R&D Capability of Japanese Industry from an International Perspective

Abstract

The decline in R&D performance of Japanese industry has been pointed out widely in recent years. I consider the following four potential causes for such decline. First, the level of R&D investment in Japan has been stagnant since the Lehman shock, which caused a significant appreciation of Yen and the subsequent deflation of the Japanese economy. Second, Japanese industry has lost its advantage in the speed at which it can develop technologies from prior technologies. Third, there remain a large difference in the extent to which science is utilized for R&D, compared to the U.S. and the U.K. Fourth, the level of utilization of foreign inventors and knowledge is low. I suggest the necessity to build an R&D strategy that recognizes both global competition and opportunities for R&D in these respects.