Top universities in Japan are preparing to apply for funding from a new and ambitious university funding project financed through a government endowment fund for science and technology development.
The national university endowment fund, which according to government estimates is projected to reach JPY10 trillion (US$82 billion) over time, will begin accepting applications from universities from April. Successful universities will be able to access larger research budgets in the fiscal year 2023.
Announced last year to mixed responses from experts, many of them sceptical about its projected investment returns, the fund – expected to be the largest in Japan – aims to turn around the country’s decade-long slide in research and global university rankings.
Analysts point to another important goal: aligning conservative university management to the more dynamic governance systems practised by some Western counterparts.
“The endowment fund is revolutionary in Japan because larger financial support for research is tied to strict terms. This is aimed at bolstering competition and innovation in Japanese higher education,” said Yuko Harayama, an executive director at Japan’s largest research organisation Riken and an advisor at Tohoku University, a major national research university in the north of Japan.
Even before the fund’s launch this April and any public announcement calling for proposals, all of Japan’s top national universities are in the throes of preparing proposals on the basis of requirements already announced, Harayama told University World News.
While many of the details of the fund’s conditions and criteria are still confidential, a key requirement is that universities applying for endowment funds should be able to show a 3% increase in their annual income through the development and implementation of new curricula.
Other requirements include increasing joint ventures, and setting up individual endowment funds to generate a certain level of return, which will mean only a few wealthy universities will qualify. Individual institutional endowments will require professionals from the finance industry to run them, which could be costly for universities.
According to Harayama, Tohoku University is planning to apply for the fund. To meet the requirements, the institution aims to strengthen its respected engineering department, including implementing new curricula and developing start-ups with regional companies that want to support the local economy, she said.
Harayama, a former executive of the Council for Science and Technology Policy under the government’s Cabinet Office, now known as the Council for Science Technology and Innovation (CSTI), said the conditions and reforms required will be daunting for universities.
“Japanese universities do not have a culture of securing outside investment,” she said. Japan’s dwindling birth rate, leading to declining student populations, is also posing a threat to university finances.
CSTI has set out goals for universities planning to bid for funding. These include focusing research on strategic priorities such as artificial intelligence, biotechnology, quantum technology, and other emerging technologies. They must be able to attract top researchers from overseas, build multidisciplinary doctoral programmes and improve conditions for research, for example by hiring more support staff.
Ministry of Education statistics support concerns regarding the ability of universities to increase their own endowment funds. Keio University, Japan’s richest private higher education institution, has around JPY73 billion (US$600 million) and the University of Tokyo has JPY15 billion (US$123 million) in endowments. The figures are way behind Harvard University in the United States with an endowment fund worth more than US$52.3 billion (JPY6.4 trillion).
Still, the new endowment fund is seen as a crucial measure to plug the shortfall in grants for researchers linked to declines in national revenue. Experts say the expected bigger research subsidies – estimated at around JPY300 billion per project – are desperately needed.
Grants allocated for universities in the fiscal year 2021 amounted to JPY1.08 trillion, down from the JPY1.24 trillion recorded for 2004. Universities blame the downward spiral that began when national higher education institutes were turned into corporate entities to lessen dependency on financial subsidies and foster a more independent budget and management system.
Domination by a few top universities
Kazuhito Hashimoto, president of the National Institute for Materials Science, Tsukuba, and a proponent of the national endowment fund, believes the new conditions for accessing the endowment will be beneficial to universities. “This is a critical trial and will pave the way for much needed long-term reforms. I expect only the good universities will survive the test, leading to a new vision in Japan,” he said.
Hashimoto, a CSTI member, predicts Japanese higher education will become more like the US and United Kingdom sectors, dominated by a few top institutions.
“The endowment regulations will change traditional policy that promoted equality above competition. The system stymied diversity and innovation in academia,” he said.
But Nagayasu Toyoda, president of Suzuka University of Medical Sciences, a smaller regional university based in Mie prefecture, believes the endowment fund is too narrowly focused on science and technology.
“For example, I would have preferred if the current conditions for applicants also included the expansion of female science researchers and foreigners in Japan. Focusing on promoting diversity and even failures in science research are necessary for these areas, and are key to the overall success in promoting innovation,” he said.
Established in 1991, Suzuka University has 3,000 students studying medical sciences. Toyoda hoped the new endowment fund would lead to expert collaboration between Japan’s top national universities and their smaller counterparts, like his institution.
The endowment fund is comprised of seed money from JPY4.5 trillion in public debt financing and sales of the country’s gold reserves. The money will be invested in stock and bond markets which the government estimates will grow over time to reach JPY10 trillion.
The Japan Science and Technology Agency (JST) under the Ministry of Education, which is the funding arm for university research, will be responsible for the management of the endowment, but there will be several layers of supervision with the cabinet office at the apex. JST is already reported to be hiring fund managers.
When the government approved the plan in 2021, then prime minister Yoshihide Suga told the Diet the new strategy would restore Japan’s international academic rankings and narrow the gap between Japanese universities’ relatively limited access to public grants and that of their foreign counterparts.
The need for sweeping change to boost national scientific achievements became urgent public policy when Japan was ranked 11th in the world in the top 10% of most-cited scientific papers during 2016-18. The figure marked a drop from its former position at 4th place in 1996-98.
The slide was again notable when Japan’s top national university, the University of Tokyo, was placed 36th in world rankings published by the Times Higher Education in 2021. China’s Tsinghua University was 20th, and the top-ranking university in Asia.
Japanese scientists who have won Nobel prizes for research have also conspicuously conducted their studies in universities overseas. The 2021 Nobel Prize in Physics went to three researchers, among them Japan-born Syukuro Manabe, a senior meteorologist at Princeton University’s Program in Atmospheric and Oceanic Sciences.