Independent Innovation Among Chemical Powers——The Third of Development Strategy of Chemical Technology in Japan

From the end of World War II through the early 1960s, Japan's chemical industry was primarily focused on expanding its scale, relying heavily on foreign technology imports to meet growing domestic demand. However, as the decades progressed, Japan began to shift its approach. Starting in the 1960s, the country emphasized not only continuing to adopt foreign technologies but also investing heavily in its own technological development. This strategic move laid the foundation for Japan's emergence as a global leader in the chemical industry. Following the oil crisis of the 1970s, Japan was forced to accelerate its innovation efforts. To support this transition, it introduced the "Principal Technology Research and Development Grant System," which encouraged companies to invest more in research and development. By the 1980s, Japan had moved from a phase of large-scale technology importation to one of independent R&D, focusing on improving efficiency and sustainability. The Ministry of International Trade and Industry (MITI) played a central role in driving industrial innovation. Throughout the 1960s and 1970s, MITI spearheaded several major R&D projects aimed at advancing the chemical sector. For example, between 1966 and 1971, over 2.6 billion yen was invested in desulfurization technology. From 1967 to 1972, 1.1 billion yen was allocated to developing new methods for producing olefins, and from 1969 to 1971, 6.7 billion yen was spent on seawater desalination and by-product utilization. After the energy crisis, additional resources were directed toward optimizing raw material use and exploring new energy sources. By the 1980s, Japan recognized the importance of basic research and long-term technological development. In 1980, the government formally adopted the policy of "Building a Nation Through Science and Technology" in its Science and Technology White Paper. This marked a turning point, shifting the focus from merely adopting foreign technology to fostering original, self-reliant innovations. The chemical industry became a key component of this strategy. In response to these policies, the Japanese chemical industry significantly increased its research investment. According to the Science and Technology Policy Research Institute, while Japan’s applied technology was strong, its fundamental scientific research lagged behind the U.S. To address this, Japan proposed in 1995 that "Scientific and Technological Innovation Must Build the Nation." This marked a strategic shift from a technology-based nation to a science-driven one. Since the 1990s, the focus of R&D in the chemical industry has increasingly shifted toward basic research. In the early 1980s, basic research accounted for about 10.1% of R&D funding, rising to 14.2% by 1992 and 14.3% by 1995. Meanwhile, the proportion of application-focused research declined. By 1995, R&D spending in the chemical industry reached 5.33% of sales, ranking second only to the electronics sector. Today, Japan remains a global leader in chemical engineering technology. Since the 1970s, under the guidance of various government policies, the industry has consistently increased its R&D investments. Following structural adjustments, the sector experienced renewed growth. In 1990, Japan’s chemical sales reached $177.13 billion, accounting for 13.3% of global chemical sales. By 1995, this figure had risen to $255.28 billion, or 18.6% of the world total. Japan has successfully integrated advanced technologies from around the globe, enhancing overall industrial productivity and making technological innovation a key driver of economic growth. Despite a decline in the number of workers in the chemical industry—down 16.6% from 1970 to 1980—labor productivity surged, increasing from an average of $28,000 per worker in 1970 to $19.43 million per worker in 1981. As a resource-poor nation, Japan imports 90% of its chemical raw materials. While basic chemicals account for 40% of annual production, high-tech fine chemicals make up around 60%, reflecting a focus on value-added products. This product structure highlights Japan’s pursuit of maximum added value through continuous deep processing. This is why, despite contributing only 7.3% to GDP, the chemical industry accounts for 9.5% of added value. High-value output depends on advanced production technologies, and Japan’s experience offers valuable lessons for other countries, including China.

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