The notion that innovation in information technology could spark a revitalization of the Japanese economy became a hot topic in 2000, and the Japanese government announced an e-Japan Strategy for creating a -knowledge emergent society- in January 2001. However, just when a consensus seemed to be emerging regarding the importance of IT innovation in Japan, the country's IT industries were deeply influenced by a recession that originated in the U.S. Although economic conditions have improved, strong IT-driven economic growth in Japan has not bounced back. Using a newly constructed set of data,...