ABSTRACT
Silicon Valley was in fact the great historical exception, simply because it was new; for the first time, an innovative milieu was created by deliberate human action, in a place that seemed to have none of the normal prerequisites. The initial location of the industry in the region benefited from the external conditions of the regions innovative milieu during the Meiji period. As historical conditions gave rise to the distinctive institutions of Japans industrial organization, an important part of that innovative milieu came to be internalized within large corporations. Besides subcontracting, there is another distinct feature of Japanese industrial organization: long-term employment and hierarchical structures in the large corporations that constitute the primary labor market. The Keihin region of Japan, embracing metropolitan Tokyo and its surrounding prefectures of Kanagawa, is without doubt the leading high-technology industrial area on the entire globe.
