Dominance of in-house research and development (R&D) by large companies has been cited as a major characteristic of Japan's innovation system. In the face of intensifying global competition in innovation, and the growing complexity and sophistication of R&D, more and more companies are looking to external collaboration in R&D activities. This paper presents the results of an analysis of university-industry collaboration undertaken by technology-based small and medium-size enterprises (SMEs) and start-up companies, which play an important role in the formation of R&D networks, using data drawn from the "RIETI's Survey of R&D Collaborations."

Technology-based SMEs, which are young and relatively small, have achieved good results through collaboration with universities. At the same time, these SMEs and strat-up companies, which are vigorously pursuing innovation through R&D collaboration with universities and other counterparts, also play an important role as a collaboration partner in R&D. Amid the intensifying competition in R&D in recent years, large companies in Japan have been attempting to refocus its scope of R&D from in-house R&D orientation. For these companies, it is becoming all the more important to seek collaboration with SMEs and start-up companies that possess unique technologies. Now that it has become clear that the Japanese innovation system cannot be maintained simply by adhering to in-house development model, the government must continue to promote the formation of R&D networks of SMEs and start-up companies as a catalyst for reform of the innovation system in Japan.