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A High-Tech Alliance: Challenges and Opportunities for U.S.-Japan Science and Technology Collaboration
In both Japan and the United States, there is a growing recognition that national security and alliance security involve more than just military concerns and extend to new technology areas and their economic effects.
Since the mid-1960s, the two countries have worked together on natural resources and medical sciences, followed by energy and outer space, and expanding more recently to include chemistry, computer science, and telecommunications.4 The political and foreign policy context for this collaboration has evolved with time as perceived political priorities and opportunities ebb and flow amid occasional direct competition.
Throughout this half-century, however, there has not been the kind of bilateral alignment that is on display today in terms of 1) a widely perceived need for S&T collaboration with allies, 2) policymaker interest in pursuing this collaboration, 3) specific areas of priority research focus, and 4) overall strategic goals for such collaboration.
In early discussions, officials from the administrations of U.S. President Joe Biden and Japanese Prime Minister Yoshihide Suga have highlighted three main goals for U.S.-Japanese S&T cooperation: 1) mitigating climate change and its impacts, 2) being able to better control pandemics, and 3) staying ahead of (or keeping pace with) China in a wide range of critical technologies and domains of scientific discovery.5 The first two objectives lend themselves relatively easily to multilateral collaboration and open information sharing.
This concept of China as a so-called pacing threat has been referenced by U.S. secretaries of defense serving both Biden and former president Donald Trump.6 It is also an underlying premise for U.S. legislative initiatives that will change the way Washington funds and directs high-tech research in the future.7 For example, one bill with broad support would authorize a reconfigured National Science Foundation (NSF) to spend $81 billion over the next five years, much of which is intended for research in AI, robotics, high-performance computing, and other technologies.8 The case for U.S. S&T collaboration with Tokyo is clear.
Joint High-Level Committee on Science and Technology Cooperation meeting in May 2019 called for greater bilateral collaboration in areas such as AI, QIS, and outer space.11 Later in 2019, the governments released a joint statement that outlined a more detailed agenda for bilateral collaboration on QIS, building on previous bilateral initiatives in nuclear energy, high-energy density science, and big data.12 Then, at their April 2021 summit, Biden and Suga announced the launch of a new “partnership for competitiveness and innovation,”
officially called the U.S.-Japan Competitiveness and Resilience (CoRe) Partnership, which provides a framework for new initiatives.13 Both governments recognize that scientific and technological advances in these and other areas (such as cybersecurity, uses of the electromagnetic spectrum, and even critical infrastructure protection and emergency response) can have a dramatic effect not only on economic prosperity but also national security.
As a result, U.S.-based research in such areas is increasingly classified or export controlled, even though existing bilateral S&T cooperation agreements—and, in many cases, certain aspects of domestic law—frequently do not allow the allies to fully leverage their S&T talent and resources for mutual benefit.
Beyond bilateral initiatives, the United States and other nations are also looking to form multilateral clubs (such as the UK’s proposed club of democratic countries [D10] or the Global Partnership on AI) that involve standard setting or even R&D for certain cutting-edge technologies that can help them outcompete China and enhance confidence in the trustworthiness of their communications and innovation networks.14 Some of these initiatives have explicit military connections (such as the U.S. Department of Defense’s International Science and Technology Engagement Strategy or Allied Prototyping Initiative [API]), while others seek to identify and more tightly control access to emerging, foundational, or critical commercial technologies.15 Japan’s ruling Liberal Democratic Party (LDP) is similarly promoting the idea of a new economic security law that could help Japan collaborate more with trusted international partners, bolster innovation, and increase engagement in standard setting.16 The Japanese government is already taking steps to enhance the country’s ability to protect valuable information within the private sector and research community, which could facilitate its participation in any multilateral clubs that might form around technology and innovation imperatives.17 These trends suggest a need to harmonize allied approaches to research conduct—or at least make them more compatible—so that the innovation ecosystem is able to grow while maintaining mutual confidence in the protection of sensitive information.
national security.18 The existing classification regime was promulgated by Executive Order 13526, signed by then president Barack Obama in 2009.19 It delegates original classification authority to the heads of many government departments and cabinet-level agencies,20 including individuals with job descriptions as diverse as the head of the National Aeronautics and Space Administration (NASA), the secretaries of defense or energy, the U.S. trade representative, and the Environmental Protection Agency administrator.21 Executive Order 13526 also explicitly identifies “scientific, technological, or economic matters relating to the national security”
citizen possesses unique or unusual skill or expertise that is urgently needed to support a specific U.S. Government contract involving access to specified classified information and a cleared or clearable U.S. citizen is not readily available.22 However, an LAA is restricted in several ways pertaining to scientific research exchanges.
Over sixty-five years of defense cooperation, the United States and Japan have developed a series of agreements and procedures for sharing sensitive and classified information with each other, particularly when it relates to military information, defense equipment, and information pertaining to nuclear energy.24 Currently, military and intelligence secrets are shared between the Japanese and U.S. governments under the framework of the General Security of Military Information Agreement (GSOMIA) signed in 2007.25 This agreement allows for those who have received “personnel security clearance”
At present, the definition of CMI could conceivably include scientific information and technology generated by Japanese or U.S. government entities, as long as that information is clearly “defense-related.”26 More broadly, the U.S. government has developed a set of guidelines and procedures for sharing CMI and other sensitive information with other countries.27 Technical data, applied R&D, controlled unclassified information, and other components of so-called international programs related to defense or national security are subject to the National Disclosure Policy (NDP).28 Such disclosure is not limited to defense-related material and could apply to a wider range of research linked to national security.
The DOD sponsors and funds several other research collaboration efforts, which are governed by rules and procedures outlined by the NDP.33 Such cooperative R&D can take the form of data and information exchange programs, engineer and scientist exchange programs, specific cooperative projects (such as U.S.-Japan bilateral work on the SM-3 Block IIA missile), and foreign comparative testing to explore the compatibility of U.S.- and foreign-made defense equipment.
The Coalition Warfare Program (CWP), for example, funds basic and applied research in technologies to address “strategic technology gaps.”34 The CWP requires collaborative efforts by U.S.-based and foreign-based teams and does not cover more than 50 percent of an investigation’s costs (thus requiring an ally to share the burden of additional research).35 Similarly, the API is a program for pooling R&D funding and expertise with other countries.36 Both CWP- and API-sponsored projects require government-to-government international agreements.
and quantum research initiatives were allocated over $200 million.37 The NDAA also increased annual funding for the Joint Artificial Intelligence Center (JAIC) that coordinates ongoing AI research—among many other activities—to $132 million.38 All of these areas have also been identified by the Japanese and U.S. governments as high-priority areas for expanding bilateral science, technology, and systems R&D.
Moreover, any time unclassified information is shared with people outside of the laboratory, every PowerPoint slide, memo, or dataset must be clearly marked with an explanation for why that information is allowed to leave the confines of that particular facility.39 With respect to international collaboration and unclassified work, the DOE is subject to the same regulations as other agencies, including export controls.
Indeed, chapter 25 of the DOE Acquisition Guide explicitly notes that the fundamental research exemption identified by National Security Decision Directive 189 (NSDD-189) “does not take precedence over statutes.”40 That is, DOE-funded research materials, results, and documents ought to be reviewed by the department’s Office of Classification prior to publication or dissemination to ensure that they do not contain export-controlled or classified national security information.
The prepublication terms are generally negotiated on a case-by-case basis between the department and the researchers with DOE funding.41 In some instances, as part of its collaboration efforts, the DOE may choose to establish a strategic partnership project (SPP, formerly known as a work-for-others agreement) with another federal or nonfederal entity.42 In this case, research work may be conducted in tandem by DOE laboratories and other government agencies, private corporations, or foreign entities.
From the most fundamental to the most accessory, the legal frameworks included: During research collaboration activities and visits to department facilities, foreign individuals and entities are supposed to be screened by the department according to the Science and Technology Risk Matrix.50 Managed by the DOE Federal Oversight Advisory Body, the S&T Risk Matrix evaluates the sensitivity of the subject matter and the nationality of the foreign individual/entity to determine if or what kind of access should be allowed to facilities and information.51 Thus, some “sensitive country foreign nationals”
The key difference in these cases—in terms of why Washington allows for more permissive information sharing—is that both countries are recognized for having a well-developed and robust system for protecting classified information, including an effective process for vetting and training people or organizations that are granted clearances.54 The NSF is an independent agency of the U.S. federal government that funds basic and applied physical and social scientific research.
Although the NSF does collaborate with other government institutions, the vast majority of its funding is directed toward colleges, universities, and other academic entities.55 In fiscal year 2020, 80 percent of the NSF’s $7.9 billion budget was awarded to educational institutions for research to be conducted by their scholars.
While the NSF funds work in many areas of basic and applied sciences that may be deemed sensitive, the agency’s policy states that “NSF grants are intended for unclassified, publicly releasable research.”56 As a consequence, NSF grantees are not granted access to classified information by proxy of winning a funding award.57 However, the NSF notes that, in line with other statutes concerning the protection of classified information, if a grantee’s research produces information or results that may be deemed classifiable, it is incumbent upon the grantee to notify the appropriate NSF program officer or federal government representative promptly.
letter from the director of the White House’s Office of Science and Technology Policy, for instance, stressed the importance of establishing and coordinating disclosure requirements for researchers applying for federal funding.58 New guidelines and rules for stricter enforcement of conflicts of interest, participation in foreign talent recruitment programs, and affiliations with other research institutions have been prescribed for the NSF in a December 2019 report by JASON, an independent scientific advisory group.59 Thus, although the NSF does not conduct personnel security clearance background checks in the traditional sense, the enhanced disclosure requirements serve as a soft security measure.
Additionally, since the publication of the JASON report, the NSF has created the Research Security Strategy and Policy Group, led by a new chief of research security, to work with the Office of the Inspector General on auditing these disclosures for potential grant fraud.60 An initial audit of past grants found up to 8 percent contained anomalies (such as subsequent publication of NSF-funded research crediting another entity in addition to the NSF that was not disclosed on the NSF grant proposal).61 This produced several cases that have subsequently been referred to the Federal Bureau of Investigation (FBI) for further investigation.62 In the same vein, the NSF ended foreign participation in its Intergovernmental Personnel Act (IPA) assignment program, whereby the NSF would assign outside personnel to rotate through various research institutions, including government agencies and private and public universities.63 Now, all such rotating personnel must be U.S. citizens.
Information is supposed to flow freely between these bilateral teams, but the NSF is considering the inclusion of stricter information protection requirements on grantees for experiment data, prepublication information, and the grant proposals themselves.66 Congress is pushing for this as well.67 Any mismatch in information handling protocols could complicate research collaboration.
It would be especially unfortunate if this problem arose just as Congress, which is looking to vastly increase funding for the NSF, has singled out Japan as a priority innovation partner.68 For all the focus on how government funds are spent on basic research in the United States (and efforts in recent years to increase that spending), the private sector supports most S&T research (see figure 1).
However, because the U.S. government seeks out vulnerabilities to conduct its own intelligence gathering and cyber espionage activities, the various government agencies that discover, develop, and use so-called zero-day exploits are required to balance the imperatives of its classified missions and interests against the public interest in disclosing the existence of such exploits to developers who could patch these vulnerabilities.
To balance these competing interests, the government established the Vulnerabilities Equities Process (VEP) in 2008 (last publicly updated in 2017).73 If the constituent members of the Equities Review Board determine that the disclosure of a discovered, classified vulnerability will satisfy a certain public interest without damaging military, operational, intelligence, commercial, law enforcement, or diplomatic interests, the vulnerability can be disclosed and reported to a software developer to be rectified.
firms, companies that are subject to foreign ownership, control, or influence (FOCI) are required to satisfy certain conditions to ensure the security of that information.75 A firm is considered to be under FOCI if it satisfies any of a number of conditions, including but not limited to: large tranches of equity or debt obligations being held by a foreign entity or entities;
It must be demonstrated to the Defense Counterintelligence and Security Agency (DCSA), which is responsible for FOCI firm administration, that the new entity would be financially viable.77 Finally, a FOCI firm could opt to create a voting trust or proxy agreement, whereby the foreign entities place several of their authorities over the firm (such as voting rights, corporate management, mergers, or declarations of bankruptcy) in a trust of DCSA-cleared U.S. citizens.
Because this, in effect, requires the foreign entity to relinquish control of the firm, it is the most restrictive option and the one that is pursued least frequently.78 The process by which the U.S. government evaluates its military and civilian personnel—as well as private citizens—to issue security clearances has evolved over time, but it has suffered repeated criticism for being inefficient.
At that time, the backlog for investigations was over 570,000 cases, up from 328,000 cases the year before.79 But NBIB was unable to turn the situation around, and the backlog grew to 700,000 in 2017 with an average investigation period of 450 days.80 The security clearance backlog peaked at 725,000 in 2018.
By then, there were calls in Congress for additional reforms.81 A massive cybersecurity breach at OPM in 2018 sealed the fate of NBIB, and its operations were transferred to DOD starting in 2019.82 Since 2019, the newly established DCSA (created by Executive Order 13869) combined NBIB with the Pentagon’s own Defense Security Service to assume responsibility for roughly 95 percent of all federal government background investigations.83 That amounts to about 2 million background investigations each year.84 Under DCSA, the personnel security investigation mission was broadened to include insider threat analysis and a continuous evaluation and vetting program, with an estimated 675,000 industry employees enrolled in continuous vetting.85 DCSA also has an industrial security mission in its organization’s roots, and it oversees implementation of the National Industrial Security Program (NISP) and NISPOM (established via Executive Order 12829 in 1993 and subsequently updated by Executive Orders 12885 and 13691).86 The DCSA director reports to the undersecretary of defense for intelligence.
It oversees 844,000 contractors with clearance eligibility, of whom about 455,000 are enrolled in a continuous evaluation program.88 The NISP is supported by a public-private advisory committee called the National Industrial Security Program Policy Advisory Committee (NISPPAC), which combines government agency representatives with those from private companies (like General Dynamics or ManTech) and research entities (like the Massachusetts Institute of Technology or the RAND Corporation) who review and recommend changes to industrial security policy.89 NISPPAC is a forum where relevant government agencies can update industry about proposed modifications to current practice and where industry can seek clarification, push back against proposals, or suggest different priorities based on their understanding of the needs in the field and compliance challenges.
Most basic research that is conducted at universities falls under the fundamental research exemption and is subject to less restrictive (or no) controls on the export of sensitive technologies or software.92 If none of the following conditions are violated, then scientific research can be regularly conducted by foreign nationals and with foreign funding unless explicitly prohibited by Title 15 of the Code of Federal Regulations (CFR), Chapter VII §734.6-10.
Such applications are considered on a case-by-case basis, and there still can be a need-to-know requirement in some situations.95 Moreover, the disclosure of CUI to nonexecutive branch entities should be regulated and managed by a written agreement, and disclosure of CUI to foreign entities should also be limited according to a written agreement and other specific criteria.96 In order to ease the process of arriving at an agreement, international research partners can adhere to the same standards for protecting CUI as specified by the Department of Commerce's National Institute of Standards and Technology (NIST).
Everyone with access to CUI must undergo mandatory training—whether they are inside or outside the government—and NIST has created detailed processes for organizations to assess their preparedness for protecting CUI and to address advanced persistent threats (particularly cyber threats).98 NIST and DOD acquisition officials work closely with private industry representatives to build in some flexibility for the protection methods, which allows them to tailor their approach so that technology solutions are not overengineered.
to protect against unlawful access, but Pentagon officials have said that they “don’t want companies spending money to buy security that [they] don’t feel will be necessary to protect the Department of Defense information and national security information.”99 Because CUI is created by so many agencies that are granted the prerogative by different statutes, the penalties and sanctions associated with unauthorized disclosure of CUI are wide ranging.
Moreover, those ministries and agencies with the authority to designate secrets do so relatively rarely—only 569 times across the entire government over the first six years since the SDS law went into effect.109 Japan’s MOD is responsible for 335 of those instances, followed by the Cabinet Secretariat at eighty-seven and the National Police Agency at forty-three.110 The SDS law also outlines the process by which government employees and private contractors receive personnel security clearances to view and handle classified information.
Each ministry’s personnel office utilizes its own records and coordinates with the National Police Agency, the Public Security Intelligence Agency, and the Cabinet Intelligence and Research Office to check criminal records and investigate any credible allegations of substance abuse or other potentially compromising behavior or personal relations.111 Reassessments are necessary every five years if individuals continue to require a clearance.
This has significant implications for potential Japanese technical cooperation with the United States in nonmilitary fields that U.S. policymakers deem sufficiently sensitive to be kept secret, including some classified R&D involving certain areas of quantum computing, materials science, AI, space systems, and other advanced technologies.
Similarly, it is unlikely that the Japanese government could issue a clearance to individuals in the private sector so that domestic companies can use classified cybersecurity information shared by friendly governments to protect themselves from zero-day attacks.114 Although U.S. authorities are often reluctant to share classified information or conduct joint projects with other countries, in some situations they clearly do want to pursue this approach.
Moreover, in 2021, the Senate Foreign Relations Committee approved a draft bill known as the Strategic Competition Act that proposes establishing a “United States-Japan national security innovation fund to solicit and support private sector cooperation for new technologies that could benefit the United States and Japan’s mutual security objectives.”116 Since 1995, Japan’s Cabinet Office has overseen the preparation of five-year basic plans for S&T promotion, which guide policymaking and funding.117 Japan’s sixth five-year plan approved in 2021 reflects considerable continuity from its predecessor plan, with a notable added emphasis on increasing public funding, incorporating digital transformation, stimulating S&T innovation for problem solving by fusing the natural sciences with humanities and social science in education, and enacting “technology outflow countermeasures.”118 The Japanese government has a variety of tools at its disposal to help achieve its goals.
To some extent, a competition for resources and policy direction is migrating up to CSTI and playing out at the NSC (which, in 2020, added an economic security office to the National Security Secretariat headed by a cabinet councilor).119 As in the United States, a key question is how to find the right balance between technonationalism and technoglobalism in areas of scientific exploration and technology development.
Further, the large share of funding disbursed by the Department of Health and Human Services can be accounted for by continuous and generous funding of the National Institutes of Health by Congress (see figure 5).121 Still, due to strong existing relationships among various agencies and departments (such as NASA-JAXA, NSF-JST, DOE-JAEA, DOE-METI, and U.S. national laboratories and universities with several top universities in Japan), there is an ample foundation of bilateral collaboration upon which to build further.
A growing number of Japanese officials believe that there are scientific and technological components of Society 5.0 (primarily in AI, quantum computing, and data flows) that could be exploited by China to Japan’s disadvantage, unless Tokyo takes steps to protect certain advancements.124 They see a consensus with the United States and European Union emerging (even if details remain murky) and are considering drafting a national economic and technology security strategy to guide the policy response.125 The Japanese government has already decided to bolster domestic research integrity by imposing stricter disclosure rules for university researchers applying for public funds, so that any connections to Chinese funders or programs can be discovered before grants are awarded.126 Finally, even though direct Japanese government funding support for private sector R&D is relatively low in Japan, the government does support domestic industry actively and coordinates closely with business leaders on regulatory and trade issues.
Like other governments, Tokyo provides subsidies and tax incentives for domestic consumption of new technologies in the auto, communications, and energy industries.127 The government has also used public funds to support domestic tech firms teetering on the verge of bankruptcy, such as when it merged the display businesses of Sony, Hitachi, and Toshiba to form Japan Display in 2012.128 Japan also provides regular support to its semiconductor industry in the form of manufacturing grants, tax incentives, and preferred loans (as do several other countries, although nowhere close to the scale of support that China provides its domestic semiconductor firms).129 As in the United States, most domestic spending on R&D in Japan comes from the private sector and is largely beyond government control (aside from the aforementioned subsidies and so-called administrative guidance).130 In recent years, private sector R&D spending in Japan has exceeded that of the government by at least a factor of four.131 From an alliance perspective, no other country’s firms spend more on R&D in the United States than Japan, both through their own work at U.S.-based affiliates and subsidiaries as well as in partnership with other U.S. firms, universities, and even government-affiliated institutes (such as NASA’s Ames Research Center).132 Japan’s FEFTA provides the government with various traditional tools for managing private companies’
it is limited to “the minimum necessary control or coordination of foreign transactions.”134 Additionally, most circumstances that allow Japan’s cabinet to decide to impose export or investment restrictions relate to fulfilling obligations under international treaties and the maintenance of international peace and security (such as upholding arms control agreements or restricted trade in wild flora and fauna).
Moreover, cabinet-imposed restrictions technically only apply to transactions between residents and non-residents, so a foreign national scientist living and working legally in Japan for more than six months would be exempt from such restrictions.137 For these reasons, the Japanese government does not have a reliable and flexible measure of legal control over the export of research data or technology design information not clearly considered dual use for the sake of arms control.
Japan’s FEFTA does provide the cabinet with an ability to intervene in special cases regarding international financial transactions, investments, imports, or exports “when it is particularly necessary in order to maintain peace and security in Japan.”139 But legal interpretation to date in Japan has not applied this concept of “peace and security”
After Washington moved to strengthen its foreign direct investment rules in 2018, for example, Tokyo amended its FEFTA in 2020 to lower the purchasing approval thresholds (from 10 percent to 1 percent ownership of the company involved) and introduced a prior notification requirement.141 This applied to certain sectors of the economy that could pose a potential national security threat including critical infrastructure (such as electricity, gas, communications, or transport infrastructure) and added new categories of data processing (including semiconductors and data storage), software related to information processing, and telecommunications businesses (like those related to internet use and mobile communications).
The fact that the Japanese government was not given prior notification confused U.S. officials, who assumed that this kind of transaction would be covered by the amended law—however, purely financial investments are exempt from the notification requirement.142 Although it makes sense for Japan to welcome foreign investment that does not seek access to nonpublic technology or does not take an activist approach in the management of the company, the challenge lies in monitoring this situation indefinitely.
The Japanese government amended its Industrial Competitiveness Enhancement Act in 2018 to create a set of uniform standards for domestic industrial security and a process to certify that Japanese firms were meeting high standards.144 U.S. officials saw this as a positive step but, unlike NISPOM in the United States, Japan’s new certification process only covers unclassified material and companies’
For example, even though Executive Order 13526 specifically limits the number of people with original classification authority to relatively few senior officials, the reality is that any Defense or State Department desk officer with a clearance must decide regularly whether to start drafting a memo and initiate a paper trail on the “high side”
There is a bottom-up process of classification that takes place every day throughout the U.S. government and among its contractors that usually defaults to overprotecting information.147 When it comes to sharing information with government officials or engineers from another country, U.S. officials are generally more comfortable doing so if their foreign counterpart exhibits a similar approach toward protecting classified information.
Although Japan overall is well trusted and highly valued by the U.S. government and military, its legal structure and culture of information protection is often seen as not equivalent to the U.S. system.148 This results in situations where less information is shared than might otherwise be the case, or additional hurdles or requirements are sought to compensate for this lack of confidence.
For example, Japan is not part of Washington’s most trusted circle of intelligence confidants (the so-called Five Eyes network), is not considered part of the U.S. National Technology and Industrial Base (like Canada, the UK, and Australia are), and is not on a short list of countries that Washington exempts from stricter scrutiny of inward investments.149 The United States does not have an ISA to its GSOMIA with Japan as it does with Sweden, India, and others.150 In practice, substantive challenges to information sharing remain.
In the case of the SM3 missile (often touted as a successful example of co-development), each government funds its own nation’s contracted work on the separate components—the only information shared relates to areas of interface between those components.151 Due to the lack of a foundational agreement on defense technology cooperation (such as an ISA to the bilateral GSOMIA), each cooperative project requires its own negotiation of a special program security agreement.152 The U.S. Defense Technology Security Administration often decides that it must confirm individual security clearance approvals given to Japanese contractors working on the project.153 The existence of the U.S.-Japan GSOMIA mitigates this to some degree on simple defense exports, but not when it comes to collaborative research or co-development projects.
All of this adds time, cost, and inconvenience to joint projects, and it contributes to an overall lack of eagerness from U.S. officials to conduct new co-development projects with Japan.154 Similarly, the State Department’s Defense Trade Advisory Group (DTAG), which is made up of private sector defense trade professionals advising the Bureau of Political-Military Affairs, has considered ways to expand the use of general licenses to reduce licensing challenges and enhance collaboration with foreign firms and countries in international cooperative programs.155 Although the DTAG actively considered including Japan as a country that should be eligible for a general license exemption, the working group assigned to this task eventually recommended only Five Eyes countries for this streamlined procedure.156 The sticking point, according to some DTAG members, was Japan’s insufficient treatment of deemed exports.
Japanese rules and practices surrounding the hiring of non-Japanese employees or university researchers were not perceived sufficiently rigorous for blanket export approvals.157 It is useful to consider the case of the United States and India concluding an ISA to their GSOMIA in 2019, given the fact that India remains on the DOE’s sensitive countries list and has maintained a close defense industry relationship with Russia for decades.
Over the past few years, Japan’s legal mechanisms, systems for the protection of sensitive and classified information, and lack of security culture have, at times, resulted in either an unwillingness to engage on some potential collaborations or a very limited view of what can be done in such research partnerships in sensitive areas (like QIS, electromagnetic threats, directed-energy technologies, and some aspects of AI), according to officials from U.S. national laboratories.158 For example, the authors of this paper are aware of two separate groups of Japanese experts who could not obtain the information they needed from U.S. officials and experts during the 2018–2019 period because an adequate answer would touch on classified material: first, national laboratory experts and representatives of the Tokyo Electric Power Company (TEPCO), a private Japanese firm, regarding certain nuclear energy facility security issues, and second, joint METI-DOE-national laboratory experts regarding an electromagnetic pulse resilience plan.
Interestingly, the U.S. DOE subsequently engaged with Japanese counterparts at METI and the Ministry of Foreign Affairs (MOFA) to develop a legal framework by which DOE officials could share information related to nuclear energy security that is classified as secret with the Japanese government.159 The allies eventually concluded an agreement between NNSA and MOFA in 2019, although there is “still some work required to be able to implement the agreement.”160 According to DOE officials familiar with the agreement, the U.S. side still has some questions regarding Japan’s security clearance process for people who would have access to this information, as well as how the information would be physically handled (including sufficiently secure safes and doors, as well as personnel training).
For example, one U.S.-based Japanese firm working as a partner with multiple U.S. universities in 2020 on QIS ran into difficulties sharing research results with the firm’s headquarters in Tokyo due to questions about whether those results should be considered export-controlled research.161 The research agreements that the company has with the universities are “typical peer-to-peer”
As a result, the research could not benefit from sharing results in real time, and the process of seeking clarification from the U.S. Department of Commerce was still pending after at least seven months.162 There is also an added expense to retain legal advice to pursue that clarification, all of which has a chilling effect on the potential for expanding such collaborative R&D initiatives.
When filing patent applications in the United States (via U.S.-based subsidiaries), the U.S.-based researchers and lawyers usually do not share details with the company headquarters in Tokyo due to concerns that the information could be export controlled or even eventually classified.163 One researcher explained that they fill out export-control applications “all the time,”
and they are almost always approved (although several reported situations where the hiring of a foreign national at the U.S. subsidiary was prohibited due to deemed export controls).164 Moreover, in one case, a Japanese firm said that a wireless spectrum product it was working on was deemed classified by the U.S. government because of the product’s ability to hide communications, and workers involved in that project had to obtain security clearances.165 This was manageable because the Japanese firm had already set up this particular subsidiary as a separate legal entity and could be treated as a U.S. firm (albeit subject to FOCI) with a special security agreement, although this limits the Japanese parent’s ability to access some subsidiary information.
When evaluating these steps, Washington can be supportive and look for equivalency in terms of the outcomes rather than insist on equivalent processes.167 Bringing about the changes necessary to allow for the expansion of S&T collaboration between Japan and the United States, particularly in areas involving the development and application of sensitive or classified information and technologies, will require high-level government interactions.
In order to address the gray areas of discretion that frequently affect decisions about what to share and with whom, the Japanese government should consider steps in a second category that will have a noticeable impact on their security culture, even if it is limited to a few public and private research centers of excellence that can become preferred partners of choice.
As one former U.S. government official mentioned, “if we want a real tech alliance, then we need a means for more unfettered access between us.”171 These two amendments (to the SDS Law and FEFTA) would also provide a stronger legal foundation upon which to establish a secret or classified patent process, as it would not only create a valid reason to classify an invention, but also the ability to authorize the inventors to continue their work.
For example, Japan created an AI Research Center in 2015 under the National Institute of Advanced Industrial Science and Technology (AIST).172 In 2020, the government began setting up eight special research bases for QIS research (including at AIST and RIKEN).173 Japan could take steps to upgrade the physical security at a couple of key locations (such as AIST) and turn them into designated hubs for dual-use research in collaboration with the United States or other partners.
In addition to physical security improvements, enhanced measures for research integrity and trusted workforce development could be implemented for joint work that is not necessarily classified but requires strong security measures.174 Japan already has the ability to conduct a thorough vetting of potential employees (in itself a form of personnel clearances) for businesses such as day care centers and gambling facilities, so it should be possible to establish a few centers of research excellence in Japan that also exemplify the highest standards in physical and personnel security.
To take one recent example, Japan’s Nuclear Regulation Authority determined in March 2021 that TEPCO allowed malfunctioning intruder-detection equipment to remain in use at its Kashiwazaki-Kariwa nuclear power plant for about one year, “even though its security guards were aware the alternative measures were ineffective and, as a result, it may have been impossible to detect intruders for more than 30 days.”175 Here is a prime opportunity for the Japanese government to carry out a high-profile investigation and penalize the company and/or some employees to the fullest extent that the law allows.
In the United States, for example, the FBI has in recent years stepped up enforcement of university researchers failing to disclose ties to China and backed up their rhetoric with some high-profile arrests.176 Of course, the primary goal for the government is to avoid security lapses in the first place, so adequate and continuous training is necessary at all levels.
For example, the U.S. Justice Department established its China Initiative in 2018 to identify priority trade secret theft cases, develop an enforcement strategy for nontraditional collectors of U.S. technology, and educate universities about potential threats, among other related goals.177 They created a leadership team and publicized the initiative via press conferences and public testimony in Congress.
It could be similar to the consultative, private sector–oriented Joint High-Level Advisory Panel established (but later abandoned) by the 1988 U.S.-Japan S&T cooperation agreement, or it could be a separate bilateral commission that proposes joint funding initiatives to the NSCs of both countries for inclusion in annual budget proposals.178 One possible approach was developed by the authors of this paper (see figure 7).
If the government determines that the CRADA partner has abandoned efforts to commercialize or sufficiently disseminate the investigation’s resultant intellectual property (when they still own the license to that technology), the government can compel the partner to license the intellectual property to a third party interested in commercializing the technology at a negotiated “reasonable”
130 Administrative guidance in Japan (or gyosei shido) refers to an informal but frequent practice (especially in the early decades of Japan’s economic development after World War II) of Japanese bureaucrats shaping private sector behavior through consensus building and hinting at various incentives or disincentives that the government can leverage to elicit that behavior.
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Building technological capacities can help countries escape commodity dependence
Developing countries whose economies depend on commodities must enhance their technological capacities to escape the trap that leaves most of their populations poor and vulnerable, says UNCTAD’s Commodities and Development Report 2021, published on 7 July.
“Commodity dependence is a state that’s hard to change,” UNCTAD Acting Secretary-General Isabelle Durant said, “but it must not be seen as fate.” “If developing countries embrace new technologies and innovation, and receive the right support from the international community, they can transform and use their resource wealth for better outcomes.” Ms.
Source: UNCTAD's Commodities and Development Report 2021 Source: UNCTAD's Commodities and Development Report 2021 In a business-as-usual scenario, the report calculates it would take the average commodity-dependent country 190 years to reduce by half the difference between its current share of commodities in total merchandise exports and that of the average non-commodity-dependent country.
The Central American nation’s path to export diversification, the report says, was enabled by a policy environment supportive of the technology, innovation and human capital needed first to diversify into higher-value food products, such as fruit juice, and then to establish and grow high-tech sectors.
One factor common to all the successful cases, the report says, is the active role governments played “in bringing about a strong commitment to change from the status quo and putting in place the resources needed to move forward”.
These include an abundance of manual labour with low levels of digital skills, limited IT infrastructure, few public and private resources to fund research and innovation, and stringent intellectual property protection that poses barriers to the wide diffusion of technological know-how.
“It is essential that international public and private partners of commodity-dependent developing countries facilitate technology transfer and participate in commodity-dependent developing country efforts towards building the physical, human and institutional capabilities required for the adoption and domestication of the relevant technologies,” it says.