Abstract
This section explains the challenge facing Japanese companies after 1990, caught between two types of innovations: breakthrough and disruptive. Before the IT revolution, the slow pace of breakthrough innovation enabled latecomers to surpass the original innovators through incremental innovation. However, with the ICT revolution in the 1990s, breakthrough innovators gained significant “first mover” advantages, often leading to “a winner-takes-all” outcome in which Japanese companies found themselves at a competitive disadvantage. Discussion of Christensen’s “disruptive innovation” theory is incorporated to show how Japanese companies are caught between breakthrough innovation from first-mover countries and disruptive innovation from latecomer countries.
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