Japanese R&D funding increased last year, but at a modest level, according to the latest data from the Japanese government. According to recent figures, the country’s total R&D spending rose in fiscal 2006 (April 2006–March 2007), continuing an upward trend, led by spending by private companies. In addition, government R&D funding is set to increase this coming fiscal year (April 2008–March 2009) for the first time in four years. According to a survey by the Japanese Ministry of Internal Affairs’ Statistics Bureau, as reported by the National Science Foundation Office in Tokyo (NSF Tokyo), R&D spending in the country increased 3.5% in fiscal year 2006 ended March 2007 to ¥18,463 billion ($157.9 million = ¥116.94 = $1). Conducted in March 2007, the survey included responses by approximately 10,900 companies, 1,000 nonprofit organizations and 3,000 universities. The survey found that industry remains the main R&D participant in Japan, performing 72.2% of the country’s research last fiscal year, compared to nonprofit and public organizations, which conducted 9.5% of the country’s R&D, and universities, which conducted 18.3%. R&D performed by industry was also the fastest growing last fiscal year, up 4.6% to ¥13,327.4 billion ($114.0 million), compared to an increase of 3.6% for nonprofit and public organizations to ¥1,753.3 billion ($15.0 million), and a 0.7% decline for university R&D to ¥3,382.4 billion ($28.9 million). Industry also remains the primary source for Japanese R&D funding, according to the survey. In fiscal 2006, R&D spending by industry rose 4.6% to ¥15,066.8 billion ($128.8 million) to make up 81.6% of the country’s annual R&D expenditures. Spending by foreign sources also increased, rising 5.5% to ¥61.3 billion ($524.2 million). In contrast, R&D funding from central and local government and nonprofit organizations declined 1.6% to represent 18.1% of the country’s expenditures. The decline in government funding is not surprising given the government’s shrinking R&D budget of recent years. But this trend is set to change. Japan’s science and technology (S&T) budget for the coming fiscal year (April 2008–March 2009) marks the first increase in the national government’s S&T funding in four years. According to a report by the NSF Tokyo, Japan’s S&T budget will rise 1.7% to ¥3,570 billion ($30.3 billion = ¥117.76 = $1) in fiscal year 2008. Spending for “Expenditures for Promoting Science and Technology,” which is the government’s primary funding mechanism, will rise 1.1% to ¥1,363 billion ($11.6 billion) for the upcoming fiscal year, according to the British Embassy in Tokyo. Despite the recent decreases in the total S&T budget, the budgets for the Ministry of Education, Culture, Sports, Science and Technology (MEXT) have been stagnant. In fiscal 2008, MEXT’s ¥2,318.2 billion ($19.7 billion) S&T budget, which will account for 65% of the Japanese government’s annual S&T spending, will increase 0.3%. This increase follows a 0.4% increase in fiscal 2007. MEXT is one of the of the largest providers of funding for Japan’s 87 public universities, which in fiscal 2007 received about half of their funding from MEXT. In contrast, MEXT funding for private universities will decline. MEXT subsidies for private universities will decrease 1.6% to ¥159,548 million ($1,354.9 million), after declining 2.2% the previous year. There were 568 private universities in Japan as of 2006, according to the British Embassy. According to MEXT’s 2006 White Paper on S&T, there are 716 Japanese national public and private universities. The British Embassy and other observers noted a growing gap between a selected few prestigious national universities in Japan and the country’s private universities, which are also receiving less funding due to falling enrollment. MEXT’s “Grant-in-aid Scientific Research” budget will rise 1.0% for a second year in a row to ¥193,200 million ($1,640.6 million) in fiscal 2008. These competitive grants are awarded to researchers for basic research in a wide range of disciplines, from the humanities to the sciences, and are administered by the Japan Society for the Promotion of Science. As part of this program, a special project to fund young scientists will receive ¥29.4 million ($0.25 million), a 23% increase from last year. The MEXT’s budget for university infrastructure and facilities will decline 0.6% to ¥41,263 million ($350.4 million) for yet another year-over-year decrease. New major MEXT projects in fiscal 2008 include programs in the life sciences and S&T diplomacy. A five-year neuroscience initiative will receive ¥1,700 million ($14.4 million) in funding in its first year. The second phase of the project that created the nation’s BioBank will receive ¥2,794 million ($23.7 million) to study the acquired SNP data as it relates to specific diseases. Under a joint program, MEXT and RIKEN (the Institute of Physical and Chemical Research) will receive ¥505 million ($4.3 million) for “omics basic research,” part of the country’s genome network project, and ¥495 million ($4.2 million) for basic research of proteins using NMR. In addition, MEXT will provide funding for a major project focused on induced pluripotent stem cells. In January, the Japan Science and Technology Agency announced a call for team and individual research applications for the project with funding of more than ¥5.0 billion ($42.5 million) available over five years. For fiscal 2008, MEXT will provide ¥2.2 billion ($18.7 million) in funding for the project, and the Ministry of Health, Labor and Welfare (MHLW) will provide ¥1 billion ($8.5 million). Funding for MEXT’s World Premier International Research Center Program, which aims to establish world-class research institutes, will more than double to ¥7,109 million ($60.4 million). Last year, the government chose five research centers to participate in the program: Kyoto University’s Institute for Integrated Cell-Material Sciences, Osaka University’s Immunology Frontier Research Center, Tohoku University’s WPI Research Center for Atom/Molecule/Materials, the University of Tokyo’s Institute for the Physics and Mathematics of the Universe, and the National Institute for Materials Science’s International Center for Materials Nanoarchitectonics. Each participant will receive from ¥500 million ($4.2 million) to ¥2 billion ($17.0 million) annually for a decade. After MEXT, the second largest S&T budget will belong to the Ministry of Economy, Trade and Industry (METI). In fiscal 2008, S&T funding for METI will increase 1.9% to ¥512.7 billion ($4.4 billion). Among METI’s major programs are projects focused on translational medicine and sustainable energy. The MHLW will receive ¥136.4 billion ($1.2 billion) in funding for a 3.7% increase. MHLW’s budget includes funding for food and drug risk analysis, clinical research and for the areas of infectious disease and cancer. In fiscal 2008, the Japanese government will also begin work on the Fourth Science and Technology Basic Plan. The Third Basic Plan (fiscal 2006–2010) allocates ¥25 trillion ($212 billion) to S&T and specifies four priority fields (life science information and telecommunications, environmental sciences, nanotechnology and materials). It also emphasizes the development of applied research, collaborations between industry and academia, new technologies and entrepreneurship. The “Innovation 25” long-term objectives for Japan, released last year, highlight many of the same goals and call for further progress in university reform, international research partnerships and competitive research funding.