Is Japan losing its cool?

This is an area where Japan should have an advantage. “Gangnam Style” may have 800 million YouTube views, but Japan produces a broader range of success stories.

Last year in North America, vintage singer Saori Yuki had a No. 1 song on the iTunes jazz chart while dance music star Kyary Pamyu Pamyu topped iTunes’s electronic music chart. “It’s almost irrelevant whether Japan is cool or not, because there is enough cool stuff here anyway that will sink or swim on its own,” says Mr. McClure.

Instead of throwing money at marketing campaigns, experts say Japan should support its struggling domestic contents industries. Japan spent just 0.12 percent of its national budget on the arts in 2008, the latest year for which comparable figures are available, whereas South Korea spent 0.79 percent, and China 0.51 percent. 

Public funds would be effective in industries like manga and anime, where young “kamikaze” animators burn out from long days and salaries that average only just over 1 million yen (about $12,185) per year.

Indeed, though Japan once dominated the industry, work is increasingly done by its low-cost Asian neighbors. “There is a culture of manga and anime that is currently in critical condition,” says Galbraith. “The manga market cannot be allowed to fail. It is the base of the contents industry in Japan.”

Public money would also be useful in helping Japanese artists make expensive trips abroad. “We get many requests from overseas fans,” says King Record’s Sayaka Yamada, who manages the international catalog of girl groups like Momoiro Clover Z. “Financial support would be very helpful,” she continues. “Japan should study Korea, which invested a lot to promote K-pop artists.”

Observers say Japan production houses should empower the “scanlators” who post pirated manga. “They need to join with other companies to make a Web presence that’s attractively priced and branded,” Mr. Kelts counsels, pointing again to South Korea, which has been much more proactive about utilizing the Internet and branding its culture.

“When a Pixar film comes to Japan, it’s branded as a Pixar film,” Kelts says. “Nobody knows Japanese anime studios like Production I.G. Cool Japan was fine in the early phases, but at a certain point distinguishing brands have to emerge.”

An initiative by METI’s Creative Industries section, which was formed just last year, may speak to new efforts in this direction. METI funded a “Harajuku Street Style” market in Singapore. “Kawaii styles are very popular there, but Japanese fashion businesses have difficulty operating overseas,” METI’s Mihara says. “We provided a budget to help them get established. Pooling their efforts, we had 13 brands available in Singapore for the first time.” 

Conveying the depth of Japanese culture

Experts also say Japan needs to get away from stereotypes.  “We need to convey the depth of Japanese culture beyond manga and anime,” says Meiji’s Mr. Kitawaki. “Behind manga and anime there is a rich culture, for example the animism of Shinto. Or take modern Japanese design’s ability to manage extremely small spaces – this is also Cool Japan.” 

The massive worldwide outpouring by the likes of Lady Gaga after the Fukushima disaster hinted at the reach of Japanese soft power. And a recent global poll by research firm StrategyOne ranked Japan the world’s most creative country.

Mr. McGray, in his famous article, foresaw two possible futures for Japan. It could either employ its vast potential soft power to reinvent itself, or, he warned, lurch toward further uncertainty.

He leaned toward optimism, saying, "Japan's history of remarkable revivals suggests that the outcome … is more likely to be rebirth.”

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