In the 1980s, Japanese firms were widely admired for their expanding strength in the development of new technology. By contrast, in the 1990s, considerable qualitative and quantitative evidence suggests that Japanese firms' research and development (R&D) efforts have been less effective. This research project will subject the apparent decline in Japanese innovative productivity to detailed, qualitative and quantitative analysis. It will also critically examine the steps Japanese firms have taken to restructure their R&D operations (partly in response to government policy initiatives), and it will attempt to identify those elements of reform that are most strongly associated with measured increases in research productivity. It will conduct this analysis in a comparative context that builds on recent research concerning innovation trends in the United States and Taiwan.