The Japan Key Technology Center (Kiban Gijutsu Kenkyu Sokushin Senta) was established by the 102nd session of the National Diet on October 1, 1985, under the "Law for the Facilitation of Research on Fundamental Technologies." Its stated goal is to "facilitate experiments and research relating to fundamental technologies which are to be advanced by the private sector, and to devise measures for raising the basic technology level of the private sector with the purpose of maintaining a sound national economic growth and raising the national living standard while, at the same time, contributing to the progress of the world economy" (Law for the Facilitation of Research in Fundamental Technologies). The law further defines by what it means by "fundamental technology":

The term 'fundamental technology', as used in this law, refers to the technologies relating to the mining industry, manufacturing industry, telecommunications industry, and broadcasting industry (including the cable broadcasting industry) as well as other technologies, which utilize radio waves in connection with electrical telecommunications under the jurisdiction of the Ministry of International Trade and Industry (MITI) and the Ministry of Posts and Telecommunication (MPT), and which are conceived to contribute immensely to consolidating the national economy and the foundation of the national living (Law for the Facilitation of Research in Fundamental Technologies).

The law designated both MPT and MITI as the "competent ministries in charge of JKTC." JKTC came into being with the privatization of Nippon Telegraph and Telephone (NTT) Corporation in April 1985. Though NTT was privatized, the Japanese government retained a share in it, and the dividends from these shares went to fund JKTC. Thus, JKTC was established to ensure that the technologies pursued by NTT were not lost due to NTT's privatization, stemming from a concern that emphasis on profit seeking in the new NTT would lead to a reduction in basic research.1 The specific choice of the JKTC model as a mechanism for stimulating commercially oriented technological innovation also reflects the belief that venture capital markets were inadequate to support start-up initiatives in research in selected technological areas.2

Published: September 1999; WTEC Hyper-Librarian