NEDO Director General of Policy Planning and Coordination Department, METI
Innovation Strategy and NEDO
( I ) DND and NEDO
On Launching This Special Series
The New Energy and Industrial Technology Development Organization (NEDO), an incorporated
administrative agency supported by the Ministry of Economy, Trade and Industry
(METI), is one of Japan's largest funding agencies for R&D. As I was recently
appointed Director General of the Policy Planning and Coordination Department,
I plan to share the ongoing activities of NEDO through this Innovation Strategy
and NEDO site to exchange views regarding an ideal national innovation system
for Japan. During my METI years, I had the opportunity to discuss innovation in
the Academia-Industry Cooperation Subcommittee with Professor Kiyoshi Kurokawa,
whom I had asked to chair. This NEDO series started coincidently with the timely
launching of the “Innovation 25 Strategic Council,” which Professor Kurokawa is
presently chairing. With the Kurokawa Strategic Council as my beacon, I aim to
find the path that NEDO's strategy should take.
It should be noted that this NEDO series is the brainchild of DND's Mr. Deguchi,
who told me: “No one knows about NEDO because of its clumsy public relations.
I will provide you with the site, so inform everyone about what great things NEDO
is doing.” Indeed, for being such a huge institution, NEDO's name is barely known
and it has not even infiltrated academia like the Japan Science and Technology
Agency (JST)*i) or Japan Society for the Promotion of Science (JSPS)*i). I have
been told that a hurdle looms large at NEDO's doorstep, shunning one away, and
I am deeply indebted to Mr. Deguchi for allowing me the opportunity to try and
remedy this situation.
As mentioned in my profile, I served as Director for the Office of University-Industry
Cooperation when the Technology Licensing Organization (TLO) Law was enacted,
and was also the Director of the University-Industry Cooperation Division for
the university-based 1000 Venture Business Project. (I was supported at this time
by Mr. Ishiguro, one of the main contributors to the DND site, during his years
as Director of the Industrial Revitalization Division, Director for the Office
for New Business, and Director of the Policy Planning and Coordination Division.)
I am delighted to have this opportunity to expand on academia-industry cooperation,
university-led ventures and the national innovation system through DND's site,
which is the only support site for university-based venture businesses.
What Is NEDO?
NEDO was established in 1980 as the “New Energy Development Organization,” a government−affiliated
corporation for developing new oil-alternative energy technologies. It was subsequently
expanded in 1988 to include an industrial technology R&D division. Re-inaugurated
as a government−affiliated corporation to undertake most of the national projects
of the (then) Ministry of International Trade and Industry (MITI), it was renamed
the “New Energy and Industrial Technology Development Organization.” With government
administrative reform and the reorganization of MITI into METI, the Agency for
Industrial Science and Technology (AIST) was abolished, and part of it was reincorporated
into NEDO as well as into the National Institute of Advanced Industrial Science
and Technology (the present AIST). NEDO thus became Japan's largest incorporated
administrative agency for implementing and managing research and development.
NEDO's six industrial technology departments (bio/medical, nano/materials, machinery
systems, electronics/IT, etc.) and the departments for new energy and energy conservation
technology development are similar in function to the former AIST R&D laboratories.
The R&D labs implemented and managed national projects which were already
planned, budgeted and launched by the bio-industry, information and communication
electronics, aerospace and defense industry and other divisions of MITI. NEDO
has now assumed the majority of their functions, from rockets and semiconductors
to new energy and coal. NEDO covers almost every industrial technology except
for oil and nuclear energy. In the area of academia-industry collaboration, it
also provides matching startup funds for university-led venture enterprises as
well as fellowships for development of human resources.
National Innovation System and NEDO
NEDO began to coordinate national projects linking industry and academia to establish
a basis for academia-industry cooperation in the late 1990s. At present, METI
is developing concrete plans for the “innovation superhighway” noted in its New
Economic Growth Strategy. It plans to accelerate innovation by resorting to scientific
fundamentals while reforming the system so that funding, human resources and technology
from the public and private sectors can be invested readily into concentrated
areas. It is thus promoting bi-directional collaboration to facilitate and accelerate
the deployment of the fruits of research into markets. NEDO's technology development
projects are based on this very concept, the details of which I will expand on
later in this series.
NEDO is an incorporated administrative agency, which means that the majority of
its funding comes from the government in the form of operating expense allocations
that are entrusted to NEDO's management. Although it is under government control,
NEDO is allowed to manage its R&D projects as needed. It is not hampered by
fiscal year budgets and resources can be allocated to projects in need of further
development or additional funds without waiting for the next fiscal year. Carry
overs to the next fiscal year or multiple fiscal year contracts are also possible,
making NEDO ‘user-friendly.'
NEDO also has an independent Inspection and Operational Management Department
that reviews and evaluates the research projects of other departments stringently
but flexibly. By simplifying contract and management processes while also closely
monitoring the outcome, it endeavors to reduce the administrative burden for those
NEDO Pursues Successful Results
Each project is subjected to interim as well as final evaluations by the Inspection
and Operational Management Department, and sometimes a project is terminated before
its completion. In the nanotech field, the ‘stage-gate system' has been adopted
so that competition among project participants results in technology of only the
highest quality. The evaluation process also considers the transfer rate of technology
into an enterprise. Innovation is meaningless unless it has practical outcomes.
If it is hampered, determining the impeding factor and what NEDO could have done
to remove it are all part of the evaluation process. NEDO's core objective is
to commercialize technology and achieve results.
As described above, NEDO's role in establishing a national innovation system as
a national strategy for technology development is extremely important. I will
address various aspects of this system and how national projects can be improved
later in this series.
*i) NEDO's budget for FY2006 is \229 billion, while the budgets of JST and JSPS,
which are also incorporated administrative agencies, are \113.4 billion and \137.9
billion, respectively.(Source of budget data: JST and JSPS Web sites)
*ii) For more details, please visit NEDO's Web site at http://www.nedo.go.jp/english/