1. Technology exports an imports of Japanese enterprises and the impact of the financial crisis Presentation to the 2nd Meeting of the Working Party on International Trade in Goods and Trade in Services Statistics (WPTGS) 16-18 November 2009 Toshie Kori International Department, Bank of Japan

2. 2 Features of Technology trade in Japan Surplus of “royalties and license fees” has been increasing reflecting increasing surplus in “royalties.” In contrast with “royalties,” “license fees” are consistently deficit reflecting payments of fees for computer software. Figure 1: Royalties and License Fees

3. 3 Features of Technology trade in Japan Payment & Receipts of Royalties by industry Major part of surplus in “royalties” are those related to transport equipment, which account for more than 90 percent of the surplus. Figure 2: Payments and Receipts of Royalties by Industry

4. 4 Features of Technology trade in Japan The large receipts of motor vehicle-related royalties due to the industry's high overseas production ratio.  The expansion of overseas production by Japanese motor vehicle companies is the major contributor to the increase in the overall surplus. Table 1: Overseas Production Ratios (By Industry)

5. 5 Features of Technology trade in Japan One of the features of motor vehicle-related receipts of royalties is that intra-firm transactions (between parent companies and their subsidiaries) account for a major portion. Table 2: Technology Exports and Imports (By Industry)

6. 6 Features of Technology trade in Japan Figure 3: Direct Investment Assets by Region at Year-End Receipt of “royalties” by industries closely linked with Japanese enterprises’ direct investment.

7. 7 Features of Technology trade in Japan Features of Receipt of “Royalties" by Region 20042008 Figure 4: The Regional Composition of Royalties Increasing receipt of “royalties” from BRICs countries reflecting increasing investment to those countries.

8. 8 Figure 5: Direct Investment Assets by Region at Year End Features of Technology trade in Japan Features of Receipt of “Royalties" by Region

9. 9 Figure 6: Technology Exports and Imports by Region for 2008 Features of Technology trade in Japan Comparison of technology exports and imports by region

10. 10 Features of Technology trade in Japan Figure 7: Payments for R&D Expenses by Industry R&D payment by pharmaceutical companies are increasing.

11. 11 Impacts of Financial Crisis Figure 8: Royalties and License Fees (from September to August) Receipt of “royalties” decreased significantly after the September 2008.

12. 12 Impacts of Financial Crisis Figure 9: Payments and Receipts of Royalties by Industry (from September to August) By industry, decrease in receipts of motor vehicle- related royalties was outstanding, due to decline in global consumption particularly for automobiles.

13. 13 Impacts of Financial Crisis Figure 10: Comparison of Technology Exports and Imports by Region, before Financial Crisis and Afterwards While “loyalties and license fees” decreased significantly, R&D exports and imports remained at the same level as in the previous year.

14. 14 Impacts of Financial Crisis Figure 11: Payments for R&D Expenses by Industry (from September to August)