Japan's Weird Science

The light bulb that flashed above Shuji Nakamura's head in 1993 to signal a brilliant new idea was, quite literally, blue. After four years of study, the senior researcher at tiny Nichia Chemical Industries, a company in southeastern Japan, had created a little azure beam that would revolutionize the global electronics industry. Nakamura's blue light-emitting diode was the missing link needed to produce cheap, energy-saving illumination in everything from traffic lights to big-screen TVs; it also promised greatly expanded storage capacity on digital video discs.

But Nakamura profited hardly at all from his pioneering work. Nichia, which holds the rights to Nakamura's invention, upped his income to $140,000--much less than a top corporate scientist in the U.S. makes. A couple of years later, when the researcher had refined his blue beam, Nakamura was told that his initial raise more than covered any future innovations. Says the 45-year-old electrical engineer: "If I had made the same discovery in the U.S., I would have got a $1 million bonus." Disenchanted, Nakamura left Nichia last December for a professorship at the University of California at Santa Barbara.

A lot of Japan's top scientists are envious of Nakamura. Like him, they feel stifled by a system at home that favors seniority over merit and product development over innovative research. While the country trains twice as many scientists and engineers as the U.S. does, Japan has produced only five Nobel-prizewinning scientists--the same number as tiny Belgium. And most of those laureates spent significant time overseas.

"Research and development is somewhat of a misnomer in Japan," says Robert Lewis, former associate director of the Tsukuba Research Consortium, a hub of high-tech companies in central Japan. "Most of the money goes to improving an existing product, not to basic research." Even when an inventor comes up with a hot product, the country's strong ethic of subordination of individuals to groups holds sway. Take the case of Aki Komikado, an unassuming sales-and-marketing employee who invented the Tamagotchi digital pet in 1996. The toy craze earned her employer, Bandai, $350 million, but Komikado didn't get a pay raise or a big bonus, and it doesn't seem to bother her. "Why should I get lots of money?" says Komikado, 32. "The real effort was made by the developers who made our product successful."

Komikado's loyalty to her co-workers is admirable, but the group mentality often discourages the risk taking needed to support experimental products. In the mid-1980s, Fujio Masuoka, a senior manager at Toshiba, created flash memory, a powerful chip that enables laptops to function without cumbersome disc drives. "American chipmakers are going to have to copy our design or risk losing the market," crowed Masuoka. Instead, Toshiba balked at mass production. Eventually, Intel swooped in and within a few years held 85% of the multibillion-dollar market.

Even Japan's legal system is tilted against the inventor. Although Japanese patent law requires firms to compensate employees for ideas that pay off, it doesn't specify how much. "There's nothing to stop a company from giving a researcher only a few hundred dollars for a major invention," says Yoshikazu Takaishi, a computer and telecommunications attorney in Tokyo. Furthermore, while U.S. law operates under the "first-invention rule"--awarding the patent to whoever comes up with the idea, regardless of when that person files an application--Japan uses the "first-application rule." So if an inventor's firm delays submitting an application, the researcher could be trumped by a competing company with more efficient paperwork.

But things may be changing. During Japan's decade-long recession, many young corporate scientists have become entrepreneurs out of necessity. The slump has also prompted some big businesses to look at their incentive systems. Electronic-components manufacturer Omron made headlines last year when it promised a $1 million bonus to any researcher whose idea contributes significantly to company sales. Toshiba lets its engineers use up to 10% of their time to focus on new concepts. Fujitsu supports a program, dubbed "My Way," that allows researchers three years to investigate a topic of their choosing. The firm concedes that very few of its 1,500 researchers take advantage of the deal.

Nakamura insists much more is needed than a few incentive programs. "We need to give our minds space to breathe," he says. He is pinning his hopes on his 15-year-old daughter, who started attending a school in the U.S. this spring. "The light in her hasn't been extinguished yet," he says. "She has been given the chance to experiment with her future."