Japanese firms establishing and maintaining large intertwined networks were said to be the key to the success of companies like Mitsui, Mitsubishi, Matsushita and Sumitomo.
The strengths of the Japanese economy are said to be aimed at structural improvement of the country's competitive position, the devotion and hard working nature of its workforce, and it's relatively high saving rate. Surely these factors can have a positive influence on economic growth, but they could never, by themselves, explain the rates of economic growth experienced in Japan and other Asian 'growth miracles', like Taiwan, Singapore, South Korea and Hong Kong during the 1960s, 70s and 80s.
Japan's startling growth rates came to a halt at the end of the 1980s. The past decade has shown feeble economic growth. However, Japan's per capita income levels are now as high as those of any other industrialized nation. Given its size, Japan can be claimed to have successfully positioned itself as an incumbent in the field of the world economy. Indeed, it is the second largest national economy in the world today. .
Economic growth in Japan in the 1960s and 1970s was based on so-called "overthrowing technologies." Japanese firms started selling plain steel to American companies in the 1960s, thereby driving down prices by means of low production and labor costs. Technology can overthrow product markets by advancing more rapidly than new technologies, which is applied into new products. When market leaders focus on constant upgrading of existing products, there is room for cheap innovation that seems less profitable, but once established, it can create new markets and destroy existing ones. This is the strategy that Japan thus followed. Overthrowing technology can create potential new markets. The United States and Europe have, in the past, proven successful in repeating a cycle of continuous development of new technologies; this has kept their economies stimulated.
