research and development in japan

A new era for industrial R&D in Japan

Japan’s industrial R&D departments are no longer achieving world-beating performance. At the macro level, the evidence has been clear for some time. The country has slipped in global rankings for productivity growth and intellectual-property generation, even as R&D expenditure remains high. And at the micro level, our research reveals that R&D leaders in Japan have lost confidence in the ability of their organizations to meet the challenges they face.

This article takes a deep dive into the company-level factors that may be hampering the success of industrial R&D in Japan. We have identified five key areas where Japanese companies have the opportunity to close gaps between their current R&D practices and those of today’s highest-performing global R&D organizations.

The rewards could be significant. For example, our experience elsewhere in the world leads us to believe that adopting best-in-class practices can lift R&D productivity by 30 percent. Across Japan’s private sector, that could free up ¥1 to 2 trillion (approximately $9 to $18 billion) a year for reinvestment in fundamental research, innovation, or new product development projects.

R&D challenges in a changing world

Over many decades, Japan has built a strong reputation for delivering technological advances and products that make a difference to people’s lives. Its cars, motorcycles, electronics, medical devices, cameras, and more have defined their categories for several generations.

The country’s manufacturers continue to perform well in many areas of product development, achieving extremely high levels of quality, often through consistent, incremental improvements that have helped leading players sustain competitive advantage for protracted periods of time. Corporate cultures that prize careful planning, consensus-building, and attention to detail have also helped many Japanese firms manage complexity very effectively—especially for products that integrate numerous components and systems with complex interfaces and dependencies, as in the automotive sector.

Still, the world is changing at a vertiginous speed. Technologies that used to be mere buzzwords—digital, advanced analytics, robotics, machine vision, additive manufacturing—are upending one industry after another. Everywhere you look, companies are offering new types of products and services, finding new ways to engage with their customers, and transforming the way they operate internally.

Capturing the resulting opportunities is a central plank of the Japanese government’s strategy to boost growth, in particular with the promotion of a future “Society 5.0” that builds on artificial intelligence, sensors, automation, and other technologies to drive the convergence of physical and cyber spaces. In addition, Prime Minister Shinzo Abe’s “Abenomics 2.0” program, adopted in 2017, aims to “accelerate our efforts towards comprehensive reforms in three vital areas: 1) boosting productivity, 2) driving innovation and trade, and 3) energizing corporate activities.” The government’s policy document cites “Applying the innovations created through the Fourth Industrial Revolution across all industries and all aspects of daily life” as a major driver of demand and investment in the coming years.

In this highly dynamic environment, the approaches that helped Japanese companies achieve their leading positions may no longer be sufficient. Japanese executives have sensed the change for some time: for example, in a 2016 global survey that our colleagues conducted of executives with research and product development responsibilities, only 14 percent of Japanese respondents said they felt their organizations were sufficiently prepared for the impact of the megatrends reshaping product development. More recently, a McKinsey survey of attitudes toward Industry 4.0 technologies found that Japanese executives were less optimistic than their counterparts in other parts of the world about these new approaches’ potential to improve time-to-market, manufacturing flexibility, or organizational agility (Exhibit 1).

The R&D performance gap

Japanese companies understand the vital importance of research and product development. At over 3 percent of GDP according to the World Bank, Japan’s annual level of R&D expenditure is one of the highest in the world. Yet over the past two decades, the country has struggled to turn that effort into tangible results. In 2000, Japanese companies and research institutions accounted for more than 30 percent of the patents awarded every year (Exhibit 2). The country’s overall share has now fallen to 10 percent. By industry, the picture is a little more nuanced. The country retains its patent-leadership position in semiconductor technology, for example, and its share of medical-technology patents has risen slightly. However, it has been overtaken by others—notably China—in a number of key sectors, including audiovisual technology, computing, and telecommunications.

Effective R&D investment is considered to be one important driver of productivity growth, but the relationship between R&D expenditure and productivity in Japanese companies has weakened. Since 1996, total factor-productivity growth in Japan (a measure of productivity that accounts for differences in both labor and capital inputs) has lagged behind its main industrial peers (Exhibit 3).

According to research by the Bank of Japan (BoJ), while US companies with the highest level of R&D expenditure achieve faster productivity growth than their rivals, Japanese companies do not see the same payback for their R&D investments. 1 Koji Nakamura, Sohei Kaihatsu, and Tomoyuki Yagi, Productivity improvement and economic growth , Bank of Japan, May 2018, boj.or.jp. To explain the reasons for this gap, the authors of the BoJ study point to three factors common to much Japanese R&D activity: a focus on incremental improvement over the creation of innovative products, the creation of products that do not appropriately meet customer needs, and low levels of collaborative innovation with outside companies and research institutions.

Where could Japan do better?

High-performing industrial R&D departments aim to beat their competitors across three primary dimensions. Higher productivity means they do more useful R&D work with the resources available to them. A shorter time-to-market allows them to capture early-mover competitive advantage and reduces the lag between R&D investment and financial return. And with a higher rate of innovation, companies generate additional value for customers by turning more—and better—ideas into products and services.

In practice, the three dimensions are interrelated. Higher productivity allows an organization to accelerate its R&D efforts, for example, helping it to reach its time-to-market goals. A company that is good at identifying valuable ideas, and abandoning underperforming ones, will achieve higher returns when more of its projects succeed in the market. Achieving excellence in any or all of these dimensions requires organizations to get multiple things right, from the way they use data and digital tools in product development activities to their ability to attract and retain talent.

In 2019, we conducted a survey with chief technology officers (CTOs) and heads of R&D at 18 major Japanese companies, in sectors including automotive, industrial, energy and materials, telecoms and technology, healthcare, and research and academia. We asked them to rate and comment on the current performance of their organizations across of a range of factors that are associated with strong R&D performance.

This survey, combined with additional qualitative data gathered through in-depth interviews, roundtable discussions with Japanese CTOs, and our work with R&D leaders in the country, helped us to identify five main areas in which Japanese R&D organizations are struggling to match the practices and performance of today’s global best-in-class companies (Exhibit 4).

Digital and analytics

The challenge of digitization is not unique to Japanese companies. Around the world, R&D departments are trying to employ new digital tools in an effort to streamline their workflows and facilitate efficient information exchange among teams, business functions, and external stakeholders. But success has proved elusive: when our colleagues at the McKinsey Global institute asked more than 2,000 senior executives about their digital initiatives, less than 15 percent of respondents said their digital transformation programs had led to sustained performance improvements.

In our survey, only 45 percent of Japanese R&D executives felt their organizations had a clear strategy and roadmap for the digitization of their internal operations. In interviews, respondents cited challenges that included the need to integrate multiple legacy systems—many of which were bespoke or highly customized in the past but are poorly supported today—along with difficulties persuading staff to adopt new digital processes and working methods, and a lack of good data to support decision-making.

Agility and speed

Respondents to our survey were most pessimistic about matters of agility and speed. Only 23 percent of them thought that their companies were good at outsprinting their competitors to be first into new markets and segments. And less than 30 percent said their organizations had successfully adopted the agile working methods that have become standard in software engineering over the past two decades, and which leading companies are now starting to adopt in hardware engineering too.

Why have Japanese companies been slow to embrace agile? The approach owes much to the incremental, continuous-improvement philosophy that underpins lean management, as pioneered by Toyota and widely used by the country’s manufacturers. It is possible, however, that the informal, flexible, and continually evolving working structures adopted by agile teams are a poor fit with the culture of many Japanese firms, where organizations tend to be hierarchical and emphasize detailed planning prior to execution. In interviews, executives also cited challenges around the use of agile in projects with a significant hardware element, noting the need to freeze specifications early enough to allow products to transition smoothly from prototype to high-volume production.

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Capabilities and talent.

Japan faces a looming talent crisis. Only 28 percent of the respondents to our survey thought their companies were capable of attracting and retaining the best engineering talent available. Only 24 percent of those working in a multinational organization said their companies would pick Japan over other countries as a preferred location for R&D activities.

Japan’s talent challenges are multifaceted (Exhibit 5). Part of the problem is demographic: An aging population means the number of people of working age is expected to decline from 75 million in 2018 to 69 million in 2030. Engineers and skilled R&D staff take years to develop their skills, making it difficult for companies to replace senior R&D staff as they retire.

Changes in technology are also playing a role. The country already has an estimated shortage of 240,000 skilled IT professionals, and that number is expected to rise to almost 600,000 by 2030. In interviews, Japanese R&D executives told us that despite changes to their HR and hiring strategies, they were struggling to fill roles in key areas such as software engineering and project management.

Rising demand for digital skills is also having knock-on effects elsewhere. One executive we spoke to noted that high-potential graduates are increasingly attracted to fashionable fields such as AI, making it harder to fill more traditional mechanical or electronics engineering roles.

Meanwhile, Japan seems poorly positioned to compete for talent on a global stage. The country ranks 20th among OECD countries in attractiveness for highly skilled talent. And despite efforts to change its business culture, average working hours in Japan are still higher than the OECD average.

Japan already has an estimated shortage of 240,000 skilled IT professionals

Effectiveness and efficiency

Only one-third of respondents believed that their organizations were actively managing their R&D project portfolios to maximize return on investment (RoI). Some respondents suggested that this was down to a lack of good data for making RoI decisions. Others noted that decision-making was complicated by factors beyond RoI, such as the need to offer products in strategically important niches, or to meet requests from key customers.

Whatever the reason, the outcomes of suboptimal portfolio management tend to be similar. Companies struggle to prioritize R&D activities or allocate resources effectively. In many companies’ portfolios, a small minority of the products is responsible for the overwhelming majority of the profits. And some respondents feared that their R&D investment decisions tended to prioritize short-term performance over long-term health, spending heavily in the departments and product categories that are profitable today while underfunding those that will become more important in the future.

Two-thirds of respondents also felt that their organizations lacked the means to steer and manage the performance of ongoing R&D projects. Without mechanisms such as an effective set of KPIs to measure project performance, R&D efforts can easily take too long, cost too much, and return too little. One respondent noted that the culture of his organization made it easier to commit to new large-scale investments than to exit existing ones that underperformed.

Ecosystem building

Innovation—meaning the identification and commercial exploitation of new ideas—is an essential R&D goal at the overwhelming majority of companies. But respondents were pessimistic about their organizations’ ability to deliver on this front. Only 30 percent of executives thought their companies created a sufficient number of innovative new products.

Moreover, the era of purely in-house innovation is over. Most of today’s innovations are collaborative efforts involving a network of stakeholders, from academic research departments and start-ups to specialist engineering consultancies. Leading companies therefore put significant emphasis on the creation of such networks as a critical growth driver. And while surveyed executives were more positive on this point than about their organizations’ innovation efforts in general, only 47 percent felt that their companies were sufficiently proactive in forming innovation ecosystems, or sufficiently effective at making use of them.

In interviews, executives cited their organization’s difficulty in finding suitable collaborators. Although several respondents noted that their organizations had recently launched innovation labs in technology hotspots such as Israel or Silicon Valley, the relationships fostered in these units had yet to translate into commercial products. Other respondents suggested that collaborative efforts were hampered by lengthy and unwieldy processes needed to evaluate potential partners and set up the necessary agreements.

The way forward

The challenges outlined above are holding Japanese R&D back, but they are by no means insoluble. Companies can look around the world to find examples of best practice in each of the five major areas. Better still, Japanese firms already have many characteristics that position them well to take the leap to a new level of R&D performance. In the following sections, we look at some solutions for closing the gap to global top performing R&D organizations.

Transforming R&D with digital and analytics

New digital approaches can help companies address many of their R&D challenges. Digital tools—from advanced simulation systems to generative design algorithms—make R&D activities more efficient and more effective. Digital communication technologies aid information exchange among teams, functions, and collaborating organizations. Data and analytics provide the fact base needed for better portfolio and resource-allocation decisions, as well as for understanding and addressing the main bottlenecks to engineering productivity or time-to-market.

One luxury automotive manufacturer applied advanced analytics to optimize product development time. Its first step was to build a data lake composed of several existing and diverse sources of data, such as R&D project plans, staff timesheets, CAD design versions, and email and calendar metadata. The second step was to build an analytics model that could not only prove (or disprove) hypotheses on which levers mattered for development-time optimization—but could also quantify each lever’s impact.

The effort enabled the company to cut development time by approximately 100 days. Many of the levers that drove this improvement would have been difficult to design without advanced-analytics support in identifying the discrete problems the company needed to address. For example, analytics revealed that the digital files containing the CAD designs for each part of the car were frequently modified after the stage gate where they should have been frozen—and that this phenomenon correlated strongly to project delays. Analysis of email traffic also detected important gaps in communication among different engineering groups.

Digitizing an R&D organization is a significant challenge in its own right, however. Many companies have learned to their cost that piecemeal or ill-thought-out approaches can struggle to deliver promised benefits. A successful digital transformation must be a well-structured, multidimensional effort.

• The first step is to establish a vision and roadmap by identifying the main issues affecting R&D’s performance, and prioritizing the digital and analytics use cases that can best address those issues. This effort should encompass the R&D function as a whole: the full potential of digital R&D will not be reached by addressing only one or two use cases.
• Second, the organization should shift to a state-of-the-art data and technology platform . A fast-paced, high-impact rollout of digital and analytics use cases in R&D requires several technology enablers, such as cloud infrastructure and new specialized tools. Companies may therefore need a new class of external partners that can help them get a head start on these requirements.
• Third, the R&D digital transformation requires new capabilities in areas such as advanced analytics, software development, or user-experience design. The organization will need data engineers develop to more efficient IT systems, such as databases, fast data processing, or new, more reliable data sources. It will require the data scientists who use those systems to unlock new insights or new knowledge from the data by developing analytical techniques and efficient algorithms. Critically, projects also require people whose skills bridge these different groups. These “translators” frame business problems in a way that digital specialists understand, and use their domain knowledge to evaluate and continuously refine the resulting digital solutions. In Japan, many companies have traditionally outsourced IT responsibility to external vendors, leaving significant in-house technology capability gaps. Acquiring and nurturing the necessary digital skills should be a high priority for companies in the coming years.

Finally, a digital transformation can only be successful with a significantly different and more agile operating model, described below.

Embracing agility in the R&D operating model

The agile methodology began as a reaction to the slow, inflexible, and error-prone methods that once characterized big software-engineering projects. Since then, the approach has been expanded into a broader organizational philosophy. An agile organization is one that is able to quickly reconfigure its strategy, resources, and organization to succeed in a rapidly changing environment—without losing efficiency.

To outsiders, the speed and relative informality of agile can give the impression that work is chaotic or poorly controlled. In practice, however, agile organizations combine dynamic capabilities with a backbone of stable, standardized processes, structures, and systems that ensure quality and productivity.

In agile environments, stability start at the top, with actions and tasks cascading from a clearly defined strategic direction or “north star.” This approach is one that will feel very familiar to Japanese organizations, having clear parallels with hoshin kanri, or “policy deployment”—an approach that underpins the well-established lean and total quality management philosophies. Likewise, agile’ s emphasis on process standardization and repeatability owes much to lean working methods.

How generative design could reshape the future of product development

For Japanese companies, the introduction of agility into the R&D function can build on these traditional strengths, adding some new elements while tweaking others. One key change involves team structures. Agile uses small, cross-functional teams of eight to ten people, which stay together for a meaningful period of time. Another is the pace of work and review cycles. Agile “sprints” are short, typically two weeks in software development, longer in hardware projects, and they culminate in a rapid review process that sets the direction for the next package of work. Teams move as quickly as possible to a minimum viable product, which is frequently tested with customers and improved over time (Exhibit 6). That approach contrasts sharply with normal practice in Japan today, where progress is evaluated at a few major quality gates.

Agile also requires a more collaborative form of leadership. Leaders in a traditional R&D organization define detailed project plans, communicate them top-down to the frontline engineers, and constantly check that everyone is following their respective assignments. Leaders in an agile R&D organization focus on empowering and coaching the frontline engineers, as well as on removing the obstacles that may impair progress in product development (Exhibit 7). For traditionally hierarchical Japanese R&D organizations, this evolution will demand a significant shift in leadership style.

Agile engineering approaches have a positive impact on multiple areas of R&D performance, including time-to-market, productivity, quality, and customer satisfaction. They also lead to significant improvements in employee satisfaction, as R&D engineers feel much more trusted and accountable for their work assignments.

One global leader in the semiconductor industry transformed its full R&D organization into an agile model. The top R&D managers were initially skeptical about the transformation, with many questions about its real benefits. What finally convinced them, however, was the impact of the new approach on employee satisfaction and accountability. Given the opportunity to play an active role in setting their own goals and timescales for R&D tasks, engineers were much more willing to take ownership of them. For the first time, engineers would confidently step forward in planning meetings and commit to a certain scope of delivery for the next development period.

Some executives in our survey questioned the applicability of agile methods to the development of hardware products. In particular, managers often worry that R&D teams working on complex hardware will be unable to generate meaningful outputs at the end of every two to four weeks, which is one of the pillars of the agile methodology.

Several elements come into play to address this concern. First, those very frequent outputs can come in a variety of value-adding forms: for example, a new version of a CAD design for a certain part, or the conclusion of a technology-feasibility study, rather than exclusively as physical artifacts. Second, R&D organizations can now use new technologies, such as 3D-printing systems, to accelerate hardware prototyping. Third, the adoption of agile in hardware engineering is often part of a larger systematic effort to increase digitization of the product development process, such as through the use of simulation technologies and other virtual testing and validation methods. A defense manufacturer provides prime example, applying agile methodologies in everything from software development and hardware engineering to fuselage design in the development of a new aircraft at a fraction of the development cost of other products in the segment.

Several decisions by the manufacturer were especially important. One was to define a modular architecture for the new aircraft and to align the organizational design accordingly, enabling each team to have clear responsibilities and be reasonably independent from each other. Another was investment in advanced virtual simulators of the aircraft, which provided every team with the ability to evaluate their latest design choices in short feedback loops. The company also located its test pilots at the same site as the engineering teams, promoting a tight collaboration between pilots and engineers, and allowing feedback to be provided at the end of every development sprint.

Redefining the employee value proposition

Competition for talent is rising worldwide, driven by factors ranging from demographic shifts to the growing need for staff with the specialized digital-technology skills. Companies with the most advanced talent-management systems treat talent like capital. They think hard about allocation, such as by identifying the 50 or so roles that will create the most future value, or by supporting enterprise-wide people agility and the purposeful movement of personnel. They use data to evaluate performance and aid recruitment, development, and progression.

In Japan, with its rapidly aging population, the need to increase diversity in recruitment is particularly acute. Against this background, companies’ traditional employee value proposition (EVP), with an emphasis on job security and seniority-based progression, is no longer sufficient to attract and retain the best talent.

That’s especially true for important groups of staff such as millennials, who tend to prioritize meaningful work, personal growth and development, and a supportive environment. To create a more attractive working environment, companies will need to define a holistic EVP covering four main dimensions: great company (e.g., culture, values, reputation, lifestyle), great people (senior managers as true role models, respectful interactions, praise and recognition), great job (for example by offering additional flexibility, rotational assignments, mentoring, and opportunities for entrepreneurship), and great rewards (both financial and non-financial).

Exhibit 8 shows how a major software company identified the needs and preferences of the type of people it wanted to attract and retain at a global level, and designed its EVP accordingly.

There are also opportunities for Japanese companies to improve the way they develop and manage talent. The absence of such elements as formal job descriptions, predefined career paths, and performance reviews, makes it harder for companies to understand the distribution of specific skills across their organizations. Building detailed role profiles, including both technical capabilities and critical soft skills such as leadership and problem solving, helps companies tailor staff-development activities to fill capability gaps and develop people for future roles. Designing compelling career paths, along with a transparent, fact-based performance review system, helps R&D personnel understand clearly what is expected from them and what career progression they can achieve, motivating them to perform at their best.

A step-change in effectiveness and efficiency

The complexity and uncertainty inherent in product development activities means there is no silver-bullet solution to guarantee the effectiveness of R&D investments. Nevertheless, leading companies apply a set of building blocks that give them the best possible chance of making good decisions about how and where they focus their resources. First, they develop and maintain a robust fact-base to support decision-making processes. Then, they continually test and adapt their R&D plans on the basis of those facts, using a well-structured, cross-functional governance to fine-tune their portfolios and project plans, and robust performance management to track progress.

One consumer packaged goods company in the Asia-Pacific region was struggling to deliver on its roadmap of product development projects. Time-to-market for new products was twice as long as that of industry competitors, and the R&D team was significantly fragmented with each employee handling anywhere between three and seven projects at a time. The company’s management decided to run a thorough analysis of the portfolio, looking at how much budget was going to be consumed by each product development project, and what net present value (NPV) would be generated by those investments.

The results were striking. More than 50 percent of the active projects offered an unacceptably low return on investment. Deprioritizing those projects released around 20 percent of the organization’s R&D budget, which was then reinvested to accelerate the remaining high-value projects, as well as to resource new high-potential innovations.

The best companies also ensure that everyone in the R&D organization understands the part they need to play and is able to operate efficiently. They clearly define the roles and responsibilities of teams and individuals within the organization and create a strong product management function with ultimate accountability for the commercial success of each product.

Rigorous performance management can transform R&D productivity. One major automotive company introduced a suite of seven KPIs to measure the cost, quality, and lead-time performance of all its engineering teams. On the basis of these metrics, it identified the highest-performing teams in its R&D organization, which it studied to isolate the practices that underpinned their superior results.

One example of those best practices was the creation of a central, dedicated team workspace, where all the engineers working on a project were co-located. This facilitated collaboration and ensured all team members could access visual project-status boards pinned up on whiteboards and walls. Another was the cultivation of deep relationships with the team’s external and internal customers, which provided engineers with a much more concrete project-scope definition.

The company then coached its lower-performing teams, helping them understand and adopt the best practices. Closing the gap between top-performing teams and the rest was the key to a 20 percent overall improvement in R&D productivity—a significant achievement in an organization with around 15,000 engineers and a past record of strong R&D performance.

Most Japanese companies already have many of the basic building blocks of R&D productivity in place. A tradition of careful planning and structured, consensual decision-making gives them the basis for an effective R&D governance system, for example. But they could improve those planning and decision-making activities by bringing more data to the table. Access to a comprehensive, up-to-date fact base gives companies the best chance of avoiding bias and making the right choices. This is an area where digitization has significant potential to deliver value.

Another major opportunity lies in the development of the product manager role, which is still uncommon in Japanese organizations. In many high-performing companies around the world, the product manager has become a pivotal individual. Acting as a “mini CEO” for a product, the product manager takes ultimate responsibility for product’s commercial and technical success.

From closed innovation to open ecosystems

Organizations seeking to accelerate their rate of innovation can pursue a multitude of different strategies, from transforming their internal R&D function to acquiring organizations with complementary assets (Exhibit 9). Increasingly, companies around the world are recognizing that innovation is most effective when it is a collaborative activity. Accessing ideas, talent, and technologies from outside the organization can boost the speed, value, and success rate of innovation efforts.

In some industries, collaborative innovation has become the norm. Take the pharmaceuticals sector. Organizations that partner with external players during the development of new drugs have more than twice the success rate of those that go it alone. In the US and Europe, pharmaceutical companies are moving beyond the sector’s traditional collaboration approaches, such as in-licensing or acquiring assets. Instead, they are taking actively engaging with partners to create and shape their own innovation ecosystems. In Japan, however, uptake of such approaches has been slow. Compared to overseas rivals, for example, Japanese pharma companies have out-licensed fewer assets to biotech companies, with only three such deals recorded between 2009 and 2018, in contrast to more than 30 in Europe and more than 100 in the US.

Japanese industry also lags many of its overseas counterparts in the adoption of organizational entities designed to actively develop ecosystems of new potential partners. For example, while some companies have developed corporate venture-capital arms to provide funding to promising startups, this activity tends to be focused in overseas innovation, rather than in Japan.

There are many other ways to create innovation ecosystems. Support in kind, knowhow sharing, and publicity opportunities can be equally valuable ways to help potential innovation partners. German automaker Daimler, for example, has established a “Startup Autobahn” that provides small technology companies with workspaces, tools and access to key personnel. In the pharmaceutical sector, Johnson & Johnson’s JLabs operate in a similar way, with participating companies receiving access to elements of the company’s extensive library of novel compounds.

Another effective way of creating new products and services is the use of “innovation garages.” Some of the world’s most successful corporations, especially in the technology industry, were started in physical garages. Innovation garages attempt to emulate the same environment and culture by building on the latest concepts around design thinking and agile: a cross-functional, co-located team; extensive ethnographic research (to understand and map customer journeys, needs and preferences); co-creation with consumers, suppliers and other industry stakeholders; and workshops that generate new ideas based on the collision of customer, business, and technology insights.

A large Japanese producer of packaged foods deployed an innovation garage to develop new product prototypes, each composed of brand definition, food form, packaging and flavor profile, and all of them applying a specific food-processing technology that the company owned. Over the course of just five weeks, the innovation Garage went through ethnographic research, collision workshops, development of product and brand concepts, testing and refinement with customers. The compressed effort generated five new brand concepts, catering to different but well-defined customer segments and needs, along with several product prototypes for each of the brands.

Advanced economies depend on high-performing R&D capabilities to sustain growth and competitive advantage. Yet R&D excellence is a complex, multidimensional topic. While the goals are simple—to bring more and better ideas to market faster than competitors—achieving them requires companies to excel in many areas, from process and organizational design to digitization and talent management. Around the world, companies face significant challenges driving by the need to update their research and product development capabilities in the face of rapid technological and commercial change.

In Japan, these challenges feel all the more acute as the country has seen its traditional R&D leadership position eroded in recent years. We believe, however, that the country’s long industrial heritage is a major asset. Japanese companies have already mastered many of the components of modern, high performing R&D. If the sector can build on its traditional strengths by incorporating new tools, organization approaches, and practices, it will be well positioned to enter the new R&D era with confidence.

The starting point in any transformation of R&D performance is a detailed and unbiased understanding of the organization’s current strengths and development opportunities. Which facts and hard data do we use to define our R&D portfolio? How often are we surprised with unexpected delays in new product launch? What are the top five issues slowing down our R&D projects? How many R&D tasks have we already optimized with digital and analytics? CTOs and heads of R&D must know the answers to these and other questions if they are to drive their engineering organizations to become truly world-class.

Download “A new era for industrial R&D in Japan” in Japanese  (PDF–3MB) or in English  (PDF–1MB).

Shun Chokki is an associate partner in McKinsey’s Tokyo office, where Hiroshi Odawara and André Rocha are partners, Christoph Sandler is an associate partner, and Takuya Tsuda is an associate.

The authors wish to thank Kanako Hayashi, Christian Johnson, Masafumi Kawasaki, Hinako Kitaura, Dominik Luczak, Robert Mathis, Minako Muragaki, Kenji Nabeshima, Yoshito Nogi, Takehito Sumikawa, Ryoji Tachibana, Masaru Tsuchiya, David Veitch, Christina Wang, Jonathan Ward, Takuya Yamashina, Bo Yang, and many other colleagues across different support functions for their contributions to this article.

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• IIntegrated Innovation Strategy 2022: Making Great Strides Toward Society 5.0

Linking Japan and the World

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Integrated Innovation Strategy 2022: Making Great Strides Toward Society 5.0

June 30, 2022

Science, technology, and innovation are growing increasingly vital not only for sustaining economic growth, but for finding solutions to social problems and ensuring safety and security. Here are the three pillars of Japan’s “Integrated Innovation Strategy 2022,” which lays out the direction for such policies and the priority measures to be taken.

At the meeting of the Council for Science, Technology and Innovation in June, PM Kishida received an explanation while observing a model of a quantum computer. He expressed his determination to collaborate with other nations and draw focused investment from the public and private sectors to accelerate initiatives for the social implementation and industrialization of quantum technology.

  　As the situation in Ukraine, infectious disease, climate change, and other unpredictable crises and unprecedented social challenges sway the world, developments in science, technology, and innovation have become not only the drivers of economic growth, but also crucial lifelines for countries to solve social problems and ensure the safety and security of their citizens. In the 6th Science, Technology and Innovation Basic Plan, Japan set the goal of reaching 120 trillion yen in R&D investment between the public and private sector over the five years from fiscal 2021, aiming to realize Society 5.0—a model future society proposed by the Japanese government, in which both economic growth and the resolution of social issues can be achieved by making full use of advanced technologies. This June, the Kishida administration released the Integrated Innovation Strategy 2022, which outlines the process for achieving this goal.   

Society 5.0

Society 5.0 refers to the new society that follows the hunting society (Society 1.0), agricultural society (Society 2.0), industrial society (Society 3.0) and information society (Society 4.0). It is defined as “a human-centered society that balances economic advancement with the resolution of social problems by a system that highly integrates cyberspace and physical space.” It was first proposed in 2016 by Japan as the future society it should aspire to be. Furthermore, Society 5.0 was redefined in 2021 as “a sustainable and resilient society that protects the safety and security of the people and one that realizes the well-being of individuals.” Key to its realization is the advancement of science, technology, and innovation. Incorporating AI, quantum technology, IoT, and other cutting-edge technologies in all industries and social activities, and creating new value from innovation, will both achieve economic development and find solutions to social problems in parallel.

  　The strategy has three fundamental pillars. The first is strengthening research capabilities and developing human resources. Utilizing a 10-trillion-yen University Endowment Fund, long-term support will be provided to realize world-class research universities that generate outstanding results and foster talented individuals who can lead society. Inquisitive minds and critical thinking, essential for the age of rapid technological innovation, will be cultivated via efforts such as enhancing STEAM education—cross-sectional education prioritizing science, technology, engineering, and mathematics, with the addition of the arts—in elementary, middle, and high schools, and providing opportunities to experience high-level pursuits at universities and other institutes for higher learning. Through such initiatives, “knowledge”—a source of innovation and value creation for future generations—will be continuously created. 　The second pillar is the strategic promotion of advanced and emerging technology. R&D in a wide range of technologies that can bring about transformational change, such as AI and quantum technology, will be advanced strategically to accelerate their practical application. For AI technology, deep learning is positioned as a priority area since its effective utilization is anticipated in a broad range of fields. Additionally, the creation of digital twins and applications for sustainability will be pursued to allow agile responses to impending crises, such as large-scale earthquakes and increasingly torrential rainfall. Regarding quantum technology, new targets of having 10 million users in Japan by 2030, achieving production on the scale of 50 trillion yen, and creating quantum unicorn startups have been set. 　To that end, innovation hubs for industry, academia, and government collaboration at all levels from basic research to social implementation will be strengthened, and utilization of such cutting-edge technologies will be promoted. Moreover, centering on the launch of programs that provide powerful support for such development, bold investment in advanced science and technology will nurture world-leading technologies. 　With research capabilities and the seeds of technology developed through these two pillars, the creation of an innovation ecosystem—the third pillar—will be a game-changer in realizing the future society. By reinforcing initiatives for the advancement of the venture capital market, a stronger mechanism for the continuous birth and growth of startups that lead to innovation will be developed. In addition, public-private R&D investment will be expanded through measures such as R&D tax incentives and the Japanese SBIR (Small Business Innovation Research) program. While leading to new growth, the rewards will be given back to individual citizens and society as a whole in the forms of fulfilling diverse well-being needs and solving social issues. 　The integration of these three pillars is essential to realizing Society 5.0. The complex social problems confronting the world today are difficult to overcome through sector-specific technologies and individual policies alone. By enhancing overall policy integration, new value will be created to sustain economic growth and solve global-scale issues, and the fruits of such efforts will be distributed to citizens, society, and the world. Japan will make strong strides toward its goal of becoming a science and technology nation for the new age that will achieve this virtuous cycle of growth and distribution.   > Find out more about Integrated Innovation Strategy 2022

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Summary of Results (2020)

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Results of the Survey of Research and Development

R&d expenditure.

Japan's total expenditure on R&D during fiscal year (FY) 2019 stood at 19.58 trillion yen, a 0.3 percent increase from the previous fiscal year. It has increased for three consecutive years, the highest ever.

Expenditure on R&D as a percentage of GDP was 3.50 percent, a 0.01 percentage point decrease from the previous fiscal year.

R&D expenditure of business enterprises stood at 14,212 billion yen, with a 0.1 percent decrease from the previous year, that of non-profit institutions and public organizations stood at 1,643 billion yen, with a 1.7 percent increase from the previous year, and that of universities and colleges stood at 3,720 billion yen, with a 1.1 percent increase from the previous year.

Within the business enterprises sector in FY 2019, "Transportation equipment" showed the highest figure among all industries, at 3,179 billion yen.

R&D Personnel

As of 31 March 2020, the total number of researchers is 881,000, a 0.7 percent increase from the previous year. It has increased for four consecutive years,the highest ever. The number of female researchers is 158,900 and accounts for 16.9 percent of the total researchers. This figure is the highest ever.

Technology Balance of Payments

With regard to technology balance of payments by business enterprises, receipts from technology exports stood at 3.66 trillion yen, a decrease of 5.4 percent from the previous fiscal year. It has decreased for two consecutive years. Payments from technology imports stood at 544 billion yen, a decrease of 8.0 percent compared with the previous fiscal year. It has decreased for two consecutive years. The technology balance of payments (receipts from technology exports minus payments from technology imports) stood at 3.12 trillion yen, an decrease of 4.9 percent from the previous fiscal year. It has decreased for the first time in three years.

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Moonshot Research and Development Program

• Japanese( 日本語 )

The Moonshot Research and Development Program sets ambitious goals to attract people, and promotes challenging R&D projects with the aim of resolving difficult societal issues while bringing together the wisdom of researchers from all over the world.

About the Moonshot R&D Program

Moonshot goals, r&d projects, international collaboration, past events, moonshot ambassador.

• Joint research with researchers and technical demonstrations

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• Japan Science and Technology Agency (JST) - Moonshot Research and Development
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• Research and Development

RESEARCH AND DEVELOPMENT

Research institute for global change (rigc).

We will promote research and development towards solution of global issues by understanding the current status and projecting the future of the global change.

To contribute to the resolution of global issues such as climate change, ocean acidification, and plastic pollution, we will lead international projects to conduct integrated research on oceans at all depths and on the close interactions of oceans with the atmosphere and land masses. We will apply the data obtained from this research to formulate both short-term seasonal predictions and mid- to long-term predictions covering centuries. We will actively disseminate our research results through international frameworks such as the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement, the UNESCO Intergovernmental Oceanographic Commission (IOC), the Intergovernmental Panel on Climate Change (IPCC), and the Arctic Council (AC). We will contribute to the achievement of the United Nations Sustainable Development Goals (SDGs), in particular Goal 13 (climate action) and Goal 14 (life below water), as well as Japanese government policies.

We will maintain our conventional ocean observation network while at the same time working to develop a new optimized observing system that integrates various observation platforms, including research vessels, drifting floats, and moored systems. To understand the physical and chemical states of the ocean. We also plan for automate observation through instruments.

The impacts of global warming are currently most conspicuous in the Arctic region, and we will conduct observation and prediction research there to better understand interactions between oceans and sea ice and other aspects of Arctic climate systems, and help reduce prediction uncertainties. For this purpose will also develop underwater drones and other new observation technologies for observing sea ice.

Based on oceanic and atmospheric observations, lab experiment and model simulations, we understand and evaluate the impacts of ocean acidification, warming, hypoxia, and environmental pollution on changes and processes of ecosystems/geochemistry linking Earth surface sub systems (ocean/atmosphere/land systems) to reveal their interactions with human activities.

We work on further sophistication of the simulation models that have been developing at JAMSTEC to better project the environment on various temporal and spatial scales. We promote collaborations among different models by taking the best of them in different ways.

In order to evaluate the impacts of human activities on the marine ecosystems, we will seek to understand the changes in marine biodiversity. Particularly to fill the current data and knowledge gaps in the deep-sea ecosystems, we will develop analytical methods for environmental DNA and measuring methods of pollutants(microplastics). Through these approaches, we aim to establish and upgrade the integrated environmental impacts assessment measures.

Director-General

Shuhei Masuda

Organization

Research institute for marine resources utilization.

Understanding material circulation and origin of resources in oceans to ensure sustainable use

Our primary goal is to understand the formation processes of marine resources, including organisms, minerals, and energy resources found in the ocean. In addition to conducting the research that contributes to the sustainable use of oceans, we will seek collaborations with other institutions and industries through providing marine samples and sharing data, technologies, and scientific knowledge to accelerate the utility of the ocean.

We will endeavor to develop a precise understanding of oceanic material circulation through conducting chemical and molecular biological analyses of marine biological, geological, and other specimens, identifying the environmental, physiological, and evolutionary factors controlling circulation, and developing a quantitative understanding of marine bio-resources.

We have sought to shed light on the processes by which submarine resources are formed by conducting  eld research, collecting and analyzing specimens, analyzing data, and developing numerical models. These e orts have shown that both physical and chemical processes influence the concentration of elements in complex ways over a broad spatiotemporal scale. We will conduct research and development using these research methods to identify correlations between chemical and physical processes and to apply the knowledge gained to build submarine resource formation models that would enable us to theoretically pinpoint promising marine locations.

Naohiko Ohkouchi

Research Institute for Marine Geodynamics (IMG)

Illuminating Earthquakes and Volcanic Activities for Disaster Mitigation

To reveal earthquakes and volcanic activities, the scientists and staff of the Research Institute for Marine Geodynamics will conduct large-scale observations around Japan and the western Pacific using JAMSTEC vessels and various state-of-the-art marine exploration technologies. In particular we will conduct geophysical-geological surveys in the Nankal Trough, Japan Trench, Kuril Trench, and other tectonically active zones that may be subject to a forthcoming megathrust earthquake or volcanic eruption. Moreover, we will develop, improve, and upgrade the methods and systems to acquire and process data. Furthermore, in line with SDGs 11 (sustainable cities and communities), our institute will contribute to disaster mitigation by sharing the scientific knowledge we have gained with society. We will also endeavor to conduct observational surveys and apply our research results in countries that are vulnerable to frequent natural disasters such as earthquakes, tsunamis, and volcanic activities.

Compared with onshore earthquakes, we still know very little about offshore events. For improve this we develop and deploy a real-time observation system of seafloor crustal deformation and seismic activity. Focusing on regions having high urgency and importance as the presumed source area of large earthquakes and tsunamis, we conduct seismic surveys and observations to investigate three-dimensional crustal structure, seismic activity, the physical properties of faults, paleoseismic record, and other factors. The surveys and observations data are broadly shared with relevant institutes and universities.

To contribute monitoring of the current status and long-term evaluation of seismogenic zones, we will accumulate and disseminate knowledge that promotes our understanding of earthquake generation mechanisms and our ability to grasp and forecast the status of the inter plate locking and slipping based on the latest data obtained from observations and research on seismogenic zones.

Submarine volcanic eruptions have caused sudden, large-scale disasters.As it have huge impact on the human society and the global environment. So to address these issues, we will conduct ocean drilling surveys using our Deep-sea Scientific Drilling Vessel CHIKYU and investigate the internal structures of the Earth that control volcanic activity.

Shigeaki Ono

Research Institute for Value-Added-Information Generation (VAiG)

Probing unknown causal relationships hidden in Earth systems

To identify interrelationships between changes in Earth systems and human activity, we will develop methodologies for integrating the vast amounts of data generated by JAMSTEC R&D activities, and mathematical analysis methods for efficiently processing the resulting integrated data. We will also support the resolution of policy issues and development of sustainable socioeconomic systems by generating and disseminating information tailored to various needs. We will additionally endeavor to expand this initiative to encompass other relevant organizations both in Japan and overseas so as to build a framework for generating even more advanced and useful information.

To identify interrelationships between changes in Earth systems and human activity, we will develop methodologies for integrating the vast amounts of data generated by JAMSTEC R&D activities, and mathematical analysis methods for efficiently processing the resulting integrated data. We will additionally endeavor to expand this initiative to encompass other relevant organizations both in Japan and overseas so as to build a frame- work for generating even more advanced and useful information.

We will develop a four-dimensional virtual earth as a large-scale data system equipped with advanced data analysis functions and capable of efficiently aggregating and managing data generated by the numerical analysis repository and other sources.

As an execution platform for the numerical analysis repository and four-dimensional virtual earth, we will build a high-speed computing system capable of handling the huge amount of information stored in the data server, connecting the system and server through a high-speed network.

Institute for Extra-cutting-edge Science and Technology Avant-garde Research (X-star)

Exploratory and challenging research and technological development for the future

Our exploratory and challenging research and development on deep-sea extreme environments, or so to be called the Earth's last frontiers, will build a scientific, technological, and intellectual platform which will lead to generating diverse knowledge and innovation to support future Japan as a maritime nation. It is expected to raise public interest in science and technology, and contribute significantly to the promotion of Japan's science and technology policies. We also lead JAMSTEC basic research and development, promote research collaboration between different fields, and accelerate mission achievement.

We will conduct challenging and highly speculative research with the aim of making breakthroughs and generating systematic under- standing that will lead to future paradigm shift in science. Japan has already gained worldwide recognition for the originality of its exploratory research on the role of the ocean in the origin of life and the co-evolution of life and the environment. By focusing on these themes, we will establish a new academic field in which Japan will lead the world.

With the goal of producing outcomes that transform oceanographic technology, we will engage in highly speculative and pioneering technological development research rather than endeavoring to extend existing technologies. Such as measurement using laser processing and electrochemical processing, and ultra-high resolution nanoscale analysis.

Institute for Marine-Earth Exploration and Engineering (MarE3)

At the forefront of marine research and study

Oceans occupy about 70% of the Earth's surface, and are a significant source of dynamic global change. A wide range of important marine-Earth research targets, including ocean deeps, tectonic subduction zones (with related earthquakes and volcanic eruptions), hydrothermal vents, and the deep subseafloor, are the primary targets of our world-leading scientific research and development program. Implementing this, while also supporting Japan's ocean policies, we will maintain and improve our advanced capabilities for investigation and observation of the world ocean and seas. We promote the operation of our marine research facilities, capable of supporting research across large and diverse fields of investigation, as part of the greater scientific and research community.

We will operate safe, efficient, and stable ocean research platforms that addresses R&D and societal needs. We will continue to upgrade the functions and performance of our equipment and facilities, and incorporate newly developed methodologies and technologies to enable the implementation of sophisticated research and observation.

Ultra-deep water and ultra-deep drilling and borehole observation technologies are required to better understand the mechanisms of mega earthquakes, new frontiers such as the sub-seafloor biosphere, and future global-scale environmental changes.

Nobuhisa Eguchi

Engineering Department

Promoting research and development to learn about the ocean

Japan has a deep and wide sea, and we have been involved with the sea since ancient times. While we received many blessings from the sea, we were also terrified by threats such as tsunamis. Until now, we have made efforts to understand the ocean through many oceanographic surveys and studies. In the last few years, as we have experienced major changes in the global environment. We feel that we must deepen our understanding of the ocean.

Project Office for Arctic Research Vessel (PARV)

Promoting construction of the Arctic Research Vessel ‘MIRAI Ⅱ’ & preparing for operations as an international research platform

JAMSTEC started the construction of Japan's first Arctic research vessel MIRAI Ⅱ with icebreaking capabilities in 2021. MIRAI Ⅱ will have the capability to generate new research outcomes since it can operate in sea-ice-covered areas, thereby providing new sets of data. Project Office for Arctic Research Vessel will deploy MIRAI Ⅱ as an international research platform, playing a leading role in international projects and observations in collaboration with interested countries, while also fostering future generations of Arctic researchers & engineers. We are dedicated to the successful construction and operation of MIRAI Ⅱ, and ensuring that MIRAI Ⅱ will be able to meet these goals as soon as it enters into service.

Advanced Institute for Marine Ecosystem Change (WPI-AIMEC)

To understand and forecast the response and adaptative mechanisms of marine ecosystems to Earth’s environmental changes

WPI-AIMEC (WPI-Advanced Institute for Marine Ecosystem Change), jointly proposed by Tohoku University and JAMSTEC, has been adopted as a new center of excellence under the World Premier International Research Center Program (WPI) program of the Ministry of Education, Culture, Sports, Science and Technology of Japan (MEXT). The WPI aims to advance the level of science and technology in Japan by establishing a “visible research center” that attracts world-leading researchers worldwide under outstanding leadership. Focusing on the Northwest Pacific, WPI-AIMEC will expound on the response and adaptive mechanisms of marine ecosystems to Earth system dynamics using a fusional approach that integrates marine physics, ecology, and mathematic information science with big data to facilitate systematic forecasting of change. Consequently, a new academic field “Ocean-Ecosystem Change Systematics (OECS)” will be established.

Research and Development and Economic Growth in Japan

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There is no question that science and technology play one of the most important roles in the economic growth of advanced countries. However, when one attempts to discover the relation between the effort devoted to research and development and the economic growth of a nation, it is not easy to find a simple correlation between them.

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A. Uchino, Investment for Research in Japan (Jitsugyokohosha).

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K. Pavitt, ‘Performance in Technological Innovation’, ch. 10 of Technological Innovation and the Economy (Wiley-Interscience, 1970).

K. Oshima, ‘Setting the Scene Three: Japan’, ch. 4, ibid .

White Paper on Science and Technology , 1968 and 1969 issues, Science and Technology Agency, Government Publication.

Report of Survey on Industrial Technology , Ministry of International Trade and Industry, Jitsugyokohosha (1964).

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Oshima, K. (1973). Research and Development and Economic Growth in Japan. In: Williams, B.R. (eds) Science and Technology in Economic Growth. International Economic Association Conference Volumes, Numbers 1–50. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-01731-7_12

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R&D expenditures Japan FY 2013-2022

In the fiscal year 2022, Japan’s expenditures on research and development (R&D) reached approximately 20.7 trillion Japanese yen. R&D spending increased by  percent compared to the previous fiscal year. 

 Distribution of R&D spending 

In recent years, most of the R&D spending in Japan has been used for natural sciences such as physical science, engineering science, agricultural science, and health science. Business enterprises have consistently spent over 70 percent of Japan's overall R&D expenditure, while tertiary education institutions have spent around 20 percent. In terms of research subjects, Japan has invested its financial resources most in life sciences and telecommunications.

 Researchers

As of March 2021, about 908 thousand researchers were employed in Japan, of which around 18 percent were women . The female rate among researchers in the science and technology field is lowest in Japan compared to other OECD (Organization for Economic Cooperation and Development) countries. To promote women’s participation in science and research, the Japanese government subsidizes research institutions like universities covering the labor costs of female researchers. 

Research and development (R&D) expenditures in Japan from fiscal year 2013 to 2022 (in trillion Japanese yen)

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December 2023

fiscal year 2013 to 2022, the Japanese fiscal year starts on April 1 of the stated year and ends on March 31 of the following year

100 Japanese yen equal 0.68 U.S. dollars or 0.63 euros as of February 2024. Figures have been rounded.

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• R&D expenditures Japan FY 2013-2022
• Number of employees in R&D Japan 2014-2023, by institution type
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• Share of scientific paper publications Japan 2021, by field
• Number of new doctorate holders Japan AY 2011-2020
• R&D expenses Japan FY 2013-2022, by institution type
• R&D expenses Japan FY 2013-2022, by financial resources
• R&D expenses Japan FY 2013-2022, by item
• R&D expenses for natural science Japan FY 2013-2022
• R&D expenses for natural science Japan FY 2013-2022, by research type
• R&D expenses Japan FY 2022, by research subject
• Share of R&D costs for life sciences Japan FY 2013-2022
• Intramural R&D expenditure Japan FY 2012-2021, by institution type
• Intramural R&D expenditure on labor costs Japan FY 2012-2021, by institution type
• Intramural R&D expenditure on material Japan FY 2012-2021, by institution type
• Intramural R&D expenditure on tangible assets Japan FY 2012-2021, by institution type
• Number of researches in R&D Japan 2014-2023, by gender
• Number of researchers in R&D Japan 2014-2023, by institution type
• Number of assistant researchers in R&D Japan 2014-2023, by institution type
• Number of R&D technicians Japan 2014-2023, by institution type
• Number of R&D clerical personnel Japan 2014-2023, by institution type
• R&D expenses of NPOs and public institutions Japan FY 2022, by institution type
• R&D expenses of NPOs and public institutions Japan FY 2022, by field
• Number of NPOs and public institutions conducting research Japan FY 2022, by field
• Number of NPOs and public institutions conducting research Japan FY 2022, by type
• R&D expenses of higher education institutions Japan FY 2013-2022, by type
• Average R&D expenses per researcher of tertiary education Japan FY 2022, by field
• Number of higher education institutions conducting research Japan FY 2022, by field
• Number of higher education institutions conducting research Japan FY 2022, by type
• Number of research collaborations among universities and companies Japan FY 2013-2020
• Number of business enterprises conducting research Japan FY 2022, by industry
• Share of R&D researchers at business enterprises Japan 2022, by industry
• Exports value of technology trade by business enterprises Japan FY 2012-2021
• Technology exchange export value of business enterprises Japan 2023, by industry
• Share of technology trade export value Japan FY 2021, by destination
• Number of patent registrations at the JPO Japan 2013-2022
• Number of utility model applications at the JPO Japan 2013-2022
• Number of utility model registrations at the JPO Japan 2013-2022
• Number of trademark applications at the JPO Japan 2013-2022
• Number of trademark registrations at the JPO Japan 2013-2022
• Number of design applications at the JPO Japan 2013-2022
• Number of design registrations at the JPO Japan 2013-2022

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• Published: 22 April 2024

Why Japan lacks a vibrant biotech industry

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Recent analysis of the biopharmaceutical industry in Japan has emphasized that the lack of a thriving biotech ecosystem in that country is largely due to tight controls on drug pricing 1 . However, this is only one part of the explanation, and any strategy to promote Japanese biotech must acknowledge the full complexity of the problem. Japan has long punched above its weight in innovative research in biochemistry and medicinal chemistry despite relative government underinvestment compared with the United States and Europe. In the United States, 363 new drugs were approved by the Food and Drug Administration between 2011 and 2021 (ref. 2 ). The leading country of origin of these approvals was the United States, with 223 drugs, but Japan was the second-leading country of origin, with 33 drugs. Drugs first developed in Japan include statins (Sankyo) and the cancer immunotherapy Opdivo (nivolumab; Ono Pharmaceutical), based on the discovery of programmed death inhibitor proteins by Nobel prize recipient Tasuku Honjo. In the field of biotechnology, Japanese successes include BioWa (acquired by Kirin), a producer of monoclonal antibodies, and Chugai Pharmaceutical, which has the largest bioreactor capacity in Japan and has been fed a steady stream of new drugs from its majority owner Roche.

Yet Japan lacks a home-grown biotech ecosystem. Even the discovery of induced pluripotent stem cells by Kyoto University researcher Shinya Yamanaka has not translated into Japanese leadership in cell therapies. Several factors beyond drug price controls are involved. Although many Japanese pharmaceutical companies have corporate venture capital arms and invest in biotech startups, these investments are mostly in the United States and other regions outside Japan. The same is true of Japanese venture capital investing as a whole. In 2022, this sector invested 120 times more in the United States than in Japan 3 , 4 . Japan has simply failed to develop a startup ecosystem, especially in biotech. According to the Global Startup Ecosystem Report 2021 from Startup Genome, Tokyo ranked ninth in the world as a startup hub, below other cities in East Asia, including Beijing and Shanghai 4 .

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Ezell, S. How Japan squandered its biopharmaceutical competitiveness: a cautionary tale. https://itif.org/publications/2022/07/25/how-japan-squandered-its-biopharmaceutical-competitiveness-a-cautionary-tale/ (Information Technology and Innovation Foundation, 2022).

National Venture Capital Association. Yearbook 2023. https://nvca.org/wp-content/uploads/2023/03/NVCA-2023-Yearbook_FINALFINAL.pdf (2023)

Venture Enterprise Center. VEC yearbook 2023. https://www.vec.or.jp/en (2023).

Startup Genome. The global startup ecosystem report, GSER 2021. https://startupgenome.com/report/gser2021 (2021).

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Research across cultures: Relationships between INL and Japanese scientists throughout history

April 25, 2024

By Michelle Goff

In her kitchen, Keiko “Kay” Rohrdanz pours tea into small mugs decorated with blue leaves. Her two Dobermans circle around her, eager for a taste of the cake she’s putting onto a plate. Her home is a mix of traditional Japanese and American décor, and she radiates hospitality as she sits down with me and one of her closest friends, Vivian Goodner.

The two met many years ago in Rohrdanz’s hometown of Tokai-Mura, more than 5,000 miles away on the east coast of Japan. Goodner traveled there with a group of visiting scientists.

“The nuclear community is small enough as it is,” said Rohrdanz. “So these cross-cultural connections were very dear to us. It’s rare that people in the community get to know each other well, much less our families and cultures.”

Rohrdanz and Goodner have remained close friends since moving back to the United States.

Tokai-Mura is in many ways a mirror image of Idaho Falls. Not only is the city the site of a prominent nuclear lab, but it also boasts a thriving agricultural community based on sweet potatoes.

These economic and cultural similarities led the two cities to form a sister cities partnership in July 1981 to exchange fellowship and friendship. Every other year, a delegation from Tokai visits Idaho Falls; the following year, an Idaho Falls delegation visits Tokai.

The sister cities partnership is just one example of the close relationships that have developed between Japanese visitors and INL employees throughout the lab’s 75-year history.

Scientific exchange

The close relationship between Idaho Falls and Japanese researchers dates to at least the 1960s. An old sign for the Zero Power Physics Reactor bears signatures from Japanese dignitaries. In fact, numerous Japanese scientists visited early reactor experiments, including the Zero-Power Physics Reactor, Experimental Breeder Reactor-II (EBR-II), and the Integral Fast Reactor (IFR).

In the early days of the IFR program, Sadao Hattori of Japan’s Central Research Institute of Electric Power Industry visited what was at the time called Argonne-West (what is now known as INL’s Materials and Fuels Complex) to receive a technical briefing and facility tour. He was so impressed with the reactor’s potential that he arranged a full-day IFR program presentation in Tokyo in 1987.

The audience included Ryo Ikegame, an executive vice president for Tokyo Electric Power Company. His support led to a signed contract with the Department of Energy that in 1989 established a joint program between the United States and Japan for IFR research. Originally, the contract scope was limited to fuel pyroprocessing research to recycle spent fuel. Two years later, it was expanded to incorporate Japan Atomic Power Company. This also broadened the scope to include fuel cycle demonstrations in Argonne-West’s Fuel Conditioning Facility.

“The few years that we collaborated with the Japanese utilities were among the highlights of my career,” said Charles Till, head of the IFR project, in his book “Plentiful Energy.”

The IFR program made its own impact on nuclear history. “IFR proved that we could design nuclear plants to be safe under even the most extreme of conditions,” said Harold McFarlane, an IFR researcher from Argonne-West.

The technical exchange between the U.S. and Japan enabled by the IFR program has had far-reaching impacts on our clean energy future. For example, as the Argonne-West site conducted research with IFR and other reactors, Japanese nuclear scientists continued to innovate back home. The country is home to one of the only power reactor facilities that can run fuel at high temperatures. In collaboration with Argonne scientists, Japanese researchers developed a unique system for identifying failures in reactors. This system involved running certain simulated failure conditions to see how the reactor behaved and how it could improve. This experimental methodology can be seen today in INL’s Transient Reactor Test Facility.

One of the visiting Japanese scientists, Satoshi Tani, was present for the lab’s first single transient test. He recalled his experience in a document reporting on Japanese scientists’ experiences working for Argonne-West.

“I stayed in the control room of EBR-II and I was a little bit nervous,” he said. “We were very glad to see that the reactor power was perfectly controlled. I learned quite a lot from U.S. researchers, not only the technical aspects but also the way of thinking. I am sincerely thankful to all of them.”

The partnership with the Japanese Atomic Energy Agency continues today. Currently, researchers at INL are preparing experiments using the Transient Reactor Test Facility to test fuel from several reactor designs, including the mixed oxide fuel samples used in Japanese fast reactors.

Cultural exchange: Idaho to Japan

For some people, this cultural exchange changed their lives. Rohrdanz worked for what is now the Japan Atomic Energy Agency, which was then known as Japan Atomic Energy Research Institute, or JAERI. She met Bob Rohrdanz when he was a visiting scientist to Tokai-Mura from what was at the time known as INEEL – the Idaho National Engineering and Environmental Laboratory. They fell in love, got married and moved back to Idaho Falls.

According to Kay Rohrdanz, JAERI ensured that these visiting scientists felt welcome and at home in Japan. They had a housing complex just for them, with furniture and kitchen, dining and bathroom facilities that aligned more with what the visitors were used to in the U.S. When Goodner traveled to Tokai-Mura she received language and culture lessons from the wife of a Japanese dignitary in Idaho Falls before they traveled abroad.

Cultural exchange: Japan to Idaho

Japanese visiting scientists to Idaho Falls were also warmly welcomed, in particular by a local couple with ties to Japan, Jun and Taka Nukaya. Jun worked at Argonne at the time and was asked to help with interpretation for visiting scientists. He quickly recommended his wife, Taka, who he said had a much stronger Japanese fluency, for the task.

The child of Japanese immigrants, Taka Nukaya, who died in 2023, studied the language at the Buddhist church in Ogden, Utah. Having served as an interpreter for her parents when she was younger, she honed her skills supporting cultural connection from a young age. Beginning in the 1970s, Taka Nukaya quickly became a key figure in the cross-cultural exchange between Idaho Falls and the laboratory’s visiting Japanese scientists.

According to her daughter, Lisa Scott, Taka Nukaya helped the scientists for almost 30 years by interpreting for them in numerous situations: at doctors’ offices and car dealerships, at parent-teacher conferences, and as they worked to obtain certain legal documents, like driver’s licenses. She tutored many of their children in English and gave the visiting scientists advice for how best to enjoy their free time in Idaho. One family even called Taka Nukaya from a hospital in Denver when their son was in a serious accident to interpret between them and the doctors.

Scott fondly recalls meeting many of the visiting scientists while growing up. Her parents’ door was always open. They enjoyed Taka Nukaya’s delicious and authentic Japanese cuisine, her advice for navigating personal and business culture in Idaho Falls, and her excellent company.

“My mother was a firm believer in the exchange of cultures and building bridges between our community and the Japanese visitors,” said Scott. “In a sincere but humorous manner, she taught them the importance of eye contact and a firm handshake in the U.S. business world. She believed in building strong relationships that extended across workplaces, cultures and ways of life.”

Today, the Idaho Falls-Japan relationships still exist. Near Idaho Falls’ downtown and Snake River walking path sits the Japanese friendship garden, which incorporates roof tiling and stone lanterns gifted by Tokai. In Tokai-Mura, there is a building called the “International House,” designed by architects who had visited Idaho Falls and were inspired by the houses in the city’s Stonebrook neighborhood.

Another visiting scientist, Seiichiro Maeda, fondly recalls being out west and seeing Yellowstone National Park. “We felt the vastness of space when I drove at a long straight road extending to the horizon,” he said. “The stay at Argonne-West was a very good experience for us not only in business but also in private. I am grateful for our many good memories.”

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UW leads international group in semiconductor research and workforce development

The University of Washington is at the forefront of an international effort to innovate the semiconductor industry while building a skilled U.S.-based workforce to design and manufacture chip technology. UPWARDS for the Future will support work already underway in the UW’s Washington Nanofabrication Faciliity. Video c redit: Kiyomi Taguchi, UW News

The University of Washington is at the forefront of an international effort to innovate the semiconductor industry while building a skilled U.S.-based workforce to design and manufacture chip technology.

Part of a landmark education partnership that was announced in May 2023 at the G7 meeting in Japan, the effort brings together researchers and faculty from the U.S. and Japan to support the University Partnership for Workforce Advancement and Research & Development in Semiconductors (UPWARDS) for the Future project. Micron Technology and Tokyo Electron Limited, as founding industry partners, the National Science Foundation (NSF) and universities together are investing over $60 million for the five-year project. Many of the participants are attending kick-off activities at the UW this week.

“With our University’s proven track record of using public research investment to spur economic and technological growth, the UW is excited to be taking the lead in expanding our capacity to educate professionals and drive discovery in the critical field of semiconductors,” said UW President Ana Mari Cauce. “We’re grateful to Senator Cantwell for her leadership and for the collaboration of our partners.”

A Seattle kickoff event hosted by the UW today and tomorrow will bring together university teams from Japan and the U.S. along with industry leaders and elected officials. Learn more about UPWARDS for the Future .

Modern technology — including household appliances, automobiles, computers and defense systems — relies on semiconductors. The semiconductor was invented in the U.S., yet today the U.S. produces about only 10% of the world’s supply. Recognizing the economic and national security risks this poses, U.S. policymakers passed the Creating Helpful Incentives to Produce Semiconductors (CHIPS) & Science Act in 2022 to strengthen the U.S. semiconductor ecosystem.

“Our nation’s success in advanced technologies depends on having a skilled workforce. The University of Washington will help establish the Pacific Northwest as a leader by training the more than 90,000 students, faculty, and skilled professionals needed to build the most advanced chips right here in the United States,” said Sen. Maria Cantwell, D-Wash., who was instrumental in passing the landmark CHIPS & Science bill. “If we want to lead the world tomorrow, we must invest in worker training today.”

Boise, Ida.-based Micron and the partner universities will jointly recruit new faculty members, named as UPWARDS Professors, who will work on high-impact research projects with the industry partners. In addition to their research responsibilities, UPWARDS Professors will also contribute to curriculum development and other UPWARDS for the Future activities, including advising exchange students and graduate fellows. The first cohort of UPWARDS professors, all women, will also participate in industry-led mentoring programs to help gain valuable insights supporting in the advancement of their own careers. The grants will also support graduate fellowships and provide research experiences for undergraduate students.

Initiatives like UPWARDS for the Future prioritize expanding the STEM talent pipeline to reach groups that are underrepresented in the semiconductor industry today. This vision for UPWARDS for the Future aligns with UW efforts to close the STEM gender gap, establish pathways into higher education and facilitate new programs dedicated to attracting and retaining historically underrepresented groups. President Cauce and College of Engineering Dean Nancy Albritton are members of the national Education Group for Diversification and Growth in Engineering Consortium, or EDGE. And, last summer, the UW joined the Northwest University Semiconductor Network, led by Micron, to grow the next generation of semiconductor experts, by enhancing experiential learning opportunities in the semiconductor industry, and prioritizing access for underrepresented students, particularly in rural and tribal communities.

“We are proud to be part of this innovation partnership and to lead the NSF grant for UPWARDS. As Washington state’s leading educator of engineers and as a leader in chip engineering and workforce development for the global innovation economy, it is an honor to work collaboratively with academic and industry partners to drive advancements in this crucial scientific field,” Albritton said.

In addition to the UW, the UPWARDS for the Future partnership includes five U.S. institutions: Boise State, Purdue, Rensselaer Polytechnic Institute, Rochester Institute of Technology and Virginia Tech; and five Japanese universities: Hiroshima University, Kyushu University, Nagoya University, Tohoku University and Tokyo Institute of Technology. The UW will share the $10 million NSF grant with the five U.S. institutions, while Micron’s and Tokyo Electron’s $20 million gifts will be shared among the 11 U.S. and Japanese institutions.

“The UPWARDS for the Future program sets a prime model of government-industry-academia partnership, propelling the development of the U.S. semiconductor technology workforce. This initiative stands out with an emphasis on international collaboration, providing students with invaluable insights and experience into the industry’s international supply chain dynamics,” said Mo Li , UW professor of both electrical and computer engineering and physics, as well as a faculty member of the UW Institute for Nano-Engineered Systems. Li will lead UW’s efforts supporting UPWARDS for the Future.

The UPWARDS program includes five pillar activities, including: Semiconductor Curriculum Design and Implementation; Expanding Women Workforces in Semiconductors; Experiential Learning; US-Japan International Student Faculty Exchange; and Memory-centric Research Projects. At this week’s workshop, the 11 institutions aim to establish across-the-board plans on student exchange, curriculum sharing and standardization, and research collaboration.

Semiconductor engineering is the second strategic university-corporate partnership initiative concluded between American and Japanese academic institutions and the corporate sector since May 2022, when President Joe Biden and Prime Minister Fumio Kishida made a commitment to advance U.S.-Japan science and technology cooperation. The UW also is the lead partner on the Cross Pacific AI Hub partnership announced on April 10, to lead innovation and technological breakthroughs in artificial intelligence. Both UPWARDS for the Future and the Cross Pacific AI Hub are cornerstones of the UW’s global impact, building lasting relationships with peer institutions and industry on both sides of the Pacific to support UW students, faculty and staff on work to address critical issues.

For more information, contact Li at [email protected].

Here’s what other leaders said about UPWARDS for the Future:

“Economic security depends on the ‘3 M’s’: machines, minerals, and minds. The UPWARDS network is developing the workforce that we need to secure semiconductor supply chains and delivering on the promise made by President Joe Biden and Japanese Prime Minister Kishida to elevate U.S.-Japan cooperation in advanced science and technology. This innovative university-corporate partnership has become the model for long-term collaboration in transformative technologies.” — U.S. Ambassador to Japan Rahm Emanuel

“This past year we have accelerated our collaboration with our ecosystem partners. Collaboration between the UPWARDS universities will cultivate the next generation of the high-tech workforce, ushering in an exciting new era of semiconductor research and manufacturing in the United States and Japan. Micron has made it a priority to increase opportunities for all students, making sure that women, students from underrepresented populations and those from rural or economically disadvantaged communities have equitable access to engineering and science degrees. The impacts of UPWARDS will be far-reaching as we work to meet the demand for semiconductor industry talent over the next two decades.” — April Arnzen, executive vice president and chief people officer, Micron Technology

“Tokyo Electron (TEL) is proud to participate in the U.S.-Japan University Partnership for Workforce Advancement and Research & Development in Semiconductors (UPWARDS) for the Future Program. The objectives of the program are in line with TEL’s vision to leverage our expertise as an industry-leading semiconductor equipment manufacturer and pursue technological innovation in semiconductors, thereby contributing to the development of a dream-inspiring society. Through participation in this program, we aim to help develop a diverse set of skilled individuals capable of leading future innovation in semiconductor technology. The UPWARDS Program is also part of our ongoing efforts in the US to collaborate with industry partners and help grow the talent pipeline for technicians, engineers, computer scientists, and other professionals who will be in high demand as the domestic semiconductor industry, its manufacturing base, and associated R&D activities grow.” —  Alex Oscilowski, president, TEL Technology Center of America

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The White House 1600 Pennsylvania Ave NW Washington, DC 20500

United   States-Japan Joint Leaders’   Statement

Global Partners for the Future

Over the course of the last three years, the U.S.-Japan Alliance has reached unprecedented heights. We arrived at this historic moment because our nations, individually and together, took courageous steps to strengthen our collective capacity in ways that would have seemed impossible just a few years ago. Today, we, President Joseph R. Biden, Jr. and Prime Minister KISHIDA Fumio, celebrate this new era of U.S.-Japan strategic cooperation during the Prime Minister’s Official Visit and State Dinner in Washington, D.C.—and pledge that the United States and Japan will continue our tireless work, together and with other partners, to realize a free and open Indo-Pacific and world.

In this new era of U.S.-Japan cooperation, we recognize that global events affect the security and stability of the Indo-Pacific, and that developments in our shared region reverberate around the world. We are therefore working together, across all domains and at all levels, to build a global partnership that is fit for purpose to address the complex, interconnected challenges of today and tomorrow for the benefit of our two countries and the world. As our Alliance cooperation reaches new heights, we are expanding our engagement to reflect the global nature of our partnership.

At the core of our cooperation is a shared commitment to work with like-minded partners and multilateral institutions to address common challenges and to ensure a world that is free, open, connected, resilient, and secure. These joint efforts are based on our shared fundamental respect for international law, including the protection and promotion of human rights and dignity, the sovereignty and territorial integrity of all states, and the prohibition on acquisition of territory by force. Our purpose as partners is to uphold and bolster the free and open international order based on the rule of law that has allowed so many nations to develop and prosper, and to ensure our Alliance is equipped to tackle the challenges of the 21 st century.

To advance our global partnership, today we announce several new strategic initiatives to strengthen our defense and security cooperation; reach new frontiers in space; drive technology innovation; bolster economic security; accelerate climate action; partner on global diplomacy and development; and fortify the ties between our peoples. Through our global partnership, we are also synchronizing our strategies, and our two nations have never been more united as we work together to address the most pressing challenges and opportunities of the future.

Strengthening our Defense and Security Cooperation

The core of our global partnership is our bilateral defense and security cooperation under the Treaty of Mutual Cooperation and Security, which is stronger than ever. We affirm that our Alliance remains the cornerstone of peace, security, and prosperity in the Indo-Pacific. President Biden reiterated the unwavering commitment of the United States to the defense of Japan under Article V of the Treaty, using its full range of capabilities, including nuclear capabilities. Prime Minister Kishida reaffirmed Japan’s unwavering commitment to fundamentally reinforce its own defense capabilities and roles, and to enhance its close coordination with the United States under the Treaty.President Biden also reaffirmed that Article V applies to the Senkaku Islands. We reiterated our strong opposition to any attempts by the People’s Republic of China (PRC) to unilaterally change the status quo by force or coercion in the East China Sea, including through actions that seek to undermine Japan’s longstanding and peaceful administration of the Senkaku Islands. We welcome the progress in optimizing Alliance force posture in areas including the Southwestern Islands to strengthen U.S.-Japan deterrence and response capabilities, and we confirm the importance of further advancing this initiative.

The United States welcomes the steps Japan is taking to fundamentally enhance its defense capabilities, including its plans to increase the budget for its defense capabilities and complementary initiatives to two percent of GDP in Japanese Fiscal Year (JFY) 2027 in accordance with Japan’s National Security Strategy, its decision to possess counterstrike capabilities, and its plans to stand up the Japan Self-Defense Forces (JSDF) Joint Operations Command to enhance command and control of the JSDF. Together, these initiatives elevate our defense ties to unprecedented levels and launch a new era of U.S.-Japan security cooperation, strengthening our Alliance and contributing to stability in the Indo-Pacific.

Today, we announce several new strategic initiatives to further advance our Alliance. Recognizing the speed at which regional security challenges evolve and to ensure our bilateral Alliance structures meet these critical changes, we announce our intention to bilaterally upgrade our respective command and control frameworks to enable seamless integration of operations and capabilities and allow for greater interoperability and planning between U.S. and Japanese forces in peacetime and during contingencies. More effective U.S.-Japan Alliance command and control will strengthen deterrence and promote a free and open Indo-Pacific in the face of pressing regional security challenges. We call on our respective defense and foreign ministries to develop this new relationship through the Security Consultative Committee (our security “2+2”). In support of this vision, we also reaffirm our goal to deepen Intelligence, Surveillance, and Reconnaissance cooperation and Alliance information sharing capabilities, including through the Bilateral Information Analysis Cell.

We will also continue to implement efforts to strengthen our Alliance force posture, build high-end base capabilities, and increase preparedness that are necessary to deter and defend against threats. We resolve to deepen bilateral cooperation toward the effective development and employment of Japan’s suite of counterstrike capabilities, including the provision of U.S. materiel and technological support to enhance Japan’s indigenous stand-off programs. The United States expressed its commitment to start the training pipeline and ship modifications for Japan to acquire operational capability of the Tomahawk Land Attack Missile (TLAM) system. We also reaffirmed our pursuit of a Glide Phase Interceptor (GPI) cooperative development program to counter high-end, regional hypersonic threats.

As our countries strengthen our bilateral ties, we will continue to build our relationships with like-minded partners in the region. Today, we announce our vision to cooperate on a networked air defense architecture among the United States, Japan, and Australia to counter growing air and missile threats. Recognizing Japan’s strengths and the close bilateral defense partnerships with the AUKUS countries, AUKUS partners – Australia, the United Kingdom, and the United States – are considering cooperation with Japan on AUKUS Pillar II advanced capability projects. Continuing the momentum from the Camp David Summit, we welcome progress on establishing an annual multidomain exercise between the United States, Japan, and the Republic of Korea (ROK). Recognizing the commitments made in the Atlantic Declaration and the Hiroshima Accord, and as the Indo-Pacific and Euro-Atlantic regions become ever more interlinked, we welcome the announcement of regular U.S.-Japan-UK trilateral exercises, beginning in 2025, as we enhance our shared and enduring security. Building on the announcement at the Australia Official Visit in October to pursue trilateral cooperation with Japan on unmanned aerial systems, we are exploring cooperative opportunities in the rapidly emerging field of collaborative combat aircraft and autonomy.

The United States welcomes Japan’s revision of the Three Principles on the Transfer of Defense Equipment and Technology and its Implementation Guidelines, which bolsters cooperation through joint development and production to enhance our deterrence capabilities in the region. To leverage our respective industrial bases to meet the demand for critical capabilities and maintain readiness over the long term, we will convene a Forum on Defense Industrial Cooperation, Acquisition and Sustainment (DICAS) co-led by the U.S. Department of Defense and Japan’s Ministry of Defense to identify priority areas for partnering U.S. and Japanese industry, including co-development and co-production of missiles and co-sustainment of forward-deployed U.S. Navy ships and U.S. Air Force aircraft, including fourth generation fighters, at Japanese commercial facilities, in coordination with relevant ministries. This forum, in conjunction with our existing Defense Science and Technology Cooperation Group, will better integrate and align our defense industrial policy, acquisition, and science and technology ecosystems. The DICAS will provide updates on progress to the foreign and defense ministers in the security “2+2.” We also commit to establishing a working group to explore opportunities for future fighter pilot training and readiness, including AI and advanced simulators, and co-development and co-production of cutting-edge technologies such as common jet trainers to maintain combat-ready next-generation fighter airpower.

We reaffirm the critical importance of continuing to enhance U.S. extended deterrence, bolstered by Japan’s defense capabilities, and will further strengthen bilateral cooperation. In this regard, we call on our respective foreign and defense ministers to hold in-depth discussions on extended deterrence on the occasion of the next security “2+2” meeting.

We continue to deepen our cooperation on information and cyber security to ensure that our Alliance stays ahead of growing cyber threats and builds resilience in the information and communication technology domain. We also plan on enhancing our cooperation on the protection of critical infrastructure.

Recognizing the importance of rapidly responding to frequent and severe climate change-related and other natural disasters, we plan to explore cooperation on the establishment of a humanitarian assistance and disaster relief hub in Japan.

In order to maintain deterrence and mitigate impact on local communities, we are firmly committed to the steady implementation of the realignment of U.S. forces in Japan in accordance with Okinawa Consolidation Plan, including the construction of the Futenma Replacement Facility at Henoko as the only solution that avoids the continued use of Marine Corps Air Station Futenma.

Reaching New Frontiers in Space

Our global partnership extends to space, where the United States and Japan are leading the way to explore our solar system and return to the Moon. Today, we welcome the signing of a Lunar Surface Exploration Implementing Arrangement, in which Japan plans to provide and sustain operation of a pressurized lunar rover while the United States plans to allocate two astronaut flight opportunities to the lunar surface for Japan on future Artemis missions. The leaders announced a shared goal for a Japanese national to be the first non-American astronaut to land on the Moon on a future Artemis mission, assuming important benchmarks are achieved. The United States and Japan plan to deepen cooperation on astronaut training to facilitate this goal while managing the risks of these challenging and inspiring lunar surface missions. We also announce bilateral collaboration on a Low Earth Orbit detection and tracking constellation for missiles such as hypersonic glide vehicles, including potential collaboration with U.S. industry.

Leading on Innovation , Economic Security, and Climate Action

The United States and Japan aim to maximally align our economic, technology, and related strategies to advance innovation, strengthen our industrial bases, promote resilient and reliable supply chains, and build the strategic emerging industries of the future while pursuing deep emissions reductions this decade. Building on our efforts in the U.S.-Japan Competitiveness and Resilience (CoRe) Partnership, including through the U.S.-Japan Economic Policy Consultative Committee (our economic “2+2”), we intend to sharpen our innovative edge and strengthen our economic security, including by promoting and protecting critical and emerging technologies.

The United States and Japan welcome our robust economic and commercial ties through mutual investment, including Microsoft’s $2.9 billion investment in Japan on AI and cloud infrastructure, workforce training, and a research lab; and Toyota’s recent additional $8 billion battery production investment for a cumulative $13.9 billion investment in North Carolina. Japan is the top foreign investor in the United States with nearly $800 billion in foreign direct investment, and Japanese companies employ nearly 1 million Americans across all 50 states. Similarly, as a top foreign investor in Japan for many years, the United States is supporting Japan’s economic growth, and as two of the world’s largest financial sectors, we commit to strengthening our partnership to bolster cross-border investment and support financial stability. As robust and creative economies, we also plan to accelerate investment in our respective start-up environments to foster innovation through the “Japan Innovation Campus” in Silicon Valley and the “Global Startup Campus” to be established in Tokyo, and in companies that take actions toward sustainable value creation (SX). We welcome our new Japan-U.S. personnel exchange programs on startups and venture capital firms under the Global Innovation through Science and Technology (GIST) initiative.

We are committed to strengthening our shared role as global leaders in the development and protection of next-generation critical and emerging technologies such as AI, quantum technology, semiconductors, and biotechnology through research exchange and private investment and capital finance, including with other like-minded partners. We welcome our collaboration on AI for Science between Riken and Argonne National Laboratory (ANL) founded on the revised project arrangement.

We applaud the establishment of $110 million in new AI research partnerships – between the University of Washington and University of Tsukuba and between Carnegie Mellon University and Keio University – through funding from NVIDIA, Arm, Amazon, Microsoft, and a consortium of Japanese companies. We are committed to further advancing the Hiroshima AI Process and strengthening collaboration between the national AI Safety Institutes.

Building on our long history of semiconductor cooperation, we intend to establish a joint technology agenda for cooperation on issues such as research and development, design, and workforce development. We also welcome the robust cooperation between and with our private sectors, especially in next-generation semiconductors and advanced packaging. We also plan to work together along with like-minded countries to strengthen global semiconductor supply chains, particularly for mature node (“legacy”) semiconductors through information-sharing, coordination of policies, and addressing vulnerabilities stemming from non-market policies and practices. We also celebrate the signing of a Memorandum of Cooperation between Japan’s National Institute of Advanced Industrial Science and Technology (AIST) and the U.S. National Institute of Standards and Technology (NIST) as a first step in bilateral cooperation on quantum computing.

Building on the Indo-Pacific Economic Framework for Prosperity (IPEF) and our respective leadership of the G7 and Asia-Pacific Economic Cooperation (APEC) last year, we continue to advance resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness for our economies . We applaud the recent entry into force of the IPEF Supply Chain Agreement. We will continue to seek cooperation on critical minerals projects, including those along the Partnership for Global Infrastructure and Investment Lobito Corridor, and through the Minerals Security Partnership (MSP) as well as the Partnership for Resilient and Inclusive Supply-chain Enhancement (RISE). We are cooperating to deter and address economic coercion, through our bilateral cooperation as well as through our work with like-minded partners including the G7 Coordination Platform on Economic Coercion. We are working to uphold a free, fair and rules-based economic order; address non-market policies and practices; build trusted, resilient, and sustainable supply chains; and promote open markets and fair competition under the U.S.-Japan economic “2+2” and the U.S.-Japan Commercial and Industrial Partnership. We will advance our commitment to operationalize data free flow with trust, including with respect to data security. We will also discuss the promotion of resilient and responsible seafood supply chains.

The United States and Japan recognize that the climate crisis is the existential challenge of our time and intend to be leaders in the global response. Towards our shared goal of accelerating the clean energy transition, we are launching a new high-level dialogue on how we implement our respective domestic measures and maximize their synergies and impacts, including the U.S. Inflation Reduction Act and Japan’s Green Transformation (GX) Promotion Strategy aimed at accelerating energy transition progress this decade, promoting complementary and innovative clean energy supply chains and improving industrial competitiveness. Today we announce Japan joins as the first international collaborator of the U.S. Floating Offshore Wind Shot. We intend to work together towards global ambition in line with the Wind Shot, taking into consideration national circumstances, through the Clean Energy and Energy Security Initiative (CEESI) to pursue innovative breakthroughs that drive down technology costs, accelerate decarbonization, and deliver benefits for coastal communities. The United States welcomes Japan’s newly-launched industry platform, the Floating Offshore Wind Technology Research Association (FLOWRA), aiming to reduce costs and achieve mass production of floating offshore wind through collaboration with academia.

We are further leading the way in developing and deploying next generation clean energy technology, including fusion energy development through the announcement of a U.S.-Japan Strategic Partnership to Accelerate Fusion Energy Demonstration and Commercialization.

The United States remains unwavering in its commitment to support the energy security of Japan and other allies, including its ability to predictably supply LNG while accelerating the global transition to zero-emissions energy and working with other fossil energy importers and producers to minimize methane emissions across the fossil energy value chain to the fullest extent practicable.

We intend to advance widespread adoption of innovative new clean energy technologies, and seek to increase the globally available supply of sustainable aviation fuel or feedstock, including those that are ethanol-based, that show promise in reducing emissions.

We are also working to align global health security and innovation, including in such areas as pandemic prevention, preparedness, and response and promoting more resilient, equitable, and sustainable health systems. Today, we announce that the U.S. Food and Drug Administration and the Japan’s Pharmaceuticals and Medical Devices Agency (PMDA) intend to collaborate and exchange information on oncology drug products to help cancer patients receive earlier access to medications and to discuss future drug development and ways to prevent drug shortages. We welcome PMDA’s future representative office in Washington, D.C., to facilitate this cooperation.

Partnering on Global Diplomacy and Development

The challenges we face transcend geography. The United States and Japan are steadfast in our commitment to upholding international law, including the UN Charter, and call for all Member States to uphold the Charter’s purposes and principles, including refraining from the threat or use of force against the territorial integrity or political independence of any State. We remain committed to reforming the UN Security Council (UNSC), including through expansion in permanent and non-permanent categories of its membership. President Biden reiterated support for Japan’s permanent membership on a reformed UNSC.

We reaffirm our commitment made in Hiroshima last year and are determined to further promote our cooperation in the G7 and work together with partners beyond the G7.

We emphasize the importance of all parties promoting open channels of communication and practical measures to reduce the risk of misunderstanding and miscalculation and to prevent conflict in the Indo-Pacific. In particular, we underscore the importance of candid communication with the PRC, including at the leader level, and express the intent to work with the PRC where possible on areas of common interest.

We emphasize the importance of all States being able to exercise rights and freedoms in a manner consistent with international law as reflected in the United Nations Convention on the Law of the Sea (UNCLOS), including freedom of navigation and overflight. We strongly oppose any unilateral attempts to change the status quo by force or coercion, including destabilizing actions in the South China Sea, such as unsafe encounters at sea and in the air as well as the militarization of disputed features and the dangerous use of coast guard vessels and maritime militia. The PRC’s recent dangerous and escalatory behavior supporting its unlawful maritime claims in the South China Sea as well as efforts to disrupt other countries’ offshore resource exploitation are inconsistent with international law as reflected in UNCLOS. We also emphasize that the 2016 South China Sea Arbitral Award is final and legally binding on the parties to that proceeding. We resolve to work with partners, particularly in ASEAN, to support regional maritime security and uphold international law.

We emphasize that our basic positions on Taiwan remain unchanged and reiterate the importance of maintaining peace and stability across the Taiwan Strait as an indispensable element of global security and prosperity. We encourage the peaceful resolution of cross-Strait issues.

We continue working together with partner countries to make concrete progress in strengthening the international financial architecture and fostering investment under the Partnership for Global Infrastructure and Investment. We are committed to delivering better, bigger, more effective multilateral development banks including through our planned contributions that would enable more than $30 billion in new World Bank lending and securing ambitious International Development Association and Asian Development Fund replenishments. We also emphasize the importance of private sector investment in the Indo-Pacific. We welcome the announcement of Google’s $1 billion investment in digital connectivity for North Pacific Connect, which expands the Pacific Connect Initiative, with NEC, to improve digital communications infrastructure between the United States, Japan and Pacific Island Nations. Building on the U.S.-Australia joint funding commitment for subsea cables last October, the United States and Japan plan to collaborate with like-minded partners to build trusted and more resilient networks and intend to contribute funds to provide subsea cables in the Pacific region, including $16 million towards cable systems for the Federated States of Micronesia and Tuvalu.

We reaffirm our steadfast commitment to the Quad and its shared vision of a free and open Indo-Pacific that is stable, prosperous, and inclusive which continues to deliver results for the region. We reiterate the Quad’s unwavering support and respect for regional institutions, including ASEAN, the Pacific Islands Forum (PIF), and the Indian Ocean Rim Association. We also reaffirm our support for ASEAN centrality and unity as well as the ASEAN Outlook on the Indo-Pacific. Southeast Asian countries are critical partners in the Indo-Pacific and the U.S.-Japan-Philippines trilateral aims to enhance trilateral defense and security cooperation while promoting economic security and resilience. Japan and the United States reaffirmed our intention to work to support the region’s priorities as articulated through the 2050 Strategy for the Blue Pacific Continent, including through the PIF as the Pacific’s preeminent institution as well as through the Partners in the Blue Pacific (PBP).

As we pursue our shared vision of a free and open Indo-Pacific, we continue to build strong ties between key, like-minded partners in the region. Building on the historic success of the Camp David Trilateral Summit, the United States, Japan and the Republic of Korea continue to collaborate on promoting regional security, strengthening deterrence, coordinating development and humanitarian assistance, countering North Korea’s illicit cyber activities, and deepening our cooperation including on economic, clean energy, and technological issues. The United States and Japan also remain committed to advancing trilateral cooperation with Australia to ensure a peaceful and stable region.

We reaffirm our commitment to the complete denuclearization of North Korea in accordance with relevant UNSC resolutions. We strongly condemn North Korea’s continued development of its ballistic missile program—including through launches of intercontinental ballistic missiles (ICBM) and space launch vehicles using ballistic missile technologies—which poses a grave threat to peace and security on the Korean Peninsula and beyond. We call on North Korea to respond to continued, genuine offers to return to diplomacy without preconditions. We call on all UN Member States to fully implement all relevant UNSC resolutions, especially in light of Russia’s recent veto. We urge North Korea to cease illicit activities that generate revenue for its unlawful ballistic missile and weapons of mass destruction programs, including malicious cyber activities. President Biden also reaffirms U.S. commitment to the immediate resolution of the abductions issue, and the two sides commit to continuing joint efforts to promote respect for human rights in North Korea.

We continue to stand together in firm opposition to Russia’s brutal war of aggression against Ukraine, its strikes against Ukraine’s infrastructure and the terror of Russian occupation. We are committed to continuing to impose severe sanctions on Russia and provide unwavering support for Ukraine. Together, we reiterate our call on Russia to immediately, completely, and unconditionally withdraw its forces from within the internationally recognized borders of Ukraine. Any threat or use of nuclear weapons in the context of its war of aggression against Ukraine by Russia is unacceptable. We also express serious concerns about growing North Korea-Russia military cooperation, which is supporting Russia’s war of aggression against Ukraine and threatens to undermine peace and stability in Northeast Asia as well as the global non-proliferation regime.

As the linkages between the Euro-Atlantic and the Indo-Pacific regions have become stronger than ever, our two countries look forward to continuing to work together to enhance Japan-North Atlantic Treaty Organization (NATO) and NATO-Indo-Pacific Four partnerships.

We once again unequivocally condemn the terror attacks by Hamas and others on October 7 of last year, and reaffirm Israel’s right to defend itself and its people consistent with international law. At the same time, we express our deep concern over the critical humanitarian situation in the Gaza Strip. We affirm the imperative of securing the release of all hostages held by Hamas, and emphasize that the deal to release hostages would bring an immediate and prolonged ceasefire in Gaza. We affirm the imperative of realizing an immediate and sustained ceasefire in Gaza over a period of at least six weeks as part of a deal that would release hostages held by Hamas and allow for delivery of essential additional humanitarian assistance to Palestinians in need. We underscore the urgent need to significantly increase deliveries of life-saving humanitarian assistance throughout Gaza and the crucial need to prevent regional escalation. We reiterate the importance of complying with international law, including international humanitarian law, as applicable, including with regard to the protection of civilians. We remain committed to an independent Palestinian state with Israel’s security guaranteed as part of a two-state solution that enables both Israelis and Palestinians to live in a just, lasting, and secure peace.

We reaffirm the importance of supporting inclusive growth and sustainable development in Latin America and the Caribbean. We continue to enhance policy coordination in the region, in particular on Haiti and Venezuela. We also recognize that promoting the stability and security for Haiti is one of the most pressing challenges in the Western Hemisphere, and we continue to support Haiti in restoring democratic order.

We also support African aspirations for peace, stability, and prosperity based on the rule of law. We continue to work together to support the democratic process and economic growth through our respective efforts, including our cooperation with African countries, Regional Economic Communities, the African Union, and multilateral organizations.

The United States and Japan are resolved to achieve a world without nuclear weapons through realistic and pragmatic approaches. It is critical that the overall decline in global nuclear arsenals achieved since the end of the Cold War continues and not be reversed, and the PRC’s accelerating build-up of its nuclear arsenal without transparency nor meaningful dialogue poses a concern to global and regional stability. We reaffirm the importance of upholding the Treaty on the Non-Proliferation of Nuclear Weapons (NPT) as the cornerstone of the global nuclear disarmament and non-proliferation regime and for the pursuit of peaceful uses of nuclear energy. In promoting this universal goal of achieving a world without nuclear weapons, Japan’s “Hiroshima Action Plan” and the “G7 Leaders’ Hiroshima Vision on Nuclear Disarmament” are welcome contributions. The two leaders also welcomed the U.S. announcement to join the Japan-led “Fissile Material Cut-off Treaty Friends” initiative. We reaffirm the indispensable role of the peaceful uses of nuclear technology, committing to fostering innovation and supporting the International Atomic Energy Agency’s efforts in upholding the highest standards of safety, security, and safeguards. President Biden commended Japan’s safe, responsible, and science-based discharge of Advanced Liquid Processing System treated water at Tokyo Electric Power Company’s Fukushima Daiichi Nuclear Power Station into the sea. Our two countries plan to launch the Fukushima Daiichi Decommissioning Partnership focusing on research cooperation for fuel debris retrieval.

To effectively address the myriad challenges outlined above, our global partnership is launching a Deputy Secretary of State/Vice Minister for Foreign Affairs-level dialogue involving our respective aid agencies to align our diplomatic and development efforts globally.

Fortifying People-to-People Ties

People-to-people exchanges are the most effective way to develop the future stewards of the U.S.-Japan relationship. In this regard, we recognize the achievements of exchange programs between our two countries, including the Japan Exchange and Teaching (JET) Programme, KAKEHASHI Project, the Japan Foundation’s programs, and the U.S.-Japan Council’s TOMODACHI Initiative, and commit ourselves to providing more opportunities to meet today’s needs, including through enhanced subnational exchanges on critical issues such as climate and energy. We also recognize the important role civil society has played in strengthening the U.S.-Japan relationship over the past 170 years, including the 38 Japan-America Societies across the United States, the Asia Society, and the 29 America-Japan Societies across Japan.

Building on the Memorandum of Cooperation in Education signed between us on the sidelines of the G7 Leaders’ Summit in Hiroshima, today we announce our commitment to increase student mobility through the new $12 million “Mineta Ambassadors Program (MAP)” education exchange endowment administered by the U.S.-Japan Council for U.S. and Japanese high school and university students who will “map” the future of the relationship with support from Apple, the BlackRock Foundation, Toshizo Watanabe Foundation, and other founding donors. In this regard, we also welcome Japan’s new initiative to expand scholarship for Japanese students through the Japan Student Servicers Organization.

We recognize the significant contributions made by the binational Japan-U.S. Educational Commission (Fulbright Japan) over the past 72 years. We welcome recent changes to upgrade the program by reopening scholarships to Science, Technology, Engineering, and Math (STEM) fields for the first time in 50 years, with the first STEM students on track to participate in academic year 2025-26, as well as removing the tuition cap for Japanese Fulbright participants to attract the highest quality students and researchers.

Celebrating the 30th anniversary of the establishment of the Mansfield Fellowship Program, we honor the legacy of Ambassador Mansfield’s contributions through the University of Montana Mansfield Center and Mansfield Foundation. The two leaders also welcome the creation of the Government of Japan endowed Mansfield Professor of Japanese and Indo-Pacific Affairs at the University of Montana.

Upon the 100 th anniversary of the birth of the late Senator Daniel K. Inouye, who made incredible contributions to our bilateral relationship, we praise the efforts of Japanese American leaders to build a bridge between the two countries and to address common community issues, including through support to the U.S.-Japan Council’s newly launched TOMODACHI Kibou for Maui project. We also share the recognition on the importance of exchanges between our legislatures. We acknowledge the importance of language study, particularly in person, to develop long-term ties and announce a new Memorandum of Cooperation to increase opportunities for the number of exchange visitors from Japan to share their specialized knowledge of Japanese language and culture in the United States, as well as welcome efforts to expand the Japanese Language Education Assistant Program (J-LEAP).

The two leaders also affirm that women in leadership remain their focus and reaffirm our pledge to achieving gender equality and the empowerment of women and girls in all their diversity. We welcome close cooperation on Women, Peace, and Security and Women’s Economic Empowerment initiatives and efforts to promote women and girls’ full, equal, and meaningful participation and leadership in public life.

Finally, we emphasize the need to build a diverse pipeline of future U.S.-Japan experts who understand and support the Alliance. Our peoples form the core of our Alliance, and we reaffirm our commitment to forge ever-closer bonds for generations to come.

Through our shared and steadfast commitment, we have taken bold and courageous steps to bring the U.S.-Japan Alliance to unprecedented heights. In so doing, we have equipped our partnership to protect and advance peace, security, prosperity, and the rule of law across the Indo-Pacific and the globe so that everyone benefits. Today, we celebrate the enduring friendship among our peoples—and among ourselves—and pledge to continue our relentless efforts to ensure that our global partnership drives future peace and prosperity for generations to come.

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Shimadzu and Tohoku University to establish co-creation research center in April to shed light on highly antioxidative supersulfides: Expectations for development of antiaging foods

Shimadzu Corporation and Tohoku University announced the establishment of the Shimadzu x Tohoku Univ. "Supersulfides Life Science Co-creation Research Center" on April 1 in the Medical Science Building of the Graduate School of Medicine. The two parties will engage in joint research at the Co-creation Research Center for three years starting in April to clarify the characteristics of supersulfides related to the aging mechanism of the living body, aiming to make practical contributions, such as the establishment of diagnostic and therapeutic methods for various diseases and the development of functional foods that promote health. The two parties held a press conference online at Tohoku University on March 13. Mr. Yasunori Yamamoto, the President, and Mr. Ryo Yamaguchi, Deputy Manager, Instruments Expert Group, Solutions Center of Excellence, Analytical & Measuring Instruments Division, from Shimadzu and Mr. Takuro Ueda, Executive Vice President for Industry-University Collaboration, and Dr. Takaaki Akaike, Professor of Environmental Medicine and Molecular Toxicology at the Graduate School of Medicine at Tohoku University took the stage to provide an overview of the establishment of the Research Center.

Supersulfides is a collective term for substances in which sulfur is bound to organic compounds such as amino acids present in the blood and organs. Supersulfides have powerful antioxidant effects and are thought to regulate the action of reactive oxygen. Excessive reactive oxygen in the body is considered a cause of fatigue, senility (aging) and diseases. The metabolic mechanism of the supersulfides elucidated in this study is expected to be applied to the establishment of new diagnostic, preventive, and therapeutic methods for such diseases, as well as to the development of new functional foods.

Tohoku University is a hub for supersulfide research, and Professor Akaike is a leading researcher in the field. In 2017, he made a groundbreaking discovery, demonstrating for the first time in the world that a supersulfide is utilized for energy metabolism by living organisms. Shimadzu has been conducting research in collaboration with Akaike's laboratory since 2020 and developed the "LC/MS/MS Method Package for Reactive Sulfur Profiling" software in 2021 for measuring supersulfides in living organisms using Shimadzu's liquid chromatography-mass spectrometry (LC-MS) system.

The newly established "Supersulfides Life Science Co-creation Research Center" is focused on developing a method to simultaneously analyze a broader panel of supersulfides, observing the intraorgan distribution of supersulfides using Shimadzu's imaging mass microscope "iMScope" and undertaking other projects. The Co-creation Research Center was established under the "Co-creation Research Center" system established by the Head Office of Enterprise Partnerships, Tohoku University. Although the contract term has to be between three and ten years, Shimadzu and Tohoku University have discussed and agreed to set a term of three years for this Co-creation Research Center. Whether to extend the contract or not will be decided based on the outcomes after three years.

Under this system, the costs of the Co-creation Research Center and the joint research projects are borne by the company, and Shimadzu is expected to bear a total cost of several hundred million yen for the activities of the Center. The minimum unit of the Research Center comprises a specially-appointed faculty member from the company who supervises the operation and a faculty member from a university department who supports the operation. Additionally, a cross-departmental operation support team, consisting of multiple members from each side, can be established.

For this Center, Mr. Ryo Yamaguchi of Shimadzu Corporation assumes the responsibility of supervising the operation as a specially-appointed professor at Tohoku University Graduate School of Medicine. Professor Akaike of Tohoku University Graduate School of Medicine, a leader in this research field, is responsible for supporting the operation. Additionally, Professor Hozumi Motohashi, Research Fellow Minkyung Jung, and Research Fellow Jun Yoshitake join to support research activities. Under the aforementioned scheme, these members work on developing supersulfide analysis technology based on "supersulfides life science," a new research field proposed by Tohoku University. They also accelerate research and explore and plan research themes related to establishing new diagnostic and therapeutic methods and developing food products for health promotion.

• Policy & Society

This article has been translated by JST with permission from The Science News Ltd. ( https://sci-news.co.jp/ ). Unauthorized reproduction of the article and photographs is prohibited.

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