Japan’s plan to raise capital for a ¥10 trillion (£70 billion) endowment for university research is an impressive attempt to restore the nation’s place in global academic rankings and to��bridge a funding gap with other countries, but money alone will not overcome systemic weaknesses in a historically underfunded system, experts said.

If the “university fund” achieves its goals, it will be one of the world’s largest endowment funds. It would be more than double the size of Harvard University’s $41.9 billion (£30.6 billion) endowment, and – while it would be a one-off – it would dwarf the annual expenditure UK Research and Innovation, which stood at £7.5 billion in 2019-20.

Akiyoshi Yonezawa, vice-director of the International Strategy Office at Tohoku University, told ����Vlog that the new fund was a sort of “short-cut process in the accumulation of endowment, initially, by granting a huge national investment…for shared usage among top national universities”. Those institutions would then be expected to supplement the boost with their own fundraising.

He described the fund as being aimed at putting Japanese research on a firmer footing internationally. “This funding scheme is based on benchmarking with US top research universities, which have performed globally in terms of research and education by utilising gigantic endowments,” he said.

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To kick-start the initiative, the Japanese government will sell off gold reserves and use public debt financing to raise ¥4.5 trillion in seed money for the fund, which is expected to be launched in March 2022.

But Akiko Morozumi, associate professor of higher education at the University of Tokyo, told��THE��that a financial injection alone may not kick-start Japan’s research performance without other systemic changes.

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“Further efforts are needed for universities to increase external funding,” she said. “A strategy of how to use such funds for university growth is also essential, but some universities have not drawn such a big vision. I think it is necessary to change both the policy-side thinking and the university-side thinking.”

Futao Huang, a professor at the Research Institute for ����Vlog at Hiroshima University, said that the creation of the fund followed more than 15 years of budget cuts. Japan’s 86 national universities, which include the country’s elite institutions, were semi-privatised into “corporations” in 2004, the same year the government started cutting their budgets by 1 per cent each year.

“It is believed that the decline in the public budget allocated to national university corporations exerted negative influences on research productivity, hiring young academics, attracting talents from other countries and regions to work in Japanese universities, and even the survival of humanities and social sciences in national university corporations,” Professor Huang told��THE.

Japan has slid down rankings over the past decade, both globally and relative to its rising Asian neighbours. In 2011,��five Japanese institutions were in the��THE��World University Rankings top 200. In the��2021 rankings,��there were only two.��

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In 2015, Tokyo topped the��THE��Asia Rankings, while Kyoto University also made the top 10. But��by 2020, Tokyo had dropped to seventh place, surpassed by institutions from mainland China, Hong Kong and Singapore. It had also become the only Japanese university in the��Asian top 10.��

The challenges facing the country’s higher education sector go beyond just funding. Low birth rates��have led to smaller domestic enrolments, while recruiting international students has been an uphill climb due to limited use of English and an academic calendar that does not match that of other countries.��

But the new fund, to be managed by the Japan Science and Technology Agency, is not designed to help the higher education sector across the board. There are no provisions for the arts and humanities nor for teaching and learning.

It is possible that “only a very limited number of top national universities” will benefit, Professor Yonezawa said.

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Professor Morozumi agreed that support would be targeted at “universities that engage in internationally competitive research, such as the University of Tokyo and Kyoto University, and manage stocks and bonds with government investment to cover R&D funds”.

The announcement comes just months after the University of Tokyo experimented with the country’s first university-linked��bond issue,��which was seen as a testing ground for a new type of higher education funding. When Tokyo’s ¥20 billion bond was offered last October, interest from investors was sixfold that amount, showing the potential for future sales.

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joyce.lau@timeshighereducation.com��