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Business

When Japanese taxes bring glory to Google

TOKYO -- Japanese rejoiced in December when Schaft, a venture out of the University of Tokyo, took first place in a round of the famed Darpa Robotics Challenge in the U.S. For architects of Japan's industrial policy, the victory would surely have been sweeter had Google not already swallowed the promising startup.

     "Why did they have to go overseas?" grumbles an official with Japan's industry ministry.

     Adding to the official's chagrin is the fact that taxpayer money went into key technologies in Schaft's humanoid robot. One patent, for instance, came out of research at the National Institute of Advanced Industrial Science and Technology. While the ministry is tight-lipped about the specific amount, it does admit that tax money went into Schaft's technologies.

     Google's quiet purchase of the Tokyo-based startup last year was not inevitable. Schaft had unsuccessfully sounded out businesses at home for funds, according to sources close to the matter. The Innovation Network Corp. of Japan, a private-public fund administered by the ministry, also apparently turned the company away.

     "People in Japan went to all the trouble of creating these technologies, so why can't they be nurtured here?" laments the ministry official, for whom the events show that Japan may have "first-rate" research but is "second rate" when it comes to turning tech into business opportunities.

     In a new growth strategy due out this June, the ministry is expected to emphasize promoting acquisitions of startups by Japanese companies. The Schaft-Google deal may have left some policymakers kicking themselves over how the measures did not come a bit sooner.

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