Industry-University Relations in Japan
I offer these brief words from the standpoint of five years at the British Embassy encouraging relations between UK universities and Japanese companies, and from 6 months at Tokyo Institute of Technology, where I teach “innovation and wealth creation”.
It is now over 5 years since the TLO legislation was passed to encourage technology transfer from Japanese universities. So how do the results look? In 2001/2, cumulative licensing income from all national TLOs was ¥410M - 1/8 of the licensing income received by UK universities in the same year. But by this year it had grown to ¥1.4B suggesting some catch up. Comparing spinouts from universities, the UK has been creating around 200 new companies each year -of similar order to Japan (cumulative total to early 2004; 531). Of course a more reliable comparison would be the size or valuation of the companies created rather than just their number. Japanese productivity in research results and citations has also improved although research productivity is still substantially lower than the UK and elsewhere.
But even if the rate of technology transfer were increased substantially, its impact on the national economy would still be small. Improved technology transfer may help the National Innovation System, but it is not a panacea for the whole economy. Economic analysis shows Japan's innovation record to be strong and improving while the economy was struggling from 1990. Japanese companies continued to invest in R&D and maintain an internationally leading position in many technologies. Even if the spotlight has fallen on areas such as Internet and biotech in the USA, Japan continues to excel in communications technologies, optics and many other key areas. It is the lack of diffusion of innovation from the internationally competitive 10% of the Japanese economy into the internal economy that has contributed to slow growth according to many analyses (1).
To help invigorate the national economy, the modern university needs to expand from teaching, through improved research into a source of local and regional innovation. Encouraging industry-university relations needs to be seen against this background. Current Japanese policies on MEXT Centres of Excellence and METI Clusters recognise this regional economic importance. However I wonder how far they will create a demand in industry for a true partnership with academia in innovation.
Japan is unusual internationally in the extent to which companies’ spend on R&D still allows them to be largely self-sufficient in many fields and even fund basic research. In addition, the Research Associations funded by METI to pursue national projects help primarily company basic R&D and have not actively sought to involve universities as equal partners. Current policies on TLOs, and venture spin outs seem to be based on doing more with the existing research “supply" in universities rather than creating a “demand” in industry. In contrast in the UK, many companies now see basic research in universities as a source of their own basic ideas and have long disbanded basic corporate research laboratories. Government policies have supported this trend by special subsidies for collaborative research between companies and universities (one of these — the LINK programme- has created 20,000 extra jobs from the resulting innovations). Many special university funding schemes are also conditional on industrial support and funding. Such incentives for proper partnerships in research help develop joint approaches and mutual respect and joint working. While the UK does not have an exact analogy to METI projects, similar ones in the UK would have a requirement for significant, perhaps equal participation by universities. In such ways, it may be possible to increase demand in industry for universities’ brains and research capabilities, and strengthen their contribution to Japan’s innovation system.
1. Unchanging Innovation and Changing Economic Performance in Japan. Adam. S Posen , Institute for International Economics. http://www.iie.com/publications/wp/2001/01-5.pdf