Okinawa's Doomed Innovation Experiment

Faced with declining competitiveness, Japan launched a series of top-down initiatives in the '80s to boost innovation. It invested billions of dollars in creating industry clusters—by developing large technology parks and providing subsidies for companies that locate in them. All these efforts failed to achieve their objectives. Undeterred, the Japanese government is doubling its bet and creating a new cluster in Okinawa. With a world-class research university as its nucleus, it hopes to turn this tropical paradise—which happens to be home to America's largest Asian military base—into a global research-and-development center.

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