Hello, this is Ryuta Hamamoto from TIMEWELL.
Japan's Ministry of Education, Culture, Sports, Science and Technology is reported to have settled on roughly doubling KAKENHI in its FY2027 budget request. The figure cited is 455.2 billion yen, which would be the largest ever.
First, the most important thing. This is a request, not a decision. Requests are due at the end of August, and negotiation with the Ministry of Finance follows. Requests are not normally granted in full. Reading this as "the doubling is settled" is premature.
That said, the content is worth looking at. Converting the entire scheme to multi-year funds may matter more to researchers than the headline number.
I also want to test something. The claim that "KAKENHI was heavily cut in the past" comes up constantly in this conversation. I checked it against the published data, and it changed my own understanding.
The short version
- The reported request is 455.2 billion yen, roughly 1.8 times this year, which would be a record
- But it is a request. Requests in August, government draft around late December, enactment in the ordinary Diet session
- Reported content: converting all of KAKENHI to multi-year funds, strengthening international joint research, expanding support for early-career researchers
- What makes it possible is the "Strong and Prosperous Japan" investment framework, created by Cabinet understanding on July 30, 2026, with no ceiling on requests
- The same policy states that measures should be based on multi-year plans, which fits the fund conversion
- The primary data does not show KAKENHI being cut. 117.9 billion yen in FY1998 to 247.9 billion in FY2026
- What hurt universities was the decline in operating grants, falling roughly 1% a year since incorporation in FY2004
Groundwork: what KAKENHI is
Terms first, because the debate goes nowhere without them.
KAKENHI (Grants-in-Aid for Scientific Research)
Competitive research funding that researchers or groups apply for and receive after review. Topics come from the researchers. The state does not dictate the field; it builds from the bottom up.
It covers everything from basic research to applied work, across disciplines. It is the core of Japanese academic research funding.
Operating grants
Baseline funding the state provides to national university corporations — salaries, facility maintenance, utilities, the things that let an institution function as an organization.
These two are completely different in character. KAKENHI attaches to specific research; operating grants fund the organization. No amount of KAKENHI pays a university's salaries. Equally, operating grants do not run individual research projects.
Both are needed, and neither substitutes for the other.
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Does "KAKENHI was cut" match the data?
Let me handle this carefully.
You often hear that KAKENHI was slashed about fifteen years ago and Japanese university research fell behind. The perception that the research environment deteriorated is well supported. But whether the cause was a cut to KAKENHI is a different question, and the published data does not say so.
The JSPS series
The Japan Society for the Promotion of Science publishes the budget series.1 Selected years:
| Fiscal year | Budget | Note |
|---|---|---|
| FY1998 | 117.9 billion yen | |
| FY2001 | 158.0 billion yen | Indirect cost introduced |
| FY2009 | 197.0 billion yen | |
| FY2010 | 200.0 billion yen | |
| FY2011 | 263.3 billion yen | Fund conversion introduced |
| FY2012 | 256.6 billion yen | |
| FY2014 | 227.6 billion yen | |
| FY2016 | 227.3 billion yen | |
| FY2020 | 237.4 billion yen | |
| FY2024 | 267.9 billion yen | Kiban (B) converted to funds; includes 15.6 billion supplementary |
| FY2025 | 303.1 billion yen | Includes 65.4 billion supplementary |
| FY2026 | 247.9 billion yen | Transformative (B) and Kiban (S) converted; includes 5.2 billion supplementary |
Over the long run it has grown — roughly 2.1 times, from 117.9 billion in FY1998 to 247.9 billion in FY2026.
Look at FY2010 to FY2011: 200.0 billion to 263.3 billion, a jump of more than 63 billion in a single year, driven by the introduction of fund conversion.
Check the dates. Japan's Democratic Party government ran from September 2009 to December 2012, covering FY2009 to FY2012. Across that period KAKENHI went 197.0 → 200.0 → 263.3 → 256.6 billion yen. It was not cut. It rose sharply in FY2011.
So what did fall?
Operating grants.
National universities were incorporated in FY2004. From then, an "efficiency coefficient" cut operating grants by roughly 1% every year.
- From FY2004 to FY2015, a decline of about 147 billion yen (roughly 11.8%) over eleven years
- In the seven years from FY2004 to FY2010 alone, about 83 billion yen
And this began with incorporation in FY2004, five years before the DPJ government took office.
The revenue structure itself changed
Going deeper, the structural shift matters more than the headline decline. Here is the breakdown of ordinary revenue across the national university corporations, from a MEXT paper submitted to the evaluation committee.2
| Ordinary revenue | FY2004 | FY2024 |
|---|---|---|
| Operating grant revenue | 1,165.4 billion yen (47%) | 1,082.8 billion yen (29%) |
| Student fees | 356.0 billion yen (15%) | 362.4 billion yen (10%) |
| External funds etc. | 171.8 billion yen (7%) | 752.1 billion yen (20%) |
| University hospital revenue | 624.5 billion yen (26%) | 1,414.8 billion yen (39%) |
| Total | 2,445.4 billion yen | 3,700.5 billion yen |
Note: external funds covers subsidies, commissioned research, donations and research-related revenue. Asset-related reversal income is omitted as it has been zero since FY2022 following an accounting standard change.
Total ordinary revenue grew roughly 1.5 times. At a glance, universities look better off.
Yet operating grant revenue fell in absolute terms and dropped from 47% to 29% of the total. The growth came from hospital revenue (about 2.2 times) and external funds (about 4.3 times).
That is the structural change. University income rose, but its composition shifted toward clinical revenue from hospitals and external money that has to be won. The portion universities can direct themselves has thinned, both relatively and absolutely.
Baseline funding that includes salaries thinning out means permanent positions cannot be sustained. The structure where early-career researchers cannot find stable jobs, and cannot settle into long-horizon work, comes mainly from here. No amount of competitive funding fills that gap.
Where the 2009 budget review fits
The November 2009 budget screening exercise unquestionably shook science funding. The Institute for Molecular Science issued a statement warning that Japanese academic research would collapse, and Nature ran a feature on Japanese science budget cuts. The alarm in the research community is clearly on the record.
The screening did issue "review" and "reduce" judgments on national university operating grants — on top of the 1% already coming off every year.
That said, the published data shows no corresponding cut to KAKENHI itself.
Putting it together
- The perception that the research environment worsened is sound, with evidence behind it
- But the main driver was the decline in operating grants, beginning with incorporation in FY2004. It does not attach to one administration
- The 2009 screening badly shook the research community, but did not translate into a KAKENHI cut
- KAKENHI grew over the long run, particularly with the FY2011 fund conversion
I hold no brief for or against any government. But if you want to fix something, you need the cause right. "Increase KAKENHI and universities recover" leaves the operating grant problem entirely out of frame.
On that front, operating grants were reported to be agreed at 1.0971 trillion yen for FY2026, the first increase in nine years, with 1.2 trillion yen reported as the FY2027 request. That side is moving too.
What the request would grow
Reported content, all at the request stage.
The number
455.2 billion yen, roughly 1.8 times the 247.9 billion for FY2026, and reportedly a record.
Converting all of KAKENHI to funds
Practically, I think this is the bigger item.
Japanese government budgets are normally single-year: spend it within the fiscal year. The end-of-year scramble to buy equipment is a familiar sight in research.
Fund conversion allows flexible spending across multiple years. Research does not run to schedule. Instruments arrive late; experiments fail and directions change. Single-year constraints do not match how research works.
KAKENHI fund conversion began partially in FY2011 and has widened by category since — Kiban (B) in FY2024, Transformative Research Areas (B) and Kiban (S) in FY2026, as the table shows. The reported plan extends this across the board.
The freedom in how money is used may matter more to researchers than the size of it.
International joint research and early-career support
The breakdown awaits formal publication, but reporting cites international joint research and early-career support.
The latter has already seen priority allocation frames. The shape of it is using competitive funding to compensate for the stable positions lost as operating grants fell.
But as noted, competitive funding does not substitute for baseline funding. Three or five-year project money does not create permanent posts. That problem stays.
Why a doubling can even be requested
There is a structural reason, and it is documented.
On July 30, 2026, the Cabinet reached an understanding on the "Basic Policy for FY2027 Budget Requests."3 It opens:
For the FY2027 budget, based on the Basic Policy on Economic and Fiscal Management and Reform 2026 (Cabinet decision of July 21, 2026), in order to implement with predictability measures that raise the potential growth rate through domestic investment, including crisis management investment and growth investment, a "Strong and Prosperous Japan" investment framework shall be created separately from ordinary expenditure.
The request rules differ for this framework alone:
For the "Strong and Prosperous Japan" investment framework, promote highly effective policies based on the Japan Growth Strategy, the Regional Future Strategy and others (...) without setting a request ceiling, requesting the necessary amounts appropriately, including item-only requests.
Ordinary expenditure must be requested within the previous year's initial budget, with additional requests up to 20% of that. Under those rules, a doubling could not be requested at all.
The uncapped framework is what makes the number possible.
The same policy adds:
To enhance predictability and support continuous efforts, measures based on multi-year plans shall be the norm.
The fund conversion plan and the framework's design point the same way — away from spend-it-this-year.
The Japan Growth Strategy and Regional Future Strategy referenced here sit in the same package as the bold investment promotion tax measure under the amended Industrial Competitiveness Enhancement Act. This is not only about research budgets; it is part of a policy package aimed at lifting domestic investment overall.
Getting from here to certainty
What "not yet decided" means in practice:
| When | What |
|---|---|
| End of August | Ministries submit budget requests (the deadline is stated in the policy) |
| September–December | Finance Ministry review and negotiation |
| Late December | Cabinet approves the government draft budget |
| January–March | Deliberation in the ordinary Diet session |
| Within the fiscal year | Budget enacted. Now it is certain |
Requests and final figures do not usually match. Reductions from request are the norm. Planning around "455.2 billion yen" would be unwise.
On the other hand, this uses an uncapped framework, which is not the usual situation. With the government committed to lifting domestic investment, the usual trimming may not simply apply. Wait for the December draft is the right posture.
Will universities and startups get closer?
Worth addressing, and worth separating carefully.
KAKENHI is competitive funding for basic research, not commercialization money. More KAKENHI does not directly produce more university spinouts. Commercialization is supported through separate schemes.
Indirect effects are plausible, though.
1. Time freedom from fund conversion. Multi-year flexibility means researchers can settle into long efforts. Technology that survives commercialization rarely comes out of short projects.
2. Early-career support. University spinouts are largely driven by doctoral students, postdocs and junior faculty. Whether that layer can stay in research sets the size of the pool.
3. International joint research. Ties to overseas institutions double as routes to overseas markets.
What this does not supply is equally clear. Commercialization needs management talent, early capital, and clean handling of IP — separately from research money. Treating a KAKENHI increase as leading directly to industry-academia collaboration is a leap.
Directionally, though, I think it is sound. Pushing collaboration on a thin base does not increase output.
What to watch
Researchers and universities. Wait for the formal request. The ministry publishes it at the end of August alongside a "key points" document. Treatment by research category only becomes concrete there. Judging from press figures alone is risky.
Companies. If you are considering joint research with a university, fund conversion changes how your counterpart's budget behaves. The habit of rushing to sign contracts before fiscal year end may ease. Revisiting joint research timeframes once the scheme settles is worthwhile.
Startups. KAKENHI is not commercialization money, but your academic counterpart's circumstances may change. Easier multi-year planning on their side means easier multi-year collaboration.
Closing thought
Writing this changed my own view of something. I had accepted the "KAKENHI was cut and research stalled" account without examining it.
The JSPS series shows KAKENHI rising over the long run. What fell was operating grants, and that began with incorporation in FY2004.
The sense that conditions got harder is real. But misidentifying the cause misdirects the fix. Baseline funding and competitive funding are separate problems, and both need watching. That is what the data left me with.
The doubling request is a welcome move. It does not, by itself, solve the baseline funding problem — worth keeping in view alongside.
Wrapping up
- The ministry is reported to be requesting 455.2 billion yen (about 1.8x) for KAKENHI in FY2027. Not decided
- Content: converting all of KAKENHI to funds, international joint research, early-career support
- Enabled by the "Strong and Prosperous Japan" investment framework from the July 30, 2026 Cabinet understanding, which has no request ceiling and treats multi-year plans as the norm
- The primary data shows no cut to KAKENHI. 117.9 billion yen in FY1998 to 247.9 billion in FY2026, with a sharp FY2011 rise on fund conversion
- What hurt universities was the decline in operating grants — roughly 1% a year since FY2004, about 147 billion yen (11.8%) over eleven years
- The revenue structure itself changed. Ordinary revenue grew 1.5x, but operating grant revenue fell from 1,165.4 billion yen (47%) to 1,082.8 billion (29%), with the growth coming from hospital revenue and external funds
- The 2009 screening exercise shook the research community but did not cut KAKENHI
- Competitive funding does not substitute for baseline funding. Project money does not create permanent posts
- Certainty comes with the late-December government draft and enactment within the fiscal year
The headline number draws the eye, but fund conversion looks like the part that will actually bite. Removing the spend-it-or-lose-it constraint could change how research gets done. Worth waiting for the formal publication to see the treatment by category.
Footnotes
-
Japan Society for the Promotion of Science, KAKENHI data (budget series, updated May 15, 2026). https://www.jsps.go.jp/j-grantsinaid/27_kdata/index.html ↩
-
MEXT, "Current Situation Surrounding Operating Grants" (National University Corporation Evaluation Committee, 80th plenary, Document IV, March 3, 2026). https://www.mext.go.jp/content/20260302-mxt_hojinka000047760_4.pdf ↩
-
Ministry of Finance, "Basic Policy for FY2027 Budget Requests" (Cabinet understanding, July 30, 2026). https://www.mof.go.jp/policy/budget/budger_workflow/budget/fy2027/sy260730a.pdf ↩
