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Innovation, Institutions And Entrepreneurs: The Case Of ‘Cool Japan’

C. Storz
Published 2008 · Economics

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The Japanese innovation system is said to possess distinct weaknesses. One indicator is that in most new key industries, Japan is underrepresented on the world market. Given Japan's success until the beginning of the 1990s, this development was quite unexpected and has induced comprehensive reforms of the Japanese innovation system. Apparently, those institutions that were responsible for the economic success of the 1980s now hinder Japan's ability to adapt to and create new industries. This paper argues that while some reforms of the Japanese innovation system may be necessary, a paradigm change is not. Mainly one argument is provided for a more optimistic stance towards the sustainability of Japan's competitiveness: the plasticity of innovation systems. With reference to one new and ‘cool’ industry, the Japanese game software sector, the relevance of the concept of plasticity is illustrated.
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