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I think the author underestimates the extent to which Japan will be able to innovative, or to copy innovations from other countries with shrinking populations. Dramatically falling birth rates are a global issue and so is hostility towards immigration (although generally not to the same extent as in Japan). There is going to be a vast amount of effort invested into developing new technologies to compensate for that.
They tried for the last 40 years, my friend.
And they seem to be doing ok so far.
Japanese solutions to Japanese problems.
