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Japan's R&D expense flows between sources of funding and sector of performance reveal that about47%of government funding goes to universities,about42%to government research institutions,and about11%to the private sector.In private-sector funding,by contrast,about99%goes to the private sector,with about0.8%to universities and about0.1%to government research institutions.

  Comparing flows of R&D expenditures between financing and performance sectors shows that in Japan there is a lesser flow of R&D expenditures between sectors(government,industry,universities and colleges)than exists in other countries.The ratio of private sector R&D expenditures funded by government is high in the United States and in France.The United Kingdom is characterized by a large proportion of R&D expenditures being borne by abroad (Figure2-1-11) .

  On the reason that the R&D expense flows from government to the private sector,and from the private sector to universities,are so low in Japan,we can point out that research and development in Japan more often relies on private-sector activities than that in other countries.The large flows from government to the private sector in the United States,France,and elsewhere are due to the large flows of aerospace research and defense research funds.Moreover,a major reason for the large flow of research funds from foreign countries into the United Kingdom is likely the existence in that country of many foreign-capitalized corporations with research and development centers in operation,which would therefore be sending R&D funds to the United Kingdom from their own home countries.

Figure2-1-11R&D expense flows in selected countries