R&D investment by Japanese companies is stagnating — although the ratio of R&D investment to GDP is not that different from other developed countries, the effectiveness of investment in terms of profit has declined significantly. Over the past 30 years, this efficiency of R&D has fallen from 75% in 1990 to just 30% in 2021. Although other countries have also seen a decline, France has managed to hold on to a 50% investment efficiency, while the US and Germany have maintained a 40% rate.According to OECD data, Japan increased its R&D expenditure by 7.7% in 2022, but this growth is modest compared to the US, China and South Korea. In particular, compared to the US and Europe, where the role of startups in R&D is emphasized, Japan is currently dependent on R&D led by large corporations. In Japan, 90% of all R&D investment comes from large corporations, which is significantly higher than other countries.

The stagnation of Japanese companies can also be seen in the rankings of the world's top R&D companies. Japanese companies such as Toyota and Honda are still listed among the top companies, but their rankings continue to fall compared to overseas giants like Alphabet, Meta, and Huawei.

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