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I think that (as I read your description of it) Don Norman's implication is that there's a special kind of insight that happens only in the head of a lone designer. I agree that insight happens inside designers' heads, but I think that innovation is a process that takes those ideas and tests them against the market. Why test against the market, rather than do more research for viability of the ideas? Because there are too many variables to research, and because the market is a dynamic system that changes based on what you put in it (which could support your product idea, or reject it). My theory is that there needs to be a balance between research that narrows and defines an envelope in which to explore, and exploration of that envelope through what Chris calls spray-and-pray product development. It shouldn't be one or the other, but both.
I can't speak to Japanese consumer culture. However, your suggestion sounds a lot like Don Norman's argument a couple of issues ago in Interactions. He basically argues that breakthrough ideas are more likely to result from the "lone designer" than from customer research. I would simply suggest that the costs of developing a breakthrough product, or let's say ten of them, when only one is needed, or wanted, by the market, reminds me of people who buy penny stocks hoping that one of them will make it big...its more a gamble than a strategy.