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A pop-up manga cartoon titled Maruichi's Tea Time designed specially for TIME by popular artist Nozomi Yanahara

COVER: Gizmo Nation
For the past 50 years Japanese have embraced the notion that salvation is to be found through technical innovation--and the world has benefited from their ingenuity
Timeline: A look at the rise of technology in Japan (photo essay)
My Robot, My Friend: Japanese love not only to give their machines names, but also to make them pals
Viewpoint: Let no one say these citizens are automatons
Birth of a Robot: TIME takes an exclusive inside look at the design, construction and assembly of "Pino" (photo essay)
Land of the Rising Gadget: At times, this can seem like an almost fully automated society (photo essay)
The 10 Smartest Machines: These whiz-bang doo-dads are just around the corner; plus, the 5 dumbest head-scratching devices (photo essay)
Lonely Inventors: Surprisingly, the country doesn't always reward its most creative scientific minds
The Old Ways: Some tasks are still done better by humans
Local Talent: Ota ward remakes itself
Cellul-Oids: Japanese cinema is full of mechanical monsters, mayhem and monkey business
On the Boards: An interactive Shakespeare
Essay: Ryu Murakami bemoans the alienation of youth
Essay: Pico Iyer on why the new is old in Japan

CINEMA: Hong Kong's It Girl
Nervy, gifted and terribly precocious, actress Cecilia Cheung may be the local film industry's next great hope
Web-only Interview: Cecelia shuns fame, rarely goes out, and has already moved house five times this year to escape press attention

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Weird Science
Constrained by a system that discourages creativity and favors age over merit, Japan's inventors must struggle to stay on the cutting edge of technological innovation

Mojgan B. Azimi for TIME
Pioneering engineer Nakamura left Japan for California because he was frustrated by a lack of creative freedom.

The light bulb that flashed above Shuji Nakamura's head in 1993 was, quite literally, blue. After just four years of study, the senior researcher at tiny Nichia Chemical Industries created a little azure beam that would revolutionize the global electronics industry. Not only did Nakamura's light-emitting diode pave the way for expanded digital storage capacity, but it also promised a long-lasting source of light far cheaper than the conventional incandescent bulb. That such a groundbreaking discovery was made in Japan, much less at a remote laboratory in rural Tokushima prefecture, sent shockwaves through the world scientific community.

But Nakamura hardly profited from his pioneering work. After repeated requests, Nichia, which holds the rights to Nakamura's invention, upped his income to what an average salaryman makes. A couple years later, when he refined his blue beam into a more powerful white light, Nakamura was told that his initial raise more than covered any future enhancements. "Researchers just aren't valued in Japan," says the 45-year-old electrical engineer. "If I had made the same discovery in the U.S., I would have gotten a $1 million bonus." Disenchanted, Nakamura left Nichia last December for a professorship at the University of California, Santa Barbara.

Makoto Ishida for TIME
Tamagotchi creator Komikado says she didn't deserve a raise.

Nakamura's disillusionment is shared by many of Japan's top scientists, who feel stifled by a system that favors seniority over merit and product development over innovative research. Their frustrations expose a fundamental paradox about Japan's love affair with technology: the same assembly-line diligence that fueled Japan Inc.'s success in earlier decades is precisely what constricts the nation's creative impulses today. True, Japan's schoolchildren boast daunting test scores, and the country trains twice as many scientists and engineers as the U.S. does. Yet Japan has produced only five Nobel prize-winning scientists - the same as tiny Belgium. And most of those laureates spent significant time overseas. Even Nakamura began the research that led to his blue-light diode discovery while on a 1988-89 sabbatical at the University of Florida. "They gave me the chance to open my eyes and look at things in a new way," he says of his American hosts.

Certainly, most of Japan's corporate laboratories don't nurture such groundbreaking thinking. "Research and development is somewhat of a misnomer in Japan," says Robert Lewis, former associate director of the Tsukuba Research Consortium, a hub of high-tech companies in Ibaraki prefecture. "Most of the money goes to improving an existing product, not to basic research." While Western corporations hunger for experienced researchers who bring new ideas with them, Japanese firms tend to prefer fresh recruits whom they can shape into the company mold. The result? Inventors like Aki Komikado, the unassuming office lady who came up with the Tamagotchi in 1996. Despite having spawned a toy craze that earned Bandai Corp. $350 million, Komikado didn't receive a pay raise or a big bonus. "Why should I get lots of money?" says Komikado, 32. "My part in the process was very small. The real effort was made by the developers who made our product successful."

Komikado's dedication to her co-workers may be admirable, but research by committee leaves little room for true innovation. "Pioneering work involves breaking away from the group," says Hugo de Garis, an artificial-intelligence researcher formerly based in Kyoto. "If you're always encouraging people to conform, you end up with an intellectually sterile atmosphere." Even worse, if a Japanese researcher shows no promise in the lab, he's often shunted upstairs to become a middle manager. That allows him to vet others' research proposals, opening the door for a disgruntled worker to nix projects out of spite.

The group mentality often discourages the risk-taking needed to support experimental products. In the mid-1980s, Fujio Masuoka, a senior manager at Toshiba, created flash memory, a powerful chip that enables laptops to function without cumbersome disk-drives. "American chipmakers are going to have to copy our design or risk losing the market," crowed Masuoka, shortly after his chip was unveiled. Instead Toshiba, wary of spending so much money on an untested product, balked at mass-production. Eventually, U.S. firm Intel swooped in and within a few years owned 85% of the multi billion-dollar market.

Japan's scientists can't turn to the government for help. While federal funds constitute 33% of total U.S. research expenditures, Tokyo contributes only 20%. Even Japan's legal system is tilted against the inventor. Although Japanese patent law requires firms to compensate employees for their mega-buck ideas, it doesn't specify how much. "There's nothing to stop a company from giving a researcher only a few hundred dollars for a major invention," says Yoshikazu Takaishi, a computer and telecommunications attorney in Tokyo. Furthermore, while U.S. law operates under the "first-invention rule" - awarding the patent to whomever comes up with the idea, regardless of when they file an application - Japan uses the "first-application rule." So if an inventor's firm delays submitting an application, the researcher could be trumped by a competing company with more efficient paperwork.

Still, things may be changing. During the recent recession, young scientists have been the first to face the ax. "Getting fired was just the push I needed," says Seiji Ishii, who started a software-design company after he was laid off by a major computer firm last year. "It gave me the courage to start a business with my own ideas." Japan's economic slump has also prompted big-business reform. Components manufacturer Omron Corp. made headlines last year when it promised a $1 million bonus to any researcher whose idea contributes significantly to company sales. Toshiba now lets its engineers use up to 10% of their time to focus on new ideas. Fujitsu supports a program, dubbed My Way, that allows researchers three years to investigate a topic of their choosing. The firm, however, concedes that very few of its 1,500 researchers take advantage of the deal.

Nakamura insists much more is needed than a few incentive programs. "There has to be a real break with the old way of thinking," he says. "We need to give our minds space to breathe." His two elder daughters were interested in science, Nakamura says, but the test-based school system deflated their dreams of scientific careers in Japan. Now he is pinning his hopes on his 15-year-old daughter, who started at an American school last month. "The light in her hasn't been extinguished yet," he says. "She has been given the chance to experiment with her future." Only that kind of bright atmosphere will illuminate Japan's future inventors.

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