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CORPORATES MAKE RELUCTANT PARTNERS The Japanese government wants to lure more industry funding into universities, but companies need to be convinced they’ll get value. BY ICHIKO FUYUNO

apanese brands are recognized globally chief of the University-Industry Collaboration By contrast, corporate R&D has recov- for their manufacturing and engineering and Regional R&D Division at the Ministry of ered from the hit. According to the govern- Jsophistication. The companies that built Education, Culture, Sports, Science and Tech- ment thinktank Institute of Science them, from Toyota to , don’t just drive the nology (MEXT). and Technology Policy (NISTEP), corporate national economy, they also boost research expenditure on R&D in Japan was 13.7 trillion and development. IN BUSINESS yen (US$120 billion) in 2015, almost quadruple Japanese corporations are a dominant force Japan’s economy took a drastic hit from the amount spent by universities (3.64 trillion in the Nature Index. They were the second- the 2008 global financial crisis and was yen) and ten times that spent by public institu- largest contributors after the United States further compromised by the 2011 earthquake. tions (1.4 trillion yen). to the share of corporate authorship between Recovery has been slow, and with growing Corporate Japan accounted for 72.3% of 2012 and 2016. Their output accounted for social and welfare expenses, universities have the country’s total R&D investment, outdone 3.34% of Japan’s total index contribution, out- suffered. Government funding for basic univer- only by neighbouring South Korea’s 77.5% and weighing the corporate share in the US, South sity operating budgets has steadily declined to China’s 76.8%. When measured as a percentage Korea, and China. 1,097 billion yen (US$10 billion) in 2016, down of GDP, private sector R&D spending reached Yet despite their strong publication per- 11% from 2004. 2.57% in Japan, second to South Korea, and formance, Japanese companies acknowledge well above that of China. that their scientific activities are primarily The biggest private-sector spenders on motivated by the desire to capture emerging science and technology in Japan are compa- markets before their competitors. nies with capital worth 10 billion yen (US$90 Corporations in Japan have also been reluc- million) or higher. They make up more than tant to partner with local universities. They 70% of the corporate R&D. The largest con- are discouraged by the lengthy administrative tributor in 2017 was Toyota Motor, with plans process involved in finalizing contracts, and to spend 1 trillion yen (US$9 billion) by the

TOSHIFUMI KITAMURA/AFP/GETTY TOSHIFUMI what they see as a lax attitude of researchers end of this fiscal year. A quarter of this invest- to commitments and deadlines. But, with the ment (up from a fifth compared to last year) is government increasingly recognizing corpora- earmarked for research into promising tech- tions as an important partner for academia, the nologies, including artificial intelligence (AI), relationship might soon grow closer. “We hope a series of government-supported initiatives will lure more corporate funding Toyota employee displaying the company's into universities,” says Takashi Uchino, unit new AI communication robot 'Kirobo Mini'.

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Hamamatsu Photonics has a 90 per cent global market share in high-precision light sensors known as photomultipliers. Its stock price has jumped more than four-fold since 2009.

cruise-control technologies and next-genera- less than 5.1% in the US, 14.4% in Germany companies find it difficult to collaborate with tion eco-friendly vehicles. and 34.5% in China. them,” he explains. Toyota Group is the second-largest corporate Companies in Japan, says Yoshikazu Yama- To bridge the divide, MEXT last year intro- contributor to the Nature Index in Japan. guchi, an expert on industry–academic col- duced a matching fund for universities that laborations and innovation policies at Chiba want to form a consortium with companies. CORPORATE RELATIONS Institute of Technology, have been wary of col- So far, it has selected seven university faculties The government is increasingly counting on laborating with Japanese universities due to the to which it will provide 170 million yen (US$1.5

companies to buoy the country’s economy daunting paperwork and failure of researchers million) annually for five years, to establish VIA GETTY AKIO KON/BLOOMBERG through ‘open innovation’, an expression that industry–academic collaboration. MEXT refers to the process of generating ideas and hopes for 2.1 billion yen (US$20 million) in the technologies through the joint effort of com- 2018 budget allocation to help selected univer- panies, universities and other institutions. To “WE HOPE A SERIES OF sities establish a new office and strengthen the achieve this goal, it is supporting companies in management of these collaborations. their R&D activities. According to the OECD, GOVERNMENT-SUPPORTED The government is also encouraging com- while Japan’s direct government funding for panies to triple their R&D investment in aca- corporate R&D accounted for only 0.03% of INITIATIVES WILL LURE MORE demia by 2025, paying particular attention to GDP in 2014, its indirect support through R&D areas such as artificial intelligence, big data, tax incentives was 0.14% of GDP, the seventh CORPORATE FUNDING INTO sensors, and optical technologies, which com- largest among 44 countries surveyed. plement the areas where companies are already Uchino at MEXT adds that the government UNIVERSITIES.” investing. is also prioritising industry–academia col- In 2016, the government released a guide- laboration “to generate innovations that have a line for universities on how to establish positive impact on society.” But the relationship to produce the outcomes companies expect. organization-level collaborations, as opposed so far has been fraught. While ministry data Instead, companies prefer to spend gener- to smaller, individual joint research activities. show that the number of such collaborations ously on overseas institutions. “US universi- That same year, established laborato- has increased year-on-year, most projects are ties often establish what they can do in, say, ries at The University of Tokyo, Kyoto University small, with an average corporate investment two years before signing a contract, and achieve and Hokkaido University to achieve a super- of about 2 million yen (US$18,000). Accord- results as stipulated in the contract,” says Yama- smart society, the government’s catchphrase for ing to the OECD, Japanese businesses con- guchi. “Many Japanese universities still don’t the seamless integration of cyberspace and the tributed an average 2.7% to higher education have this kind of business mindset and can be real world. Meanwhile, Chugai Pharmaceuti- R&D expenditure over the past decade, much sloppy in managing contractual obligations, so cals is betting on top-tier basic research. In 2016,

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CORPORATE SHARE United States OF HIGH-QUALITY RESEARCH Japan US corporations contributed a lot United Kingdom to Nature Index publications China between 2012 and 2016, but Germany their contribution as a proportion of Switzerland the country’s total was lower than South Korea Switzerland, South Korea and Japan. France SOURCE: NATURE INDEX; R&D DATA PROVIDED BY COMPANIES BY PROVIDED INDEX; R&D DATA SOURCE: NATURE

Netherlands

Canada

0 20,000 40,000 60,000 80,000 0 500 1,000 1,500 2,000 3,000 0 1 2 3 4 Total WFC 2012–2016 Corporate WFC 2012–2016 Corporate share of total WFC (%)

120 SPENDING VS OUTPUT The Japanese corporations that 100 produced the most Nippon Telegraph and Telephone Corporation high-quality research in the Nature Index between 2012 and 80 2016 didn’t necessarily spend the 60 most on research and Toyota Group development in 2016. WFC 2012–2016 WFC

40 Corporation Hitachi, Ltd. Mitsubishi Group* 20 Corporation Takeda Pharmaceutical Company Limited JEOL Ltd. Daiichi Sankyo Co., Ltd. Corporation Photonics K.K. NEC Corporation Sumitomo Chemical Company, Limited 0 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 1,100,000 2016 R&D spending (million Japanese yen) *R&D output for Mitsubishi Group only includes spending by Mitsubishi Chemical. the company signed a contract to pay 1 billion the high-quality journals tracked by the index. However, Hara says, “as a private corporation, yen (US$9 million), every year, for 10 years, to The telecommunications company Nippon we put more focus on filing patents.” the Osaka University Immunology Frontier Telegraph and Telephone Corporation Group Honda Motor, whose R&D expenditure Research Center (IFReC), led by immunologist, (NTT), for example, is the largest corporate was 750 billion yen (US$6.6 billion) in 2017 Shizuo Akira, who was the world’s most highly contributor to index authorship in Japan, but — more than triple the amount spent by NTT cited scientist in 2006 and 2007, according to its R&D expenditure is only about a fifth of Group — did not make the list of top 100 com- Thomson Reuters. Toyota’s, at 210 billion yen (US$2 billion) in panies in the index in 2012–2016. “These collaborations can bring merits for 2017. According to the public relations office “The importance placed on publishing in both sides,” says Kumiko Miyazaki, whose at NTT, the company sees papers published high-impact journals depends on the company research at the Tokyo Institute of Technology in high-impact journals as “very important as and the sector,” Miyazaki explains. “In the case looks at strategic management of technologies. one subjective measure to evaluate our research of component makers, publications contribute “Companies can learn from talented young strength, and a good motivation for authors.” to marketing their products to their customers. researchers at universities, while universities The optical equipment manufacturer, Hama- But, a buyer would not consider publications to can expand the scale of their research amid matsu Photonics K.K., is also among the 14 Jap- be an important criteria in buying a car.” tight budgets from the government.” anese companies ranked in the global top 100 Yamaguchi at Chiba adds that many Japa- corporations in the Nature Index in 2012–2016, nese companies still place more importance TWO SIDES OF A COIN despite an R&D expenditure this year of a mere on submitting papers to Japanese-language Increased reliance on corporations, however, 12.4 billion yen (US$100 million). The direc- journals and technical journals, which are not will not necessarily translate into high scientific tor of Hamamatsu’s central research laboratory, represented in the index. Corporate culture output. “Companies don’t put so much weight Tsutomu Hara, says papers published in high- also matters, he says. “Companies that allow on writing papers,” says Miyazaki. impact journals are good for the company’s flexibility in research activities seem to appear Companies that spend a lot on R&D are not image, and the company provides a small mon- more in high-impact journals, even though always the ones that publish a lot of papers in etary bonus to researchers who publish papers. their R&D expenditure is modest.” ■

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