UNLEASHING R&D IN JAPAN
Numerous initiatives are under way to glean greater profits from Japanese science
JEAN-FRANÇOIS TREMBLAY, C&EN HONG KONG
Japanese companies are constrained in their attempts to conduct basic research in collaboration with universities and government institutes. As a result, they are often unable to turn the achievements of Japanese scientists into innovative new products.
For example, in Tsukuba--a green, campuslike city an hour's drive from Tokyo and where many of the best Japanese scientific organizations are based--several agencies pursue identical research goals. Yet regulations, bureaucracy, and tradition prevent them from collaborating.
"The research organizations are well separated, like silos in a farm," says Kazuo Kadowaki, a professor at the Institute of Materials Science of Tsukuba University. In the area of superconductivity, for example, national labs and universities conduct research without contact with each other. "There have been many initiatives to integrate the efforts, but they have not been too successful so far," he says.
Japan urgently needs to bring some spunk back into its economy. It has been in an economic slump since 1990, and the government continues to run large fiscal deficits. But Japanese R&D, one of the drivers of economic vitality, is not managed to produce optimum economic results.
JAPANESE FIRMS recognize the roadblocks. In recent years, they have spent twice as much money collaborating with U.S. universities as with Japanese ones, according to Toyohiko Yatagai, director of the Tsukuba Industrial Liaison & Cooperative Research Center of Tsukuba University. Foreign firms face many of the same hurdles, and they, too, have mostly stayed away from collaborative research in Japan.
||HIGH-TECH Products based on unique technologies will be a success, the Japanese government hopes.
The Japanese central government allocated nearly $10 billion in the current fiscal year, almost 6% more than a year earlier, to support science and technology. It also allocated $23 billion to national universities. This kind of funding would appear sufficient to generate technological breakthroughs to help boost the competitiveness of Japanese companies and energize the economy.
And Japan does boast good science. For example, Japanese researchers discovered blue light-emitting diodes and lasers, based on gallium nitride, that will "revolutionize the world's lighting industry," according to Gerhard Fasol, coauthor of the 1997 book "The Blue Laser Diode: The Complete Story."
Fasol now runs the Tokyo-based consulting firm Eurotechnology, which helps foreign companies benefit commercially from Japanese R&D. Fasol, who once taught electrical and electronic engineering at Tokyo University, also says Japan is a world leader in biotechnology research.
But Japan has not succeeded in turning this research prowess into a strong biotechnology industry. Osaka University President Tadamitsu Kishimoto, head of a panel seeking to change this, said recently that the lack of a strategic plan has prevented the emergence of a vibrant biotechnology industry in Japan.
The number of marketable innovations stemming from Japan's research are too few. In its latest annual report on the promotion of science and technology, the Japanese Ministry of Education, Science, Sports & Culture (MESSC) stated that the country must "create an innovation system that is capable of continuously generating creative product innovations." The report notes that most products and services with a major impact on society were invented in Western countries.
The picture isn't pretty, but Fasol sees change coming. He says the country is executing a transition from "old" Japan to "new" Japan. In his opinion, old Japan features companies led by a tightly knit group of older men. In old Japan, management has no room for women or foreigners. The new Japan is the opposite. The fastest growing companies are new names like Nichia or Softbank, not necessarily founded by Japanese but built around breakthrough technologies or innovative management concepts.
THE NEW JAPAN is internationally minded and pursues new technologies. In the new Japan, it is possible for foreign companies to hire some of Japan's most talented human resources. In the new Japan, Fasol believes, foreign companies can take advantage of opportunities that were not available in the past 50 years.
The new Japan will need to pioneer new industries, because Taiwan, South Korea, and others have become more proficient than Japan at improving products and processes invented abroad.
George Stephanopoulos, a chemical engineering professor at Massachusetts Institute of Technology who is also a board member at Mitsubishi Chemical, says breakthrough technologies that give rise to new industries are very often the result of interdisciplinary research. But such research involving private companies and academics from across disciplines is difficult to implement in Japan. University regulations, restrictions on academics' sources of funding, and lack of clarity on patent ownership all conspire against innovative research consortia.
Industry-academic research has taken place in Japan for a long time, Stephanopoulos says, and private companies have been allowed to conduct research with individual university professors. But this is done cautiously. In state-owned universities, professors are considered public servants and are not allowed to accept money from private companies. Private companies, moreover, cannot set up physical infrastructure such as laboratories on national university campuses. Although only 20% of universities are government-run, some of the best science departments are in state universities.
Numerous constraints on Japanese academics will be lifted in 2004, when state-owned universities are spun off from the government. Not only will this change provide academics more freedom in choosing research partners and funding sources, it will lighten other administrative restraints. Currently, most of the forms and documents used by state universities are issued centrally in Tokyo in accordance with a one-size-fits-all principle.
The transfer of patents has traditionally been an obstacle to academic/private-sector collaboration. A recent survey by MESSC showed that professors failed to notify university administrators of most of their patentable research results.
PHOTO BY JEAN-FRANÇOIS TREMBLAY
PHOTO BY JEAN-FRANÇOIS TREMBLAY
MITSUBISHI CHEMICAL PHOTO
ONE REASON, according to the survey, is the complex administrative process required for notifying university officials of patentable research achievements. Another reason is the expensive process professors face if they want to purchase the patents resulting from their inventions. Hideaki Takagi, vice president for research development at Tsukuba University, notes that when collaborative research is conducted with government organizations, any resulting patents belong to the government.
To solve this problem, universities throughout Japan are setting up or strengthening technology licensing organizations that are entrusted with simplifying procedures for transferring and licensing intellectual property. Perhaps more important, universities have run awareness campaigns sensitizing academic researchers to the importance of transferring knowledge to private companies.
The campaign is showing results. When asked in a 2001 survey by MESSC how they would like their research results to be used, 35% of academics at Japanese universities said they would like their achievements turned into technologies that can be used by industry.
The University of Tsukuba, where professors have won three Nobel Prizes since 1965, is taking steps to improve collaboration with industry and government institutes. In April, it launched the Tsukuba Industrial Liaison & Cooperative Research Center, which aims to promote collaborative research with outside organizations and transfer the results to industry.
To promote interdisciplinary research among various organizations, eight years ago Tsukuba University created the Tsukuba Advanced Research Alliance. TARA aims to collaborate with other organizations in frontier areas such as functional genomics or the creation of new materials. One of the main roles of the new Industrial Liaison & Cooperative Research Center is to strengthen TARA's exchanges with the private sector.
In the remaining two years until universities gain independence from the government, the existing rules limiting academic exchanges are being interpreted creatively. Takeshi Akasaka, a professor of chemistry at TARA, says the research alliance has appointed some private company researchers as "visiting" professors. The move allows students to conduct academic work at company sites.
Another creative interpretation of the rules is Tsukuba University's appointment of 20 nanotechnology researchers from the National Institute of Advanced Industrial Science & Technology as visiting scholars. Under the arrangement, the AIST researchers need not actually visit the school. But university students can receive stipends from AIST and conduct research using the equipment on hand at AIST. Although Tsukuba is well funded, academics at the university tell C&EN that the AIST researchers are much better endowed, especially when it comes to acquisition of equipment.
Mitsubishi Chemical has found a way to conduct interdisciplinary research with the state-run Kyoto University. Last summer, under Stephanopoulos' leadership, Mitsubishi assembled a consortium composed of Nippon Telegraph & Telephone, Pioneer, Rohm, Hitachi, and Kyoto University targeting organic electronic materials and devices. With a budget of $5 million, the program already has launched 15 research projects. By next year, it will involve up to 200 researchers, about 50 of whom are university professors.
Stephanopoulos credits Kyoto University professor Kazumi Matsushige as the true enabler of the alliance. Despite Kyoto's rigid rules, about two years ago, Matsushige was able to form a new university subsidiary--the International Innovation Center--which is permitted to engage in joint research with several private companies at the same time.
UNLIKE IN OTHER countries, it has traditionally been illegal in Japan for academics to launch their own companies. In Japan, Fasol says, an academic launching a company making commercial use of his expertise would be seen as no better than a customs official opening up a consultancy advising people how to pay lower custom duties.
Following lobbying from universities, academics are now allowed to be directors of companies, as long as they do so outside official working hours. And the working-hour restriction is already being interpreted with considerable leeway.
An example of the turnaround in Japanese policy can be seen in a 2002 report on the promotion of science and technology published by MESSC. It states that "in universities, it is important to heighten the awareness and understanding of entrepreneurship among researchers and to promote venture companies originating from universities."
The Japanese government's desire to increase the transfer of research to industry is also illustrated by changes that have been taking place at AIST. The institute, an organ of the Ministry of the Economy, Trade & Industry, was launched last April following the merger of 15 institutes previously controlled by the former Agency of Industrial Science & Technology--known as the old AIST--and the Weights & Measures Training Institute. AIST says it is currently Japan's largest public research organization.
The 3,200 scientists at AIST are now urged to conduct research that can be of use to industry, according to Takashi Goto, director of AIST's collaboration department. It's a 180-degree turn, he says, from the situation at the old AIST, which emphasized basic research.
At the old AIST, Goto relates, researchers were primarily evaluated on the quality and quantity of their published research. Under the new system, "if a researcher does not publish particularly outstanding papers but comes up with useful patentable research, it will be looked upon very favorably." He adds that basic science is not dead at AIST. "Researchers can still go on simply publishing papers; it's just that there is another dimension to the way that they are evaluated," he says.
Although the change occurred only one-and-a-half years ago, collaboration with private companies or universities is expanding rapidly. In 2000, the last year of the old AIST, 972 research projects were conducted with outside groups. In 2001, this had already grown to 1,131 projects. An additional dimension to the improvement, Goto says, is that several joint research projects now extend over several fiscal years, a type of arrangement that was prohibited at the old AIST.
AIST also made a number of administrative changes to help technology transfer to private companies. The old AIST did not have a collaboration department, a technology licensing office, or even a patent policy office. Whereas before AIST researchers were not allowed to collect licensing fees exceeding $46,000, there is now no absolute limit on how much they can earn from their licenses--as long as AIST gets 75% of the proceeds.
Numerous constraints on Japanese academics will be lifted in 2004, when state-owned universities are spun off from the government.
MOREOVER, a likely change in regulations next year will allow AIST researchers to act as paid consultants to private companies. For the time being, they are only allowed to become directors of private corporations outside official work hours.
Collaboration with private companies is not always beneficial, cautions Kazuo Akagi, a professor at Tsukuba University's Institute of Materials Science. He says the primary mission of universities is to educate students and conduct research, pursuits that at times conflict with the desire of private companies to maximize speed to market.
Akagi is now involved in three joint research projects with companies in which he and his students synthesize new materials that can be used in the manufacturing of organic light-emitting displays. Akagi won last year's Tsukuba Prize from Ibaraki Prefecture's Science & Technology Promotion Foundation.
AIST's Goto concurs that private companies, universities, and government labs conduct research for different reasons. Research at private companies is profit-driven, while in universities it is "curiosity-driven," he says. In government labs like AIST, it is "scenario-driven," based on assumptions about what society will need in the future.
Scenario-driven research obviously backfires if the wrong assumptions about the future are made. Nobel Prize winner Ryoji Noyori recently criticized the Japanese government's ambition to go beyond simply improving collaboration between industry, academia, and government institutes to actually deciding their research themes. In the current budget, $300 million worth of science funding is allocated to organizations deemed the best suited to pursue research objectives set by MESSC.
It may or may not be a good idea for the government to set research goals or for students to spend much time on projects that serve corporate objectives more than their educational needs. And it is too early to gauge the effectiveness of measures being adopted to allow more interaction between universities, government institutes, and companies. But as Japan continues its slide following 10 years of economic stagnation, empowering its research community to participate more actively in the economy cannot hurt.