Innovation and Public Research Institutes

28 Pages·2014·0.66 MB·English

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RIETI Discussion Paper Series 14-E-021
Innovation and Public Research Institutes:
Cases of AIST, RIKEN, and JAXA
SUZUKI Jun
National Graduate Institute for Policy Studies (GRIPS)
TSUKADA Naotoshi
RIETI
GOTO Akira
RIETI
The Research Institute of Economy, Trade and Industry
http://www.rieti.go.jp/en/
RIETI Discussion Paper Series 14-E-021
May 2014
Innovation and Public Research Institutes: Cases of AIST, RIKEN, and JAXA*

SUZUKI Jun, TSUKADA Naotoshi, and GOTO Akira
National Graduate Institute for Policy Studies (GRIPS)
Research Institute of Economy, Trade and Industry (RIETI)

Abstract
In this paper, we focus on three large public research institutes (PRIs) in Japan—National Institute
of Advanced Industrial Science and Technology (AIST), the Institute of Physical and Chemical
Research (RIKEN), and the Japan Aerospace Exploration Agency (JAXA)—and investigate their
roles in helping Japan’s industry by examining their patents. First, the background and history of the
development of these institutions are described briefly. We employ four measures drawn from patent
data (inventor forward citation, examiner forward citation, family size, and generality index) to
describe the inventive activities of PRIs. Universities’ and firms’ patents are used as benchmarks.
The impact of the PRIs’ research collaboration with the private sector is analyzed as well. We found
that each of the three PRIs has been playing a unique role in Japan’s innovation system. In addition,
we found out that universities’ patenting activity has been facing difficulties particularly in recent
years. Finally, we discuss the factors that might affect the research outcome.
Keywords: Public research institute, University, Patent, Research collaboration
JEL classification: O34, O32
RIETI Discussion Papers Series aims at widely disseminating research results in the form of
professional papers, thereby stimulating lively discussion. The views expressed in the papers are solely
those of the author(s), and neither represent those of the organization to which the author(s) belong(s)
nor the Research Institute of Economy, Trade and Industry.

* This study is conducted as a part of the Project “Role of public research institutes in Japan’s National Innovation
System” undertaken at Research Institute of Economy, Trade and Industry (RIETI). We would like to express thanks
for the comments received from participants at the Asialics 2013, the RIETI/GRIPS workshop at January 2014, and
persons concerned of AIST, RIKEN and JAXA. We would also like to thank Masahisa Fujita, Masayuki Morikawa,
Sadao Nagaoka.
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1. Introduction

Among the actors in the National Innovation System (NIS), the Public Research Institute
(PRI) is probably the least studied. Recently, many researchers inquired changing role of
universities in the National Innovation System. In comparison, research on the role of PRIs in
the NIS is rather limited. Much of that research focuses on the PRI’s role in developing
countries’ NIS. Notable exceptions include Rush et al. (1996), whose chapters examined PRIs in
Germany, the United Kingdom, and the United States, among others. Jaffe et al. (1998) used
patent statistics to evaluate NASA’s support of industry technology, although whether it is
appropriate to classify NASA as a PRI is debatable.
In Japan, the total amount of R&D spending in 2010 was 17 trillion yen, 70.2% of which
industry has spent. Universities and colleges have spent 20.1%, and public organizations have
spent 8.3%. Still, it uses 40% of government R&D, while universities spend 53% and firms
spend 5%. It employs 32.422 researchers, which is 3.8% of the total number of researchers in
Japan, while the firms’ share is 58.2% and the universities’ share is 37.0%. PRI researchers
spent more R&D per researcher, 90.98 million yen, compared to 12.09 million yen per
university researcher and 24.48 million yen per researcher in the business sector. While most
university researchers spend a certain amount of time teaching and engaging in activities other
than research,2 researchers at PRIs have more time to concentrate on their research, although
we do not have the data to support this.
Historically, PRIs conducted research related to government missions, including defense,
space exploration, health care, agriculture, and industrial technology. PRIs that aimed to help
industry played an important role to help industries upgrade their technology. For instance,
Odagiri and Goto (1996) introduced a case where Electro-Technical Laboratory (ETL)
researchers contributed to the development of semiconductors.3 The ETL is a part of the
National Institute of Advanced Industrial Science and Technology (AIST) today, which is one of

2 According to a survey by the Ministry of Education, university faculties spent only 36.1% of
their working hours on research in 2008 (NISTEP-MRI, H21.3).
3 See Chapter 8, Electrical and Communications Equipment, in Hiroyuki Odagiri and Akira
Goto, Technology and Industrial Development in Japan, Clarendon Press, Oxford, 1996.
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the three PRIs we will examine in this paper.
However, throughout the 1970s and 1980s, as Japanese firms’ technological capabilities were
enhanced and reached technological frontiers with increasing financial resources, their reliance
on PRIs as a source of advanced technology decreased. Universities’ growing research
capability and their close ties with firms also obscured the role of PRI in post catch-up Japan.
This is particularly true for PRIs whose mission is to promote industrial technology.
Another factor that influenced the discussion on the proper role of PRIs was increasingly
intense trade conflict with the United States. The United States criticized the Japanese
government for its “mercantilist” policy and outright government assistance to industry. In
response, the Japanese government shifted research at PRIs toward basic research from research
closely related to industrial needs. This trend was further compounded by the perception that
Japanese industries had finally reached the technological frontier and it had to create technology
on its own rather than depending on foreign technology. As a result, government research
institutes that were working closely with industry started to emphasize basic research.
This trend changed again after the economic downturn in the early 1990s and prolonged
recession that followed for more than a decade. Because of the recession and aging population,
government deficit increased substantially. Thus, public spending was scrutinized to ensure the
government was bringing in “value for money.” There was a simultaneous trend toward
privatization, more use of market, and smaller government, further questioning the rationale of
PRIs.
Presently, there is an ongoing discussion about the role and rationale of PRIs in Japan’s
innovation system. Whether it will remain a research institute, evolve into something unique, or
transform into a technology service organization still remains to be seen in Japan.
In this paper, we focus on three major PRIs in Japan: the National Institute of Advanced
Industrial Science and Technology (AIST), the Institute of Physical and Chemical Research
(RIKEN), and the Japan Aerospace Exploration Agency (JAXA). Specifically, we investigate
their role in helping Japan’s industry by examining their patents. First, however, we will provide
a brief overview of the three PRIs.

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2. A brief history of three institutes

In this section, we briefly describe the three PRIs’ history, current status, and their patenting
activity. Also included is a brief description of Japanese universities’ patenting activity since we
use the university sector as a benchmark to compare the three institutes’ performance.
We identified patent applications of the three PRIs and universities by checking applicant name,
applicant address, and inventor address in the patent bibliographic information using the IIP
patent database.4

2-1. AIST

Although some of the laboratories constituting AIST were established more than 100 years
ago, the direct precursor of AIST—the Industrial Technology Agency (ITA)—was established in
1948. Following a succession of restructuring as well as a name change, a large laboratory was
built in Tsukuba in 1980, which is 50 km outside Tokyo. At that time, it was a science city in the
making. In 2001, it was incorporated as an independent administrative agency upon the
integration of the 15 laboratories under the auspices of the Ministry of Economy, Trade and
Industry (METI).
AIST’s main mission is to explore next-generation key technologies through advanced
research in leading-edge industries in such fields as electronics, information, machinery,
environment, and biotechnology, and through interdisciplinary research. As a public research
institute, AIST functions as a platform for developing technologies for innovation in Japan and
is proactive as an organization that directly promotes such innovations in industry.
AIST and its predecessor ITA have a long history of contribution in planning, coordinating,
and promoting many large-scale national R&D projects, most of which are organized as
research associations. Most research associations in Japan are created by the METI (formerly
MITI) initiative to coordinate industrial participation in a specific METI large-scale project. A

4 We used the beta version of IIP database. The latest published version is available for
academic use from the website of the Institute of Intellectual Property:
http://www.iip.or.jp/e/e_patentdb/
4
notable example is the VLSI Research Association formed in 1976. AIST has a section devoted
to conducting research to develop national standards such as mass, length, time, electricity,
temperature, luminous intensity, and amount of substance.
AIST’s annual budget was 90 billion yen in 2012, and it employs 2,500 researchers. About
79% of its revenue comes from the government, and 14% comes from industry. AIST accepts
4,600 visiting researchers from other organizations through the industry/academia/government
partnership (1,700 from industry, 2,100 from academia, and 900 from other PRIs) in 2012.
AIST and its predecessor ITA applied patents actively for quite some time. Figure 1 shows
the general trend in patent applications in Japan from 1971 to 2010, overlaid with 2 sets of
patent series concerning AIST: the number of patent applications by AIST/ITA and the number
of joint patent applications by AIST/ITA and private firms. The periods of some of the
well-known large-scale R&D projects are also shown. (The “Sunshine” and “Moonlight”
programs were collections of large-scale R&D projects that focused on new energy sources and
the effective use of energy following the oil crisis.)
The total number of patent applications in Japan grew rapidly from the late 1970s to 1990,
declining somewhat in the early 1990s. This decline in the early 1990s may have been due to
introducing an improved multiple claim system in 1987, and to administrative guidance to
reduce patent applications since JPO had backlogs of applications to be examined. The number
of patent applications surged again in the late 1990s, peaked in 2001, and then declined in the
2000s. The number of patents applied for in 2009 and 2010 in this chart is not reliable, as our
dataset does not fully cover them.
As shown in Figure 1, AIST’s number of patent applications has two distinct peaks. The first
peak is seen in 1985 and the second in 2003. The 1980s can be regarded as the “golden age” for
AIST/ITA, just after it relocated to the new Tsukuba Center and participated in many large-scale
projects, such as the Sunshine and Moonlight projects and fifth-generation computer project.
However, the number of joint patent applications with the private sector is greater during the
second peak seen in the early 2000s.
AIST/ITA’s patent applications slowed down in the mid-1990s, a dip seen in other PRIs and in
the overall number of patent applications in Japan. A possible reason is the adoption of an
improved multiple claim system in 1988. After this change, the number of claims in a patent
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increased, and possibly decreased the total number of patent applications. In addition, for PRIs,
the emphasis on basic research mentioned before might have resulted in the decrease of patent
applications. In the latter half of the 1990s, the importance of patents was emphasized in Japan,
following the introduction of the Bye-Dole Act and so-called pro patent policy in the U.S. in the
1980. In 1998, Technology Transfer Promotion Act (TLO Act) was enacted in Japan, and
universities and PRIs were encouraged to apply patents and transfer technology through
licensing. This may be reflected in the increase of patent applications by AIST and other PRIs in
the latter half of 1990s. Patent applications peaked in 2005 and started to decline afterward,
partly due to a weaker Japanese economy in general and decline of electronics industry, which
was the most actively patenting industry, and partly because of the shorter maximum amount of
time between the filing of applications and requests for examination from seven years to three
years.
(Figure 1 here)

2-2. RIKEN

RIKEN, the Institute of Physical and Chemical Research, was established in 1917 as a private
foundation for the study of pure science by industrialist Eiichi Shibusawa and leading
researchers, modeled on the Kaiser Wilhelm Society in Germany. The private sector and the
government each provided half of the funding.5 With increasing support from the government,
RIKEN grew steadily through the 1930s and early 1940s. RIKEN is rather unique in that it
created a group of companies that commercialized RIKEN’s research output and then return the
part of the profit to RIKEN. It was considered a Zaibatsu (conglomerate) that dominated the
Japanese economy before WW2, and was dissolved after the end of WW2 by the Allied Forces.
Some of the companies still exist and developed into major corporations, such as Ricoh or
Kaken Pharmaceutical.
RIKEN re-incorporated in 1958 as a government-affiliated corporation for basic science and

5 See T. Hiroshige (1973) Kagaku no Shakaishi (The Social History of Science) Tokyo, Chuo
koron-sha. See also Odagiri and Goto (1996).
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applied research. It relocated in 1967 to state-owned land in Wako, outside Tokyo, and in the
1980s, modeled after the Max Planck Society in Germany. It began establishing satellite
institutions across the country, each focusing on a specific field of research such as genetic
research, super computer, synchrotron radiation, and tissue engineering. In 1996, RIKEN
generated and incubated spin-off companies, and 22 firms have been established as of 2013.
Since 2003, RIKEN has been an independent administrative agency under the Ministry of
Education, Culture, Sports, Science and Technology (MEXT). Its mission is to support excellent
research in science and technology in order to contribute to the technological and economic
development of the Japanese society through active partnerships with the private sector.
Until 1986, RIKEN’s research staff members were permanent employees, and its number was
almost stable at 400–450. RIKEN started to employ fixed-term research staff in addition to
permanent staff in 1986. Since then, the number of researchers has grown rapidly, reaching
about 2,900, of which 2,500 are fixed-term employees in 2012. Moreover, RIKEN accepts about
3,000 visiting researchers and graduate students every year.
In 2012, RIKEN’s annual budget was about 90 billion yen. About 98% of its revenue comes
from the government and 1.5% from the private sector. Its focus is toward the basic end of
research, but as mentioned above it has a unique history of having created spin-off companies
before WW2, and its contribution to industry has always been emphasized.
Figure 2 shows the trend in RIKEN’s patent applications. Its overall pattern is somewhat
similar to that of AIST. It peaked in the mid-1980s, similar to AIST, and peaked again in the
mid-2000s. The second peak may have resulted from the “Arima Initiative” pursued by
RIKEN’s 7th president, Dr. Akito Arima, from 1993 to 1998. He emphasized RIKEN’s close
ties with industry in the past and encouraged patenting activity, noting that “the value of one
patent equals that of ten academic papers.” He lifted the ban on exclusive licensing of RIKEN’s
patents (on a limited-term basis) and aggressively supported generating spin-off companies and
technology transfers. The proportion of RIKEN’s joint patent applications with the private
sector has exceeded AIST’s but has gradually decreased in the 2000s.

(Figure 2 here)

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2-3. JAXA

JAXA has three precursor organizations: the Institute of Space and Aeronautical Science
(ISAS), the National Aerospace Laboratory of Japan (NAL), and the National Space
Development Agency of Japan (NASDA).
The Institute of Space and Aeronautical Science (ISAS) was founded in the University of
Tokyo in 1964. In 1970, it launched Japan’s first artificial satellite, OHSUMI, and put it into
orbit successfully. In 1981, ISAS was reorganized as a joint research organization among
Japanese universities, and it has launched 27 scientific satellites and solar system explorers to
date, including the SAKIGAKE probe to Halley’s Comet and HAYABUSA probe to the asteroid
ITOKAWA.
The National Aerospace Laboratory of Japan (NAL), which was established in 1955, has
pursued research on aircraft, rockets, and other aeronautical transportation systems, as well as
peripheral technology. NAL has also developed and improved large-scale test facilities, such as
wind tunnels and super computers, and has made them available to related organizations and
projects. Those examples include the NAMC YS-11 project, a turboprop airliner built by a
Japanese consortium started in 1954, and the Mitsubishi Regional Jet (MRJ) project, a turbofan
jet airliner built by Mitsubishi Aircraft Corporation started in 2003. The Ministry of
International Trade and Industry initiated both projects.
The National Space Development Agency of Japan (NASDA) was established in 1969 to
develop space and the promotion of the peaceful use of space. Its main purpose was to develop
satellites (including space experiments and the space station), launch vehicles (including
launching and tracking the craft), and develop methods, facilities, and equipment required for
such endeavors. NASDA had successfully developed a series of liquid propellant rocket engines
and launched more than 30 satellites for communication, broadcasting, weather observation, and
so on. Since 1988 NASDA has been incorporated in the International Space Station program.
ISAS, NAL, and NASDA coalesced to form one independent administrative agency, JAXA,
in 2003 under the auspices of MEXT. It employs 1,500 researchers with an annual budget of
180 billion yen, 99.4% of which the government provides. JAXA is different from the previous
two PRIs. Not only does it conduct R&D related to space, but it also develops rockets and other
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products in cooperation with industry, and procures from it. In 2012 “the contribution to private
sector innovation” was officially included as part of JAXA’s mission. NASDA and NAL worked
closely with each other and have a long history of collaboration with the private sector. For
example, NAL undertook R&D and analysis projects to design, test, and define the development
steps of the key large rocket engines, which were then developed by Mitsubishi Heavy
Industries or Ishikawajima-Harima Heavy Industries, two major contractors for rockets, under
NASDA sponsorship. Many of the technical papers on the development of engines or
components were written by JAXA engineers, even though most of the work was done by the
two contractors (Sutton, 2005).
Figure 3 shows the trend in JAXA’s patent applications. Although the number of patents
owned by JAXA is far smaller than those of AIST and RIKEN, it has two peaks in the 1980s
and 2000s, similar to AIST and RIKEN. The obvious feature of JAXA’s patenting is the high
proportion of joint applications (even higher than RIKEN’s), especially in the 1990s. This could
be explained in part by the close relationship between JAXA and its contractors. Most of
JAXA’s R&D activities are, in fact, the collaborative development of special hardware and
software with a limited number of private firms. Joint inventions are common, although the
applicability of that kind of knowledge is rather limited. The several big projects involving
private firms were completed around these periods, which might be one reason why the share of
joint patent decreased.

(Figure 3 here)

2-4. University
In addition to the three PRIs mentioned above, we would like to discuss the patenting activity
of universities in Japan. In 2012 there were 771 universities in Japan, 86 of which are national
universities. Most R&D activities are highly concentrated in these national universities, except
for a few large private universities. National universities did not have the status of independent
legal entity until 2003, and hence they did not have patent rights. Although formal collaborative
research with private firms on a contract basis became possible for national universities only
after 1983, university professors had been working closely with industries, mostly informally.
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