1.Overview 2.Economic Policy 3.Public Finance  
4.Taxation 5.Monetary Policy and the Bank of Japan   6.Trade  
7.Employment   8.Finance   9.Business  
10.Energy   11.Transportation   12.Science & Technology  
13.Information Technology   14.Agriculture, Forestry, and Fishing Industries        
12. Science and Technology
Japan accounted for an average of 10.3% of papers relating to natural sciences and engineering published in the world from 1997 to 2001, according to the 2003 white paper on science and technology, behind the United States with 32.7%. Also, according to investigations by the Japan Patent Office and others, the number of patent registrations by Japanese private companies and other entities or individuals was about 1.13 million in 2000, putting Japan second in the world behind the United States, with about 3.8 million patent registrations. (*1)

Nine Nobel Laureates in Natural Science
Two Japanese won Nobel Prizes in 2002, making it the first time that more than one Japanese was so honored in the same year. Professor Emeritus Masatoshi Koshiba of the University of Tokyo won the prize for physics, and Koichi Tanaka, a researcher at Shimadzu Corp., the prize for chemistry. It was also a brilliant feat that for three consecutive years Japanese were awarded Nobel Prizes. These awards, which make the total number of Nobel Prizes having been awarded to Japanese scientists to nine, bring the government's goal of having 30 Japanese awarded Nobel Prizes over the next 50 years a step closer to reality.

Nanotechnology and Biotechnology
Research projects to develop devices and equipment through the use of nanotechnology and biotechnology are increasingly being launched by industry-academia alliances.
For example, Matsushita Electric Industrial, Tokyo Institute of Technology, Nara Institute of Science and Technology, and Osaka University are jointly developing a large-capacity memory device that uses protein circuitry. The new technology, once achieved, would radically change the way in which semiconductors are made.
Olympus Optical, Toyobo, Shimadzu Corporation, Kaneka Corporation and Nipro Corporation, among others, have also teamed up with the National Institute of Advanced Industrial Science and Technology to set up a research committee charged with finding ways to commercialize nanotech and biotech products. The participants plan to develop medical equipment and artificial cells that can help mend damaged blood vessels. Attention has been focused on integrating nanotech and biotech to build intricate devices that imitate the structure of living organisms.
Japanese companies are devoting an increasing amount of resources to nanotechnology research and intend to accelerate related investment in future years. Toshiba, Showa Denko KK, Sumitomo Electric Industries, and Omron Corporation, for example, each spent more than ¥2 billion on nanotechnology research in fiscal year 2003. The number of researchers employed in the nanotechnology field is also expected to grow over the next several years.

Efforts in Industry
From the years of postwar reconstruction to the period of high economic growth in the 1960s, technological progress took place mainly in steelmaking, shipbuilding, and other heavy industries. After pollution emerged as a dire problem in the 1960s, the Environment Agency (now Environment Ministry) was set up in 1971 as a government organization to promote administration relating to environmental protection in a comprehensive manner.
Industry also began to tackle the issue of pollution. Research and development relating to energy-saving technologies made progress, such as the development of cars with low fuel consumption and less exhaust. At this time, technological levels in the automobile, consumer electronics, and steelmaking sectors have become world-class.
Further, in response to the growth of electronic information processing, technology made great strides in the fields of computers, semiconductors, and communications. Research also progressed in such fields as life sciences, ocean development, and earthquake prediction.

Promoting Creativity
In the 1980s Japan began to respond to calls that it recognize the importance of pursuing its own course with its own original standards in science and technology. In other words, Japan was pressed to review its traditional practice of introducing basic technology from abroad and refining it on the basis of practical experience in actual production.
The emphasis on basic research also appeared in government policy. In 1985, the government formulated the Basic Policy for Science and Technology with the aim of fostering progress in creative sciences and technology. In addition, to spur creative basic research, the Science and Technology Basic Law went into
effect in 1995.(*2) This law declares promotion of science and technology a national mission and obliges the government to actively adopt policies to that end.
Research Expenditures
According to the Ministry of Public Management, Home Affairs, Posts and Telecommunications, Japan's public/private scientific and technological research expenditures totaled about ¥16.7 trillion in fiscalyear 2002.(*3) This figure was up 0.9% over the previous year and accounted for 3.35% of Japan's gross domestic product. Research expenditures in Germany and the United States in 2000 represented 2.45% and 2.69% of the GDP, respectively.
Government research spending totaled about ¥3.1 trillion in fiscal year 2002.(*4) It is used to fund basic research and development projects, often in unexplored fields, carried out by national and other public institutions, such as universities, research institutes and special corporations. The government's share of research spending stood at 18.6% in fiscal year 2001, which is quite low compared with figures for other industrial nations, generally in the range of 30% to 40%.

Research Bodies
Japan had 18,468 experimental and research bodies in fiscal year 2002, 1,119 of which were national and other public institutes. Faculties of national, public, and private universities and colleges accounted for 3,091. Most of the remaining 14,258 institutes are research laboratories belonging to private companies. Japan's experimental and research bodies were staffed by 757,339 researchers as of March 2003.(*5)