Japan’s total R&D expenditures declined for the second year in a row in fiscal 2010 (April 1, 2009–March 31, 2010). The country’s total R&D expenditures reached ¥17,246.3 billion ($185.4 billion = ¥93 = $1), a decrease of 8.3%. Total R&D expenditures as a percentage of GDP declined 0.18% to 3.62% in fiscal 2010. The figures in this article are based on the Statistics Bureau of Japan’s Ministry of Internal Affairs and Communications (MIC) annual R&D survey, published in December 2010. The National Science Foundation’s Tokyo Regional Office reported the findings in January 2011.

The survey was sent to approximately 13,400 companies that conduct R&D activities and have capital assets of more than ¥10 million ($100,000). The survey’s return rate was 83%. All 1,100 of the country’s public and nonprofit research organizations and the 3,600 universities, two-year colleges, inter-university research institutions and technical colleges that were sent the survey responded. Research expenditures are based on the most recent reporting period ending prior to or on March 31, 2010.

R&D performed by industry declined 12.1% to ¥11,983.8 billion ($128.8 billion) in fiscal 2010, accounting for 70% of the nation’s total R&D spending. This was the second straight year of decreases. In fiscal 2009, R&D performed by industry decreased 0.8% after increasing 2.6% in fiscal 2008. R&D performed by Japanese universities increased for the third year in a row, rising 3.0% after increasing 0.6% and 1.2% in fiscal 2009 and fiscal 2008, respectively, to make up ¥3,549.8 billion ($38.1 billion), or 21% of total expenditures. Nonprofits/public organizations’ R&D performance accounted for 10% of the total, with ¥1,712.7 billion ($18.4 billion) in spending, a decrease of 0.5% after an increase of 0.6% in fiscal 2009.

As a source of R&D funding, government spending hit an all-time high in fiscal 2010. The government contributed 20% of R&D expenditures, which were valued at ¥3,495.7 billion ($37.5 billion), 4.5% more than fiscal 2009. Despite an 11.1% decline, industry remained the primary source of R&D funding, contributing ¥13,682.5 billion ($147.1 billion), to make up 79% of total R&D expenditures. Industry’s R&D spending declined 1.2% in fiscal 2009 after increasing 3.4% in fiscal 2008. Direct investment by foreign organizations in fiscal 2010 was ¥68.1 billion ($732.2 million) in fiscal 2010, a 2.2% increase, or 0.4% of R&D expenditures. In fiscal 2009, foreign organizations’ spending jumped 11.4% after declining 2.5% in fiscal 2008.

Natural sciences accounted for 92% of Japan’s total R&D expenditures in fiscal 2010, at ¥15,865.5 billion ($170.5 billion). This category includes science, engineering, agriculture and health R&D. R&D expenditures for all three types of research decreased last fiscal year. Spending on developmental research, which still represented the majority of research, declined 12.0%. Developmental research comprised 60% of total natural science R&D expenditures at ¥9,640.4 billion ($103.6 billion). This is yet another decline as developmental research decreased 1.0% in fiscal 2009 after an increase of 1.2% in fiscal 2008. In fiscal 2010, expenditures on applied research decreased 5.6% to ¥3,837.3 billion ($41.2 billion), or 24% of total natural sciences R&D. Applied research expenditures decreased 0.2% in fiscal 2009 after rising 7.6% in fiscal 2008. In fiscal 2010, basic research expenditures declined 0.2% to ¥2,387.7 billion ($25.6 billion) to account for 15% of total natural science R&D expenditures. Basic research expenditures rose 1.7% in fiscal 2008 and decreased 0.1% in fiscal 2009.

All seven fields of natural sciences experienced declines in R&D expenditure in fiscal 2010 as well. Nanotechnology R&D expenditures declined the most, falling 8.4% to ¥907.3 billion ($9.7 billion) to make up 5% of total natural science R&D expenditures. Life science represented the largest field for R&D expenditures last fiscal year with ¥2,705.4 billion ($29.0 billion) in spending, 16% of total natural science expenditures, for a 1.4% decline. Environmental R&D expenditures declined 5.9% to ¥1,040.7 billion ($11.1 billion) to make up 6% of the total. Energy R&D expenditures accounted for 6% of the total with ¥965.6 billion ($10.3 billion) in spending, a decrease of 5.4%.

As of March 31, 2010, the number of personnel involved with R&D in Japan was 1,063,200, a decrease of 0.2%. The number of researchers also declined 0.2%, to 840,300, accounting for 79.0% of total R&D personnel. The National Science Foundation describes the decline in personnel as minor, considering the decrease in R&D expenditures.