AbstractThe science and technology system in Japan is undergoing continuous and dramatic changes. The country's globalising firms are establishing technological bridgeheads and tapping into the scientific potential in many parts of the world. Similarly, American and European companies have made considerable investments in R&D facilities in Japan. The Japanese government has been pressured to open up its R&D system and to make large contributions to basic research. The initiatives to organise international research programmes in the TRIAD have so far met with limited success. However, Japan is systematically expanding its support for basic research which may result in several new centres of excellence, which might be followed by Nobel prizes before the end of the century.