They are shifting more and more of their operations abroad. The businesses of the new Japan are faster than the exporters, but they are even less willing to foot the bill, and even more mobile if conditions at home prove hostile. Unlike earlier additions to the dual economy, these businesses will compete with the old Japan. They are not so much offering new things but a new way of doing old things. The venture capitalists, software engineers and financial planners are leaving the big companies and setting up on their own because they think their companies are no good at serving their customers, and they can do a better job.
Manufacturing lies at the heart of old Japan.
It controls wholesaling, and wholesaling controls retailing. These semi-feudal keiretsu relationships are very Japanese and very costly. But the new retailers have the muscle to break the system apart. Deregulation in the 1990s has allowed them to become big, so they can bargain hard with suppliers. They use IT, which provides them with knowledge about their customers that the manufacturers would dearly love.