Abstract

This article offers an assessment of the international competitiveness of Japanese service industries and examines the sources of competitive edge which have been developed within Japan. It distinguishes three groups of service industries: those where Japan currently enjoys a high degree of international competitiveness (banking, finance, and construction); those where international competitiveness is unlikely to be achieved in the foreseeable future (education, legal services, and software); and, most important, an intermediate group within which Japan's international competitiveness is rising rapidly (advertising, engineering services, real estate, and insurance). The article concludes with a number of analogies between the success of Japanese manufacturing firms and their counterparts in the service sector.