Changing Japan

1
Changing Japans National Innovation System and
Its Policy Implications

• Kazuyuki Motohashi
• University of Tokyo RIETI
• http//www.mo.rcast.u-tokyo.ac.jp/

2
Outline of Presentation

• Characterizing Japanese System Large firm
  dominated system
• But it is changing. RIETI Survey on RD
  collaboration
• Econometric analysis on RD collaboration on
  research productivity
• Policy implications for facilitating changes of
  J-NIS toward network model

3
Business Expenditure of RD in Japan
4
Japans national innovation system
5
Changes in Large Firm Dominated System? Possible
Factors

• Intense innovation competition globalization and
  catching up of Korea, Taiwan and China
• Necessity of innovation speed in order to
  appropriate rents from RD
• Importance of scientific knowledge for industrial
  innovation particularly the case for
  bio-pharmaceuticals
• Institutional changes in science sector PRIs and
  national university reforms

6
RIETIs Survey on RD Collaboration

• Firm level survey on external RD collaboration
  business to business networks and university and
  industry linkages
• Data for 2003, 556 samples
• Survey items
• Recent trend of external RD collaboration and
  IPR licensing
• Factors behind RD collaboration decision
• Managing the boundary of firm in RD, internal
  RD vs outsourcing
• Detail results are found as the following site
  http//www.rieti.go.jp/jp/projects/innovation-syst
  em/H15.html

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Japanese system is changing? From RIETI survey
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Management of firms boundary in RD
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Factors behind RD outsourcing
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Motivation and underlining hypotheses for
econometric analysis

• Factors behing external RD collaboration
• Intense innovation competition?
• Increasing complexity of innovation and the role
  of scientific knowledge
• Selection and concentration of RD projects, but
  it needs wider technological scope
• UICs impacts on research and production
  productivity greater impact for small firms
• Less Not-Invented-Here Syndrome
• Focusing on more concrete project (short term
  benefit) and greater pressure for
  commercialization

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Important factors behind RD
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Collaboration and RD strategy
13
Research Productivity by Firm Age
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Research Productivity and RD Project Type
Research Productivity
Scientific Research
New Product Development
Firm Age
15

Implications for J-NIS
Commercialization of new product
Commercialization of new product

Systemic barriers
Large firm
Close to the market
SMEs Start-ups
Product development
Research Lab.

Scope of UIC
Scope of UIC
Scientific knowledge and fundamental science at
universities and PRIs
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Synthesis and policy implications

• Growing trend of RD external collaboration
• Reflecting firms RD strategy for innovation
  speed and wider technological scope
• Research productivity is higher for young and
  small firms as compared to old and large firms
• The role of SMEs and start-ups for Japans NIS
  reform toward network type system
• SMEs and start-ups facilitates systems
  transformation. In addition, it may be beneficial
  for large firms to have strong high-tech startups
• Policies for facilitating network type NIS system
  are important, such as IPR, labor mobility, VC
  finance