Japanese tends to be a lot more "conglomerative" than English, presumably because it has kanji—which are little self-contained nuggets of meaning—as one of its fundamental units. Many words are formed by cramming together smaller meaningful parts, with the result being still fairly concise.
In addition to the benefits for creating new words, this is a huge help in reading unfamiliar words: even if you don't know all the nuances, you can often get the basic meaning of an unknown word from the meanings of its component parts.
[This is true of kanji themselves as well... kanji are (essentially) conglomerations of simpler kanji, and you can get some (very rough) idea of the meaning and pronunciation of an unknown kanji by looking at its parts.]
In addition to the benefits for creating new words, this is a huge help in reading unfamiliar words: even if you don't know all the nuances, you can often get the basic meaning of an unknown word from the meanings of its component parts.
[This is true of kanji themselves as well... kanji are (essentially) conglomerations of simpler kanji, and you can get some (very rough) idea of the meaning and pronunciation of an unknown kanji by looking at its parts.]