Cutting-edge music, art, fashion, design and other pop-culture categories of every stripe are attracting the world’s attention. In Japan, they say, the future is cool.

Even as Japan’s economic leadership has been slipping for more than a decade, its cultural hegemony has only swelled. “Japan has changed from being a corporate manufacturing and industrial society to a pop-culture society,” says Ichiya Nakamura, a visiting scholar at Stanford Japan Center and M.I.T. Media Lab.

According to Tsutomu Sugiura, director of the Marubeni Research Institute, an economic think tank, Japanese cultural exports–such as from the media, licensing, entertainment and other related industries–have tripled over the past 10 years to $12.5 billion, while manufacturing exports have increased by only 20%.

Japan’s future identity no longer rests in being the leading manufacturer of goods–whether cars, cameras or stereos–but as the world’s foremost creator of cool.