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Already leading the world in the development of consumer electronics, South Korea and Japan have been leading innovators in the creation of digital content economies. Both governments recognized both the commercial potential and the employment possibilities associated with the digital content industry. The sector, however, did not fit easily with existing industrial and technological models of economic development, particularly due to the small size of digital firms, the youth culture orientation of most products and services, and the antiestablishment ethos of the creative industries generally. In Japan, digital content firms created a robust domestic market but struggled to get international market share. Government policy, therefore, has focused on building international interest in digital products. Although South Korea has enjoyed considerable success through their K‐pop cultural exports, it has really capitalized on the country's highly successful online gaming industry. South Korean policy initiatives emphasize public promotion of Korean digital content with sizeable investments in creator and incubator spaces for start‐up firms. Together with initiatives in Singapore, Malaysia, Hong Kong, and Taiwan, the Japanese and South Korean efforts demonstrate how Asian countries have sought to integrate the digital content sector into their national innovation strategies and to jump‐start a promising and potentially valuable economic sector. [ABSTRACT FROM AUTHOR]

For over two decades, Japan has been a leading nation in the development of the digital economy. The country's business development in mobile computing, video games and animation led the world. While this prominent role continues, the country has struggled with a "digital island" reality in three areas: the wireless industry, which tried but failed to expand globally; an active but Japan-focused digital content sector; and digital services, which have not expanded as expected to non-Japanese markets. This article examines the evolution of Japan's digital media and digital content sector which has created significant global interest but less business development than expected. The article argues that Japan's "Galapagos" reality reflects the inherently (but not exclusively) culture and language-specific characteristics of the digital content economy and the country's largely inward-looking culture industries. [ABSTRACT FROM AUTHOR]