Will new fund be game changer for universities’ research capabilities?

It has long been said that the research capabilities of Japanese universities are declining. To break the impasse, stable support for universities is needed.

The government has decided to include in its economic stimulus measures a plan to launch within this fiscal year a “university endowment fund” worth about ¥10 trillion to support universities. The plan is to make ¥300 billion in investment profits each year and distribute the money to top universities in Japan that can compete with their counterparts worldwide.

The government grants operational subsidies to national universities, but the amount is only tens of billions of yen a year even for a major university. If the government allocates financial resources of ¥300 billion to several universities every year, it will likely have a profound effect. It is hoped that this will serve as an opportunity to strengthen the research capabilities of Japanese universities.

However, because it takes the form of a fund, there could be concerns about its management. A fund is mostly fiscal investments and loans, so when a large loss emerges, the question of how to make up for it will arise.

The fund will be established in the Japan Science and Technology Agency (JST), a national research and development agency under the jurisdiction of the Education, Culture, Sports, Science and Technology Ministry. The JST must endeavor to establish an operational system that generates stable investment profits.

What the government has in mind is funds held by top universities in Europe and the United States. Harvard University in the United States uses the investment profits raised from its ¥4.5 trillion fund to improve the environment for various fields of research.

Unlike Japan’s envisaged fund, which will rely on public money, funds for universities in Europe and the United States consist mainly of donations from millionaires and graduates. Since universities do not have to pay this money back, they can take on high risks to invest the funds and also use them freely.

It is difficult to create a similar fund in Japan, where a culture of donation has not developed to the same degree. It is understandable that the government aims to first lay the foundation using public funds for what will serve as a university fund. In the future, universities will also have to make efforts such as securing more funds from the private sector.

The government should further promote tax reforms that can encourage donations.

The establishment of the fund alone will not reverse the long-term stagnation of Japanese universities. Students hesitate to go on to graduate school and young researchers with fixed-term posts are unable to envision their future. This situation is spreading across the country regardless of whether universities are national or private.

In recent years, some said that the research capabilities of Japanese universities are declining because of a “selection and concentration” approach, in which budget allocations are focused on a few top universities. To fix this excessive focus and raise the overall level of research capabilities, the same voices have said that funds should be distributed broadly to local and mid-level universities as well.

Although it is necessary to strengthen top universities to some extent, couldn’t this be balanced with a wide range of support measures? Broadening the base of talented young researchers will lead to long-term improvements in Japan’s research capabilities.

— The original Japanese article appeared in The Yomiuri Shimbun on Nov. 29, 2021.