Science and Technology Policy: Abe’s Bold Reform Plan

Reemphasizing the Council for Science and Technology Policy

On March 1 the Council for Science and Technology Policy held its first meeting since the launch of the current Abe Shinzō administration. This council, which is chaired by the prime minister, is charged with formulation and overall coordination of Japan’s fundamental comprehensive policies for science, technology, and innovation. It is ordinarily expected to meet for about an hour once a month or so, but while the Democratic Party of Japan was in power, particularly under Prime Ministers Kan Naoto and Noda Yoshihiko (from June 2010 through December 2012), the meetings were held at intervals of several months or longer and lasted only about 20 minutes. The amount of time the prime minister devotes to the meetings of this council is a concrete indicator of the level of importance he places on this aspect of government policy. Prime Minister Abe made his own stance explicit in a comment he made at the council meeting, where he noted that the preceding DPJ administrations did not make active use of this organ and declared, “I believe that it is necessary to send out a message that innovation is critically important, in order to promote innovation and to encourage the people engaged in such innovation, in the area of science and technology, and also in the field of politics.”

The participants at the March 1 meeting agreed on the need to strengthen the council and formulate a new strategy for science and technology in order to promote economic growth. The prime minister called for measures to be considered that fundamentally reinforce the functions of the council as an organ of coordination, through increasing its authority and budget, so that it serve as a greater driving force.

Prior to this, at a meeting of the Industrial Competitiveness Council on February 18, Yamamoto Ichita, minister of state for science and technology policy, presented a proposal for reform of the Council for Science and Technology. (The Industrial Competitiveness Council, which is also chaired by the prime minister, is an organ under the cabinet’s Headquarters for Japan’s Economic Revitalization.) Up to now the allocation of budget funds for science and technology has been handled separately by the ministries and agencies in charge. A major plank of the proposal Yamamoto presented was to strengthen the functions of the Council for Science and Technology Policy by having it handle these appropriations on a unified basis. Evidently the administration is thinking of enhancing this council’s role as a control tower by giving it authority over the allocation of resources. It has also been reported that the ruling Liberal Democratic Party is aiming to put together its own reform plan for the reorganization of the Council for Science and Technology Policy by the end of March, and Yamamoto is to present a plan to the Industrial Competitiveness Council by June after considering the LDP proposal, which is to be drafted by the Research Commission to Promote Research and Establish a Nation of Innovative Science and Technology, an organ under the party’s Policy Research Council.

Bottom Up or Top Down?

What approach should be taken to strengthen the role of the Council on Science and Technology Policy as an organ for coordinating policy on science, technology, and innovation policy? How should the council be involved in the process of appropriating budget funds for science and technology? Should it have ¥2 billion to appropriate? Or should the amount be ¥50 billion or even ¥150 billion? Questions of this sort have come up every time the idea of revamping the council has been discussed.

The underlying question is whether Japan’s policy for science, technology, and innovation is to be formulated through a bottom-up process, as it has been up to now, or on a top-down basis. This is not a question of which of the two approaches is superior. Each has its advantages and disadvantages. In general terms, a bottom-up approach to policymaking minimizes risks but tends to be lacking in terms of overall strategic vision, while a top-down approach allows a high degree of strategic coherence but is accompanied by greater risk. Even if it were theoretically possible to design a system that would optimize the balance between strategy and risk, in practice it is extremely difficult to achieve. So what is required is a bold political choice of one approach or the other, supplemented by efforts to make up for the weak side of the approach that has been adopted—by hedging against risks in the case of a top-down system and by doing whatever possible to enhance strategic coherence in the case of a bottom-up system. But we must not forget the existence of an important premise, namely, the extremely dispersed system of policymaking and resource allocation that is a feature of the Japanese government.

An Ambitious Plan to Revamp the Policymaking Process

Within the Japanese government, specific policy measures are formulated at the level of divisions in the responsible ministries and agencies. The same divisions submit budget requests for the measures in question, and after funding is approved they are responsible for implementation of the budget. The heads of the divisions and the civil servants working under them are well versed in the policy issues for which they are responsible, and they are familiar with the private-sector counterparts with whom they need to cooperate. For example, the personnel at the division in charge of next-generation renewable energy sources are well aware of the relevant human resources at universities, public research institutes, and business corporations, the topics that these researchers are working on, and the problems they face. So the government’s ability to draft specific policy measures is quite good, and there is little risk that it will commit major mistakes at this level. But this approach makes it hard to conduct strategic initiatives aimed at achieving major policy goals.

So what should be done? I had thought it would be quite difficult, in the absence of extraordinary political determination, to grant a substantial budget to the Council for Science and Technology Policy and put it in a position to wield its budgetary authority over the policymaking process at the division level. But if Prime Minister Abe says that he intends to make this change, good for him.

Actually, the Fourth Science and Technology Basic Plan (a five-year plan covering fiscal 2011–15) called for the establishment of a system to make it possible to address major policy issues under the leadership of the Council for Science and Technology Policy by having it group together the specific measures formulated by divisions into packages covering two broad areas, “life innovation” (life sciences and medicine) and “green innovation” (the environment and energy). The idea was to introduce not exactly a top-down approach but one based on joint direction by a group of key individuals. But the reform that Prime Minister Abe is now seeking to implement, aiming to strengthen the council’s role as the command tower, is far more ambitious.

In order to make this reform bear fruit, two conditions will need to be met. One is the appointment of science and technology advisors to the prime minister—people who can give him the support required to grasp the issues and make informed decisions about the overall direction for the government’s policies. The other is the strengthening of the council’s secretariat. It currently consists of only about 130 people, fewer than the comparable organ in South Korea, which has a population less than half of Japan’s. This secretariat should be substantially enlarged, and it should strengthen its coordination with the other government organs supporting research and development, such as the Japan Science and Technology Agency, Japan Society for the Promotion of Science, and New Energy and Industrial Technology Development Organization. These are the minimum conditions that must be met in order to establish a top-down system for Japan’s science and technology policy.

Participating in the TPP Talks: From Protecting the Agricultural Coops to Reviving Agriculture

Finally, let me just touch briefly on Trans-Pacific Partnership. On March 15 Prime Minister Abe announced that Japan would seek to participate in the TPP negotiations. This is a highly welcome move. I have repeatedly written in this column about the great strategic importance of the TPP for Japan. Here I would like to note just one more point. The Abe administration’s economic policy consists of three main planks: (1) bold relaxation of monetary policy, (2) dynamic fiscal stimulus, and (3) growth strategy and structural reform to encourage private-sector investment. The TPP will offer a good opportunity to advance the structural reform agenda. The Central Union of Agricultural Cooperatives is strongly opposed to participation in this free-trade pact. But Japanese agriculture is already in decline. The government should shift its focus from protection of the status quo in farming, of which the agricultural cooperatives are the loudest defenders, to measures that will promote a revival of Japan’s agricultural sector.