A. They definitely are. To sustain economic growth, we need to spur technological innovation and create new industries in fields like medicine and health care, not just in the conventional industries of the automobiles and home electronics. One good example of our efforts in this arena is the ¥110 billion [$1.12 billion] we committed to the research of iPS stem cells led by Dr. Shinya Yamanaka, the Nobel laureate. [Induced pluripotent stem cells, referred to by Mr. Shimomura, are stem cells derived from ordinary body cells rather than embryos].

We need to develop human capital to realize industrial growth as envisioned in the “third arrow” of Abenomics. Our per capita gross domestic product has fallen from being the world’s No. 2 to No. 27 recently. As the labor force shrinks and the population ages, lifting productivity is about the only pathway to realizing higher economic growth.

Q. What is the main challenge for universities?

A. Japan’s higher education has not truly been a place to foster global talents. For a good illustration of that, look at where Japanese universities are in the published rankings. Fewer Japanese universities today are on these lists.

Strengthening universities would allow us to develop talents that better serve the needs of our industries. Individual universities may not be able to do it by themselves financially, so, the government and universities should share the strategy and work together.

Q. What should they be doing to become more global?

A. We want Japanese universities to increase the number of international faculty, raise the number of classes conducted in English and introduce standardized tests like Toefl as a means to lift English skills. We also want to double the flow of students coming to Japan and those leaving Japan for overseas institutions.