Japanese Firms’ Innovation Strategies in the Twenty-First Century : An Institutional View

The landscape within which Japanese companies innovate stands altered by events of the past two decades. Buffeted and metamorphosed by the forces of a severe asset value shock followed by a decade of economic malaise, then a decade of growth, and now the recent financial crisis, Japanese firms are transforming their innovation strategies because the institutional basis of those strategies seems to be altered by new economic realities. Even though the basis of the strategies, and perhaps the strategies themselves, are changing, Japan is maintaining its level of innovation according to recent data. Small companies seem to be increasingly part of recent innovation. So we ask, how is the level maintained given that the strategies that created Japan’s acknowledged industrial innovativeness seem to be transformed by events?