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This paper is concerned with three questions: What role has the Japanese Government played in strengthening the technological base of Japanese companies through cooperative research in biotechnology? How important are Japanese Universities for Japanese companies involved in biotechnology? How has the Japanese Government responded in the area of biotechnology to the increased globalisation (opening) of the Japanese innovation system? All these questions have direct bearing on the renewed debates taking place on the role that Governments should play in attempting to facilitate increased competitiveness and growth.