Innovation vs. Learning by Doing: Implications ofJapan's 'Lost Decade' in the Infonnation Age

This paper describes the strengths and weaknesses of “leaning by doing” in comparison to those of “innovation，” With attention to the experience of Japan’s “lost decade.” It is apparent that the Japanese economy has failed to reap the benefit of innovations in information technology in the 1990s． With the concepts of “modularity” and “integrality,” it seems reasonable to infer that the integral system of Japan works well for technological improvement of learning by doing， but it does not induce dynamic “new combinations” that boost innovation． Therefore， it is necessary to recognize the importance of a modular system， rather than an integral one， for　engendering appropriate regional innovation system，or RIS，in this emerging information age．