Innovation Policy Challenges

R&D Trends
and the Open Innovation Activities 
of Japanese Firms
 
Japan‟s economic growth rate has been sluggish since the collapse 
of the bubble economy in the early 1990s. Growth in businesses‟ 
R&D investment has been stagnant ever since. 
Figure 1 
shows 
trends in GDP and R&D investment growth (five-year average annual 
growth rate, GDP deflator-adjusted real values). Around 1990, GDP 
growth dropped from around 4% to below 2%. Recently, due to a 
sharp decline in GDP after the Lehman shock in 2008, its average 
growth rate from 2005 to 2009 fell to -1.9%. The growth of private 
R&D spending also decreased sharply in the early 1990s. It rose 
again between 1995 and 2005, but fell in recent years due to the 
financial crisis. On the other hand, public R&D increased in the period 
2005–2009. At this moment, the impact of the Tohoku earthquake on 
R&D is unknown. However, private R&D spending is expected to 
plunge since many companies need to invest in restoration activities.