AbstractStatistics on Japanese R&D reveal various problems of policy and implementation. Some difficulties of Japanese technological development and possibilities for overcoming them are discussed. Among others a fundamental problem is the generation of technology with less reliance on Western support. The relationship between the need for self‐generated technology and the fact of excessive reliance on technology imports is discussed in regard to superiority, inferiority and appropriateness of Japanese technology. Innovation in the Japanese automobile and iron and steel industries is characterized as integrative or combinatory innovation associated with managerial innovation. The conditions under which integrative innovation is effective are identified, and these conditions are expected to be valid for many other sectors. Finally, the mechanism of government–industry cooperation in Japan is identified as an informational control system in contrast to the financial control system in Western countries, and the major medium of control by the Japanese government is identified as technological forecasting information.These characteristics of Japanese technology management can be held up as valuable lessons for other countries given certain conditions which are expected to hold in many fie