MITI Report on International R&D Cooperation

[David Farber <farber@linc.cis.upenn.edu>]

From: Thomas Hagemann <hagemann@gmd.co.jp>
Subject: MITI Report on International R&D Cooperation
Date: 29 Jun 1994 08:27:57 -0700
Abstract
The following is a summary of a report by the Industrial Technology
Council, an advisory body to MITI, about their view on international
R&D cooperation, dated June 8, 1994.


For me, the most interesting sections of the report are Part 4, Chapter
I, Section 2 "Promotion of International Cooperative Research", and
Section 3 "Ensuring a Smooth and Unrestricted Flow of Japan's
Technological Information".


The former section states that the provisions for handling intellectual
property rights in programs like IMS and RWC could serve as models "for
future international industrial R&D cooperation projects". IMHO, the
IMS provisions might become such a model; therefore, these provisions
are included at the end of this report for reference. On the other
hand, RWC is a domestic Japanese program with foreign participation, so
that purely Japanese rules apply; this means that ownership of
different kinds of intellectual property is treated differently
(patents: at most 50% belongs to the inventor, the rest to the Japanese
state; copyrights and other forms of know-how: 100% belongs to the
Japanese state by default), conditions for the usage of patents are
complicated (specific conditions like usage fees are decided
case-by-case for each patent by the Ministry of Finance), transfer of
patent usage rights to third parties is similarly complicated, and
various aspects (ownership, usage fees) are dependent on reciprocity
conditions in the participating countries' regulations case-by-case.


The latter section announces the start of a technological research
information service on the Internet by the Electrotechnical Laboratory
in Tsukuba. This should encourage other national research labs and
universities to provide Internet access to their respective know-how.


Thomas Hagemann


 GMD Bureau Tokyo                  Tel: +81-3-3586-7104
 German Cultural Center            Fax: +81-3-3586-7187
 Akasaka 7-5-56, Minato-ku         Net: hagemann@gmd.co.jp
 Tokyo 107, Japan                       {thomas.}hagemann@gmd.de
 GMD is the German National Research Center for Computer Science


------------------------------------------------------------------------


                          Summary of Report
                                 for
             Minister of International Trade and Industry
                                 by
    International Research and Development Cooperation Committee
                  Industrial Technology Council
- Promotion of Comprehensive and Strategic International Research and
  Development Cooperation Aimed at a New Technology-based Nation -


                           June 8, 1994






Part 1: Domestic and International Conditions Concerning International 
Research and Development (R&D) Cooperation




I. Trends in Japan


1. Economic Recession
   Under the present persisting economic recession, private companies 
in Japan have been reducing their investment in R&D and international 
cooperative research (which is expected to decrease by 12% in FY1994 
compared to the previous year). This puts into serious question 
Japan's future R&D potential.


2. Shortage of R&D Personnel
   Japan's population of young people is expected to decrease and they 
show growing preference for non-scientific and non-technical careers. 
Japan's small and medium enterprises, in particular, are suffering 
from a serious shortage of R&D personnel. (A recent survey showed that 
24% and 51% of companies suffer manpower shortage in the manufacturing 
sections and R&D sections respectively, and 36% of big companies and 
53% of small and medium-sized companies responded that they are short 
of R&D personnel.) The utilization of overseas R&D personnel will be a 
major consideration.


3. Increasing Need for the Creation of New Industry
   There is a declining rate of new business establishments in small 
and medium enterprises, from 7% between 1960s and 1970s to 4% in 
recent years. This is seen with grave apprehension as an indication of 
a weakening of the entrepreneurial spirit of Japan's industrialists. 
In the US., however, brilliant engineers of large corporations 
frequently spin off venture businesses. It is strongly hoped that 
"technology" from both domestic and foreign sources will play crucial 
roles in the creation of new industrial establishments in Japan.




II. New Trends in Promoting "International Cooperative Research"


1. Strengthening of the Relationship between "Technology" and 
"Economics"
   The recent trends after the Cold War are characterized by the 
change of governmental policies of many countries to place more 
priority on technological development so as to vitalize their 
economies.
   In international economic relations, we see an increase in 
transactions involving "technology" in addition to those involving 
goods and capital.
   Governmental technology policies of many countries have been 
shifting their emphasis toward economic stimulation.
   It will be essential for Japan to send out strong messages 
emphasizing that countries should not follow the tenets of "technology 
protectionism" which are based on the recognition that one company 
possessing advanced technology is likely to solely monopolize the 
market in the end.
   It also becomes increasingly more important to engage in 
cooperation in the harmonization of industrial standards to prevent 
any bent toward "technology protectionism."


2. Growing Sophistication and Complexity of Technology
   As industrial technological problems become increasingly more 
sophisticated and complex, capital resources and risks needed to 
overcome these problems will tend to increase.
   Therefore, international cooperation has been recognized as a more 
effective way of R&D.


3. Increase in the Problems Shared by Humankind as a Whole
   It is necessary to take action to address common problems shared by 
humankind as a whole such as the problems of our global environment, 
earthquakes, volcanic eruptions, desertification and other natural 
disasters, the problem of AIDS, etc.
   With the end of the Cold War, there is also the important problem 
of ensuring the smooth conversion of defense industries to civil 
industries.




III. Growing Interest in the Free Flow of "Industrial Technology"


1. Assuring Free Flow of "Industrial Technology"
   There is an imbalance in the exchange of researchers, for example 
in relation with the US. Japan is sending 5 times as many 
researchers as it is accepting from the US. There are greater calls 
for better access to the technology of the private sector and for 
fuller provisions to accept foreign researchers in public institutes.
   There is increasingly greater interest in gaining access to Japan's 
technology. (The ratio of Japanese researchers sent abroad and foreign 
researchers accepted from abroad by private companies in Japan was 
4.13 in FY1992, 4.50 by universities and 1.07 by national research 
institutes.)
   Japan has a deficit in technology trade, which is directly related 
to the Japan-U.S. Framework for a New Economic Partnership.


2. Growing Interest in Intellectual Property Rights
   Interest in the proper protection of intellectual property rights 
and international harmonization in the patent field is growing very 
rapidly among the advanced industrialized nations. This is a very 
important issue in terms of the promotion of technology transfer to 
the developing nations.




IV. Expectations Placed on Japan for Making an International 
Contribution through "Industrial Technology"


1. High hopes for smooth industrial technology transfer
   There are growing expectations among the international community 
for Japan to make a contribution through technology transfer as a 
"front runner" in the technology field.


2. Offering of knowledge and information concerning "industrial 
technology"
   There are increasingly greater calls, primarily among the 
developing countries, for Japan to offer knowledge and information on 
how to formulate industrial technology policies and plan and execute 
R&D projects with the cooperation of the government and private 
sector.
   There are increasingly stronger demands also from the advanced 
industrialized nations calling for Japan to provide knowledge and 
information on how to smoothly implement cooperation schemes between 
the public and private sectors, notably between industry, government 
and academia, and the role of Japanese "public testing organizations" 
in enhancing the technological potential of small and medium 
enterprises in local regions.






Part 2: Direction of Future International R&D cooperation




I. Promotion of International Industrial R&D Cooperation Aimed at a 
"New Technology-based Nation"


   From the standpoint that Japan will play a leading role in the 
development of the world economy by creating new industries through 
new technologies, it becomes possible to recognize that the promotion 
of international industrial R&D cooperation is a necessity and the 
role demanded of Japan as an "International Trading Nation".
   It is necessary for Japan, with a high level of technology forming 
the basis of its national survival, to strive toward a "new 
technology based nation", making an international contribution through 
ensuring the free flow of "technology" and diffusing new "technology." 
Japan has been insisting on the importance of "techno-globalism" in 
this context. It will be important also in the future to initiate 
internabonal industrial R&D cooperation on the basis of dialogue with 
all countries concerned.




II. Basic Philosophy for International Industrial R&D Cooperation


1. Provision of Bases for R&D and Researcher Exchange in Japan
   It is necessary to create a Center of Excellence (COE), needed not 
only for Japan to contribute to international society in the field of 
industrial technology but also to upgrade the level of industrial 
technology in Japan.


2. Strategic Use of Joint Research
   It is of vital importance to promote the long-term commitments 
indicated in 1. above. For the further development of Japanese 
society, "technology" is expected to play a major role as an 
intellectual resource. Therefore, it will be necessary for Japan as a 
tangible and short- or medium-term measure to exercise a leadership 
role in promoting "international industrial R&D cooperation" centered 
on implementation of international joint research projects and promote 
cooperative relations between domestic and foreign companies, in order 
for the advanced nations to avoid resorting to "technology 
protectionism" based on such philosophies as the notion of "strategic 
trade policies." This is an important means for establishing an 
approach based on cooperation instead of confrontation and also 
practical alternative to the philosophy of "strategic trade policies." 
Furthermore, international cooperative research will have a spin-off 
effect in producing new technologies through the fusion of domestic 
and foreign know-how. Considering the difficulties associated with 
individual efforts to develop new industries, international 
cooperative research clearly contributes to the rebuilding of existing 
industries and the development of new industries based on new 
discoveries (seeds of technologies), and eventually to a significant 
dynamism of the world economy. Since we have seen cases in which 
international industrial standards have been applied as a means of 
international trade strategy, it is also important to promote 
international industrial R&D cooperation in the domain of 
standardization so as to ensure the sound development of international 
trade.


3. Free Flow of Technology and Offering of Technical Information
   Considering the vital importance of "technology" as an intellectual 
resource for the nation, it is absolutely vital to ensure the smooth 
and unrestricted flow of the results of technology and technical 
information. For this purpose, it is necessary for Japan to make a 
concentrated effort to diffuse its technical information and at the 
same time remove access barriers to technical information. There is 
also the need to seek international harmonization of various 
countries' intellectual property rights systems.


4. Promotion of Industrial Technology Transfer
   There is the need to make efforts on all fronts in connection with 
offering information covering Japan's high level of "industrial 
technology." These efforts should include strengthening policy 
dialogues with countries concerned.


5. Commitment Toward solving Global Problems
   It is also essential for Japan to show initiative in terms of 
coming to grips with global problems shared by the whole of humankind, 
including the problems of our global environment and measures to 
defend ourselves against natural disasters. International programs 
such as the"New Earth 21" program in the environmental field and 
natural hazard mapping should be promoted in this connection.
   It is also necessary to give fuller consideration to expansion of 
"grant" programs including the Human Frontier Science Program and the 
International Joint Research Grant Program administered by the New 
Energy and Industrial Technology Development Organization (NEDO).






Part 3: Means of International R&D Cooperation




I. Role of Industry, Government and Academia in International 
Cooperation


   It will be necessary to promote cohesion between private industry, 
government and academia so as to carry out international industrial 
R&D cooperation, while giving the most serious consideration to the 
roles they should play . Their respective roles can be summed up as 
follows.
(1) With national research institutes, it is easy to engage in 
cooperation on an organizational, ongoing, and long-term basis.
(2) Universities do not solely concentrate on basic research but also 
engage in applied studies that may have profound effects for society. 
Not only playing an important role in nurturing human resources, 
universities will also expand their role in R&D cooperation.
(3) Private companies hold a reservoir of extensive management 
resources (innovation, management know-how, etc.) with the capability 
to follow through the R&D stage close to commercial application. They 
also hold the key to industrialization.
   In view of these specific roles each of the above three sectors 
play, we can say that it is necessary to achieve and maintain a triad 
of cohesion between"government-industry-academia" to promote and 
further cooperation projects responding to international needs, with 
"government" called upon to act as the coordinator to help "academia" 
and "industry" bring out the best results in the fields where they 
excel.
   In this sense, it is also necessary to consider what deregulation 
measures might be necessary to ease the conditions which restrict the 
activities of government and academia.




II. The Five Principles of International Cooperation


   The following five principles are important in the actual pursuit 
of cooperation under government initiative.
(1) It will be essential to seek and achieve innovation by constantly 
bearing in mind that the cooperation should make a contribution to the 
consolidation of industrial competitiveness for the participating 
countries in the cooperation as well as to the development of the 
world economy.
(2) The areas in which cooperation is extended should be fields in 
which the nations concerned can complement each other. These fields of 
technology should be in a precompetitive stage.
(3) For promoting joint R&D projects, the private sector should be 
encouraged to participate in them so as to make use of their knowledge 
and know-how. Consideration should be given to a fully integrated 
approach spanning the entire process from locating the themes of 
cooperation to the diffusion of the results.
(4) Before the partners of cooperation engage in cooperation programs, 
they should reach agreement on the way to treat and share the results 
of their joint research on an equitable basis and make the greatest 
possible effort in diffusing these results.
(5) Cooperation should start with an open dialogue and the door should 
always be left open for the participation of interested third parties. 
Consideration should be given, in particular, to the promotion of 
technology transfer to the developing countries.




III. Promotion of Comprehensive R&D Cooperation in the mid-term 
perspective


   It has been pointed out that the Japanese Government should 
increase R&D expenditures and promote upgrading of R&D potential. 
Considering the recent situation where Japan has been expected to play 
a major role in promoting international R&D cooperation, it is 
increasingly important for the Japanese Government to strengthen its 
effort drastically in the field of R&D policy. For this reason, it is 
necessary to promote international joint research in the field of 
industrial technology (The FY1994 budget proposal includes 45.4 
billion yen for this purpose.), expand the provisions for inviting 
researchers to both the national and private research institutes (AIST 
invited 150 foreign researchers for over 6 months each to its research 
institutes in FY1994.) and to present and defuse technical information 
by carrying out comprehensive measures including allocation of 
significantly more funds and strengthening of the systems. Furthermore 
it is important to make a plan to execute the above mentioned measures 
from a midterm perspective.






Part 4: Regional Development of International Industrial R&D 
Cooperation - Practical Policy -




I. Direction for International Industrial R&D Cooperation with the 
Advanced Industrialized Nations


1. Further Promotion of the Exchange of Researchers
(1) To ensure that the International Industrial Technology R&D 
Cooperation Center (Techno Growth House), which is scheduled to start 
operation from next fiscal year, can engage in effective and fruitful 
activities, we will conduct discussions by specialists concerned from 
both Japan and abroad, including the United States.
(2) A system for inviting researchers from abroad shall be upgraded.
(3) A "US-Japan Industry and Technology Management Training" program 
shall be strengthened and cooperation efforts shall be made in 
establishing the conditions required for expansion of the circle of 
companies coming into the scheme, including the advertising and PR 
activities to achieve this, and also in matching of foreign 
researchers with host companies and funding, for the program.


2. Promotion of International Cooperative Research
(1) In conducting cooperation, attention should be concentrated on the 
industrial generic technologies which are capable of forming the basis 
for industrial development.
(2) The provisions made for dealing with intellectual property rights 
in the Intelligent Manufacturing Systems (IMS) and Real World 
Computing (RWC) shall be a model for future international industrial 
R&D cooperation projects.
(3) Supporting programs shall be implemented to promote joint research 
in the private sector. (45.6% of joint R&D in the private sector is 
not actually joint R&D but just commissioned research)
(4) Efforts shall be made to ensure transparency for overseas 
companies and provide domestic and foreign interested parties with an 
equal chance to participate in R&D projects based on the principle of 
nondiscrimination.


3. Ensuring a Smooth and Unrestricted Flow of Japan's Technological 
Information
(1) Consideration should be given to the transmission of important 
technical information to the governments of other nations on a regular 
basis through the cooperation of the Japan Industrial Technology 
Association (JITA) and other organizations.
(2) The Electrotechnical Laboratory of AIST is to start its 
technological research information service with the Gopher (INTERNET) 
System. Other research institutes organized under AIST will be 
required to make the same kind of effort. Efforts shall also be made 
at the universities and other research institutes to create research 
information networks linked up with INTERNET.
(3) Parallel with the Techno Growth House, there shall also be a 
Technological Information Office for the benefit of overseas engineers 
and researchers. This Office shall function as a technology access. 
Consideration shall also be given to the creation of similar 
facilities in other technology-intensive regions of Japan.


4. Other
   To achieve a deeper mutual understanding with our partners abroad, 
provisions shall be made to intensify a direct dialogue between the 
"International Research and Development Cooperation Committee of the 
Industrial Technology Council" and those responsible for technology 
policies in the various foreign countries concerned. Efforts shall be 
made on a regular basis to diffuse policies information through the 
holding of "Industrial Technology Policy Forums" composed of Foreign 
Embassies, Chambers of Commerce, etc. and consideration shall also be 
given to strengthen support for activities designed to bring about a