In the last decade, the Japanese have succeeded in convincing their competitors in the world market that the old saw—that the Japanese can imitate, not innovate—no longer cuts the mustard. But it would appear that they have yet to convince themselves.

For while any expert in global economics would say that the Japanese are capable of doing a lot more than simply knocking off United States inventions and turning those knockoffs into irresistibly cheap and sought-after exports, the Japanese keep worrying that their island culture stifles creativity.

This lack of confidence that they can compete with the U.S. in innovation has caused the Japanese to make changes in every level of enterprise—with many of these experiments ironically imitative of U.S. techniques. The government, for example, studied U.S. science parks and spurred the creation in its homeland of vast technology innovation centers such as the 7,000-scientist "science city" of Tsukuba, northeast...

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