The paper examines the characteristics of Japan's middle market, gauges the sentiment of senior managers at mid-market firms, examines the key challenges they face in growing and seizing opportunities abroad, and identifies the factors differentiating those that have grown steadily in recent years from those that have struggled. The paper also includes case studies based on indepth interviews with the heads of a number of innovative and notable mid-market firms at the forefront of their industries. It paints a picture of a sector of Japanese business that is crucial to the future of the economy, competitive compared to its international peers and yet concerned about its future.