U.S.-Japan University Relationships

PAUL E. GRAY

I am grateful to Bob White and his colleagues at the National Academy of Engineering (NAE) for the invitation to participate in this symposium. I relish the opportunity to take part in an event that honors Gerry Dinneen as he comes to the final months of his distinguished service as foreign secretary of the NAE.

The Academy has been very fortunate to have Gerry's service during the period the “walls”—in Berlin and elsewhere—came down, permitting the development of working relationships with nascent or reinvigorated academies in Eastern Europe. He has been indefatigable in his willingness to travel for the Academy—often with Mary at his side—to serve the interests of engineering and technology in a changing world.

During the past year, I served as chairman of the NAE nominating committee. As part of its responsibility, the panel had the duty of recommending to the NAE Council a candidate to succeed Gerry. It will surprise no one here that everyone the committee asked about the responsibilities of the position and the necessary qualities of the nominee took Gerry's tenure as the paradigm. He has defined the job for these times, and he has done so to a very high standard.

There have been many occasions in recent years when I've tried to reach Gerry only to find he was in Europe, or Australia, or China, or Japan. It can be said of Gerry, as it was of Walter Rosenblith when he served as foreign secretary of the National Academy of Sciences, that you may not know his latitude or longitude at any given moment, but you can be reasonably sure of his altitude: about 7 miles.

Gerry Dinneen and I first got well acquainted about 2 decades ago. I had just assumed the role of deputy to Massachusetts Institute of Technology (MIT) Presi-



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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium U.S.-Japan University Relationships PAUL E. GRAY I am grateful to Bob White and his colleagues at the National Academy of Engineering (NAE) for the invitation to participate in this symposium. I relish the opportunity to take part in an event that honors Gerry Dinneen as he comes to the final months of his distinguished service as foreign secretary of the NAE. The Academy has been very fortunate to have Gerry's service during the period the “walls”—in Berlin and elsewhere—came down, permitting the development of working relationships with nascent or reinvigorated academies in Eastern Europe. He has been indefatigable in his willingness to travel for the Academy—often with Mary at his side—to serve the interests of engineering and technology in a changing world. During the past year, I served as chairman of the NAE nominating committee. As part of its responsibility, the panel had the duty of recommending to the NAE Council a candidate to succeed Gerry. It will surprise no one here that everyone the committee asked about the responsibilities of the position and the necessary qualities of the nominee took Gerry's tenure as the paradigm. He has defined the job for these times, and he has done so to a very high standard. There have been many occasions in recent years when I've tried to reach Gerry only to find he was in Europe, or Australia, or China, or Japan. It can be said of Gerry, as it was of Walter Rosenblith when he served as foreign secretary of the National Academy of Sciences, that you may not know his latitude or longitude at any given moment, but you can be reasonably sure of his altitude: about 7 miles. Gerry Dinneen and I first got well acquainted about 2 decades ago. I had just assumed the role of deputy to Massachusetts Institute of Technology (MIT) Presi-

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium dent Jerry Wiesner following Al Hill's retirement. In my new role, I was the contact point within the MIT administration for Lincoln Laboratory, which was then directed by Gerry, who had been at Lincoln for more than 20 years. My new job exposed me for the first time to the arena of federal relations. Gerry was a marvelous colleague and teacher as I learned my way around the halls of government. There was in place at that time a congressionally mandated salary ceiling at Lincoln and at all other federal contract research centers. The cap was becoming increasingly awkward and expensive for the institute, as each of those high-inflation years pushed a few more members of the Lincoln staff and leadership above the salary limit. The excess had to be paid out of MIT general funds. With Gerry's support, I undertook to get that constraint relaxed—a mission that included two remarkable audiences with Sen. Robert Byrd (D-W.Va.). Those efforts provided this inexperienced university administrator with his first lessons in congressional power. Out of those 2 or 3 years during which Gerry and I had a close professional relationship, there developed a warm personal friendship between the Dinneens and the Grays. It has persisted through changes of locations and careers, and it will flourish in the years to come. I turn now to the subject of intellectual relationships between the United States and Japan, emphasizing particularly the perspective of a science-based research university. I shall describe, very briefly, the origins of these relationships—from the point of view of a participant, not a historian—comment on the associated controversies and tensions that have become evident during the past decade, and conclude with some personal speculation about the shape of future relationships. THE MIT INDUSTRIAL LIAISON PROGRAM My observations date only the to the early 1970s. Of course, there have been focused small-scale relationships between educational institutions in the United States and Japan for many years, including some which began soon after the Meiji Restoration more than 125 years ago. However, relationships between U.S. universities and commercial enterprises in Japan are much more recent. The industrial liaison program (ILP) was the vehicle for MIT's first involvement with Japanese industry. The ILP was started in 1948 by the institute's then-president James Rhyne Killian Jr. Businesses —initially only U.S. firms—became members of the program by paying an annual fee, which typically came out of their research budget. Member companies receive facilitated access to research in progress at MIT and to the results of this research. An ILP liaison officer learns about the interests and needs of the company and is proactive in encouraging communication between MIT and member firms. ILP also supplies to members a directory of current research, makes available preprints and reprints

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium of research reports and theses, invites members to symposia, and provides opportunities for MIT faculty to visit corporate laboratories or plants. Note that except for the services of the liaison officers and the symposia, the ILP does not provide its members with privileged access; any interested person or organization may request and receive the same materials. In fact, most of the information about MIT programs that is provided to ILP members is now available to all interested persons via the World Wide Web. MIT benefits from the ILP in two ways. First, the program provides a very important channel of corporate feedback about the institute 's research and educational activities, and it is a useful mechanism for helping faculty stay informed about the interests, needs, and technological directions of industry. Second, the program develops significant institutional relationships with participating corporations —relationships that often lead to high-level partnerships and may include sponsored research or the creation of endowed funds. Programs similar to the ILP have been established by many other research universities. Early in the 1970s, the tremendous growth of the Japanese economy, the increased flow of Japanese scientists and engineers to MIT, and the institute's desire to reinvigorate the ILP, which had experienced some decline in membership, led to the decision to seek foreign participation, in particular from Japan. A senior member of the faculty with extensive Japanese experience, Professor Samuel A. Goldblith, was appointed ILP director in 1974. His bona fides with the MIT faculty were an important element in creating the renewal and expansion of the program over the following decade. Additionally, retired Lieutenant General James B. Lampert, who had served as the last high commissioner of Okinawa and who was widely known and highly respected in government and corporate circles in Japan, came to MIT in 1972 as vice president. His responsibilities included oversight of the ILP. In 1976, in recognition of the formidable difficulties posed by distance and language, we opened a small ILP office in Tokyo staffed by a single professional. In this undertaking, we received crucial assistance from the late Dr. Yaichi Ayukawa, an MIT alumnus and member of the institute's governing board. In 1975, Nippon Telephone and Telegraph (NTT) became the first Japanese member of the ILP. By 1980, there were 25 Japanese members. By 1990, there were about 45 Japanese and about 40 European member companies out of a worldwide membership of some 300 firms. Relationships between MIT and foreign members of ILP led to significant support of the institute beyond the membership fees associated with the program. During the 20 years since the ILP sought foreign members, Japanese corporations have created 28 endowed professorships at the institute. These endowments represent an important academic resource and a significant addition to the permanent endowment. The gifts provide a degree of recognition to their corporate sponsors, and sponsors may designate a general field from which a chairholder is to be selected. Still, the agreements setting up the endowments preserve for MIT

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium the right to designate an independent chairholder, and they permit no outside influence, direct or indirect, on the scholarly activities of the person selected to fill that chair. U.S.-JAPAN TENSIONS During the 1980s, both the U.S. federal budget deficit and the trade deficit ballooned. Several industries, including automobiles, integrated circuits, and steel, faced considerable competitive pressure from Japan. U.S. economic productivity grew in a most anemic manner. American corporate downsizing efforts and stagnant living standards for most Americans created malaise. The search for root causes focused inexorably on Japan, which was generally demonized as an economic bastion embodying a different kind of capitalism apparently aimed at the domination of world trade, the perpetuation of barriers to imports, and the “buying of America.” Of course, these concerns were mirrored in congressional attitudes and actions. Members of Congress expressed the view that America was at an unfair disadvantage because Japanese corporations were acquiring U.S. technology and the fruits of basic research done and paid for here, then exploiting this information behind impenetrable trade barriers in markets for high-value-added products, thereby causing large-scale exportation of U.S. manufacturing jobs. In the spring of 1989, Rep. Ted Weiss (D-N.Y.) held a hearing of the Committee on Government Operations that focused (in sharp contrast to the previously announced agenda) on MIT's industrial liaison program and on its involvement with Japanese corporations. As the principal witness at the hearing, I was asked to explain why it was proper to “sell,” via the ILP, the fruits of federally funded research to U.S. multinational corporations and why foreign corporations, particularly Japanese firms, were included in the program. The latter question seemed to betray a conviction that U.S. competitive disadvantages vis-à-vis Japan had come about because Japanese corporations were very successful in exploiting basic research performed in U.S. universities —research made available to them by the ILP and programs like it in other universities. My efforts to explicate the chain of events that leads from basic research to a new, successful product, and to locate the high-cost, high-risk portion of that chain in industry were not successful. The committee's final report (U.S. Congress, House Committee on Government Operations, 1992) confirmed a fundamental misunderstanding in Congress about the nature of basic research, the process of technology transfer, the nature of this nation's competitive posture, the factors that created trade deficits in areas such as automobiles and semiconductors, and the character of international competition in high-technology, high-value-added markets. The issues aired in this hearing generated significant interest and further discussion in the U.S. academic community and in the Japanese corporate world.

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium Sensitivity to the sharp congressional criticism was, I believe, a factor in the decline in the number of Japanese ILP members from about 45 in 1990 to about 30 in 1994. MIT itself began to reconsider the institute's relationships with foreign corporations. In May 1991, a faculty study group appointed by the provost and chaired by Professor Eugene Skolnikoff affirmed the proposition that: MIT's responsibility to the nation in which it was founded and nurtured is served first and foremost by maintenance of its position as a premier institution in education and research in science and technology. The commitment to maintain preeminence requires that MIT be thoroughly engaged in international activities in science and technology and that its faculty, students and research staff be able to interact fully and openly with, and stay abreast of, research wherever it is carried out . . . Occasionally, there are may be major conflicts between national and international roles. In the resolution of such conflicts, we believe the Administration, with the advice of the Faculty, should give primary weight to the general responsibility to the nation (Massachusetts Institute of Technology, 1991). With respect to the ILP in particular, however, the report said: The value of the ILP to the faculty as a vehicle for staying abreast of industrial research, the Program's usefulness in raising resources, and the fact that faculty contacts with American industry through the ILP are only a small portion of their contacts with American industry, argue strongly in favor of the program and give no grounds for recommending reevaluation . . . we see no basis for establishing a limit on the proportion of foreign-based companies in the ILP nor for restricting the provision of services based on nationality. Another MIT effort laid the groundwork for greater reciprocity in the flow of information about scientific and technological development between Japan and the United States. This is the MIT-Japan program, created nearly 15 years ago by Professor Richard J. Samuels of the MIT political science department. This widely copied initiative prepares MIT students, through study of the language, culture, and history of Japan, to work in that nation and places them in internships in Japanese industry, government, and university laboratories. These internships, in which about 40 students are involved at any one time, run from 3 months to a year or more. The program has a staff member located in the ILP office in Tokyo. A LOOK TO THE FUTURE Japan is now emerging from a serious recession. During the recession, there have been significant political and regulatory changes aimed in part at easing restrictions on domestic competition, simplifying the nation's baroque distribution system, and enhancing the market power and living standards of consumers generally. Nonetheless, the Japanese government continues to exhibit a remarkable mixture of ineffectiveness and impotence in terms of its ability to respond to,

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium or create, significant change. I was in Japan during the weeks before and after the terrible earthquake in Kobe, and it seemed to me that the apparent inability of the government to respond to this awful event stood in sharp contrast to the stoicism and courage of the people of that ill-fated city. Japanese industry has ferociously reduced costs in response to the remarkable strengthening of the yen against the dollar and the resulting pressures on profits. Indeed, I found among corporate leaders in Japan a consistent preoccupation, bordering on an obsession, with the yen-dollar exchange rate. Some measure of their success in this regard is provided by the observation that Japanese manufacturers increased their share of the U.S. automobile and small-truck market in 1994 despite the fact that the dollar averaged 102 yen for the year! Japanese manufacturers have been increasingly aggressive in moving elements of production to lower-wage nations, particularly elsewhere in Asia and in Mexico. The resulting concerns about “hollowing out” the Japanese economy have produced a renewed interest in redirecting the Japanese educational system to encourage individual creativity and entrepreneurship. At the same time, there has been a strengthening of the competitive posture of many sectors of the U.S. industrial enterprise. U.S. manufacturers have reduced costs and improved product quality in several sectors, including steel and automobiles, and have widened their competitive advantage in other sectors, such as telecommunications equipment and services, high-end integrated circuits, and computers, including particularly software. However, there is a tendency in the United States, I believe, to read more into the tea leaves of the present restoration of product quality and competitive than may be justified. These improvements are, in large measure, a consequence of the decline in the value of the dollar that has occurred over the past few years. Indeed, informed economic opinion suggests that two-thirds to three-quarters of these improvements is attributable to the decline in the yen-dollar exchange ratio. The United States needs to continue to work on the fundamental aspects of productivity, including workforce education, process and product design, the organization of work, and the use of capital. Also, there is plenty of room for the federal government to continue to press for trade liberalization with Japan. The evening news in Tokyo on January 12 featured President Clinton presenting Prime Minister Murayama with a basket of apples in recognition of the fact that U.S. apples were now sold in Japan for the first time. Housewives in Japan were reported to be pleased by their pricing. It is worth noting that the laws or regulations forbidding the importation of apples to Japan were changed in 1971; it took 24 years to work out the practical details. It's also worth remembering that there are not enough apples in North America to make much of a dent in the trade deficit with Japan. What might we expect in the future in terms of competition between Japan and the United States, and what are the implications for U.S. universities? Rich Nation, Strong Army (Cornell University Press, 1994), a recent book by Richard

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium J. Samuels, offers important insights into this question. Samuels explores the relationship in Japan between the civilian and military economies and elucidates the ideological basis for Japan's sharp focus on the technological foundations of national security—a set of beliefs and policies he calls “techno-nationalism.” He observes that the strategic importance of technology as the basis for wealth and power has been understood and employed in Japan for centuries, and he describes the three elements of policy that sustain techno-nationalism: Import-substitution, or indigenization—the identification and acquisition of foreign products and manufacturing and design processes in order to stimulate local development and encourage technological independence; Diffusion—the distribution of this know-how throughout the economy; and Nurturance—the cultivation of the capacity to innovate and manufacture. While it is not difficult to come up with current examples to illustrate the application of these policies (consider VCRs, semiconductor memories, fiber optics, and flat-panel displays), I find it sobering to learn of examples that date from the Tokugawa Shogunate more than 3 centuries ago. My personal experience with Japan, including my associations of nearly 20 years with several corporate leaders there, provides rich evidence of the Japanese qualities of consistency, respect for tradition, and attention to long-range needs and objectives. It seems certain that we will see in the decades ahead further manifestations of what Richard Samuels has called Japan's “technology lust,” and that this determined search for novel and important technology, which has made Japan rich and strong in just a few decades, will continue to generate tensions between the United States and Japan centered on trade, jobs, and market share. Japan's drive for technological independence and for a premier position as a manufacturer of high-value-added, high-technology products will continue unabated and will present difficult challenges to manufacturers here and in Europe for the foreseeable future. This future, in which competition will continue and intensify, insures, I believe, that the pressures on this nation's research universities, which have become evident in the past 2 decades, will not diminish. At the same time, the climate for federal research support is certain to become more difficult. The government-university partnership that was established by White House science advisor Vannevar Bush nearly 50 years ago, which has served the nation so well and so effectively and which has encouraged the flowering of an academic research system that is the envy of the world, is rapidly disappearing. I fear that it will be replaced by principles of procurement, in which the support of research may be altogether too similar to the process by which the government purchases combat boots or military rations. These forces will greatly complicate the judgments that will be expected of university leaders in the next decade. If industrially sponsored research becomes more important to the survival of research universities, what is the proper balance

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THE GLOBAL AGENDA FOR AMERICAN ENGINEERING: Proceedings of a Symposium between intellectual freedom and the proprietary interests and needs of industrial sponsors? Should this balance be different if the sponsor is a foreign corporation? How can governmental pressures for limiting foreign access to research be reconciled with the openness of academic institutions—an openness that is important to the integrity and effectiveness of the process of basic research? There are no easy answers. I am afraid that the lot of the university president, seldom a happy one in recent years, is likely to become less so. To conclude, let me suggest that the quality of American science and engineering is rooted in the nation's research universities and in their historic effectiveness generating knowledge and communicating it to successive generations of young men and women. That effectiveness has depended on openness—on the free communication of ideas and research results—and on the conviction that the difference between best and second best is all important. Out of these propositions, which have been supported by the NAE as well, have grown relationships with organizations and institutions in Japan and Europe. I am persuaded that U.S. universities, and the nation that sustains them and which they serve, are strengthened by these relationships. I earnestly believe that we all should work, as Gerry Dinneen has, to ensure that they can thrive in the geopolitical and economic realities of the future. REFERENCES U.S. Congress, House Committee on Government Operations. 1992. Is Science for Sale?: Transferring Technology from Universities to Foreign Corporations. Washington, D.C.: U.S. Government Printing Office. Massachusetts Institute of Technology. 1991. The International Relationships of MIT in a Technologically Competitive World. Cambridge, Mass.: Massachusetts Institute of Technology. Samuels, R.J. 1994. “Rich Nation, Strong Army”: National Security and the Technological Transformation of Japan . Ithaca, N.Y.: Cornell University Press.