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Over the past year, Japan's scientific activities have been notable for many reasons, from widely publicized misconduct in stem-cell research to breakthroughs in efficient blue light-emitting diodes that won the 2014 Nobel Prize for Physics. As a backdrop, the government is implementing drastic structural reforms of the research environment, including organizational changes aimed to improve project management.

In 2012, Prime Minister Shinzō Abe took power, and hoped to use advances in science and technology innovation to revive the stagnant economy. His aims are laid out in the government's sustainable growth plan, the Japan Revitalization Strategy, under which activity is already going ahead. Under this plan for example, the government is accelerating the push to turn breakthroughs into new industries.

Innovation, though, can only take place with structural reforms, such as improving government oversight of national science programmes. Such reforms “are essential to make the most of the limited budgets,” says Atsushi Sunami, professor of science policy at the National Graduate Institute for Policy Studies (GRIPS) in Tokyo. Many scientists hope that Abe will revamp the research structure, but wonder if it will solve deep problems in Japan's scientific foundation.

Despite the push for innovation, Japan's economic outlook remains bleak and the main research budget for 2015, which accounts for a third of the total science and technology allocation, fell 3.9% from the previous year to about US$10 billion. Every year the government has also been cutting another form of support called management expenses grants, a basic subsidy to operate universities and research institutes. To compensate for the reductions in those grants, the University of Tokyo secures much of its revenue from external funds. In 2013, for example, it obtained more than US$580 million, about 30% of revenue, from external sources.

To get the maximum impact from the curtailed budgets, Japan's government strengthened the authority of the Council for Science, Technology and Innovation (CSTI), which is an advisory body chaired by the prime minister. For 2015, the CSTI selected 153 projects under five themes: clean energy, improved life expectancy, next-generation infrastructure, the creation of new industries with regional resources, and reconstruction in northern Japan after the huge 2011 earthquake. Many of these projects are coordinated beyond the boundary of government ministries, which have been criticized for inconsistent support and duplication of projects.

Fifty of CSTI's projects are categorized in the SIP (Strategic Innovation Promotion Programme), which provides about US$425 million over five years to support 10 non-medical programmes. In the best-funded SIP activity, retired University of Tokyo geologist Tetsuro Urabe will lead a US$51 million effort to find better ways to exploit ocean resources, such as rare metals, for commercial applications. Half of the 10 SIP programme directors come from Toyota and other large manufacturers. Yuko Ito, an expert on policy at the National Institute of Science and Technology Policy (NISTEP), says, “Large companies are looking to research and development partners abroad.” Ito suggests that SIP will also explore domestic universities and that programme directors could even require academics to put a case forward for potential commercial applications of basic science to obtain research grants.

The CSTI also created a US$450 million programme called ImPACT that takes chances on risky research that could bring high-impact results. Under ImPACT, 12 projects are underway, including the development of super-green IT devices using spintronics, a next-generation technology to use both the charge and the spin of electrons for energy-efficient information storing and processing, by reducing power consumption to a hundredth of existing memories.

Japan already contributes significant efforts to related disciplines. In the 2014 Nature Index, for example, 75% of Japan's articles come from chemistry and physical sciences.

A new medical research system

Japan's rapidly ageing population — 24.1% of its people were 65 or older in 2012, and the figure is expected to grow to 39.9% in 2060 — is driving the country's urgency for R&D on drugs and other therapies. Such development, it is hoped, would have a major economic benefit. In 2013, Japan's import of drugs exceeded its exports by about US$15 billion, and its trade deficit for medical equipment was about US$6 billion in 2012. To reduce this imbalance, the Japanese government set an ambitious goal of doubling the exports of medical equipment by 2020.

The government is consolidating the management and funding for medical research into the newly established Japan Agency for Medical Research and Development (AMED). Headed by Makoto Suematsu, currently dean of Keio University's School of Medicine in Tokyo, AMED will take over projects managed by three different ministries. It will have a 2015 budget of about US$1.1 billion, to be distributed between nine areas identified for their contribution to the economy and the healthy longevity of citizens. Among the focus areas will be cancer and neural diseases, plus innovative technologies. Currently, about a quarter of Japan's Nature Index publications are in life sciences.

Techniques, such as this 3D-printed organ model along with work on engineered tissues, drive Japan's reputation for medical capabilities. Credit: The Asahi Shimbun/Getty Images

“There will be a lot of difficulties in running the new organization, but we expect the system will stimulate the activities of academia and companies and bring results to patients at the earliest possible time,” says Yutaka Hishiyama, deputy director general of the Office of the Healthcare Policy, which will oversee AMED.

The government's biggest push involves regenerative medicine. Efforts will be centered on induced pluripotent stem (iPS) cells, which can achieve embryonic-like status by being reprogrammed with specific genes, a technique that Shinya Yamanaka of Kyoto University won the Nobel Prize in Physiology or Medicine 2012 for developing. In September 2014, a team led by stem-cell biologist Masayo Takahashi at RIKEN succeeded in the first attempt to implant tissue derived from iPS cells into a patient with visual impairment, but results remain uncertain.

Getting more competitive

Leaders of Japanese science have legitimate concern that the country is stagnating. “We fear that both the quality and quantity of research have kept deteriorating since around 2002,” says Ito. Between 1999 and 2011 the number of papers published by scientists in Germany, the United Kingdom and the United States increased by more than 20%. But during this same period, Japan's count increased by a mere 3%, according to National Institute of Science and Technology Policy (NISTEP). The quality of the Japanese papers also appears to be slipping. Japan ranked fifth in the most-cited papers in 1999–2001, but its position had fallen to eighth a decade later.

Government initiatives could improve Japan's competitiveness. For example, the science ministry plans to allocate Management Expenses Grants to universities based on performance, measured by such indicators as the number of papers published and external grants received.

Moving too fast?

Excessive pressure to produce results too quickly, however, might undermine the country's scientific foundation, says Michinari Hamaguchi, president of Nagoya University — home of six out of the 13 Japan-born scientists who have won a Nobel Prize in the 21st century. He says that his university's strength lies in its tradition of open discussion and curiosity-driven research. He says, “But nowadays, the atmosphere in Japan's academia doesn't allow such free discussion. Japanese culture is demanding conclusions quickly and shutting out different opinions.”

Young people don't know how to foster originality to become fully-fledged scientists

Mitiko Go, former president of Ochanomizu University in Tokyo, says that large-scale funding schemes are thwarting the creative thinking of young people. “Faculty staffers with sufficient funding are too busy producing papers in high-impact journals, which are the indicator for their evaluation,” she says. “And young people are like factory workers. They don't know how to foster originality and become a full-fledged scientist.”

Careers in academia are losing their allure. The number of graduate students in the science and engineering doctoral courses at national universities has been falling — down 24.3% from 2000. The number of tenure positions fell 9.8% from 2005 to 2012. Scientists say people are shying away from academia because of working conditions. “Some post-docs cannot marry, or even get a credit card,” Sunami says. Post-docs in the US, for example, do not suffer from this kind of constraint. “Can the government-led innovation policies prevent this from worsening? We don't have clear answers yet,” Sunami says. “But whatever we do we cannot afford to fail.”