Today, we are in the midst of a major transition: our focus is shifting from tangible to intellectual products. Universities should be in the forefront during this age of reform. The two main types of universities are (1) research-oriented universities and (2) teaching-oriented universities. Research-oriented universities emphasize advanced research and development, which promote the creation of an intellectually innovative society and set global standards. Teaching-oriented universities prepare their students to assume positions of leadership in a society that values knowledge, and to be active in the global arena.

(1) Fostering research-oriented universities

Some examples of successful research-oriented universities are Harvard University, the University of Chicago, MIT (Massachusetts Institute of Technology), and Stanford University. All of these institutions and their organizational structure, management methods, and curricula have received a great deal of attention in Japan.

Pursuant to its Guidelines for the Structural Reform of Japan's National Universities issued in June 2001, the Ministry of Education, Sports, Culture, Science and Technology has requested a budget allocation of approximately \21.1 billion for fiscal 2002. These funds are earmarked for distribution to Japan's top 30 national, public, and private universities in the hope of making them internationally competitive, world-class institutions. For this purpose, academic disciplines have been categorized as follows:

1. Life sciences
2. Medicine
3. Mathematics and physics
4. Chemistry and the earth sciences
5. Information, electricity, and electronics
6. Mechanics and materials
7. Construction and architecture
8. Humanities
9. Social sciences
10. Interdisciplinary studies

During the first five years, the focus will be on five of these disciplines, from which 10-30 research projects will be selected. The aforementioned budget allocation will be divided among those projects for five consecutive years, after which the results will be evaluated.*1

It is possible, to a certain extent, to select projects that are likely to attain world-class status. But world-class status must be earned, and is attained in a particular discipline only through painstaking research and development, and inventions and discoveries deserving of that status. We cannot predict results, but we can state with certainty that the world's top-ranking research-oriented universities are those that invent or discover new theories, new materials, and new paradigms that turn previous perceptions and technology around 180 degrees.

(2) How world-class research-oriented universities are made

How do we go about creating world-class research-oriented universities? The government's "top 30" policy is a step in the right direction, but a tiny one.Universities that rely heavily on cash infusions from the government have little hope of achieving this goal. Researchers who have created important inventions or made significant discoveries have cited the following factors as crucial to their accomplishments.

1. The research environment must be a free one.
2. Researchers must not be influenced by immediate rewards or "fashionable" subjects. They must view their projects objectively, and pursue their goals carefully and deliberately.
3. Other, tangential discoveries have been made during the course of a research project.
4. Methods selected as a result of the experience of many research projects have unexpectedly yielded new inventions or discoveries.*2

These comments prove how important the proper environment (a. and b.) is. To that end, universities must attract talented researchers, both Japanese and foreign, afford them the freedom to select their own projects, and provide them with an environment that is conducive to research.

This is not a budgetary concern, but a matter of the culture prevailing at the university in question, and the way in which it affects organization and management of that institution. Japanese universities claim that they are autonomous, but their commitment to protecting vested interests and short-term profits results causes considerable rigidity in their organization and operations. Budget allocations cannot create research-oriented universities. Japanese universities must learn from American and European universities, especially from their organization and management. They can then launch a "university revolution" by adapting what they have learned from their U.S. counterparts to their own needs.

(3) Toward new teaching-oriented universities

Originally, European and American universities were places where the liberal arts (religion, philosophy, pedagogy, etc.), rather than practical disciplines, were studied. In the 20th century, by which time the Industrial Revolution had given rise to capitalism, universities discovered and developed scientific knowledge, which they then offered to the industrial community to support the growth of industry. During that century, the role of universities was to nurture and aid in the advancement of industries that provided food, clothing, and housing, and to create scientific tools. *3 With the dawning of the 21st century, we have entered an age in which society is more intelligence-oriented, and wealth is measured in terms of intellectual assets. The acquisition of vocational skills during the college years skills that support the intelligence industry is now essential. The advanced nations (Western Europe and the U.S.) have risen to that challenge by augmenting vocational education programs at all levels of higher education. *4

The Ministry of Health, Labour and Welfare has requested a fiscal 2002 budget allocation for measures to protect employment during the current recession, which shows no signs of improving. Part of the allocation would be used to establish vocational training and education courses at universities (which are already in place in advanced Western nations). Japan's universities can transform themselves into teaching-oriented universities, such as one finds in the U.S., if they shift their focus to the sciences and technologies that will support Japanese industry after structural reforms have been made, and if adults enroll in their undergraduate continuing-education programs and in graduate programs.

In nations where consumers are incapable of judging the quality of services, there is no choice but for the providers of those services to make such judgements. However, in nations like Japan, the U.S., and Western Europe, where the population has matured intellectually, consumers should have the right to make judgements and decisions about services they purchase. It is the people of Japan, who use the services provided by universities not university authorities who decide whether a university is attractive, individualistic, or internationally competitive. The same goes for research and education, the services universities provide.

The wisdom of entrusting evaluations of universities (whether they are world-class or internationally competitive) to third-party rating organizations is now being debated. However, on the membership roster of those rating organizations are persons connected with universities and the Ministry of Education, Sports, Culture, Science and Technology in other words, the suppliers. And though these members may be of excellent character and have expertise skills and knowledge at their command, they are not qualified to rate universities, especially if the rating is going to be done in accordance with market principles. For the present, we can expect objective criteria for evaluation standards used by rating organizations in Western Europe and the U.S. to be used on a widespread basis. The results of the ratings will be announced, and users will evaluate them in turn. Furthermore, the attractiveness of universities and the services they provide will be determined by their popularity (or the lack thereof) with private organizations, the media, and most importantly, students and graduates. In Japan, the conventional wisdom is that users of professional services are not qualified to judge the caliber of those who provide them (physicians, attorneys, patent agents, judicial scriveners, licensed tax accountants, etc.). The same perception prevails when it comes to judging the quality of highly specialized services: only the providers of such services are capable of judging them. This perception, though deeply entrenched, is seriously flawed. The correct assessment of services provided by universities and specialists is that made by the users, the people of Japan, and it should be heeded. This argument has been sufficiently validated in Western nations.

Here we are concerned with the quality of the services offered by universities. It should not matter whether a university was founded by the central government, local government entities, or a private corporation. The assumption is that national and other public universities should receive public funds, but private universities should not. This assumption is erroneous. From the taxpayers' viewpoint, public funds should be provided to universities if they are needed seven to private universities. If we were to cite the Constitution, we would mention that the State guarantees the right to receive an equal education to all people (Article 26). Therefore, the State is obligated to provide an ideal learning environment for its people to receive an education commensurate with their ability and ambition. In other words, in addition to physical facilities, the State bears the responsibility to provide skilled instructors, suitable curricula, scholarships and student loans. There should be no distinction between public and private educational institutions, just as there should be none between the quality of home-care and child-care services. Public (municipal and nonprofit) social-service and child-care facilities claim that only they should receive public funds. This claim is, of course, fallacious. This right, too, is guaranteed by the Constitution (Article 25), which states that "all people shall have the right to maintain the minimum standards of wholesome and cultured living." When we benefit from social and child-care services, the Constitution does not allow discrimination against social-service agencies and child-care centers based on the status of the provider. Attempts have been made to justify such discrimination, citing Article 89 of the Constitution, *5 but they are inappropriate both in the context of comparative constitutional law and the guiding principles of a modern State.

Furthermore, among services required by the people, only a few (diplomacy, military affairs, and public safety) must be provided by the State, local government entities, special-status corporations, or nonprofit foundations, because market principles cannot be applied to those services (of course, where other state functions are concerned, the State comes first, as long as it is a sovereign nation). Therefore, in modern nations that reached a high level advancement (of which Japan is a prime example), the basic services that support our lives (e.g., education, social services, child care, electric power, communications, transportation, and finance) can be provided to a sufficient extent by the private sector. That is actually the case in the U.S. and Western Europe. We can interpret Prime Minister Koizumi's statement to the effect that any functions that can be accomplished by the private sector should be entrusted to that sector as excluding diplomacy, military affairs, and public safety.