Innovation and Growth Policies in Japan-U.S. Economic Relations:Considering areas for new engagement

There is wide consensus on the role of innovation as a primary driver of productivity and growth, generating new employment and contributing social returns benefiting the broader public. The Japanese and U.S. governments have placed increased emphasis on innovation as a core component of economic growth policies to boost job creation and economic competitiveness. They have also identified it as an important element in bilateral economic cooperation. Building on a long history of co-evolution of innovation and science and technology policies, this presents one area with good potential for deepening Japan-U.S. economic relations while meeting the challenges of an increasingly competitive global environment that both countries face. This paper explores potential areas where Japanese and U.S. policymakers and stakeholders could increase cooperation around policies and initiatives related to fostering innovation and growth. Following review of recent literature and Japanese and U.S. innovation policy approaches, the paper suggests that existing bilateral frameworks offer near-term, sustainable channels to pursue increased engagement, including through new focus and by maximizing opportunities for synergies among various initiatives. Additionally, it identifies bottom-up initiatives that incorporate the vast networks of people and institutions linked across both countries as an already important component of cooperation around innovation, and one that should be further encouraged by the national governments to bring together diverse stakeholders and generate new energy within bilateral collaborative activities.