Site: New Energy and Industrial Technology Development Organization (NEDO)
Sunshine 60, 29F
1-1, 3-Chome, Higashi-Ikebukuro
Toshima-Ku, Tokyo 170-6028, Japan

Date Visited: 13 October 1998

WTEC Attendees: I. Feller, G. Gamota, P. Herer, P. O'Neill-Brown



NEDO supports R&D in new energy sources and energy conservation technology, primarily through direct contracts ("entrustment") with private sector firms and consortia. NEDO describes itself as supporting R&D that the private sector can't do because it's too risky or too long term (the basic market failure model). NEDO has no R&D laboratories or facilities of its own. Rather it supports private sector R&D. (NEDO also has an international joint research program, including some projects with NIST.)


The framework for NEDO's activities is as follows: for basic R&D, it uses the entrustment model in which 100 percent of the cost is paid by NEDO. If findings emerge from R&D, NEDO then moves to a direct subsidization of follow-up activities. The exception to this practice is international joint research. Here, projects are supported on a grant basis, which NEDO officials consider a form of donation. Approximately 90 percent of NEDO's budget goes for the entrustment model. NEDO's support is directed at personnel costs, with the firms providing facilities.

The R&D thrust areas are determined by MITI and NEDO. NEDO's total budget is 100 billion. NEDO officials invite proposals from firms to do work on R&D priorities that NEDO has set. The organization also invites proposals from firms on industrial technology or for the development of industrial research teams.

The contracts with firms are not competitive, but they are negotiated on a sole source basis. Increased use of open-ended program solicitations is being initiated. A new mechanism initiated about three years ago involves thematic program announcements inviting applications for awards of up to 100 million for three years. No specific allocation of funds by research area is specified in the announcement; "creativity" is reported to be the main selection criterion. (NEDO considers universities as research institutes, not as training facilities. Thus, the impact of university-based research on graduate education is given little weight.)

NEDO's project selection committee consists primarily of academics. NEDO has 5 billion for special programs. The success rate on applications for this new program is about 10 percent. Applications come from firms, universities, and national laboratories. New permission has been granted to universities to participate in NEDO-supported projects, and more flexible arrangements to allow joint university-industry proposals have been instituted. NEDO is the first agency to have a mechanism for allowing open competition among universities, industry, and others. This approach is now being tried by other agencies.

No formal committee in NEDO or MITI exists to set R&D priorities. Rather, informal discussion occurs among these agencies, firms, and others, including informal input from academics.

NEDO evaluates project applications as follows: applications are first read by one or two staff members; the applications are then forwarded to a review committee comprised of the top faculty in the relevant field and the best experts from the private sector. Review committee members serve two year terms.

NEDO officials expect the projects they support to be commercially viable, and also to produce royalty income for NEDO (although they describe this objective as more of a hope and a wish than as a reality).

Data on the size distribution of the recipients of NEDO contracts were not available to the panel, but most awards, in fact, are described as going to large firms. One reason offered for NEDO's predominant interaction with large firms is that MITI has a separate institute on small- and medium-sized enterprise corporations which funds R&D by small- and medium-sized firms.

Little relationship between NEDO and JKTC was reported. Both organizations, however, are under MITI, which is charged with coordination. JKTC projects were described as short-term and geared to commercialization, whereas NEDO was described as supporting longer-term, more basic R&D projects.

Published: September 1999; WTEC Hyper-Librarian