It doesn't seem like you really gave a reason for thinking it not to be true. It's an awful big coincidence that all of japan's CE firms would lose their ability to innovate simultaneously around the time of a extended economic slump.

You're thinking in overly short time horizons. Major economic impact takes time to reverberate. Where was Sony in '95? On top. US Stagnation started in '08 give or take, so it really hasn't been that long. A lot of California's current success (in the web and elsewhere) can be traced back to the economic policies of the 90's and the easy money of Y2K. Where do you think the angel money came from? What would happen if there weren't small innovators available everywhere for google et al to purchase to keep their growth up?

I couldn't agree with you more.

When I was in Osaka, I stayed at a backpackers and I met a few young Japanese locals. Between my extremely poor and limited Japanese and their broken English, we were somewhat able to maintain a conversation and I mentioned the same thing to them.

Since it was only a subset of 5 or so people, I wouldn't count it as the general consensus of the Japanese people but they were very aware of how stagnant the big Japanese tech giants (and the country's economy) have become and how Japan is already lagging being China and Korea.

What I did find interesting is that these young blokes blame the government rather than the company themselves.