Keidanren published its proposal "National University Reforms to Generate Innovation" on December 17. The proposal shows specific measures for effective promotion of "National university reforms plan" of the government.

The proposal recommends reviewing the number and size of present national universities, pointing out the necessity of differentiating their functions into types such as "research oriented", "education oriented" and "regional contribution oriented" along with the process of reorganization and integration. At the same time, it also stipulates three reform perspectives: 1) implementation of the principle of competition, 2) enhancement of their organizational strengths and 3) securing transparency.

Regarding the "implementation of the principle of competition," the proposal highlights the importance of developing a mechanism that gives financial and other merits to universities striving for improvement. Four specific measures introduced in this regard are: "improvement of allocation by priority in operating support grants and refining evaluation standards," "allowing greater freedom in setting tuition," "strengthening incentives for obtaining external funds" and "allocating the 30%-indirect costs in the competitive funding to university presidents' discretionary expenses." It is indispensable to review the current allocation method of operating support grants which are fundamental sources for university expenses. It is also necessary to fundamentally review the current situation where the funds are mechanically allocated based on the number of students and faculty members, and develop an evaluation indicator by functions, such as "education," "research," and "social contribution," as well as a system that realizes fund distributions in favor of highly-evaluated universities. The proposal also refers to a review of the salary system, including shifting to an annual salary system, as part of the human resources and wage system reforms.

As for the "enhancement of their organizational strengths," the proposal mentions issues such as "universities as management organizations" and "centralization of internal management bodies." Specifically, the proposal refers to reviewing the way of electing university presidents as well as clarification of the position of faculty councils from a legal standpoint and their scope of deliberation.

For "securing transparency," the proposal points out that information disclosure by national universities is essential. It also stresses that content of information disclosure by "University portraits (tentative name)" should be enriched, which will fully start in April 2014 by the Ministry of Education, Culture, Sports, Science and Technology.