The article considers the new five-year plan for scientific and technological development of Japan (2016-2020) as reflecting changes in Japanese government’s assessment of the role of science and technology innovation in economic development and the government’s economic policy. The content of the new policy document is viewed in the context of abandoning old sectoral approach to R&D funding and shifting its focus towards creating friendly environment for developing and implementing socially important innovations by the research community in collaboration with the private business. Such innovation is viewed as the main long-term tool to enhance national ability to withstand global competition.