JAPAN: A NEW FOCUS ON RESEARCH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T01058R000101290001-3
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 22, 2016
• Document Release Date: January 7, 2010
• Sequence Number: 1
• Publication Date: April 16, 1985
• Content Type: REPORT

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Central Intelligence Agency
DIRECTORATE OF INTELLIGENCE
16 April 1985
Japan: A New Focus on Research
Summary
Japan is confronted with growing difficulty in
gaining access to basic research conducted abroad just
as its industrial structure is becoming increasingly
knowledge-intensive. In an effort to solve this
problem and to maintain its bureaucratic influence in
determining new directions for Japanese industry, the
Ministry of International Trade and Industry (MITI)
has drafted a law that would promote research by
establishing an R&D center. One goal of the center
will be to encourage US and other foreign
participation in basic research projects. The
Ministry of Posts and Telecommunications--an
increasingly aggressive bureuacratic actor--has begun
to assert it own policymaking authority over new
high-technology sectors, however, by proposing
legislation to counter the Trade Ministry's. Although
the Cabinet approved a draft law in mid-February that
consolidates the two bills, ongoing turf battles could
This memorandum was prepared byl (Office of East
Asian Analysis. Information available as of 16 April 1985 was
used in its preparation. Comments and queries are welcome and
may be directed to the Chief, Japan Branch, Northeast Asia
Division, OEA, on
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delay passage during the current Diet session. Even
if the law is passed this year, continued bureaucratic
bickering, competition for funds from other
ministries, and uncertainty among Japan's industrial"
leaders about their role in a national R&D effort
could delay implementation.
Motivations
MITI sees an increasing need to encourage and support
research and development because the Japanese are facing more
difficulty in gaining access to basic research and want to begin
work in new areas where research has not et been done.
Access to US R&D
programs has long enabled t e Japanese to concentrate on
development and application research with quicker and more
assured commercial returns. Japanese corporations have
traditionally committed few, if any, resources to research that
does not contribute directly to development and
commercialization of new products. Greater attention to
high-risk, basic research is essential, however, to Japan's
ade
t
l
.
r
ogy
competitive position in high-techno
A New Research Center
In response to this need--and in an effort to maintain its
traditional bureaucratic role as booster of Japanese
business--MITI has proposed legislation to establish a research
and development center. The center would promote R&D in new
materials, biotechnology, and electronics; encourage domestic
cooperation in research and development among industry,
academia, and the government; and support international
cooperation in research. To accomplish those goals the new
organization would:
o Subsidize research and development of advanced
technologies, using funds from the national budget, the
Japan Development Bank, and the private sector.
o Grant joint patent rights to Japanese enterprises and
foreign participants engaged in cooperative research.
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o Recruit foreign researchers who specialize in advanced,
core technologies.
o Create a data bank for more effective use of technological
data and evaluation of materials.
o Establish testin standards for new materials technologies.
MITI probably hopes the center will enable it to maintain
access to funds in an era of tight national budgets. MITI's
budget from the general account for technology development, for
example, decreased by 6.9 percent in 1984 and by 20 percent over
allocations may be insufficient to support 5th generation and
supercomputer projects. The new center would provide funds for
research, allowing the ministry to keep current projects on
schedule and add new ones.
The US Angle
By calling for foreign participation in the center, MITI
probably hopes to achieve two goals: facilitate continued
acquisition of US and other foreign technology and ward off-
international criticism of the new center. MITI has
traditionally been in the forefront of fostering and
coordinating acquisition of foreign technology for Japanese
firms and clearly sees US participation in research projects as
a means to secure access to technologies being developed in the
United States. In the past, patents secured from research
projects supported with government grants were owned by the
Japanese Government and were not necessarily made available to
foreign firms. MITI probably hopes its proposed formula to
share patents, free of charge, with foreign participants in
joint projects will encourage US participation in the center's
projects.
An experienced participant in the international arena, MITI
recognizes that Washington and other foreign observers may view
the center as offering an unfair advantage to Japanese
industries benefiting from targeted research. To forestall
foreign criticism, MITI will argue that its proposal in support
of R&D differs little from what is being promoted in the United
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States by the National Bureau of Standards or the National
Science Foundation But
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MITI probably will not push for foreign participation
in fact
,
in fields where Japan has an advantage.
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Prospects
Despite MITI's past supremacy in identifying new directions
for Japanese industry, its proposal for an R&D center has fallen
victim to a growing rivalry with a newly important bureaucratic
actor--the Ministry of Posts and Telecommunications (MPT). In a
move to exercise its influence over Japan's information and
communications industries, MPT developed its own proposal for an
R&D n late last Year.
On 16 February the Cabinet approved a draft law
establishing the center and a compromise plan setting general
guidelines for its operation and funding. Under the plan MPT
will supervise activities related to telecommunications,
broadcast, and radio wave technologies, while MITI will direct
work related to mining and manufacturing technologies. Total
A unique element of the proposed funding is Japan
Development Bank participation. The current Japan Development
Bank charter limits loans to capital investments, but in
December 1984 the Finance Ministry submitted legislation
designed to expand the bank's investment function. The new law,
which the Diet will probably approve this spring, allows the use
of Japan Development Bank funds to finance salaries of research
personnel and costs of R&D projects approved by the Ministry of
Finance.
Although the Cabinet has approved the draft law
establishing the consolidated center, battles between MITI and
MPT over details of the budget, staffing patterns, and
ordinances for the center could delay passage of the new law
during the current Diet session. If the law is passed,
continuing differences between the two ministries will have to
be resolved before it can be implemented. Operation of the
center could be further complicated by participation of other
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bureaucratic elements. The prospect of additional funding for
high-technology programs has prompted interest in the new center
lf
d
We
by other ministries, including Health an
ar7_1
l
ture.
Transportation, Construction, and Agricu
Private industry, however, is not particularly enthusiastic
about the new center. Members of Keidanren--Japan's most
influential business organization--are concerned that the
private sector will be expected to fund an increasing share of
the center's budget. Keidanren members already are expected to
provide $12 million for the new center, but they have not been
consulted or made a party to the negotiations on its
establishment. Keidanren has questioned the process by which
joint R&D projects will be selected for investment and
financing, the extent of technology sharing that would be
required in joint research with potential competitors, and the
degree of MITI control over research and patents. Finally,
Keidanren fears that use of Japan Development Bank funds for the
new center will reduce the amount available for other, more
important loan programs.
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Japan: A New Focus on Research
Distribution:
C/OEA/NA/Japan
C/OEA/NA/Korea
C/OEA/Northeast Asia
C/OEA/China Division
C/OEA/Southeast Asia
OEA/Research Director
D/OEA
DDI
Executive
PDB Staff
NIO/EA
C/PES
C/DO/PPS
C/EA
OCR/DSG
NIC Analytic
CPAS/ILS
CPAS/IMC/CB
Group
Donald Gregg, Office of the Vice President
Desaix Anderson, Department of State
William Brooks, Department of State
Cdr. James Auer, Department of Defense
Defense Intelligence Agency
Byron Jackson, Department of Commerce
James Murphy, Office of the United States Trade
Doug Mulholland, Department of the Treasury
National Security Agency
Garnetta Phillips, Department of Energy
DDI/OEA/NA/Japan/
Rep.
(16 April 1985)-
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