r&d by industry 



Because of the congestion and 

 pollution created by the geographic 

 concentration of Japan's heavy in- 

 dustries, Japan's economic planners 

 have de-emphasized industries per- 

 ceived as environmentally disrup- 

 tive (e.g., chemicals, steel) and 

 introduced policies to replace them 

 with those perceived as environ- 

 mentally clean and/or information- 

 based (e.g., electronics, scientific and 

 professional instruments). Indus- 

 trial R&D investments appear to have 

 been somewhat responsive to these 

 priorities. 



In 1965, the chemical industry in 

 Japan was the principal performer 

 of R&D, accounting for 28 percent 

 of total manufacturing R&D; it was 

 followed by the electrical machinery 

 industry, which accounted for 23 



percent (chart 19). ^^ By 1975, elec- 

 trical machinery had overtaken the 

 chemical industry as the primary 

 R&D performer, and— by 1985— the 

 electrical machinery industry was 

 outspending the chemical industry 

 2 to 1. In both 1965 and 1985, the 

 electrical machinery, chemicals, 

 general machinery, and motor vehi- 

 cles industries were the four largest 

 sources of Japanese manufacturing 

 R&D, together accounting for 68 per- 

 cent of manufacturing R&D in 1965 

 and 73 percent in 1985. The industries 



-'The Standard Industrial Classification for Japan 

 includes computers under the "electrical machin- 

 ery" classification as communications equipment and 

 electronic components, whereas the United States 

 and the Organisation for Economic Co-operation 

 and Development classify such equipment under 

 "general machinery." 



with the largest real R&D growth from 

 1965 to 1985 were communications and 

 electronic equipment, rubber (includ- 

 ing plastics), motor vehicles, and 

 professional and scientific instru- 

 ments. 



The United States has a different 

 ranking of the top sources of man- 

 ufacturing R&D depending on 

 whether total or company-funded 

 R&D is examined. For total manu- 

 facturing R&D, aircraft and missiles 

 account for 23 percent of R&D per- 

 formance; electrical machinery, gen- 

 eral machinery, and chemicals 

 industries combined account for an- 

 other 47 percent of the total manu- 

 facturing R&D.—' ^-^ For company- 

 funded manufacturing R&D, the 

 electrical machinery industry is the 

 single largest source of manufactur- 

 ing R&D (34 percent), followed by 

 the chemical (16 percent), motor ve- 

 hicle (12 percent), and professional 

 and scientific instruments (9 per- 

 cent) industries. ^^ 



^ 



Chart 19. Distribution of Japanese total manufacturing R&D 

 among selected industries: selected years 



Percent 



40 



- 30 



20 



- 10 



Chemical 



Iron and General Professional and Motor 



steel machinery^ scientific vehicles 



instruments 



Electrical 

 machinery 



^Note that unlike the United Stales, in Japan computers are classified as electrical - not general - machinery 

 SOURCE National Science Foundation, SRS, table B-16 



-Unlike the United States, Japan does not have 

 a separate industry category for aircraft and mis- 

 siles, probably because these industries are so small. 

 Missiles are not mentioned at all in the product 

 classificaHons; ordnance is included in general ma- 

 chinery and aircraft are included in the category for 

 transportation equipment other than motor vehi- 

 cles. In 1985, R&D expended by "other transpor- 

 tation" industries was constant $561 million with 

 an RcSiD to net sales ratio of 2.6 percent. 



='Much of the total U.S. manufacturing Rc&D is 

 not available on a sufficiently disaggregated basis 

 to allow for a detailed industry comparison with 

 Japan. 



-■•Note that the U.S. manufacturing industry data 

 have been adjusted to be more comparable with the 

 Japanese data. Computers have been reclassified 

 h-om general machinery to communications and 

 electronic equipment under electrical machinery. 



19 



