Overview of Intellectual Property Revenue

Japanese companies have significantly increased their revenue from intellectual property in recent years. According to international balance of payments statistics, Japan’s surplus in royalties and license fees increased from 149.1 billion yen to 3.1508 trillion yen over the 20 years from 2003 to 2023, a 21-fold increase. This growth has been primarily driven by licensing fees related to the automotive industry.

Categories and Changes in Intellectual Property Revenue

Royalties and license fees are mainly divided into two categories: “Industrial property rights and similar rights” including patent and trademark rights, and “Copyrights and similar rights” covering software, music, video usage fees, and character licensing. The surplus in industrial property rights and similar rights expanded from 483 billion yen in 2003 to 4.9306 trillion yen in 2023, a 10-fold increase. In contrast, Japan has consistently maintained a deficit in copyrights and similar rights.

Industry Distribution

According to the “Survey of Research and Development” by Japan’s Ministry of Internal Affairs and Communications in 2023, transportation machinery, including automobiles, accounted for the largest share at 46% of total technology exports. This was followed by the pharmaceutical manufacturing industry at 19% and metal products manufacturing at 8%. In the automotive sector, technologies related to gasoline and hybrid vehicles (HV) dominate. Japanese companies’ strengths in areas such as autonomous driving, sensors, and fuel efficiency are gaining widespread application overseas.

High Proportion of Intra-company Transactions

Despite the increasing surplus in intellectual property, this does not necessarily indicate widespread use of Japanese intellectual property by numerous foreign companies. In the transportation machinery sector, for example, 87% of technology usage occurs through “intra-company transactions” between Japanese parent companies and their overseas subsidiaries. This suggests that while the intellectual property surplus is increasing as Japanese companies expand overseas, revenue growth from external companies remains relatively slow.

Future Challenges

Japanese companies face new challenges in the face of structural changes in the industry. The adoption rate of pure electric vehicles (EVs) in Japan is slower compared to overseas markets. Yayoi Sakanaka, a senior economist at Mizuho Research & Technologies, points out that if EVs become mainstream, Japan’s intellectual property surplus may decrease, presenting a significant challenge for the future.

Key Points:

• Japan’s intellectual property revenue has grown substantially over 20 years, with the surplus increasing 21-fold.
• Automotive-related technologies are the main driver of intellectual property revenue growth.
• Japanese companies’ intellectual property revenue primarily comes from intra-company transactions.
• Industrial structural changes, particularly the proliferation of electric vehicles, may impact Japan’s future intellectual property revenue.