Le Japon à bout de souffle?

A programmed crash or an eminent revival?

EPFL

May 2003

Different perceptions, indeed!WHAT THE WORLD SEES

• 0.89% Growth of GDP over the last decade (FY01 GDP decrease 1%)

• Debt: Massive! Public: Debt to GDP ratio =140%Private: 276 Mia $ bad bank loans

• Deflation

• Depression syndrome

• Demographics: A Rapidly Aging society

WHAT JAPAN SEES

• 12.1% Savings rate, one of the world-s highest: Japan public savings = $11 trio

• 5.5% Unemployement, one of the world’s lowest

• $33’840 Average individual gross income

• $400 Mia in foreign currencies, world’largest reserve

WHAT USA SEES:

•Japan has $ 333 Mia worth of US Treasury Bonds

•JP Bank loans to US: $ 340 Mia

Si le Japon était un village de 1000 habitants…

• 511 seraient des femmes et 489 des hommes• 10 étrangers vivraient dans ce village• 506 habitants travailleraient: 297 hommes

209 femmesdont 423 dans les entreprises (50 dans le secteur de la construction)

et 34 dans l’administration• 55 seraient au chômage• 46 habitants auraient moins de 4 ans, et

179 plus de 65 ans• Et dans 50 ans ce village ne comptera plus que…

791 habitants!

La société nippone• Une société basée sur:L’harmonie et l’unité – l’égalitarisme – la

poursuite du consensusLa société japonaise n’est pas fondée sur l’individu

mais sur les relations entre individus: « Nous sommes donc je suis »

La coopération des individus – importance primordiale du groupe (responsabilité partagée)

La loyauté à une organisation (contrat réciproque: emploi à vie)

Le respect de la séniorité – hiérarchie - tradition

Japan Competitiveness

• Japan is gliding down the world competitiveness ranking established by the IMD: in 2002, Japan is 30th (among 49 countries)! just in front of China...

Japan seems to lack an attractive business climate

in terms of: heavy costs, reputation of a closed society, excess regulations and v. heavy bureaucracy, lack of internationally minded skilled people.

Foreign Direct Investment

• end of FY2000: total FDI inward stock $50 bn equivalent to 12% of GDP (UK: 34%, US: 30%)

• FDI inward flow for FY2000 6 times greater than the figure for FY92

• Ratio of FDI stock outward / inward = 5.5 Very high! (1.9 in UK, 1.4 FR, 0.9 in US)

• FY92: outw.flow/ inw. flow= 8.4FY2000: 1.7

• 5 times more M&A in 2000 than in 1996

Japanese Strength in Technology• Technology Exports: ca.$8 bn

Technology Imports: ca.$3 bn=> Technology Trade Balance = 2.39

the largest in history (in comparison USA, TTB = 0.85)

• World’s largest number of patents

• #people involved in R&D activities: ca.1 mio, = 16/1000 labor force, one of the highest ratio in the world (n04)

• Ratio of R&D expenditures ($125 bn) against GDP = 3.18%, the largest in history (in comp. USA = 2.6%) Total expenditure on R&D per capita: 2nd!

PRESENT CHALLENGES FOR JAPAN

• Paradigm shift:> from “catch up” to “front-runner” (->basic sciences)

• Mounting competition from China & SE Asia>increase high tech industries

• Compatibility to the new global economy > New human Management necessary

• Increase its industrial competitiveness>deregulate, stimulate private sector R&D (tax breaks, restructurate certain industrial sectors), improve transfer of technology Academia-Ind.-Government

• Reform the Education System: promote competition, cultivate creativity & individuality

Driving Forces for Economic Growth

Capital Intensive

Heavy Industries: Chemical;

Shipbuilding

Labor Intensiveindustries

Knowledge Intensive

Light Industries: Semiconductors

PCs

KnowledgeCreating

Industries

CyberTechnologyBiotechnology

Nanotechnology

50’s - 60’s 70’s - 80’s 21st CenturyPre-Modern Era

SMILE

SMILE!

• S for Systemization and integration

• M for Materials and nanosciences

• I for Information

• L for Life Sciences

• E for Environment

Major Aims of Governmental Reform

• Strengthening function of PM's Office Making leadership of PM stronger

Council for Economy and Finance

Council for S&T Policy

Making the central government smaller by merger of ministries

e.g. Merger of Ministry of Education, Science, Sports and Culture and STA

Science and Technology Administration in JapanPrime MinisterPrime Minister

Cabinet Office for basic policy and general Cabinet Office for basic policy and general coordination on important for cabinetcoordination on important for cabinet

Ministry of Education, Culture, Sports, Science and Technology

Ministry of Public Management, Home Affairs, Post and Telecommunications

Ministry of Health, Labour and Welfare

Ministry of Agriculture, Forestry and Fisheries

Minister of State for ScienceMinister of State for Science and Technology Policyand Technology Policy

Science Vice-Science Vice-MinisterMinister

ParliamentaryParliamentarySecretarySecretary

Director-General Bureau of Science and Technology PolicyDirector-General Bureau of Science and Technology Policy

Council for Science and Council for Science and Technology PolicyTechnology Policy Atomic EnergyAtomic Energy

CommissionCommission

Nuclear SafetyCommission

Ministry of the Environment

Ministry of Land, Infrastructure and Transport

Ministry of Economy, Trade and Industry NationalResearchInstitutes

NationalUniversities

and Laboratories

S&T POLICY

Five-year Basic Science &Technology Plans

• April 96 to March 01TARGET

> Doubling spending public money on R&D: commitment to invest Yen 17 trillion ($150 billion) in R&D over this 5 year period !!!

• April 01 to March 06TARGETS

> Half of govt. research funds earmarked for basic research should go to curiosity-oriented research> Double the amount of “competitive funds” (from 9% to 18%)

Invest 24 trillion yen!

S&T POLICY Second Science & Technology Basic Plan

Three major goals:• The promotion of science, with an emphasis on

contributions to the world through scientific knowledge

• Ensuring a safe, healthy life for the japanese people

• Achieving sustainable economic development through technological innovation

S&T POLICY

2nd Science & Technology Basic Plan

Adopting a strategic approach to government research investments:

• Promoting Basic research• Focus on R&D responding national and social issues:

4 highly prioritized areasLife sciences, Health and Medical treatment Information and Telecommunications, Environmental Science, Nanotechnology and Materials

S&T POLICY

2nd Science & Technology Basic Plan

Reforming the S&T systems

• Building competitive research environment• Improving university facilities• Improving evaluation system• Enhancing young researcher’s independence and

mobility• Promoting cooperation among academic, industrial

and governmental research sectors• Enhancing communications with society

FY 2002 Budget on Science & Technology in Japan

Governmental Budget on S&T

• FY 2003: 3’588 Mia Yen + Budget complémentaire (prévision) de 940 Mia Yen

• FY 2002: 3’544 Mia Yen (SFr. 45 Mia) + budget complémentaire 324 Mia Yen

• FY 2001: 3’469 Mia Yen + budget complémentaire 608.1 Mia yen

• Second S&T Basic Plan (FY 2001 - 2005): Aims at Spending 24 Trillion Yen (ca. SFr. 300 Mia) over the next 5 years

0

5

10

15

20

25

30

35

40

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Government R&D Expenditures

Evolution over last decade (in 100 bn Yen)

Japan R&D Expenditures (FY2000) $125 bn (+1,7% from FY99)

ca. 3.2% GDP

Performers

Companies 66% $ 83 bn

Univ. 20% $24 bn

Research Inst. 14% $17bn

Sources

Industry 78% Govt 22%

Distribution of R&D Expendituresin Japan

Budget 2003 (env. 43 Mia CHF) : Highlights

• Réforme et augmentation de fonds pour projets spécifiques

• Amélioration des infrastructures universitaires

• Réforme de l’Université et mise en place de collaborations Industrie-Université-Gouvernement

• Développement de la recherche à l’échelon local (financement par les régions)

• Protection et utilisation des droits de propriété intellectuelle

• Mise en place d’un système d’évaluation équitable et transparent de la R&D

• Réforme des entreprises ou des associations impliquées dans la recherche

• Introduction de « local Intellectual clusters » pour revitaliser les régions par une association Ind.-Univ.-Gouv. sur les thèmes R&D

JFY 2003 Budget for Major Four fields

Life Sciences, Health & Medical Treatment

Yen 431.6 bn (FY2002: 417.3)

+3.4%

Information & Telecommunication

Yen 277.1 bn (FY2002: 262.3)

-0.3%

Environmental Science Yen 720.1 bn (FY2002: 758.4) +6%

Nanotechnology & Material Science

Yen 149.1 bn (FY2002: 135.2)

+5.6%

University Reform

Hokkaido (7)

Tohoku (7)

Shikoku (7)

Kanto (20)

Chubu (22)

Kinki (15)

Chugoku (6)

Kyushu (14)

Okinawa (1)

(Number of National Universities as of April 2002)

1. Universities in Japan: (1) Education

• 49% of eligible students proceed to univ.

• 97 national universities and colleges

• 496 private universities - educating 70% of nation’s students

• 66 regional universities

• All national universities offer Master’s, 80 of them offer Ph.D.

1. University in Japan: (2) Research

• Universities spent 1.99 trillion yen in R&D in FY 2000 (20% of nation’s R&D expenditures!)

• 424 venture companies emerged from universities by Aug 02 ( from 251 in August 01 and 65 in 2000) For comparison in US: 3300!!!

• Very few licensed patents: Univ. account for 20% of nation’s R&D expenditures and employ 35% of country’s researchers but were granted only 161 patents in FY2000!

• Only 9% of the new inventions created at Jap. Univ. were used or transferred to private companies (in US: 60%)

1. University in Japan: (3) Collaboration with industry

Domestic

Collaboration still very much based on individual networks (a professor – company resonance):

informal and consultative.

R&D funds paid by Jap. companies to Japanese Univ. increased from 38,4 bn Yen in FY96 to 73 bn Yen in FY99;

65% going to national universities

1. University in Japan: (3) Collaboration with industry

International

0

200

400

600

800

1000

1200

1400

to overseasinstitutions

to domesticinstitutions

to jap.Institutions

JP Companies investments in univ. and labs

overseas investments

Unit: $ mio

FY99

Industry increasingly outsourcing R&D abroad

2. Timeline for Transition to Independent Administrative Bodies

• March 2002: MEXT issued Final Report on Study of Privatization of National Universities: “On New Form of National Universities”

• FY 2004: Transfer all national universities to the independent administrative bodies– Mergers and realignment of universities to be

done by FY 2004

3. Toyama Plan: Guideline by MEXT for Univ. Structural Reform

• Promote consolidation and realignment of universities

• Revitalize universities

• Introduce private sector’s competition theory• Prompt transfer to independent admin bodies

• Introduce competitions via third-party evaluation

• Elevate the level of Japanese universities: Top 30 universities in Japan to be world top class

3. Toyama Plan: Guideline by MEXT for Univ. Structural Reform

“In a nutshell”

• Amélioration de la base de gestion des universités

• Elévation du niveau de l’éducation et de la recherche dans les universités

3. Toyama Plan: TOP 30 Program for Universities

• Select top 30 universities in 10 fields

• Nurture the top 30 universities to the world class, by competition via evaluation and prioritized resource allocation (between yen 100 mio and Yen 500 mio/year/Univ.)

Goals: 1) World-class environment and system for research & education, 2) Internationally competitive HR, 3) Contribution to the society

Sept. 2002: 70% of Universities selected were national universities

4. Alliances among Universities(survival strategy)

• 75 out of 101 considering consolidations/ alliance with other universities

• 2 pairs of universities have already merged• 10 cases already reached agreement to merge• Consolidations tend to be based on geography and

on academic fields• Some universities determined to stay on their own

(Univ. of Tokyo, Tokyo Univ. of Foreign Studies etc.,)

• Numerous strategic alliances for academic purpose

5. New Management System for Universities

• More Teaching staff from outside organization, industry, and abroad

• HR Management based on merits and abilities

• Increase Tenure Track Professors

• Independence for parts of universities (Business Schools, Law Schools)

• Increased Transparency

• Evaluation by the Third Party Organization

6. Competitive Funds(1) Govt Scheme

• 2nd S&T Basic Plan: Goal to double competitive funds

• 30% Overhead to be secured within competitive funds

• Reform Planning on Competitive Funds at CSTP

Research funds on open and competitive-proposal basis

1.311.66 1.79

2.28 2.51 2.67

2.0

0

1

2

3

'96 '97 '98 '99 '00 '01 '02

(Bil

$)

[+6.4%][+10.0%][+13.5%]

[+12.5%]

1$=130yen

[+7.6%][+27.0%]

7. Industry-Academia Cooperation (1) Laws to facilitate tech transfer

1998: “Law for Promotion of Technology Transfer from Universities” (Nat’l univs can establish TLOs)

2000: Law to Strengthen Industrial Technological Ability

2000: Change in rules for professors at national univ.: now possible to take up executive positions in companies

2001: Ease Patent Law for National University Researchers;

• Professors will be able to obtain equities such as stock options as remuneration from their venture companies (2002)

• Ceiling on compensation money for inventions will be removed (2002)(used to be 6 Mio Yen)

7. Industry-Academia Cooperation

7. Industry-Academia Cooperation Government Initiatives

• Toyama Plan (MEXT; June 2001)– Corporatize 700 patents at Univ in 5 years

– Create 10 “Silicon Valleys” in 10 years

• Hiranuma Plan (METI; May 2001)– Venture Companies 1000 in 3 years

– 10 Fold Patents from Univ in 10 Years

7. Industry-Academia Cooperation (4) Technology Licensing Offices

• 27 TLO’s as of April 2002• Domestic Patent Application through TLOs: 1306

cases as of Sept. 2001 (740 in Dec 2000)• 424 Venture companies from Univ.”spin-off”• FY 2002 METI will invest 47.7 billion yen

(SFr.600 mio), MEXT 32.4 billion (400 mio), in academia-industry cooperation

7. Industry-Academia Cooperation (5) Local Intellectual Clusters

• Launch FY 2002 ~ by MEXT

• 5-year program, 6 billion yen annually

• To make national universities the cores of industrial clusters for innovation

• Boost local economy via cooperation with industry

• 10 Clusters will be launched in FY 2002

7. (5) Intellectual Clusters

Sapporo: IT

Sendai: IT

Takamatsu: Bio

Hiroshima: Bio

Nagano/Ueda: Nanotech

Hamamatsu: Opto-Electronics

Osaka Area : Biomedicine

Keihanna: IT/Genome

Kyoto: Nanotech

Kita Kyushu: IT(LSI)

Fukuoka:IT

Kobe: Med

Outlook Biotechnology in Japan

Life Science Budget FY02 (SFr. 4.4 Mia)

By Ministry

Ministry of Environment

1%

Ministry of Agriculture

4%METI7%

Ministry of Health & Labor 29%

MEXT59%

Biotech Market Size Outlook

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100

150

200

250

300

2001 2010

SFr. Mia

Bio Ventures in Japan

60 250

~1998

September 2001

2010 (Target)

Source: Presentation by Japan Bioindustry Association

1000The National

Strategy for Industrial

Biotechnologies

MAJOR OBJECTS OF RESEARCH IN LIFE SCIENCE

• Age-Associated Diseases : Prevention and Treatment Based on Genomics, Postgenomics and Regenerative Medicine

• Infectious, Autoimmune and Allergic Diseases ; Mechanisms and Prevention

• Brain Research ; Basic and Clinical• Use of Biological Materials for Industries or Bioremediation of

Environment• Food Production & Functional Foods Through Plant Genomics• Bioengineering &Challenge to New Interdisciplinary Areas

• Biological Resources as Infrastructure

Source: CSTP

Outlook Nanotechnology in Japan

Nanotech Market Size Outlook

2356

27329

0

5000

10000

15000

20000

25000

30000

2005 2010

Billion Y

FY01 Budget on nanotechnology-related items: (Total 60.5 billion yen)

Instrumentation18%

Medicine/bio6%

Environment/Energy8%

IT/Communications36%

Nanomaterials32%

Budget for Nanotechnology

(Billion Yen)

Inter-Ministerial Structure of Nanotech R&D Strategy

METIMPHPTMAFFMHWL

Flagship Projects

MEXT

JST

RIKENNIMS

Universities

Priority Projects (Challenge-Type Projects)

Generic Technologies (nano-analysis, nano-fabrication,

nano-simulation, etc.)

Fundamental Research

Strategy R&D in Nanotech Policy proposal from Keidanren

Flagship Projects•R&D focused on application and industrialization in 5 - 10 years•Network-type COE operation

Future Projects

•Targeted R&D based on basic technology•Network-type COE operation•Well-timed practical application (VBs)

Fundamental Research •Emphasis on creativity of researchers•Clustering of research

Source: "A Future Society Built by Nanotechnology," Journal of Japanese Trade & Industry, Vol. 20, No. 5, p 32.

Strategy R&D in Nanotech: Flagship Projects

1) Next generation semiconductor technology

2) Terabit-level information storage technology

3) Network Devices

IT: Developing Low-Power, High-performance Technology for Building a Ubiquitous network Society

MAJOR OBJECTIVES OF HIGH PRIORITY IN NANOTECHNOLOGY

AND MATERIAL SCIENCE

• Nanodevice and Materials for IT and Telecommunication of the Next Generation

• Materials for Efficient Energy Utilization and for Reduction of Environmental Chemicals

• Nanobiology for Medical Use and Technologies Based on Biological Mechanisms

• Basic Technologies for Measurement, Standardization. Processing and Mathematical Simulation

• Materials with Innovative Characters and Functions Source: CSTP

MAJOR OBJECTS OF RESEARCH IN IT AND TELECOMMUNICATION

• Ubiquitous Network Society ; Broadband, Mobile Internet System with Convenience, Security and High Fidelity

• New Device and Software ; Human Interface Technology, Quantum Technology etc.

• Next Generation Computer

• Interdisciplinary Areas and Infrastructure Including Data Base

Source: CSTP

MAJOR OBJECTIVES OF HIGH PRIORITY

IN ENVIRONMENTAL SCIENCE

Global Warming and Modeling. Global Warming and Modeling.

Eco-engineering for Recycling of Resources.Eco-engineering for Recycling of Resources.

Eco-science of Urban and Suburban Areas Eco-science of Urban and Suburban Areas

from Viewpoint of Water Management.from Viewpoint of Water Management.

Management and Risk Assessment of Management and Risk Assessment of Chemical Substances.Chemical Substances.

Source: CSTP

WHAT ARE EMERGING NEW FIELDS

• Integrative or Interdisciplinary Area of Biotechnology, Information Technology and Nanotechnology

• Integrative Area of Cognitive, Behavioral and Social Sciences

Source: CSTP