In dealing with the causes of Japan's declining trend in commercial innovation, it's necessary to first dispel a widely-repeated cultural myth: that "the Japanese" are only good at incremental innovation, not big breakthroughs. Not only is it not accurate about Japan. It's not even accurate regarding the relationship between creating new products and improving them, incremental versus radical innovation.

            Time after time, particularly in the 1960s-80s, Japanese companies have been the first, or among the first, to develop a new product.

            Someone may invent a product or technology that eventually--perhaps decades later--proves to be transformative in its economic impact. Steel, electricity, and the internal combustion engine come to mind. But they become that important because of decades of one incremental improvement after another.

            Consider the lithium-ion (L-I) battery, which was invented in 1985 by Japanese chemist Akira Yoshino. For this invention, Yoshino was awarded the 2019 Nobel Prize. In 1991, SONY developed a commercial L-I battery. Back then, the 75 kilowatt-hour (KwH) battery pack powering today's Tesla Model S would have cost a half-million dollars and weighed 4,000 pounds. Today, it costs about $10,000 and the price is still plunging. The weight is down to 1,200 pounds. Without these incremental improvements, the EV would not be commercially viable.

            To lift the economy, technological innovation must be married to commercial skill. Why was it Tesla, not Nissan, that changed the world? After all, the Nissan Leaf, invented in 2010, was the first commercially successful EV and was the world's top seller until 2020. But Nissan failed to make the necessary incremental improvements, including fixing its poor battery life. The culprit is not a lack of technological prowess, but a failure of corporate strategy and execution.

            See https://richardkatz.substack.com/p/myth-japanese-are-only-good-at-incremental