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For Japan, the 30 years of the Heisei Era was a period of economic stagnation. Japan’s share of global GDP measured in purchasing power parity more than halved from slightly less than 9 percent to around 4 percent today. According to the Institute for Management Development’s World Competitiveness Rankings for 2018, Japan tumbled from first to 25th place in terms of international competitiveness. Thirty years ago, 14 of the top 20 businesses in terms of aggregate market value were Japanese businesses. Today, there are no Japanese firms in the top 20. It is deplorable that Toyota Motor Corp., Japan’s top company, is now ranked at 35th on this global list.

The reason for this is clear: Japan failed to give birth to new industries such as GAFA (Google, Amazon, Facebook and Apple) or unicorns (unlisted venture businesses established within the past 10 years with an estimated value of $1 billion or more). The fundamental reason for the stagnation is that Japan was simply unable to foster innovation.

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