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I think you are right, economic factors have made a big difference. The Yen, the liquidity trap, the disproportionately old population and resulting humongous government debt are the main culprit.

It is impressive that Toyota has manage to survive.

People say that Japan is good at hardware but not at software. I own multiple Samsung products and their software is downright embarrassing yet the company is thriving.

They all have excellent hardware but if I for example use the 'smart' part of my 'smart TV' it is unresponsive, crashy and generally a terrible experience. My Samsung blu-ray player takes seconds to respond to button presses and integration between my Samsung devices which is promoted heavily by them is not reliable and the user interface is terrible.

Yet Samsung manages to dominate and actually make decent devices when the mostly rely on other's software (Google).

IMO the difference between Korea and Japan can be explained by economic factors not technical ability.

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