Asian Economies Striving to Enhance Innovation Capabilities

The governments and companies of the Asia-Pacific region all recognize the importance of new technology and innovation as one of the most critical factors to sustaining future economic growth. Unlike the 1980s and early 1990s, they are looking at how various aspects of the U.S. model might be adapted to their particular needs, and more importantly, are moving forward quickly to implement new ideas and institutions. This is true both for the major Asian S&T powerhouses-Japan, China and Korea-and for the increasingly strong smaller technology players like Singapore and Taiwan. They all are taking full advantage of their full access to the global economy and to scientific advances wrought by advances in information technology. The region's overall economic recovery and individual players' optimistic pronouncements about their increasing technological strength, however, mask substantial differences among individual countries. The more industrialized economies of Singapore, Korea, Taiwan, and Hong Kong, China are growing rapidly while others such as Indonesia and the Philippines are still struggling. The Japanese economy appears to be slowly turning around, pulled in part by the strength of its Asian trading partners and the resulting need for Japanese products. China continues to grow but more slowly, raising questions of whether it will be able to reach its long-term S&T targets and successfully finish privatizing its state-owned enterprises. Here, briefly, are what Asia's major S&T players are doing to enhance their innovation capabilities: Japan Seeks "Balanced R&W" Japan continues to produce close to 20 percent of the world's R&D, trailing only the United States and maintaining its edge over third-place Germany. It continues to increase its R&D expenditures and is radically restructuring its science and technology policy and institutions. Many of the institutional changes are scheduled to go into effect January 1, 2001 and could portend a greater openness toward foreign participation in the Japanese economy and in its science and technology infrastructure. In 1995, concerned about how to break its economy out of recession, Japan enacted a new Science and Technology Basic Law that sought to double government R&D expenditures by 2000 and reinvent its research institutions and policies. Japan will more than meet the first goal of doubling its government R&D expenditures, and will have radically reorganized its government S&T institutions by January 1, 2001 and its national universities by early 2003. It is clear that these changes are in response to globalization and intense economic competition with other countries, and just as importantly, the aging of Japanese society. Japan is seeking to achieve a "balanced R&D ability" that supports not only technology development but also basic science that it defines as "use-inspired" basic research. Major changes include the establishment of the National Council for Science and Technology (NCST) within the Prime Minister's Office with authority to make policy recommendations, advise on the strategic allocation of R&D resources and evaluate national R&D efforts. It is seen as combining the roles played in the United States by PCAST (President's Council of Advisors for Science and Technology) and the coordination functions of the White House Office of Science and Technology Policy. However, at least in the short term, it is very unlikely to possess the same clout. In addition, the Science and Technology Agency (STA) will merge with the Ministry of Education, Science, Sports and Culture to become the Ministry of Education, Science and Technology. This new Ministry will control almost 70 percent of national R&D expenditures, and will attempt to combine STA's reputation for innovation with the Ministry of Education's resources. The reorganized Ministry of International Trade and Industry will control approximately 16 percent of R&D funds. …