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Le Japon à bout de souffle? A programmed crash or an eminent revival?

Le Japon à bout de souffle? A programmed crash or an eminent revival?. EPFL May 2003. WHAT THE WORLD SEES 0.89% Growth of GDP over the last decade (FY01 GDP decrease 1%) D ebt: Massive! Public: Debt to GDP ratio = 140% Private: 276 Mia $ bad bank loans D eflation D epression syndrome

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Le Japon à bout de souffle? A programmed crash or an eminent revival?

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  1. Le Japon à bout de souffle?A programmed crash or an eminent revival? EPFL May 2003

  2. 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 Different perceptions, indeed! • WHAT USA SEES: • Japan has $ 333 Mia worth of US Treasury Bonds • JP Bank loans to US: $ 340 Mia

  3. 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 femmes dont 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!

  4. La société nippone • Une société basée sur: • L’harmonie et l’unité – l’égalitarisme – la poursuite du consensus • La 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

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

  6. 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

  7. Japanese Strength in Technology • Technology Exports: ca.$8 bnTechnology 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!

  8. 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

  9. Knowledge Creating Industries Driving Forces for Economic Growth Light Industries: Semiconductors PCs Heavy Industries: Chemical; Shipbuilding SMILE Knowledge Intensive CyberTechnology Biotechnology Nanotechnology Capital Intensive Labor Intensive industries Pre-Modern Era 50’s - 60’s 70’s - 80’s 21st Century

  10. SMILE! • S for Systemization and integration • M for Materials and nanosciences • I for Information • L for Life Sciences • E for Environment

  11. Major Aimsof Governmental Reform • Making the central government smaller by merger of ministries e.g. Merger of Ministry of Education, Science, Sports and Culture and STA • Strengthening function of PM's Office Making leadership of PM stronger Council for Economy and Finance Council for S&T Policy

  12. Prime Minister Science and Technology Administration in Japan Cabinet Office for basic policy and general coordination on important for cabinet Minister of State for Science and Technology Policy Council for Science and Technology Policy Atomic Energy Commission Science Vice- Minister Parliamentary Secretary Nuclear Safety Commission Director-General Bureau of Science and Technology Policy Ministry of Education, Culture, Sports, Science and Technology Ministry of Public Management, Home Affairs, Post and Telecommunications Ministry of Health, Labour and Welfare National Universities and Laboratories Ministry of Agriculture, Forestry and Fisheries National Research Institutes Ministry of Economy, Trade and Industry Ministry of Land, Infrastructure and Transport Ministry of the Environment

  13. 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 POLICYFive-year Basic Science &Technology Plans

  14. S&T POLICYSecond 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

  15. S&T POLICY2nd 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 areas Life sciences, Health and Medical treatment Information and Telecommunications, Environmental Science, Nanotechnology and Materials

  16. S&T POLICY2nd 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

  17. FY 2002 Budget on Science & Technology in Japan

  18. 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

  19. Government R&D ExpendituresEvolution over last decade(in 100 bn Yen)

  20. Japan R&D Expenditures(FY2000)$125 bn(+1,7% from FY99)ca. 3.2% GDP Performers Sources

  21. Distribution of R&D Expendituresin Japan

  22. 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

  23. JFY 2003 Budget for Major Four fields

  24. University Reform

  25. (Number of National Universities as of April 2002) Hokkaido (7) Okinawa (1) Chubu (22) Chugoku (6) Tohoku (7) Kinki (15) Kyushu (14) Kanto (20) Shikoku (7)

  26. 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.

  27. 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%)

  28. 1. University in Japan: (3) Collaboration with industryDomestic • 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

  29. 1. University in Japan: (3) Collaboration with industryInternational Industry increasingly outsourcing R&D abroad Unit: $ mio FY99

  30. 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

  31. 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

  32. 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

  33. 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

  34. 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

  35. 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

  36. 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

  37. Research funds on open and competitive-proposal basis 1$=130yen (Bil $) [+6.4%] [+10.0%] [+13.5%] [+12.5%] [+7.6%] [+27.0%]

  38. 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;

  39. 7. Industry-Academia Cooperation • 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)

  40. 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

  41. 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

  42. 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

  43. Sapporo: IT Kobe: Med Sendai: IT Hiroshima: Bio Kyoto: Nanotech Kita Kyushu : IT(LSI) Nagano/Ueda : Nanotech Hamamatsu: Opto-Electronics Fukuoka: IT Osaka Area : Biomedicine Takamatsu: Bio Keihanna: IT/Genome 7. (5) Intellectual Clusters

  44. Outlook Biotechnology in Japan

  45. Life Science Budget FY02 (SFr. 4.4 Mia) By Ministry

  46. Biotech Market Size Outlook

  47. Bio Ventures in Japan 2010 (Target) September 2001 1000 ~1998 The National Strategy for IndustrialBiotechnologies 250 60 Source: Presentation by Japan Bioindustry Association

  48. 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

  49. Outlook Nanotechnology in Japan

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