European and Japanese experiences with cooperative R&D ventures have stimulated considerable interest in the role of R&D collaboration in strengthening technological performance. Foreign governments, with varying degrees of success, have expanded their financial support for civilian technology development programs. The most prominent example of central government support for collective R&D efforts is Japan. The Japanese government not only has provided subsidies to industry-led programs in R&D but also has provided low-cost loans to companies for business development and equipment leasing.⁹⁶ In response to the perceived success of Japanese efforts and as a means of promoting economic integration, the Commission of the European Communities and a number of its member governments have also moved to promote collaborative R&D during the past decade.

The Japanese experience with collective research efforts dates to the 1961 Research Association for the Promotion of Mining and Industrial Technology Act. The act established Engineering Research Associations (ERAs) to increase the technical expertise of small and medium-sized companies. Ventures sponsored under the act are incorporated as nonprofit entities, with the government providing partial funding to the ERA.

Prior to the 1970s, ERAs did not focus on large-scale R&D projects involving advanced research on the cutting edge of science. In most instances they concentrated on a single technical barrier or technology-generation problem, with the objective of diffusing best-practice information on manufacturing product and process technologies. This information and much of the technological know-how diffused through collaborative ventures was based on technological advances outside Japan.⁹⁷ Collaborative R&D projects changed focus after 1970, however, under the general direction of the Ministry of Industrial Trade and Industry (MITI). New sets of “large-scale projects,” including several well known in the United States—the Very High Performance Computer Systems, and Fourth Generation Computer Systems, among others—were started. It should be noted that not all collective research efforts in Japan, particularly those subsidized by the central government, have been successful in meeting their technical objectives.

Overall, 59 ERAs were established between 1971 and 1983 in fields including microelectronics, ceramics, and biotechnology.⁹⁸ By 1985, there were 50 ERAs still actively engaged in R&D.⁹⁹ Most projects aimed at advancing Japan toward technical parity with its major competitors. These ventures typically last from seven to ten years and have budgets of $100 million for the life of the ERA. Research work is performed at a member company or in one of the Japanese national laboratories. The results of any