tokyo

New heights: Japan is increasing the proportion of gross national product spent on R&D.

Despite Japan's severe economic situation, spending on industrial research and development increased by a record amount in the fiscal year 1997, according to figures released last week by Tokyo's Management and Coordination Agency.

The agency's annual report on R&D expenditure revealls that Japan's overall research spending grew by 4.4 per cent over the 1997 fiscal year, which ended in March. Total spending on R&D reached 3.12 per cent of the nation's gross national product — considerably higher than that of all other large industrialized nations (the United States, for example, spent 2.43 per cent of its gross national product on research in 1996).

The increased expenditure, however, only occurred in ‘developmental costs’, which account for 61.7 per cent of the overall R&D expenditure. In contrast, spending on basic research, which took up 13.8 per cent of total expenditure and is carried out primarily in universities and research institutes, has decreased from last year.

Although industry spent a modest 6.2 per cent on basic research, the figure has grown by 7.4 per cent from the previous fiscal year. But spending on basic research at universities and research institutes fell slightly from last year.

There was increased support for R&D from all sectors, especially from industry, which faced considerable declines in both revenue and profits in 1997. Although such declines are continuing, many companies say their investment in R&D is unlikely to sufffer.

The report is based on a survey of more than 15,000 companies, universities and research institutes across Japan. It estimates total R&D expenditure at 15.7 trillion yen (US$130 billion). Spending on industrial R&D, excluding the software industry, grew by 6.1 per cent, while universities and research institutes showed modest increases of 0.8 and 1.5 per cent, respectively.

Overall private spending on research, which accounts for almost four-fifths of total R&D expenditure, increased by 4.9 per cent, with a marked increase in the electronics, telecommunications and transport sectors.

In contrast, however, public research spending grew by only 1.4 per cent, leading many to doubt whether Japan will reach its goal for the five-year plan for science and technology, launched in 1996, of doubling government spending on science by 2001.

The discrepancy between the figure displayed in the survey and the projected increase of 11.9 per cent in government research funding budgeted for the 1997 fiscal year (see Nature 385, 104; 1997) can be partly explained by generous supplementary budgets for the previous fiscal year.

Although supplementary budgets appeared to add considerably more to overall public research spending, the actual amount spent on research was minimal, and thus the target for the five-year plan is still likely to be out of reach.

A survey carried out by Nihon Keizai Shinbun, a financial daily newspaper, shows that major listed companies in Japan intend to spend even more on R&D in the current fisscal year. Sony plans to increase worldwide R&D spending by ¥350 billion, while the Matsushita Electric Industrial Company projects a 4.1 per cent rise to ¥500 billion.

“Although profit and revenue declines are expected to continue into the current fiscal year, spending on R&D will be given prioority, as we consider research to be the lifeline of the company,” says Akira Kadota, a spokesman for Matsushita. Research in the key areas of digital television systems and large-capacity data-storage devices is likely to see a significant boost this year.

The pharmaceutical industry is also considering more R&D spending. “Whatever the economic situation, we cannot afford to reduce our investment in R&D,” says a spokesman for Eisai, one of Japan's largest pharmaceutical companies.