Nishimura also believes that political tensions in the region could keep the area afloat financially. Militarily this is still a high-tension area. Everyone is suspicious of the countries on their borders, so I don't expect them to lower their spending. However, if you are going to invest in East Asia, take a look at the customers who will purchase the technology. The countries' governments continued involvement in the economic policies also stabilizes the area.
Japan is seen by many as the central core of economic strength in the region.
But as a result of the financial situation in that area, Japanese companies could also experience problems. In addition, on the supply side of the equation, Japanese firms are feeling the fallout from the extensive growth in the region during the late 1980s and early 1990s. Japan shipped a lot of its production to other areas of the region and by doing so helped those economies. The cost of living went up during the boom years, and the wages also increased. Although Japan will continue to produce computer hardware, many of the innovative advances in the technology field, such as virtual reality and simulation, are now developing in the software arena, Nishimura says, and Japan is not heavily involved in producing software.