Tokyo Revs Up Its R&D Machine

It will spend up to $155 billion but still won't be a basic-science superpower

For years, basic research has been a national disgrace in Japan. Researchers have sat in dark basements of universities, unable to buy the latest equipment. Hallways are cluttered with filing cabinets, unused chairs, and dusty equipment because of the lack of space and not enough money for disposal. Thanks to a mismanaged tenure system, researchers avoid taking risks, and few qualify as brilliant scientists. As a result of these shortcomings, the Japanese have won only five Nobel prizes in science, compared with 175 for the U.S.

Japan is trying to change all that. In July, the government endorsed a plan that calls for investing $155 billion in science and technology over the next five years--a 12.5% annual increase that would double government spending from 1992 levels by 2000. Government support would approach 1% of gross domestic product--comparable with that of the U.S. The spending is aimed at 100 national universities and hundreds of private schools, which conduct basic research, as opposed to corporate labs, which are famous for their skill in turning existing technology into products.

The money should be enough to overhaul the shabby academic labs, finance thousands of postdoctoral fellowships, and launch giant new research projects in brain science and climatic research. As the nation emerges from a recession in which it felt unfamiliar pangs of economic anxiety, the hope is to spur innovations that will ultimately bolster Japan's strengths in autos, electronics, and nuclear energy, and help cultivate new businesses in biotechnology, space, and other industries of the 21st century.

Japan is launching this master plan because its traditional formula of successfully taking and improving upon innovations achieved elsewhere is in trouble. A key reason: The pace of technological advances, particularly in the U.S., has accelerated. By the time a technology laggard such as Japan is able to engineer an improved product, U.S. companies are moving on to the next technology. "Now, leading-edge technology goes straight into the marketplace," says Akinobu Kasami, senior vice-president in charge of research for Toshiba Corp. "So to succeed, we need our own breakthroughs."

Despite talk like that, it's not likely that Japan will begin achieving genuine breakthroughs at the cutting edge of knowledge. The structural problems in the R&D Establishment are so severe that Japan won't be able to transform itself into a superpower of basic science. What's much more likely is that the increased spending will improve Japan's ability to absorb and apply technology faster than ever. As in so many matters involving Japan, the end result could be quite different from the stated objective.

The first place where the impact of the new spending will be felt is in Japan's university labs. The Science & Technology Agency reckons it will take at least $30 billion to bring these labs up to snuff. "You hear in the U.S. that facilities are not state-of-the-art," said Erich Bloch, a distinguished fellow at the Council on Competitiveness in Washington. "But if you think things are bad here, you should go to Japan."

More important than the new facilities, though, are plans to ramp up the number of postdoctoral fellowships. A decade ago, Japan had almost zero postdocs. Now, it aims to have 10,000 by 2000. The result will be a larger, better-trained pool of scientists--exactly what corporate labs need to absorb and exploit advances overseas. "Basic research is something you've got to do," says Robert M. Solow, professor emeritus at Massachusetts Institute of Technology and winner of the 1987 Nobel prize in economics. "If you don't, you don't have the trained people who can say: `Aha! This advance in, say, chemistry, might be useful to us."'

"TURF BATTLES." Also key are proposals to let academics and industry cooperate more closely. Now, faculty at state-funded schools and government labs are barred from outside work. Today, few scientists, even those in Tsukuba, home to the top national science university, pay much attention to commerce. As in Silicon Valley, such collaboration would help make university research more commercially relevant and introduce fresh ideas into corporate labs. "University professors and scientists in government labs in Japan have almost no idea about industry or the marketplace," says Hiroshi Inose, president of the National Science Council.

Money alone won't fix the problem, however. That's why the most talented Japanese researchers want reforms. Insular and ineffective university faculties, a disbursement system that wastes resources, and a penchant for big projects that are more applied than basic in nature are key problems. Consider the numbers: Japanese government funding of science is the chintziest among major industrialized nations. Scientific publications by Japanese had the lowest impact among major nations from 1991 to 1995 in terms of number of citations by other researchers (chart).

Standing in the way of sweeping deregulation of the R&D Establishment is the Education Ministry. It is the biggest source of research money but also one of the most change-resistant arms of Japan's government. Says former Prime Minister Kiichi Miyazawa (1991-93), who fought unsuccessfully with the Ministry to put PCs into schools in the early '80s: "When you're talking about educational reforms, there's a turf battle, and that stands in our way."

Toshiba's Kasami, for instance, would like the freedom here that he enjoyed in Britain. There in 1990, he hired Michael Pepper, a professor of physics at Cambridge University, to set up and run a small 13-person research center to study quantum-effect physics that could lead to new types of semiconductors. Japan's master plan calls for such freedoms, but detailed discussions haven't even begun. It will be a long slog: Kasami fears the Education Ministry will insist that all professors be rotated through such assignments rather than let companies pick and choose the people they want.

Deciding who gets hired is another issue. Now, faculty members control hiring, but they've selected staffs that are insular in mentality. About 80% of the faculty at Tokyo University, for instance, graduated from the same departments they teach in. There are few foreigners or fresh ideas from outside. "There's no real competition in hiring. Most positions are filled through connections," said Robert J. Geller, an American geophysicist who was the first foreigner tenured at Tokyo University.

Japan does a better job of supporting big science projects in space, nuclear energy, and other areas that offer clear commercial benefits. For instance, a Japanese consortium of private companies is negotiating with a unit of Hughes Electronics Corp. to launch more than 10 satellites via the H-2 rocket between 2000 and 2004. This marks Japan's entry into the commercial launch business. The consortium includes 73 Japanese aerospace companies, insurance firms, and banks.

But some projects--such as the 10-year, $500 million Fifth Generation computer project that sought to develop a computer capable of reasoning--have been outright failures. This project fell into the grey zone between basic and applied, and was ill-conceived from the beginning. The Japanese thought they would be able to leapfrog existing computer knowhow. But the basic groundwork in cognitive science was nowhere near ready. Not only did young Japanese software developers fall short of their goal, they missed the advent of the Internet and became also-rans in software.

MODEST RESULTS. What seems different today is a sense among Japanese technologists and political leaders that they must improve their whole system to keep up in a world of rapid innovation. "The scientific-research atmosphere will quickly change," predicts Kato Koichi, secretary-general of the Liberal Democratic Party and a key supporter of bigger science spending.

It's possible that aside from increased spending, Japan's scientists will win small reforms that cumulatively add up to progress, says Jean Johnson, senior analyst for the National Science Foundation in Arlington, Va. Johnson has just spent three months in Japan interviewing scientists and researchers. "They told me: `If we don't [change], our future is miserable,"' she says.


So even though Japan's master plan won't guarantee major scientific breakthroughs, a stronger pool of scientists will help Corporate Japan pick up on developments offshore. The cross-fertilization between private and public sectors could also help rejuvenate the system by creating recruits who are trained in more fundamental thinking and more international in their outlook. "What we need are better students with original concepts and a sense of how they relate to the market," says Kasami. If the government's master plan achieves only modest results such as those, the ability of Japanese companies to absorb and apply technology from the outside world will remain unparalleled.

    Before it's here, it's on the Bloomberg Terminal. LEARN MORE