Research funding in Japan has recently undergone a major structural transformation. Persistent cutbacks in stable institutional funding, coupled with the proliferation of competitive funding schemes, have had complex effects on research and researchers in Japan. As signs of systemic fatigue can be seen in the overall research funding landscape, funding reform has now emerged as a critical issue in Science, Technology, and Innovation (STI) policy in Japan. Indeed, the nation's Fifth Basic Plan for Science and Technology, established in January 2016, emphasized the need for funding reform.

In November 2014, Japan Science and Technology Agency (JST)'s Center for Research and Development Strategy (CRDS) published an interim report containing some policy options for funding reform. Then, university reform and funding reform became big policy issues at the government level. In June 2015, expert groups of the Ministry of Education, Culture, Sports, Science and Technology issued reports delineating prospective reforms of competitive funding and stable institutional funding.

In the fiscal years 2014 and 2015, institutional environment for universities greatly changed in Japan. Financial aggravation of national universities began to put intense pressure on Japan's research performance, while nation-wide reform of national universities moved into the implementation phase and unique efforts on the part of those universities got underway. Thus, it has become essential to ask what kind of efforts national universities should make to secure necessary financial resources, and what kind of public funding schemes for research are needed for post-reform national universities.

This strategic proposal proposes the following policy measures, which are either directly or indirectly concerned with reform of research funding. Some of them are already under implementation; this strategic proposal intends to present a comprehensive menu of policy items in a balanced way, discussing their current status and what will be required from now.

　<Policy item 1>　 Promoting salary reform
　<Policy item 2>　 Securing indirect costs
　<Policy item 3>　 Systematic consolidation of various competitive funding schemes
　<Policy item 4>　 Sharing and carrying out good practices to obtain more private sector funding
　<Policy item 5>　 Reconsidering the roles and institutional arrangements of university hospitals
　<Policy item 6>　 System reforms for the diversification and efficient use of university income
　<Policy item 7>　 Strengthening performance-based portion of regular funding for national universities
　<Policy item 8>　 Shift to funding schemes which sustainably support universities' unique efforts
　<Policy item 9>　 Securing a platform for dialogue needed for the design of funding schemes
　<Policy item 10>　Promoting construction and use of the evidence base

The Fifth Basic Plan for Science and Technology and the Third Mid-term Planning Period for National Universities will start from the fiscal year 2016. Policy measures enumerated above should be considered for implementation at the earliest possible time within these periods. Construction of an optimum national framework for research funding should be pursued by overcoming inter-ministry and inter-bureau barriers, taking into consideration both higher education and STI standpoints, in order to ensure public accountability of research funding to the fullest extent possible.