center (KTC) Program

In contrast to earlier initiatives focused on next-generation technology, the KTC program involves high-risk R&D. The program functions as a venture capital fund, providing seed money in the form of government-owned equity shares to support industrial collaborations, which typically involving 10 or fewer companies. (Participation of foreign-owned subsidiaries in KTC programs is not prohibited.) Participants are expected to



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