This report focuses on one of the areas of R&D essential to solving global social problems, namely, nanotechnology, and comprehensively covers the following issues: (1) clarification of the scientific and technological aspects of nanotechnology and the positioning of nanotechnology with respect to other disciplines on a total science-technology map, (2) analyses of the national nanotechnology initiatives of major countries worldwide, including cautions and suggestions for future public investment in this area in Japan, and (3) concrete proposals for new nanotechnology initiatives to solve global issues.

The main conclusions include the following.

(1) The scientifi c and technological (S&T) area of "nanotechnology" is evolving through three different stages: the first involves the progressive advancement of each independent nanotechnology ("progress-nano"), the second concerns the interdisciplinary integration of advanced nanotechnologies originating from various S&T areas ("fusion-nano"), and the third involves the creation of a system of new functions by assembling various advanced and fused nanotechnologies ("systems-nano"). Through this serial and parallel evolution of nanotechnology, highly specialized and diverse disciplines are synthesized in a unified manner, giving rise to "Functions Design" for global issues. "Functions Design" symbolizes the restoration of true Engineering which is being driven by nanotechnology, and serves as a powerful tool for solving future problems and promoting innovation.

(2) Since the 1980s, the Japanese government has continuously made R&D investment in nanotechnology and materials, an area which has maintained high scientifi c as well as technological potential. Recently, however, not only the United States and European

Union but also China and Korea have exceeded Japan in the level of public investment in this area (when comparing purchasing power parity in 2007). It is likely that Japan will lose her internationally strong position if the government hesitates over suffi ciently funding the area of nanotechnology in the future. Tangible and intangible assets such as R&D potential, networks of user facilities, and human resources which have been built up over the past several decades should be inherited as a legacy without delay into the strategies of the 4th Science and Technology Basic Plan to be initiated in fi scal year 2011.

As for issues of education and human capability development, not only the government sector but also the academic sector should make efforts to prepare their long-term future plans.

(3) Public investment policy in Japan's 2nd (2001-2005) and 3rd (2006-2010) Science and Technology Basic Plans has been based on so-called "Priority R&D Areas", but will nowbe shifted to "Social-issue Targets" in the 4th Science and Technology Basic Plan (2011?).

Such a drastic change in S&T policy should be justifi ed based on logical and quantitative evidence obtained from a systematic review of the spending of the Science and Technology Basic Plans over the past 10 years, which is in the order of roughly \40T (US$370B); however, such a review has not been carried out as yet. In any case, independent of whether S&T policy targets "Priority R&D Areas" or "Social-issue Targets", the most important systems for improving investment efficiency in the area of nanotechnology are, fi rstly, an implementation system which promotes interdisciplinary interaction and academia-industry communication and, secondly, a coordination system which encourages inter-ministry collaboration. It is important, therefore, to view the whole S&T Plan as a matrix consisting of "Social Issues" and "R&D Areas" and to implement it as a unified plan.

The R&D areas held to be important in the fi eld of nanotechnology are "Green Nanotech" for Energy and the Environment (Green Innovation), "Nano-Bio" for Health and Medical Issues (Life Innovation), and "Nanoelectronics" for maintaining the global competitiveness of the Electronics Industry. Different from the strategically important R&D areas focused on in the 3rd Science and Technology Basic Plan, the priority areas in the coming Basic Plan should be funded according to their prescribed ratios of total amount of investment. Specifi cally, the investment ratio of each priority area should be authorized by the government in advance in order to guarantee the quantitative execution of the strategy, which would be similar to NNI's system of Program Component Areas (PCA) in the United States as well as the systems in place in Korea and Taiwan. This kind of funding policy is important for constructing infrastructure such as a user facility network, and for promoting the activities of EHS and ELSI toward responsible development of nanotechnology. ?