Abstract This chapter analyzes Japan’s changing competitive position in the TFT-LCD industry over the past several decades. Based on the analysis of multiple factors that affected Japan’s decline, I identified paradigm shifts in the TFT-LCD industry that have directly or indirectly led to a change in Japan’s competitive position. The chapter shows that declining competitiveness of a country and a firm cannot be fully understood without closely relating it to the shifts in the paradigm of the industry. In addition, this chapter shows how the paradigm shifts of the industry, the changing competitive positions of a country and a firm, as well as the changing locus of innovation for a company, i.e. domestic vs. international and in-house versus collaborative, are aligned with one another.
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