Total R&D intensity in Japan (3.4% of GDP in 2007) is the highest among G7 countries and well above the OECD average (1.9%). Japan alone accounts for about 20% of the growth in OECD business R&D over 1997-2007.
In 2007 Japanese businesses financed 78% of total R&D expenditures, against an OECD average of 54%, but only 2.2% of government R&D, the lowest share among G7 countries. SMEs accounted for only 6% of business R&D, one the lowest share in the OECD area.
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Targeting New Growth Areas
In 2007 Japan had second highest number of patents (111 per million inhabitants), after Switzerland (118).
Japan is the most specialized in environment-related patents among G7 countries. It also accounts for 17% of nanotechnology and 12% of biotechnology patents, the second largest shares after the United States (over 40% in both fields).
In 2008 Japan, together with Korea, became the first country with more fiber-based subscriptions than either DSL or cable. About 89% of Japanese firms have their own website, against an OECD average of 69%.
Competing in the World Economy
Japan has the lowest value of foreign direct investment (FDI) relative to GDP among G7 countries. In the first quarter of 2009 FDI inflows dropped by 59%.
In 2007 the Japanese trade balance in medium-high technology industries registered the largest surplus in the OECD (15% of manufacturing trade). Comparative advantages in high technology goods, however, dropped by 5 percentage points over 1997-2007. In the same period, the number of cross-border trademarks increased by 25%.
Connecting to Global Research
In 2004-6 Japan had the smallest share of patents with a foreign co-inventor (about 3%), with a decrease of 30% from the mid-1990s. Cross-border patents confirm this trend.
R&D funds from abroad accounted for less than 1% of business R&D in 2007, one of the lowest shares in the OECD. Similarly, foreign affiliates accounted for only 5% of industrial R&D.
Over 1996 and 2006, the technology balance of payment increased its surplus from 0.05% to over 33% of the GDP, the largest increase in the OECD.
Investing in the Knowledge Economy
University graduation rates for men (43%) are the highest among G7 countries but female rates (34%) are low. Japan has also the lowest level of female participation in scientific studies: no more than 15% of S&E degrees are awarded to women.
Doctoral graduation rates (1.0%) are below the OECD average (1.3%).
Employment with a tertiary-level degree increased by almost 3% over 1998 and 2007 and accounted for over 40% of total employment. However, the share of occupation in science technology (15%) is the lowest among G7 countries.
OECD Science, Technology and Industry Scoreboard 2007