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This publication on human welfare and technological innovation contains two sections. The first section examines the objectives and functions of technological innovation while the second section discusses the direction and analysis of technology transfer between Japan and other nations. Subtopics within the first section include: (1) characteristics of technology, (2) human and environmental problems associated with technology, and (3) countermeasures to offset the problems of increasing technology. Section 2 contains five subtopics dealing with Japan's technology and its relationship to Asia and the world. These subtopics analyze problems stemming from the change in the industrial structure of Japan, examine Japan's role in the international division of labor and in the energy crisis, discuss the characteristics of Japan's science and technology and her relations with the United States and the industrialized nations of Europe, analyze relationships in the international division of labor in Asia, and discuss the need to develop a new scale for perception of environmental quality. (Author/DE)