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After two decades of slow economic growth, Japan shows signs of renewed dynamism. It is the world’s third largest economy in GDP terms after the United States and China, and with 3.35% of GDP dedicated to R&D it ranks among the world’s most R&D-intensive countries. Growth prospects are clouded however by an ageing population, high national debt (over 230% of GDP), and the effects of the Great East Japan Earthquake. The 4th S&T Basic Plan (2011-16) promotes an issue-driven, integrated approach to innovation policy, to be created and promoted together with society. Priority is given to environment, energy, health and medical care, and social challenges. In 2013, Japan adopted a Comprehensive Strategy on Science, Technology and Innovation as a long-term vision and roadmap to Japan’s ideal economic society.
Hot Issues are major national STI policy priorities, as self-reported by countries in their responses to the OECD STIO 2014 policy questionnaire.
Innovation to contribute to addressing social challenges (including inclusiveness)
The Comprehensive Strategy provides a set of issue-oriented policies and measures for building a healthy and active ageing society and creating next-generation infrastructures. Japan seeks to turn its medical equipment industries into world leaders and to become a “health country” with world-class health and medical technology and improved medical supply. The Research Centre Network for Realisation of Regenerative Medicine was launched in 2013 to advance induced pluripotent stem cell research and clinical applications will begin soon. Japan also promotes preventive medicine and supportive nursing, in addition to medical treatment. The 2nd Basic Programme for Shokuiku Promotion encourages education on food and nutrition. New infrastructures that use cutting-edge technologies (e.g. information technologies) and integrated approaches (e.g. Smart Life Project) are being developed to meet the needs of an ageing population.
Improving the framework conditions for innovation (including competitiveness)
Japan has recently reinforced the IP legislative framework and facilitated research and development. The Patent Law was amended in 2012 to enhance protection of licence agreements and provide appropriate protection for results of joint research activities. The Japan Patent Office (JPO) introduced in 2013 a system of “collective examination for IP portfolios” to grant rights on a cross-section basis in line with the timing of business expansion. The JPO also revised the examination guidelines in order to expand the allowable scope of unity of invention. The Department for Promotion of S&T was created in 2011 to make recommendations for the reform of the S&T system, and the Act of Strengthening R&D Capability and Efficient Promotion of R&D with Promotion of R&D System Reform (2008) was amended in 2013 to allow independent administrative agencies to contribute, including through IPR, to start-ups in order to encourage the commercialisation of R&D results.
Improving the governance of innovation system and policy
Japan faces two difficulties for better co-ordinating innovation policy. One is the need to bridge the gap between S&T and innovation components of the national innovation system. The other is the lack of co-ordination among the many ministries involved in STI policy making. To address these issues, the central role of the Council for Science and Technology Policy (CSTP) has been reinforced. The CSTP is the main forum for discussion, development and assessment of S&T policy. It is in charge of strengthening co-operation among ministries, changing silo governance structures and strengthening R&D activities at different research stages, including basic research. To this end, the Cross-Ministerial Strategic Innovation Promotion Programme has been allocated USD 494 million (JPY 51.7 billion) to reinforce the CSTP Secretariat’s role in S&T budget formation, ministerial co-operation and evaluation.
Public R&D expenditure is modest (Panel 1a), especially in light of Japan’s high GERD intensity. Applied R&D and experimental development absorb 50% of public R&D expenditures, and basic research about 30% of it. In terms of universities of global stature and high-impact publications, Japan is below the OECD median (Panel 1b, c). The 4th S&T Basic Plan aims to foster world-class basic research and emphasises the development and shared use of advanced research facilities as well as open data and open science infrastructures. The National Guidelines for Evaluating Government-Funded R&D were revised in 2012 to reinforce the use of evaluation results in decision making regarding R&D programmes. Implementing agencies are also expected to make evaluation results public.
Japan’s business sector is one of the world’s most R&D-intensive (2.57% of GDP in 2012). The STI system is dominated by major corporate groups, which are among the world’s largest corporate R&D investors (Panel 1d, e). Business investments in high-technology and medium-high-technology R&D (pharmaceuticals, communication equipment and motors vehicles) (Panel 2) have made Japan a world technology leader. Performance in non-technological innovation as measured by trademarks is modest (Panel 1g). Public support to the business sector is limited as firms finance 98% of their R&D activities. The R&D tax credit is the main public funding instrument.
In Japan, innovation by large firms relies less on contracted public research (Panel 1o) and on co-operation with the science base than on innovation within the corporate group. As a consequence, researchers are highly mobile in the private sector but less so between industry and academia. A public-private consortium formed in 2014 encourages researchers’ intersectoral mobility. The commercialisation of scientific research has been a priority of Japanese STI policy in recent decades, with a number of measures implemented since the mid-1990s. Through the new Centres of Innovation, the government subsidises high-risk collaborative R&D projects on social visions for the coming decade. If technology transfer through industry-science co-operation remains weak, universities and PRIs are active in patenting (Panel 1p). In 2012, Japan created the Programme for Creating Start-ups from Advanced Research and Technology (START) with USD 191 million (JPY 20 billion). START combines government funding and private-sector commercialisation know-how to support the launch of academic start-ups and leverage additional funding for public research.
The Comprehensive STI Strategy and the Japan Revitalisation Strategy promote regional revitalisation by taking advantage of regional resources, developing regional infrastructures for innovation, particularly for transfer between universities and industry, and providing greater autonomy in the management of regional projects. Capitalising on prior cluster initiatives, Japan adopted a new Industrial Cluster Plan in 2014 with comprehensive initiatives to revitalise Japanese industry.
Japan remains weakly linked to international S&T co-operation networks (Panel 1q, r) and attracts few international R&D investments by firms (Panel 2). The Act for Promotion of Japan as an Asian Business Centre introduced corporate tax breaks, acceleration of patent examinations, reduction of patent fees, and shorter examination times for residence permits to encourage the establishment of foreign R&D centres and headquarters in Japan.
Japan has a sound skills foundation with a large pool of university graduates (Panel 1t) and high scores on international assessments of adults in technology problem-solving and of students in science (Panel 1u, v). However, there are relatively few doctoral graduates in science and engineering (Panel 1w) owing both to the low participation of youth (especially women) in doctoral programmes and to the lack of interest among youth in S&T studies. Japan has therefore sought to improve the attractiveness of research careers and to build a broader science culture. The 4th S&T Basic Plan aims to enhance support for doctoral students, improve the career paths of researchers, and promote the active involvement of female researchers. It also aims to raise interest in and awareness of science among youth and society by promoting S&T communication activities by researchers, various S&T-related activities at science and regular museums, and the population’s S&T literacy.