Shuzo Nishimura

Donated Chairs at Graduate School of Economics and their Future

Since Japan experienced collapse of the bubble economy at the beginning of the 1990s, it has been in a long recession. The Japanese economy seems to have lost its self-confidence. Some people refer to the 90s as the lost decade. One of the causes often cited for the long recession is the financial crisis resulting from the fact that Japanese bankers were unable to better respond to drastic financial revolution. After a decade, both the government and financial institutions are gradually realizing the need for institutional change of financial systems.

Corresponding to such trends of institutional change, the Graduate School of Economics, Kyoto University has also realized the need to change research and education in finance. With this institutional change in mind, the Daiwa Chair was first established in 2002 for studies of financial engineering. Funds for this were donated by Daiwa Securities Group. And this year, in 2005, two donated

professorships were established. One is the Chair that concentrates research and education on corporate finance. Funds for this have been donated by Mizuho Securities Co. Ltd. The other is the Chair that concentrates research and education on venture capital management. Funds for this have been donated by UFJ Capital Co. Ltd. Now our school has three donated professorship chairs, all of which are related to finance.

All of these chairs will contribute to the development of research and education on financial analysis in various aspects. First of all, financial engineering is a new research area that has been making dramatic progress since Black and Scholes invented the formula to price European call options. It has contributed to diverse areas of economics, including the evaluation of credit risk that is essential to the issue of disposal of non-performing loans.

The Daiwa Chair provides several programs and lectures on financial and securities systems and tries to develop

valuation methods and risk management for assets in incomplete markets.

Corporate finance is a research field that our graduate school has pursued for a long time. Among finance research areas, our school has advantages in macro-economic aspects, while we are also realizing the need for supplementing micro-economic aspects such as corporate finance. Mizuho Chair is a timely establishment for the whole arrangement of our research and education.

Venture capital management is also a timely establishment for our graduate school. Since our school had already opened the venture business management chair in 2001, this new research area will collaborate in fostering new businesses. On one hand, research on

venture business management will give wisdom on how to foster entrepreneurship, while on the other hand, research on venture capital management will give insight on how to evaluate and finance potential venture businesses.

By the way, our Graduate School of Economics is planning to establish the new Management School as a joint operation with the Graduate School of Engineering. This School will start in April 2006, with the help of many other graduate schools such as the Graduate School of Informatics. In this new school, Finance will also play the core role in research and education. The donated chairs described above will also participate actively in research and education at the new school.

Our graduate school's policy on accepting donated chairs is as follows: although our school has been put emphasis on basic research during the long history of one of the two oldest schools on economics and management research in Japan, we also have a tradition

of studying practical matters in economics and management. Therefore, it is quite natural for our school to try to mitigate basic and applied researches. To study what is going on now in the real business world is important in itself and also for basic research.

Outline of Kyoto University s Establishment of the Graduate School of Business Management Education and the reorganization of Graduate Schoolof Economics

Objectives and reasons for the establishment and reorganization

It has been suggested that one reason Japan's economy has been in a slump in recent years is a distinct lack of suggestions for reformation based on systematic business education and research in areas such as corporate management. To address this need and offer courses that teach practical and advanced specialist knowledge, the Graduate School of Economics and the Graduate School of Engineering have joined forces to establish a Business Management Course in the Graduate school of Business Management. The education offered in this course shall be based on the following fundamental concepts.

(1) Take advantage of the multi-discipline nature of Kyoto University and seek cooperative participation from all faculties, and in particular, utilize the knowledge of the latest technologies of, for example, the fields of information science and engineering.

(2) Place priority on specialist fields not offered by other universities such as "Turnaround Management","Project and Operations Management",and "Financial Risk Management" and offer education training to people wishing to enter advanced specialist occupations relevant to these fields.

(3) Adopt a multifaceted educational approach by inviting numerous teachers with practical experience to access knowledge from the work front of cutting edge businesses in addition to research-based teaching staff.

In addition to the establishment of these graduate courses, the two courses, Contemporary Economics and Business Science offered by the Graduate School of Economics will be reorganized and offered as Contemporary Economics and Business Analysis. These measures will further enrich the substance of the education and research of the existing Contemporary Economics Course. The function of developing people in advanced specialist occupations will be moved from the Business Science Course to the Business Management Course of the Graduate Department of Business Management Research and the Business Management Course of the Graduate Department of Business Management Education to provide education aimed at building a system of educational guidance that places importance on developing researchers.

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Approach and Characteristics of the Educational Curriculum

The educational coursework of the Graduate School of Business Management consists of traditional core subjects in the economic field such as business management, marketing, and accounting (12 units), a base of specialized subjects such as organizational behavior, technological management, corporate analysis, and logistics management (16 units), and extended subjects primarily taught by professional experts with practical experience such as business startup models, venture capital, intellectual property management, disaster recovery, investment risk management, and corporate finance (14 units). In addition, numerous lecture-based courses such as information systems analysis theory, information systems design theory, and risk management are planned to be offered through positive contributions from lecturers from other graduate schools such as Graduate School of Informatics. Moreover, the course shall not merely consist of providing the practical business knowledge of experts; rather, students will receive a broad grounding of the fundamentals of this knowledge in a carefully prepared environment consisting of new methods and curriculum such as concurrent lectures from several teaching staff.

The educational coursework of the existing researcher courses of Contemporary Management and Business Science shall continue to be provided through the Contemporary Economics and Business Analysis Course.

Photo of Nishimura

Shuzo Nishimura

Born in 1945.
Specialized Research Field: Health Economics
Graduate of the doctoral program, Economics Professor,Graduate School of Economics, Kyoto University

It is sometimes difficult to address what must change to match the times and what should be left alone regardless of the changing times. Being at the helm of Graduate School of Economics as it searches for clarity in these issues is an extremely challenging task.

Although Kyoto University's collaborative projects with industry have till present focused on the research fields related to natural sciences, the Graduate School of Economics has now begun a full-scale industry-university collaboration aimed at conducting research in the field of social sciences and implementing the findings of this research in the real social world. The introduction of a course in contribution by commercial industry is perceived as a first step towards concrete collaboration. Meanwhile, collaboration with other faculties within the university is also continuing well with the steady development of joint-establishment initiatives such as the Management School in collaboration with the Graduate School of Engineering and the Graduate School of Public Policy in collaboration with the Graduate School of Law, which are expected to open in April 2006. This move, which is a response to globalization in universities and the Japanese economy, is a big change for the Graduate School of Economics, which till present has maintained staunch independence. Professor Nishimura, whose strong leadership has been bringing these new projects to fruition, has encountered many occasions where his position as Head of the Graduate School of Economics has been in contradiction with his personal research position. Professor Nishimura's field of specialty is the health economics. This field's strong relationship with an aging society and social welfare is reason alone for taking a prudent stance towards global standards based on the competitive principle. Professor Nishimura has expressed his desire to see Kyoto University take advantage of all the wisdom that a multidisciplinary university can generate by creating a system with which all the faculties cooperate to tackle the issue of the aging society. Despite his hectic workload as Head of the Graduate School of Economics, he has yet to lose his passion for research. Born and raised in Kyoto City, he has inherited the city's venturesome spirit and love of the new. The study of the health economics is a new field for the economics faculty. He considers economics to be like politics in that it is a method for resolving conflict and we look forward to seeing his Kyoto-spirit at work in his future endeavors.