The paper discusses the conditions under which new markets are created, and tries to identify them by an empirical case study of Japan's silver market. It starts from the perspective that the source of competitive advantage under fundamental uncertainty lies in the integration of objective and subjective opportunities that derive from economic, socio-political, and cognitive conditions. The authors argue that the promise of the eventual size of the silver market is insufficient as an explanation for market creation because of the uncertainties involved. Moreover, cultural traditions are much more varied than stereotypes may suggest and explain rather little. The supply and diffusion of information by various state organs, business associations and firms is conspicuous. The role of the state is a helpful one, though 'hard' regulation is less important than elsewhere. The emerging market can profit from well-established core competences like manufacturing expertise and from the contribution of well-established, large enterprises and wide inter-firm networks. The authors conclude that Japanese firms do not have an inbuilt inability to create novelty as is sometimes suggested, particularly in cases where established enterprises can utilise their peculiar resource endowment. The plasticity of available institutions and technologies should not be underestimated, and a helpful mechanism to overcome cognitive path dependencies is soft regulation.