An exploration of the strengths and weaknesses of Japanese science and technology, including an estimate of the importance of foreign technology to Japanese technological advancement and an examination of the power of Japanese business management and government policy over scientific and technological development. Possible areas for U.S.-Japanese collaboration are identified. Today government policy in Japan is to concentrate on "knowledge intensive" areas, such as computers, fine chemicals, nuclear energy, and semiconductors where significant levels of R&D expenditures are required to compete on world markets. Projects chosen aim at satisfying long-term national and industrial needs. Japanese transportation problems stimulated research on road traffic control and magnetically levitated trains. Pollution promoted research on flue gas desulfurization and electric cars. The greatest opportunity for cooperation lies in large-scale projects of national interest, such as magnetohydrodynamic power generation, plasma fusion, road traffic control, cryogenic power transmission, magnetically levitated transportation, and solar energy. 174 pp. Ref.