The service sector, especially software industries, became the largest employer of university science and technology graduates last spring, overtaking manufacturing, according to the National Institute of Science and Technology Policy.
Analysts attribute the shift in part to Japan's continued economic slump, as well as the decline of the domestic manufacturing industry coupled with economic growth in other parts of Asia, including China and South Korea.
"It reflects a change in the industrial structure, as the focus shifts from manufacturing to software," said the institute, which is affiliated with the Ministry of Education, Culture, Sports, Science and Technology.
The software industry, which is considered part of the service sector, was a popular job market.
The findings are based on data from the ministry's basic surveys of schools since 1965, covering the careers chosen by students in science and technology, excluding medicine.
The findings show that the percentage of students landing jobs in manufacturing peaked in 1970 at 67.5 percent and had dropped to 31.5 percent by 2002.
Those employed in the service sector jumped from 4.6 percent to 35.2 percent in the same period.