1. Role of Science and Technology
in Japanese Economy
Japanese Hi-Tech Wave – Opportunity for Czech Companies ?
TBN, April 2, 2007
Karel ANTROPIUS
Former Economic and Commercial Counsellor
Embassy of the Czech Republic, Tokyo

2. Agenda
History of growth
Government Science and Technology Policy
Japanese hi-tech industries
How to look for a business partner in Japan

3. HISTORICAL VIEW
˝For the restoration of the Empire, knowledge will be sought for
anywhere it can be found˝ ; Emperor Meiji, April 1868
End of the WWII, Japan in ruins
Government aware that Japan is a resource-poor country and its
future prosperity depends on development of S&T and support of
R&D
Decision: Revitalization through education, mainly in Natural
Sciences
Heavy investments into Universities and Research Institutions
By 1960 Japan had gradually brought up a whole generation
prepared to adopt the newest western inventions and technologies
In principle, Japanese started building a Knowledge-based
Economy
» Recommended reading: Akio Morita: Made in Japan

4. Real GDP Growth
Period Growth Note
1950s aver. heavy industrialization, boosted by Korean War
10 % (USA paid special military procurement)
1960s aver. Golden Sixties, Japan economic miracle
10 % shift to export trade
1970s aver. 5 %
1980s aver. 4 %
1989 highest prices of land, 1 m2 (Ginza) = 1.5 mil USD
peak of the bubble economy
1990 burst of the bubble economy
sliding stock and real estate prices

5. Real GDP Growth – cont.
Period Growth Note
1990s aver. "lost decade" - growth slower than in other
1.5 % major industrial nations
1998 - 2.2 % worst after WWII
2001 - 0.8 last year of recession
2002 1.1 beginning of economic recovery
2003- aver.
2004 2%
2005 aver. 4 Q – 5.5 %, more than USA, EU
2.8%
2006 2.6 % est. OECD

6. Administrative structure of S&T Policy
Prime Minister
Cabinet Office
Council for S&T Policy
Ministry of Education, Culture, Coordination
Sports, Science and Technology Other Ministries
MEXT
Cooperation
Research Institutes
Universities
Research Agencies

7. Government Science and Technology Policy
during recession in 1990s it was understood that country‘s future
prosperity depends on the development of unique, outstanding S&T
1995 : Science and Technology Basic Law was enacted in the
middle of „lost decade”
FY 1996 – 2000: „1st Science and Technology Basic Plan”
» expenditures for Governmental R&D investment 17 trillion ¥
» aggressive promotion of R&D to meet social and economic needs
» promotion of basic research
FY 2001 – 2005: „2nd Science and Technology Basic Plan”
» budget for Governmental R&D investment 24 trillion ¥
» 3 basic Ideas (vision): what the nation should aim for
1. creation and utilization of scientific knowledge
2. international competitiveness & sustainable development
3. securing safety and quality of life

8. Government Science and Technology Policy
2nd Science and Technology Basic Plan – cont.
» strategic priority setting in S&T:
• increasing significance of basic research in governmental R&D
• increasing competitive funding
• preferential allocation of resources to 4 fields: (46 % of budgets)
1. life sciences 2. information and telecommunications
3. environmental sciences 4. nanotechnology / materials
» competitive R&D environment and R&D system reforms
• 68 national research institutes reorganized into independent
administrative institutions in April 2001
• national universities reorganized into corporations in April 2004
» increasing industry-academia-government collaboration
• increase in industry-academia joint research projects
• more university spin-off ventures (total number reached 1,000)
• 18 regions recognized as knowledge clusters

9. Government Science and Technology Policy
FY 2006 – 2010: „3rd Science and Technology Basic Plan”
» expenditures for Governmental R&D investment 25 trillion ¥
» based on the following 2 principles:
1. S&T to be supported by public and to benefit society
(to be achieved by returning R&D results to society )
2. Emphasis on fostering human resources and competitive
research environment
» sets 6 practical policy goals:
1. Quantum jump in knowledge, discovery and creation
2. Breakthroughs in advanced S&T
3. Sustainable economic growth & environmental protection
4. To generate high value added innovation
5. Securing good health of people over lifetime
6. Making Japan the world's safest country

10. Government Science and Technology Policy
3rd Science and Technology Basic Plan – cont.
» Strategic priority setting in S&T:
1. Promotion of basic research
2. Promotion of 4 priority fields (the same as in the 2nd BP):
• life sciences
• information and telecommunications
• environmental sciences
• nanotechnology / materials
and preferential allocation of resources
3. Promotion of other 4 areas fundamental for nation's existence:
• energy
• manufacturing technologies
• social infrastructure
• frontier
4. Encouragement to deal with emerging and interdisciplinary fields

11. MEXT S&T Strategies
Fostering and Securing Human Resources (allowing young, female
and foreign researchers to exercise their abilities)
Promotion of Basic Research (aiming at future innovation)
Creation of Innovation (to make the Japan‘s original research to
resolve social issues – e.g. international competition, security)
Setting S&T Priorities on 5 Key Technologies of National
Importance:
1. Space Transportation Systems
2. Fast Breeder Reactor Cycle Technologies
3. Super Computers
4. Earth Observation and Ocean Exploration System
5. X-Ray Free Electron Laser

12. Results of S&T policies since 2000
Japan has improved its international status in the quality and quantity
of research papers. Nobel Prizes awarded to 3 researchers in chemistry
(Hideki Shirakawa 2000, Ryoji Noyori 2001, Koichi Tanaka 2002), and 1
in physics (Masatoshi Koshiba 2002).
Japan's unique research findings created a new market generating
hundreds of billions of yen
Japan's balance of trade in technology has improved

13. Results of S&T policies since 2000 – cont.
Research findings have returned to the economy and society.
Specific examples:
• a new cancer therapy with heavy ion accelerator developed
• new materials for regenerative medicine applied practically
• the world's highest solar power conversion efficiency achieved and
technology for mass production developed (50 % of the world‘s
total)
• state-of-the-art semiconductor manufacturing technology developed
(magnetic micro disks with the world-highest bit intensity)
» Such results improved Japan's competitiveness, contributed to
domestic and global security, enhanced safety and health, and helped
to ensure the sustainable prosperity of the Japanese economy.

14. High-tech Industries
Require: large investments in R&D
sophisticated technology during manufacturing process
» The size of high-tech product export = indicator of competitiveness
Hi-Tech Products Export in 2003
Industry Share in OECD Total amount
Japan USA (billion USD)
Electronics 19.0 % 19.8 % 378.0
Medical, precision & optical 13.9 % 22.8 % 199.5
instruments
Office machinery & 11.5 % 19.5 % 210.1
computers
Pharmaceuticals 2.1 % 10.2 % 202.8
Aircraft industry 1.5 % 33.7 % 151.3
All high-tech products 11.4 % 20.4 % 1,141.7
Source: White Paper on Science and Technology 2006

15. Export / Import Export / import payments ratio in high-tech
6.0
5.0
4.0
3.0
2.0
For USA, UK, France and Germany approx. 1.0
1.0
0.0
1981 83 85 87 89 91 93 95 97 99 2001 2003
Year
Source: White Paper on Science and Technology 2006

16. Export / import payments ratio by industry
in 2003
Industry Export Import Export / Import
(billion yen) (billion yen) Ratio
Electronics 8,329 3,685 2.26
Office machinery & 2,801 2,807 1.00
computers
Medical, precision, & 3,211 1,909 1.68
optical instruments
Pharmaceuticals 484 860 0.56
Aircraft industry 269 791 0.34
All high-tech products 15,093 10,051 1.50
All manufacturing 51,989 32,778 1.59
industries
Source: White Paper on Science and Technology 2006

17. How to look for a business partner in Japan
Attend a specialized trade-fair (more than 200 trade-fairs annually)
JETRO database available at
www.jetro.go.jp/en/matching/j-messe/
See the information network of The Japan Chamber of Commerce
and Industry – CIN, and fill the Trade Inquiry Registration Form
www.cin.or.jp/trade/
See the list of web addresses for business matching at the
"Souhrnná teritoriální informace Japonsko" – the quarterly
publication of the Embassy of the Czech Republic in Tokyo
www.mzv.cz/tokyo/

18. How to look for a business partner in Japan
Register and use free JETRO Business Matching Database (TTPP)
www.jetro.go.jp/en/matching/
• allows to search through over 25,000 business proposals
• approx. 10,000 proposals from Japan
• foreign business proposals translated into Japanese free of charge
• automatic matching function - TTPP will automatically conduct a search
and notify you of the latest proposals with conditions corresponding to
your needs
• 67 major proposal categories, more than 250 subcategories
• 17 offer (business) types (incl. technology transfer, joint R&D, etc.)
• registered information can be updated and deleted online
• TTPP website promotes links with other business matching sites

19. Thank you for your attention