Deputy Director-General of METI
Expectations for Innovation 25
After writing the 70th of my column, I thought of taking a little break
when I received an e-mail from Mr. Deguchi urging me to write again. Actually,
the Personnel Authority (*人事当局), having possibly thought that I had
rested enough, appointed me an additional post of Regional Economic and
Industry Policy from the end of October besides that of Manufacturing Industries
Policy. I have been trying to fulfill one of Prime Minister Abe's slogan:
"Helping Striving Regions to Help Themselves," by reviewing the
Policy for Promoting Business Locations (*企業立地促進策). I have suddenly become very busy
because of it, with business trips to Ohita and Tottori, making them an
excuse for my loafing on my writing. But wherever I go I meet someone that
tells me, "I am reading your column," making me feel that I can't
loaf around too long. It is easier for me to write about the Policy for
Revitalizing Regional Economies or a chronicle of the business trips, but
since the recent topic is about innovation, I will put those aside for
a later column, and write on what I expect of Innovation 25.
The Changing Universities
In my 3rd column I had written on the University-Based 1000 Venture Business Project that:
"If it moves ahead as planned, a flair for business management will
be instilled in the universities, welling up incentives to strengthen cooperation
with the industrial circles and local communities. Based on this development:
the faculty members that are able to procure capitals from outside will
be properly evaluated; an evaluation system that can make full use of the
research resources within the university will be established; at the same
time, the functions of the administrative offices will be strengthened,
being able to conclude contracts and manage intellectual property rights,
thus establishing a system that can support the faculty. Further developments
will bring about academia-industry collaboration from the research stage,
development support from the trial business stage, and obtaining and transferring
of patents. During these processes the universities should be able to establish
a human network with venture capitalists, attorneys and certified public
accountants. University-based ventures are created only after these comprehensive
efforts are made. Conversely, when the university-based ventures are being
born by the dozens, recombination and mutations should be occurring in
our business ecosystem. I have thus promoted the University-Based 1000
Venture Business Project as a symbolic policy for the Innovation System
Well then, what is your evaluation on the outcome? Naturally, there might be those who still consider it insufficient, but compared with the times before this project was launched we cannot deny that the universities have changed drastically, for the better or worse; that the antennas of the universities capturing the needs of industry and society have been extended higher; and that the universities have become a center of social attention. We hear, on the one hand, comments such as: "The proceeds are mostly government consignment funds." or "The administrative functions of the offices are insufficient and they have not evolved beyond being a 'Ministry of Education (ME) Clerk'." or "The university resource allocations are still being decided formally without any strategies in faculty meetings consisting of those who have no management sense." Yet, on the other hand, are opposing voices such as: "Ventures aren't everything."; "We should put more effort into basic research." or "The primary function of universities will be lost from being business-oriented."
In short, what this suggests is that within this past seven to eight years
from the breakthrough of university-based ventures there have been new
movements generating friction heat and dynamical changes within the universities.
Many with experiences in corporate practices have been recruited into the
universities. Who could have imagined ten years ago that Mr. Deguchi would
ever have become a visiting professor of Tokyo University of Agriculture
& Technology? (Mr. Deguchi, no hard feelings intended (chuckle).) With
this closer relationship between university and the industrial circles,
and with the spreading of academia-industry cooperation from the usual
engineering department to departments of science, medicine and economics,
we cannot deny as well that the environmental and cultural grounds have
now been laid out for the university and the industrial circles to jointly
A Virtuous Cycle of Innovation and Demand
As I have mentioned in my 44th column, innovation will bring about active investments in plant and equipment; and as new products and services with higher customer satisfaction rate are supplied, personal consumptions will rise; and at the same time, if the products/services are internationally competitive, exports will be stimulated. With these processes ignited, the employment rate will take an upturn and bring about increase in the national income, stimulating further demand, and thus forming a Virtuous Cycle of Innovation and Demand. This has been typical of a high-growth period, but it has always been vital to incessantly generate innovation for a sustainable path of economic growth.
The concept of attaining economic growth through Virtuous Cycle of Innovation and Demand was set forth in Nov. 2001 by the New Growth Subcommittee, Council for Industrial Structure(*産業構造審議会) (Subcommittee Chair: Hiroshi Yoshikawa, (then) Professor, Tokyo University Graduate School of Economics). Prof. Yoshikawa has also discussed in his 2003 book on "Structural Reform and Japanese Economy (Iwanami Publishing Co.)" his academic views on this concept. Based on this concept of Virtuous Cycle of Innovation and Demand, in 2005, The New Industry Promotion Strategy, and in 2006, The New Economic Growth Strategy were developed, and with the present Abe Administration's motto being "Economic Growth through Innovation," it has become a widely disseminated social term. Through this concept, both the Science and Technology Policy and the Economic Policy have intertwined like a double-stranded DNA into one solid policy.
The Remaining Task Is: To Have a Big Vision and a Long-term Scenario
With rapid changes in the universities and the industrial circles, and economic growth through innovation becoming a common understanding, what remains is to have a big vision and a long-term scenario. I have repeatedly written in my column that innovation does not just spring out by leaving the market alone as some economists have claimed. The basis for an epoch-making innovation that could change the world is in most cases the product of a military or a national project. Computers came out of ballistics computing technology, and internet was an emergency communications network technology when regular communication means were disrupted. Thus only by having the industry-academia-bureaucracy share a common vision under active government leadership can we give rise to and accelerate an epoch-making innovation that could create a 50-year unit Kondratieff Cycle.
However, the innovations and the new industry groups imaged by The New Industry Promotion Strategy and The New Economic Growth Strategy that were drawn up by the author and others are only for a ten-year span at most. There is nothing written about what is beyond that or what we should aim for beyond it. University-based ventures have effectively functioned as a vehicle for university reform, but they are apt to end-up as in-depth pursuits of circumscribed disciplines of technology, hindering instead the synthesis of diverse technologies, and becoming inappropriate as the bases for long-term innovations. Not to mention its harmful effect of putting the university in the midst of a short-term merit-based undercurrent.
Under the circumstances, because we are a country with technology and economic strengths that can contribute globally, we are being asked at this time to have a super long-term vision of what to aim for and what to materialize with our technologies. In other words, what our 'dreams' and 'aspirations' are. A big vision that is a national consensus is never a military one in Japan. We might find some hints from an everyday example such as in the 'secret weapons' of Doraemon (the animated character), who ponders: "It would be great if we could do this and if we could do that♪" Concomitantly, whether the pursuit of our visions have meaning for the whole mankind, that is, whether our dreams and aspirations are of a noble character, capable of international contribution will also be asked of us.
Such tall tales are not meant for government officials. I have considered myself as a disciple of Professor Kiyoshi Kurokawa for the past five to six years. But he is full of inspirations and his stimulating ideas have always been an eye-opener for me. He used to drop by quite casually at my office during his visits to METI, such that it elicited surprises from my junior officers when I told them afterwards that that was the President of the Science Council. I feel that to have him chair the Innovation 25 Strategic Council as the Cabinet's Adviser is a super personnel appointment. I look forward for him to stir dreams and aspirations in the Japanese and to present a vision that will strike a chord in our hearts.