Abstract
Against the background of a brief recent history of the higher education system in Japan, the author reviews the increasing recognition of the importance of establishing and developing interaction between higher education institutions and industry. Aside from increasing the relevance to industry of university education, there is now a strong emphasis in Japan on the development of basic research to maintain industrial competitiveness. This has led to government initiatives to encourage cooperative research between industry and universities and various mechanisms are in place to facilitate the development of interaction between firms and universities. In the current economic climate, universities are increasingly looking to the private sector for research funding and this is also accelerating the profound changes in the education–industry relationship.
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