R&D spending rose an estimated 4.7% in fiscal year 2014 (ending March 31, 2014), the first increase since FY12, according to the results of a survey by Japan’s Ministry of Internal Affairs and Communications (MIC) published in December 2015 and a report compiled by the NSF’s Tokyo office released this month. The MIC survey of over 11,000 Japanese businesses, and public and nonprofit organizations was conducted in May 2014.

Industry accounted for 80% of R&D expenditures in Japan last fiscal year, with its R&D expenditures rising 4.0% to ¥14,508.2 billion ($144.7 billion = ¥100.25 = $1). However, the largest increase in R&D spending among the three sectors surveyed was by foreign organizations, whose R&D expenditures climbed 23.2% to ¥88.0 billion ($87.8 billion). Fiscal 2013 R&D expenditures by national and local government were also healthy, increasing 7.0% to ¥3,537.4 billion ($35.3 billion).

Industry is not only the source of the most R&D funding in Japan but also the largest R&D performer. In fiscal 2014, industry accounted for 70% of R&D performed in the country, followed by universities at 20%, and nonprofit and public organizations at 10%. Yet it was nonprofits and public organizations whose R&D performance recorded the fastest growth last year, rising 9.4% to ¥1,742.0 billion ($17.4 billion). Industry’s R&D performance grew 4.3%, while university R&D performance rose 3.9%.

Total R&D spending on the natural sciences, which includes science, engineering, agriculture and health, rose 5.0% in FY14 to ¥16,737.6 billion ($167.0 billion), after declining 0.4% the previous fiscal year. In the natural sciences, basic, applied and developmental research rose 5.4%, 5.7% and 4.6%. Developmental research accounted for 62% of natural science R&D in FY14. Applied research represented 23%, and basic research represented 15%.

Japanese environmental and nanotechnology R&D showed the largest increases in FY13 among the four fields as represented in the graph above. R&D spending in each field rose over 9%. Nanotechnology R&D expenditures rose 9.4% to ¥1,005.1 billion ($10.0 billion). Environmental R&D spending grew 9.3% to ¥1,097.6 billion ($10.9 billion). Of the four fields, life science remained the largest in terms of R&D at ¥3,033.6 billion ($30.3 billion) in spending last fiscal year, a 5.6% increase. Energy R&D expenditures rose 5.8% to ¥1,051.9 billion ($10.5 billion).

For R&D personnel, the survey collected data for fiscal 2015. Despite these increase, the number of R&D personnel (researchers, research assistants, technical staff, administrators and other) remained stagnant in FY14, rising 0.6% to 1,046,600. However, this is the first increase since FY12. Eighty percent of research personnel are researchers, whose total numbers rose 0.7%, up from a 1.0% decline in FY13.

Universities accounted for over 80% of R&D personnel in Japan. And while researchers accounted for 83% and 82% of R&D personnel in industry and at universities, respectively, in FY14, they made up only 62% and 50% of R&D personnel at nonprofits and in government. Comprising 6% of all R&D personnel in FY14 were research assistants, the number of which grew 0.2%.

According to MIC, the Japanese industries that accounted for the largest shares of R&D spending last fiscal year were “transportation equipment” at 20% and “information and communication electronics equipment” at 13%.

The third-largest spender was the pharmaceutical industry. In fiscal 2014, the pharmaceutical industry spent ¥1,437.1 billion ($14.3 billion) on R&D, according to the MIC, which represented 11% of all Japanese R&D spending by industry. Seventy-five percent of the 30,177 R&D personnel employed by the industry are researchers

For universities and colleges, in the natural sciences and engineering, over 50% of researchers were in the medical sciences, which includes the medical, dental and pharmacy fields, in FY14. In the field of physical sciences, biology and chemistry researchers at universities and colleges totaled 7,285 and4,550, respectively.

Of R&D personnel in Japan not employed by industry or universities, 6% work for public agencies and 1% work for nonprofit organizations. Of the 39,334 researchers employed by public agencies and universities, 34% work in engineering and technology, 29% work in the agricultural sciences, 24% work in the physical sciences, and 13% work in the medical sciences.