Fundamental research creates a legacy for the coming generations. It is my strong belief that this nature of fundamental research justifies national support for it in which the expenses are paid out of the tax. This view is supported by papers appearing in the present issue: they propose to extend the technology-oriented national policy, conceived as a survival strategy for the country with poor natural resources, into a comprehensive security policy involving natural aspect, and discuss importance of enhanced technology transfer to Asian countries and contribution to the global community through fundamental research activities. We have seen the Fundamentals of Science and Technology Law enacted and a corresponding general plan established. However, too often in the past, apparently excellent science and technology policies did not result in exciting outcomes. Papers included in this issue argues for drastic increase in governmental support for fundamental research, which will help us attain a status of credibility in the global community, and discuss legacy creation and total security policies.

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The paper presents a comparative study of the competitiveness of U.S. and Japanese companies up to 1990 as viewed from the standpoint of management accounting, followed by a discussion of changes in the management according in the two countries since 1990. Traditional accounting practices in Japanese companies can be characterized as indefinite, customer-oriented, team-oriented, and subject to non-financial factors, while the American practice is rather logical, individual-oriented and shareholder-oriented. However, considerable changes in these characteristics are observed since 1990: either country tends to adopt some of the traditional features of the other.

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The concept of international competitiveness comprises various factors, providing a number of aspects. The present work evaluates the competitiveness of the Japanese manufacturing industries in terms of productivity. The growth of the physical labor productivity in the Japanese manufacturing industry has been slowed down since the 1970s and has been recording negative rates since 1990. In contrast the American manufacturing industries, after the sluggish 1970s, have improved the physical labor productivity in the 1980s by reducing the labor input and show a significant growth since 1990. The value-added labor productivity in Japan, as measured by purchasing power parity, was found to be 74% that of the U.S. in 1991. These comparisons indicate clearly that the international competitiveness of the Japanese manufacturing industries is declining.

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The international competitiveness of an industry involves many factors hardly measurable in terms of price, such as product quality and sales conditions, as well as those evaluated as prices. Indexes of the international competitiveness of an industry include productivity indexes, such as labor productivity and total factor productivity, and cost indexes such as unit labor costs and unit multi-factor costs, each with its own merits and demerits with respect to ease of calculation and accuracy. International comparisons of such indexes must be made on a common currency basis, which means that changes in the exchange rates affect directly the international competitiveness of each country. Unit labor costs for Japan, for example, show a better performance than those for the U.S. on the common currency basis, reflecting the recent exchange rates of Yen against U.S. dollar. After the abrupt hike in early 1995, which placed the Japanese manufacturing industry under highly unfavorable conditions, the Yen rate has been gradually normalized since the Summer of the same year. The present rate indicates a desirable value in terms of the international competitiveness of the industry.

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The Japanese automotive industry showed an excellent performance in product development, resulting from such corporate abilities as use of the development and production performance of component manufacturers, parallel development approach, and highly organized product managers. Such performance has basically been retained until the 1990s at the level of individual projects. However, excessive reliance on these abilities led to the "excessive design" problem, which is now being compensated for by the "lean product" approach. The Americans and Europeans have caught up the Japanese with respect to the abilities listed above, but with only partial accomplishment. The Japanese have greatly reduced the development period owing to the 3-dimensional CAD/CAE and other new technologies. This trend of simplification in design will further proceed in future, invalidating the prediction that the strong yen would impair the competitiveness of Japanese enterprises leading to "hollowization". Mutual learning between enterprises is a very important feature in the international competition platform. The competition pattern is so mobile that timely and objective data are indispensable for arguments claiming any degree of credibility. This means that positive investigations into the dynamic processes of product development should be continued further.

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Enhancement of international competitiveness of industry and expansion of employment are now receiving high priorities in the policy of every country facing the historical turning point. The advent of the age of great economic competition has triggered transformation of Japan's industrial structure, which must result, in the next century, in a nation based on creative science and technology. This requires a society open to the global community and creative, self-reliant individuals, which in turn needs a third overhaul of the country's educational system, following ones in the early Meiji era and immediately after WW II. It was against these backgrounds that the Fundamentals of Science and Technology Law was established as a non-partisan legislation. The present paper discusses the implication of the law as well as issues in its implementation.

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The radical reform of Japan's post-war government structure is now concentrated on administrative and financial reforms and deregulations. The next step is the focus of the Fundamentals of Fundamentals of Science and Technology Law which demands creation of new industries superseding the "hollowing" ones, solution of problems of global community. The purpose of the Law is doubling the governmental expenditure for R&D and renovations in the nation's R&D systems. An important issue is how a rational and efficient system, as seen in the American society, can be grafted onto the traditional systems and culture of Japan. For example, Japan's national research institutes have limited freedom in decision making, while the powerful faculty meetings in the universities tend to be egalitarian; both lack sufficient leadership in research activity. Young researchers, whose creativity is essential in social reforms, are not well-paid. The rigid budgetary system inhibits flexible research management. Regulations for government officials imposes sectionalism that inhibits, for example, academics from being entrepreneurs. Japan has been suppressing inevitable conflicts over research evaluation between creative researchers and reviewers. Switching from the traditional government-let R&D system to a more autonomous structure while increasing government expenditure is a difficult task, which is, however, essential in the nation's perspective in the next century.

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The R&D strategy of a business corporation should be linked to the general corporate policy in order that R&D activities contribute effectively to the corporate performance. The R&D division makes two distinct types of dialogue: one with sales/marketing divisions, and one with other technical divisions. On the assumption that functional integration and technical integration, generated by the respective types of dialogue, have great influences on the corporate performance, a questionnaire was prepared and sent to listed manufacturing companies for elucidating elements and structure of the dialogues. The result revealed that: 1. Functional integration contributes to the corporate performance; 2. Technical integration, as far as isolated, detracts from the corporate performance;3. Technical integration in combination with functional integration has a positive contribution to the corporate performance. It has been pointed out that the performance can be improved by modifying the interaction patterns between divisions, even without extending managerial resources.

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It was previously reported that the R&D expenditure for a chemical product is inversely proportional to its market price if it is the sole product of the manufacturer, but the total R&D expenditure for a number of products of an enterprise is practically independent of the prices of individual products. A theory was developed to explain these findings quantitatively. The theory imposes a set of requirements on the distribution of market prices among the products. Data o the petrochemical industries were found to meet the requirements fairly well. The marginal revenues for individual products are also predicted to be independent of the market price, and this argument seems to be supported by the data available at present in spite of considerable scatter. Corrections are made to some results previously reported using new information.

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The aim of the present work is to analyze the difficulties encountered in interdisciplinary researches, and to present a perspective, according to the analysis, on the expected integration of knowledge obtained in individual disciplines. Communities publishing journals, rather than disciplines in general, were regarded as research units that have particular criteria of "validity" or "scientific soundness" of a research. Interdisciplinary research was classified into three types according to the characteristics of their output. Causes of communications problems arising in each type of research were then discussed in terms of differences in the validity criteria. Based on the conclusions of this analysis, perstective of knowledge integration is presented for each type of research.

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