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Making Higashi-Osaka the Base for University-Industry Cooperation in Kansai

September 10, 2004

Proposal for the Establishment of a Higashi-Osaka Model of University-Industry Cooperation

What is wanted in Higashi-Osaka is a university-industry cooperation model between small and medium enterprises (SMEs) and universities, etc. SMEs are both limited in business resources and inexperienced in university-industry cooperation. On the other hand, by coming to the forefront, managers will also be able to clarify the aims of research and development and build good relationships of trust and cooperation (see Figure 23). It is early days for university-industry cooperation, and there are also many issues that need to be resolved, but, based on the results of our examination of SMEs in Higashi-Osaka, we propose the following five points.

(1) Expectations of universities The legislation and other foundations for university-industry cooperation have been put in place, and due to factors such as the surge of interest in acquiring external research funds as a result of the establishment of national universities as independent administrative corporations in 2004, indicators such as the number of university-industry joint research projects and the number of TLO patent applications show rapid growth. The number of joint research projects between SMEs and universities has also risen considerably, and companies in the industry cluster of Higashi-Osaka also have high hopes of universities as partners for university-industry cooperation (see Figure 24).

But, also at universities, because in the past cooperation has been on a laboratory-level and was mostly with large companies, it is fair to say that university-industry cooperation with SMEs as partners has only just started and is likely to depend greatly on future efforts. At SMEs and large enterprises, the content sought in cooperation differs. Since large enterprises have the capacity for research and development in-house, in many cases they spend time trying to practically apply the results of cooperation with universities. Often SMEs expect from research and development concrete results on a narrowly defined theme. It is therefore necessary for universities to consider their approach to aspects such as the speed and cost of joint research, etc. (see Figure 25).

(2) University-industry cooperation schemes through post-doctors, etc.
A point that becomes an issue when SMEs engage in university-industry cooperation is that they have a thin layer of in-house researchers. In the past, at large enterprises, they have conducted joint research, etc. without any problems by recruiting research graduates. Graduate school graduates have also started to joint top-rated SMEs in Higashi-Osaka, but still only very few. The fact that there are no in-house researchers who can liaise properly with universities is one of the reasons why SMEs are not very good at university-industry cooperation.
Kinki University has started a program in which the university conducts joint research and graduate education at the same time in the form of paying companies research expenses equivalent to the salary of a graduate student. Current university-industry cooperation usually takes the form of the company going to the university. From now on, however, an arrangement whereby the university approaches the company and promotes cooperation is also needed. It is necessary to create a system under which universities send post-doctors (See Note), etc. full-time for about two years to solve the issues facing companies, and universities and public research organizations provide total back-up including research guidance.
(NOTE) Temporary researchers, i.e. for the time until graduate students who have been awarded a doctor's degree find a regular post.

(3) Need for a system to cover the interval from research results to commercialization In the interval until the research results of university-industry cooperation are commercialized, interim tests, trial production research, etc. are essential, and often takes a long time and requires a great deal of funding. This is one of the reasons why all the research results fail to reach the final product and commercialization stage.
In Higashi-Osaka, Professor Yamada of Osaka Industrial University has set up a venture enterprise (OSU Japan) jointly with the university to conduct development research up to the stage where the patents he himself holds are easy to use for SMEs, and he makes proposals that even take into consideration the fields in which the university's seeds will be applied at SMEs (See Figure 26.). Moreover, among SMEs, there are also examples like iOCS Corporation which, after conducting research and development using universities, introduced new manufacturing methods and new materials to small and midsize companies in Higashi-Osaka with the intention of raising the level of regional industry. It would be good to see support in the region such as the matching of these seeds with local companies that can use them.

(4) Strengthening the coordination function
On promoting university-industry cooperation, the role of coordinators that link SMEs and universities, etc. is important. Since the scope of a coordinator's duties is broad and there is also a wide difference in skill depending on individual natures, there are few excellent coordinators and it is difficult to assemble appropriate staff in a short time. In Higashi-Osaka, based around Creation Core Higashi-Osaka, there is a group of experts who are familiar with the city's enterprises and who have an excellent reputation.
However, since the Creation Core Higashi-Osaka Phase 2 Facility is complete, and support activities will be expected to move up a gear, it is necessary to identify and train people to succeed current coordinators.

Through its registration system, the New Industry Research Organization (Kobe City) has about 120 coordinators (NIRO Technology Transfer Advisors) made up mainly of company alumni (see Figure 27). NIRO also has about 20 experts in management, marketing and law as well as 12 areas of technology such as machinery, chemistry, pharmaceuticals, welfare and care, and provides a one-stop service covering everything from the identification of corporate needs and seeds, to not only patent distribution and technology transfer but also product planning, product development and technology sophistication at licensed companies following technology transfer. Since the number of people registered is high, it is possible to give wide-ranging advice, and since there is repeat work for excellent coordinators, their skill improves, leading to better results. To strengthen the coordination function, this kind of system combining a registration system and job-based turnover approach should be introduced.

It is also important that regional financial institutions perform a coordination function. Regional financial institutions are familiar with companies, and because they have many branches, it is easy for SMEs to consult them in the course of their routine contacts. For universities also, with coordination through regional financial institutions there is a high probability that an agreement will be reached, because they are also familiar with corporate finances and can also be expected to provide assistance in terms of joint research funding.

(5) Abolition of application of the law promoting plant relocation
The reason a region systematically supports the sophistication and foundation of companies through university-industry cooperation, etc. is that the subsequent corporate growth can be expected to have a positive impact on the regional economy and employment. It is therefore an important matter of concern whether or not a plant continues to be located in a particular region, even if the plant increases in size. In 2002, legislation restricting plants, etc., which had restricted the location of plants in the Osaka City area, was abolished. Given the important role that the industry cluster in Higashi-Osaka will continue to play in Japanese manufacturing, application of the law promoting plant relocation in the Higashi-Osaka region (1972 Law No. 73) should be abolished (see Figure 28).

For more information on the content of this report, please contact
Tomoyuki Yokota
Economics Department

Tel: 06-6243-7380
E-mail:yokota.tomoyuki@jri.co.jp

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