Ideas? Japanese Buy American, Raising Hackles : Research: Critics worry that by investing in our universities, the Japanese are able to tap America’s strength. But we get something too.

In a scramble to develop the advanced technologies for the 21st Century, Japanese firms have hiked research spending, opened basic research labs and introduced more flexible working conditions. But in the quest for innovative thinkers to produce creative breakthroughs, many still look to America.

In the past, Japanese firms generally obtained U.S. technology through joint ventures and licensing agreements. Today, that strategy is changing. Many companies are now establishing their own U.S. research facilities with direct links to the world’s greatest repository of first-class scholarship, the American university system.

The growing Japanese presence has touched off a sharp debate on whether U.S. universities--most of them publicly funded--are selling out America’s last and best competitive advantages: its spirit of innovation and its unparalleled position in basic science.

At issue are ventures such as those by Kobe Steel Ltd., which began mining the American mind four years ago. In a move to diversify into electronics, the steel giant first opened small offices in Northern California and North Carolina to survey U.S. technological developments.

Then it began forging ties with local universities, giving North Carolina State University $666,000 for an endowed professorship to research electronic materials and Stanford University an even larger, undisclosed gift. Finally, the firm opened full-blown research labs near Raleigh, N.C., in 1989 and Stanford in April--staffed largely with Americans.

“Our company attitude is to learn from American researchers,” said Hiraku Miuchi, senior vice president of Kobe Steel USA Inc.

Kobe Steel has plenty of company. In recent months, Hitachi Chemical Co. has established a $16.5-million biotechnology lab at the University of California, Irvine. Otsuka Pharmaceutical Co. and the University of Washington are collaborating on a Biomembrane Institute to probe cancer. Last October, Shiseido Co. established an $85-million Cutaneous Biology Research Center with Harvard Medical Center and Massachusetts General Hospital to investigate the skin’s aging process.

Others, such as Canon, Ricoh, ASCII Corp., NEC Corp. and Oki America Inc., have opened research centers near top universities to tap the local talent.

And several Japanese firms have joined university industrial affiliate programs for fees ranging from $10,000 to $100,000. Those programs aid corporate research and development efforts by offering members early access to research, the right to send visiting scholars and, often, licensing rights to any technologies developed.

“We have been told by many of our Japanese clients that it is impractical to try and establish R&D; in which maverick thought is supported in Japan. The cultural requirements of group decision-making . . . is simply too powerful and widespread to accommodate individual creativity and drive,” said William H. Swegles, a senior consultant with the Los Angeles office of Arthur D. Little Inc., an international technology and management consulting firm.

“They have decided to put lots of R&D; in the United States, where we encourage individuals to become unguided missiles, to shoot off in a whole bunch of different directions and thereby come up with a really neat new idea.”

Some U.S. firms have also opened research labs in Japan, including Hewlett-Packard Co., Eastman Kodak and Du Pont. But rather than seeking creativity, the Americans say they hope to take advantage of Japan’s skill at building on scientific discoveries to develop commercial applications.

The academic ties with Japan pump needed research dollars into U.S. universities--one reason education officials are courting the Japanese as aggressively as the Japanese court them. U.S. researchers say they often get back as much knowledge as they give out to the visiting Japanese.

For their part, the Japanese say U.S. research centers help them better design products for American consumers and further establish the products as truly “Made in America,” from research to manufacturing to sales and distribution.

It remains to be seen how successfully the Japanese can manage fiercely independent American researchers--quite a different challenge from assembly-line manufacturing workers. Two years ago, Arthur D. Little conducted a study on what makes Japanese-funded research in the United States successful. Substantial freedom for researchers and a de-emphasis on the group process were most important--factors that run counter to Japanese management style.

Fujitsu America Inc. director Katsuhide Hirai, for instance, said he was utterly perplexed at how to manage U.S. software engineers--a particularly iconoclastic breed--when he arrived in San Jose more than two years ago. He was appalled by their relative lack of discipline, work habits and disregard for human relationships. Hirai finally learned that challenging assignments were the way to win them over and spark their enthusiasm and creativity.

“I was a baby in terms of managing Americans. I expected they would act like a Japanese programmer,” Hirai said. “Now I’m confident I can communicate with each individual.”

So far, John Jacobs has found his Japanese bosses better than Americans. The director of basic research for the Hitachi Chemical Research Center in Irvine said they have given him more independence to propose and pursue his projects, as well as more time for research.

“They’re not as bullying as I’ve found other American high-level managers,” said Jacobs, who has also worked at Merck Sharp & Dohme, the world’s largest pharmaceutical company. “You’re not as pressured by quarterly mandates. I think in the long run, that’s how you get creativity, because you’re not worried constantly about quarterly earnings or research paying out dividends in one or two years.”

Several factors are driving the Japanese to build their own U.S. research base. First, today’s leading-edge technologies, such as optoelectronics or biotechnology, require basic scientific research. Even the steel and auto industries require increased levels of basic research into microelectronics to run computer processes, say, or develop new materials.

But Japan’s scientific capabilities and university research system are relatively weak, compared to that of the United States. No formal system to conduct joint research between industry and academia existed in Japan until just seven years ago--making it cheaper and quicker, Japanese firms say, to invest in academic centers of excellence abroad than to try and build them up in Japan.

In addition, Japanese firms are spreading their operations around the globe. As they set up manufacturing centers in the United States and other markets, many view local research facilities as a natural next step. The proximity allows a closer eye on the U.S. market and a quicker response should the market suddenly change.

For instance, about four years ago, Ricoh Corp. and other Japanese office equipment makers shipped copiers and fax machines to the United States equipped with touch-tone pads instead of buttons. American consumers, however, rejected them. Although touch-tone pads are more popular in Japan, Americans are accustomed to keyboards and thus prefer buttons, said David Niermeyer, a Ricoh manager.

“In the past 10 years, they got into a real problem of Ricoh in Tokyo shipping boatloads of equipment here and saying, ‘Here it is, guys, sell it,’ ” he said. “More than once, the boats went back loaded and we said, ‘Sorry guys, we can’t sell it.’ ”

In 1988, Ricoh established the California Research Center near Stanford to focus on artificial intelligence and neural networks--collections of processors that imitate the brain by working simultaneously rather than serially to solve a problem. Potential products include more intelligent fax machines and copiers that can, for instance, recognize oral commands. Senior staff scientist Vesko Marinov said the firm has earmarked $70,000 to strengthen research ties with U.S. universities through industrial liaison programs and direct grants.

In addition, more and more U.S. universities are aggressively soliciting Japanese support, in part because the pool of American research funds is shrinking.

It was UC Irvine, for instance, that approached Hitachi Chemical about establishing a research relationship--not the other way around. Irvine wanted to woo Masayasu Nomura, a renowned biological chemist, from the University of Wisconsin. In 1984, it convinced Hitachi to contribute $600,000 to its College of Medicine to recruit him. The firm subsequently agreed to establish the biotech lab this year.

At the University of Southern California, Michael Arbib has just returned from a trip to Japan, where he met with 15 firms to solicit support for his Center for Neural Engineering. The center has launched a joint project with Nissan Motor Co. to study the use of neural networks in automobile controls. It is currently negotiating with NTT Data and with Ricoh to build intelligent computer chips to process visual patterns.

Arbib said he hopes that the Japanese partners will parlay the basic research into product development. That could secure a stream of royalty income for USC, which would own the patents but grant the licensing rights to the Japanese.

“The intention is to make both sides the winner,” Arbib said. “The idea is that we’re building up the American research infrastructure, rather than selling the store, as some people worry about.”

Leonard Minsky is one of those who worries. He is the executive director of the National Coalition for Universities in the Public Interest. The nonprofit, public interest group was incorporated in 1984 by Ralph Nader, then-MIT professor David Noble and Albert Meyerhoff of the Natural Resources Defense Council to monitor academic conflicts of interest and other perceived abuses of the public trust.

“The Japanese have walked in through an open door and are carting away whatever they can cart away without, by the way, reciprocity,” Minsky said. “The resources the public is paying for are being abused, and part of that abuse is the leakage of enormous amounts of high technology to foreign corporations that have put some of our own major corporations out of business or on the defensive.”

University officials call such sentiments xenophobic and unwarranted.

“The Japanese aren’t stealing ideas from us; they are just more willing to pay the upfront costs of studying, developing and implementing them,” said Paul Gray, president of the Massachusetts Institute of Technology. “We cannot fault the Japanese for taking advantage of the broadly accessible resources of the international research community. Many faculty members are complaining these days that, whereas U.S. firms have resisted their pleas to support novel research programs on campus, Japanese firms are often standing in line.”

Noble, the former MIT professor who now teaches history at Drexel University, points his finger more at the Americans than the Japanese. MIT, he said, opened an office in Tokyo more than 10 years ago to solicit Japanese support, offering them cut-rate membership fees for privileged access to research that largely belongs to the public.

“I don’t want in any way to fan nationalist sentiments,” Noble said. “Our concern is the wholesale trading in public goods by stewards entrusted by the public.”

Such concerns prompted a congressional subcommittee hearing last year on conflicts of interest among universities and industry. Much of the focus centered on MIT’s links with Japanese firms. Among 250 members in MIT’s industrial liaison program, 53 are Japanese and about 45 are European.

In 1988, the program collected $8 million in corporate membership fees. In exchange, corporate members gained access to MIT research worth about $300 million, 80% of it publicly funded. Yet foreign companies took greatest advantage of it. Eight of MIT’s top 10 recipients of grants from the National Institutes of Health consulted with more foreign companies than American companies, the subcommittee found.

MIT officials say such figures are misleading, since the majority of U.S. firms collaborate with the institute outside the liaison program. But no one denies that the program is a valuable source of scientific know-how for foreign members. Koji Kobayashi, chairman of Japanese electronics giant NEC Corp., has been quoted as saying that his firm owes much of its success in computers to MIT’s program.

To greater protect the public interest, Noble favors full disclosure of a researcher’s financial ties to private corporations involved in publicly supported academic research institutions. Minsky would go further, denying foreigners access to U.S. research without an “overriding public interest.”

But such restrictions would strike at the university’s very essence, academic officials say.

“A university is to spread information and research,” said Carol Tajnai, director of Stanford University’s Computer Forum. “What we have to offer is open to everyone, and if foreign companies choose to take advantage of it, that’s the way it is.”

Tajnai added that several U.S. companies recently dropped out of the forum’s industrial liaison program, among them 3M, Honeywell, Unisys, IDS American Express, Control Data Corp. and Kodak.

“The thing that troubles me most,” she said, “is that when the going gets rough, American companies tend to cut their R&D; budgets and sever their ties with universities. This is how we’ve seen a shift to a higher percentage of foreign companies.”

Among the Computer Forum’s 75 members, 19 are Japanese, 10 European and one Korean.

At the UC Berkeley, doctoral candidate Dave Burnett said he has gained considerably from the Japanese. Burnett works with NEC Corp.’s Tadahiko Horiuchi, a visiting researcher in semiconductor technology and device physics. Because of Horiuchi’s long years of industrial experience, he has been able to suggest and execute new and different techniques for experiments into bipolar transistors, Burnett said.

The academic relationship has blossomed into a genuine friendship, with the two researchers and their wives sharing dinners and social outings.

For Horiuchi, the time at Berkeley gives him a welcome respite from applied research and a chance to stretch his intellectual horizons in fundamental physics: “Maybe the research work I’ve done here doesn’t make some profit directly, but for future development, the engineer who has wide knowledge is required.”

Kei Kogure, a Nissan engineer who is studying materials science at UCLA, said he has learned about far more than his specialty of carbon fiber composite materials. He said the Americans have taught him creativity.

“In Japan, the homogeneous society usually has very close relations with each other, so it’s very difficult to do conspicuously different research,” Kogure said. “Here, you can research your own way, with your own methods, a kind of creativity. I take pleasure in both systems.”

In turn, U.S. researchers say, the Japanese have brought them lessons in the value of methodical research and testing, quality assurance and plain hard work.

Ultimately, researchers say, that kind of cross-pollination can only benefit both Americans and Japanese in today’s increasingly global economy.

“If things continue to go the way they are, the American engineer will pick up the habits of the Japanese engineer, and the Japanese engineer will pick up habits of the American,” said Andy Stockton, vice president of Ricoh’s strategic technology and research. “What you will have is a blending out so that the way people look at R&D; is going to be much the same.

“You will find an equilibrium.”