Abstract
While the first and second 5-year plan of the Science and Technology Basic Policy has been generally successful, a further step is needed to create the virtuous cycle between innovation and demand for the next 5 years. Underlining the importance of re-allocation of R&D finance and human resource to the strategic field where Japan has inherently competitiveness advantage and re-establishment of the Japan's own model of innovation reflecting the Japanese social and economic structure, the paper proposes three key policy agenda - enhancing fundamental research through a competitive environment and adequate research management and evaluation, reforming the government R&D management in a more flexible and pragmatic manner, and improving engineering education, especially in universities and graduate schools.
