The individualist view of history would argue that the individuals behind the innovations aren't with us anymore, or based in Japan. For example, some argue tha

The individualist view of history would argue that the individuals behind the innovations aren't with us anymore, or based in Japan. For example, some argue that Sony has not seen any Walkman-scale consumer innovations/global successes since Morita. I read somewhere, many years ago, that as many as 11 could be directly traced to him. The macro economist (e.g. see "The Volatility Machine" by Pettis) would argue that there was fabulous amounts of FDI right until 1991, and one side effect of cheap capital is a lot more R&D into "useless" and "risky" things some of which become groundbreaking consumer innovation. As the FDI dried up so did the keiretsus' spare cash for risky ventures, or it went elsewhere (here in Singapore we see a lot of Japanese VCs like Gree). I do wonder if it has stopped outside consumer electronics (which are the most visible). In my now 5 trips in the last 2 years alone, I've been consistently impressed by the quality of the engineering (particularly civil and systems) all over the country.