Vow. Very good analysis.
1. Was Sony able to invent Walkman because Sony mastered solid state transistor technology? Why was not any American companies invented Walkman?
Why do you think Japan failed to innovate after 1980? What had change Japan from highly innovative Japan to unable to innovate?
I'm not sure, but here is what I speculate:
Walkman: Japan has long specialized in miniaturization. I'm not sure what drives this, whether it's cultural or simply the Japanese sense that they live on a densely populated island, but this mindset enabled the thinking that went into the Walkman (no room for big stereo sets in the home, want to listen to music on a crowded train without disturbing those nearby, a chance to personalize one's life when the group is socially dominant, etc.) Simply put, it was solving a Japanese problem that happened to translate well into other markets. It was not designed from the outset to appeal to export markets, as far as I am aware.
Another important example of miniaturization or the desire to make products smaller to save space is the Japanese focus (and now dominance) of the small car market. Compare to the US focus on trucks and SUVs.
I can't speak to the technical aspects (e.g. solid state transistor) since I'm not an engineer, sorry.
The 1980s: This will be controversial, but I hope @
Nihonjin1051 forgives me for the sake of open discourse, and I am happy to be corrected if I am wrong. Here is why I think Japan essentially "hit the wall" in the 1980s and its momentum stopped.
1) Japan has been good at adapting outside ideas to its home market, but less good at producing ideas that will change the world (partly because as previously discussed, Japan is focused on its home market, not the world). The example of W. Edward Deming and his influence on Japanese manufacturing is well known. To this, Japan added quality circles and just-in-time manufacturing, again, primarily due to the specific needs of the Japanese market and the restrictions of Japanese society. The next stage of outside ideas that came into the mainstream in the 1980s and helped America recover competitiveness (mergers and acquisitions, leveraged buyouts, business process re-engineering, globalized supply chain, etc.) were so radical that they were not accepted in Japan, and indeed, would have destroyed the social compact in Japan had they been implemented. Of course, we see now that these changes needed to be made anyway, but now it's too late.
2) It's easy to catch up to the leader. It's hard to take over as leader. Leadership, or our focus here, innovation, requires constant questioning of the status quo, and an embrace of risk to push the boundaries of what is possible. Neither of these factors suit Japanese society well, until Japan is forced to embrace them. I remember there used to be talk in the 1980s of "gaiatsu" (did I get that right, @Nihonjin1051?) or outside pressure. Japanese society is complex, and sometimes Japanese leadership (political or business) needs outside pressure to serve as cover under which reforms can be enacted. We can see this in Japanese history, with great leaps forward in the Meiji revolution after the threat of colonization. After massive societal changes were made, Japan strengthened considerably and the economy became dynamic, but after a time, stagnation set in. Then, in the wake of the destruction wrought by WWII, again massive changes were made to Japanese society, and once again dynamism returned, and lasted until the 1980s. Then stagnation set in. You and @
Lux de Veritas pointed out the signs of this: working long hours for the sake of appearance, rather than productivity; prioritizing seniority over merit; prioritizing social harmony over profit, etc. If you want to compete in today's global economy, you cannot hold on to these customs.
3) Finally, in regards to your point about English. It's easy for me to say this, coming from an English speaking country, but it's the unfortunate truth. Without English proficiency, a company will not be able to compete globally. Those that have demonstrated such proficiency (Toyota, Rakuten, Fast Retailing, Softbank, etc.) are lean machines, able to compete with anyone. Those that have not wither and die. Perhaps someday this will be said in regards to Chinese, but for the moment, English is the lingua franca of the business (and scientific) world.
What to do? First, Japan (both on the political and corporate level) needs visionary leadership. It's not enough to just tinker around the edges. Then, it's sad to say, but I think Japan needs some kind of catalyst, probably of an external nature, to provide leadership the support it needs to enact radical societal and corporate reform and enable the next stage of Japanese growth. This goes for both the political class and the business class. We can see that Japanese corporations are finally undertaking the reforms they need now that they are close to death--but is Japanese society ready for the changes that such restructuring will entail? It's unfortunate it's taken this long, but sometimes that is what is necessary in Japan.
(Loser mentality here hahaha). Since I was out from NEC 10 years ago, the company was about to bankrupt, even sold her head quater at Tokyo to repay the debt. (You need to retain good employee like me I told you.
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trust me your country made best electronics and now a days people have less purchasing power then in past . so they buy cheap quality but for me quality is more impotent then price i am sure i will never have complain long time now what i buy made in Japan - Germany 
. i am sony fan ans always try to buy sony and sure sony made in japan not made in Malaysia china
