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Some of the world’s most ambitious privately funded research projects
are facing the chop following the downturn of the Japanese economy. The
cuts are part of nationwide cutbacks in investment by less Japanese companies
after the slump at the Tokyo Stock Exchange over the last two years. They
will affect Japan’s entire research and development strategy because private
companies pay for more than three-quarters of the nation’s scientific effort.

So far, most of the cuts have fallen on investments planned for the
future rather than existing projects. For example, Japan’s leading independent
software company, Ascii, last week revealed that it had set back by a year
the opening of a centre to develop new ‘multimedia’ packages that combine
video, animation and sound with text on computer screens. The company says
it is cutting back all investment that does not directly increase profits.

However, some of Japan’s largest companies are making real cuts in their
research departments. Earlier this year, the giant electronics company Mitsubishi
Electric said it planned to cut spending on research after a decade of increases
averaging 10 per cent a year. Its competitor Fujitsu, the world’s second
largest computer maker, is to freeze investment.

The electronics and engineering company Hitachi also plans to freeze
spending on R&D. Its decision is likely to force cutbacks in areas such
as artificial intelligence and superconductors, where the company supports
basic research.

Companies in the motor industry are also cutting back. Nissan Motor,
the world’s fourth largest car maker, plans to spend 250 billion yen ( £1.1
billion) this year, the same as last year.

Private industry in Japan accounts for a much higher proportion of the
national R&D effort than in Europe or the US. Budgets rose quickly in
the late 1980s in the quest for high-value products. Analysts expect many
of the more ambitious projects to go on hold until the economy recovers.
The need to spend more on developing technologies to reduce pollution will
also put pressure on basic research.

One side effect of the boom was the ‘internationalisation’ of Japanese
research. A survey by the Science and Technology Agency in Tokyo found that
117 Japanese companies carry out research overseas. More than half were
makers of consumer electronics and nearly all the projects were set up in
the late 1980s. However, the survey found that this trend has now come to
a halt; only two companies had plans to open laboratories in the US.

Japanese scientists are unlikely to find themselves out of work. The
system of ‘lifetime employment’, coupled with a national shortage of people
with scientific and technical skills, means that companies prefer to reassign
scientists to profit-making divisions rather than lay them off.