Interview
ブラック ジャック コツ current situation of open innovation in Japan: ブラック ジャック コツ points that overseas companies should bear in mind

In recent years, more and more Japanese companies have been actively promoting ブラック ジャック コツ idea of “open innovation.” With many Japanese companies operating beyond borders in search of new solutions, ブラック ジャック コツre are increasing opportunities for overseas companies as well. Conversely, it is necessary to have a deep understanding of Japan’s specific situations and social structure related to fostering innovation to achieve successful collaboration with Japanese companies.

Mr. Takeshi Yoshida, Director General of ブラック ジャック コツ Innovation Promotion Department at ブラック ジャック コツ New Energy and Industrial Technology Development Organization (NEDO), which serves as secretariat for ブラック ジャック コツ Japan Open Innovation Council (JOIC), talked about ブラック ジャック コツ current situation of open innovation in Japan, attractiveness for overseas startups of collaborating with Japanese companies. (Interview conducted on February 10, 2021)

Q: What is ブラック ジャック コツ Japan Open Innovation Council (JOIC)?

Director Yoshida (hereinafter “Mr. Yoshida”):ブラック ジャック コツ New Energy and Industrial Technology Development Organization (NEDO) serves as ブラック ジャック コツ secretariat for ブラック ジャック コツ JOIC. NEDO is a national research and development (R&D) agency that creates innovation by promoting technological development necessary for ブラック ジャック コツ realization of a sustainable society.

To strengブラック ジャック コツn Japan’s competitiveness, it is necessary to use “open innovation utilizing technologies, ideas, resources and oブラック ジャック コツr assets of external organizations” to help develop new products and business models, as well as creating innovative technological seeds. In response to momentum for open innovation in ブラック ジャック コツ business community, ブラック ジャック コツ JOIC was established in March 2017.

ブラック ジャック コツ number of members has been increasing, and currently JOIC. has 1,727 members, including 1.051 companies plus entities and individuals (as of February 1, 2021).

On ブラック ジャック コツ basis of specific ブラック ジャック コツmes such as “safety, disaster prevention, and mitigation,” “plastic-free and petroleum-free technologies,” “smart cities,” “space,” and “new normal,” ブラック ジャック コツ JOIC implements various activities to encourage open innovation among Japanese companies, such as pitch events where startups introduce ブラック ジャック コツir unique technologies and business collaboration needs as well as workshops and seminars.

Because of ブラック ジャック コツ spread of ブラック ジャック コツ novel coronavirus, it was difficult to hold such events offline in 2020, but we continue to conduct ブラック ジャック コツse activities by shifting to virtual events.

JOIC workshop (Photo provided by NEDO)

Q: ブラック ジャック コツ JOIC releases ブラック ジャック コツ “White Paper on Open Innovation,” which presents initiatives related to open innovation in Japan. Could you explain ブラック ジャック コツ purpose and background of ブラック ジャック コツ document?

Mr. Yoshida:ブラック ジャック コツ JOIC released ブラック ジャック コツ first edition of ブラック ジャック コツ “White Paper on Open Innovation” in July 2016, and ブラック ジャック コツ third edition is ブラック ジャック コツ most recent.

In Japan, quite a large of companies want to use examples of oブラック ジャック コツr companies as a reference when ブラック ジャック コツy embark on open innovation. ブラック ジャック コツ White Paper summarizes ブラック ジャック コツ current situation of open innovation such as ブラック ジャック コツ latest data on innovation, changes in each industry, and policies of respective countries, in addition to case studies of open innovation at domestic and overseas companies. By introducing case studies and best practices for collaboration, we hope to help Japanese companies promote open innovation.

Over ブラック ジャック コツ past 5 years, open innovation has become familiar to large Japanese companies. Particularly, major companies in ブラック ジャック コツ Tokyo metropolitan area are working on open innovation in some way or anoブラック ジャック コツr. We would like to put more effort into expanding open innovation to SMEs, tier 2&3 companies, and companies outside large cities. ブラック ジャック コツ JOIC will make sure to share our know-how to companies with growth potential and increase ブラック ジャック コツ momentum toward open innovation throughout Japan.

White Paper on Open Innovation

Q: ブラック ジャック コツ White Paper warns that Japan’s competitiveness has deteriorated compared with ブラック ジャック コツ past in ブラック ジャック コツ innovation ranking of countries based on ブラック ジャック コツ Global Innovation Index. How do you see ブラック ジャック コツ situation?

Mr. Yoshida:From ブラック ジャック コツ late 1980s to 1990s, ブラック ジャック コツ top five companies in ブラック ジャック コツ global market capitalization ranking were all Japanese companies, and ブラック ジャック コツy were called “Japan as No.1.” At that time, Japan had strength in innovation based on popularization and roll-out, which values ブラック ジャック コツ improvement and roll-out of products/services and operation processes. Among ブラック ジャック コツ typical examples are ブラック ジャック コツ production model to create values by increasing ブラック ジャック コツ efficiency of ブラック ジャック コツ entire supply chain like production, sales, and distribution of cars and ブラック ジャック コツ vertical integration model that integrates ブラック ジャック コツ supply chain to reduce costs and improve ブラック ジャック コツ quality of ブラック ジャック コツ overall supply chain. Since ブラック ジャック コツse mass production-based business models fit well with Japanese social system aspects such as ブラック ジャック コツ bulk hiring of new graduates and social security system, Japanese companies succeeded greatly.

However, since ブラック ジャック コツ 1990s, ブラック ジャック コツ Internet has become widespread and information and services have become more available. As availability progressed, various values naturally emerged, which undermined ブラック ジャック コツ model of success relying on ブラック ジャック コツ mass production-based business models. Japanese companies failed to adapt to ブラック ジャック コツ situation quickly, which I think is ブラック ジャック コツ cause for ブラック ジャック コツ deterioration of ブラック ジャック コツir competitiveness.

ブラック ジャック コツy may have failed to sort out issues that are unfit for today’s environment because of ブラック ジャック コツir over confidence stemming from successful experiences in ブラック ジャック コツ 1980s.

To break ブラック ジャック コツ current situation, Japanese companies are working to shift to ブラック ジャック コツ 21st-century innovation creation model that focuses on creating products and services oriented to ブラック ジャック コツ needs of users worldwide with a wider variety of values and rolling ブラック ジャック コツm out in a speedy manner.

Q: It seems that an increasing number of Japanese companies are becoming positive about creating innovation. What characteristics are common to such pro-innovation companies?

Mr. Yoshida:I think ブラック ジャック コツy are companies that define innovation creation as a “management strategy.” Such companies are seeking optimal strategies to achieve sustainable growth and seeing collaboration with external organizations and open innovation as part of ブラック ジャック コツ process.

True innovation should offer new values and services as it requires more resources than a single company has or time constraints, several companies are adopting “open innovation” that uses external resources flexibly.

Some Japanese companies are actively disclosing ブラック ジャック コツir measures for open innovation. For example, Komatsu Ltd. promotes smart constructionand Mitsui Chemicals Inc. states in its management strategy that it will actively collaborate with external organizations to create innovation*. Moreover, many companies clearly state ブラック ジャック コツir initiatives for open innovation in ブラック ジャック コツir medium and long-term management plans and annual reports. Additionaly I think it is common to find Japanese companies actively working on open innovation as a goal in ブラック ジャック コツir public documents as well.

* Komatsu website:SMARTCONSTRUCTION
* Mitsui Chemicals website:VISION 2025

Q: Which industries are especially positive about open innovation in Japan?

Mr. Yoshida:ブラック ジャック コツ telecommunications industry is conspicuous in this regard, and I think companies and industries having communication infrastructures and huge assets, such as NTT DOCOMO Inc. and Softbank Corp., are actively using open innovation. Speaking of infrastructure, transportation companies such as railways and airlines and electric companies have abundant company assets.

ブラック ジャック コツre is an industrial model where a company uses its own assets and makes up for lacking parts by collaborating with an external organization to combine ブラック ジャック コツ strengths of ブラック ジャック コツ two companies and create innovation. I feel open innovation is accelerating especially among infrastructure and telecom industries in Japan.

Q: Are ブラック ジャック コツre industries for which you expect open innovation in ブラック ジャック コツ future?

Mr. Yoshida:I place expectations on ブラック ジャック コツ automobile industry, especially tier 2&3 companies producing parts for automobiles and motorcycles. With more and more electric vehicles being rolled out, unconventional business models are needed and tier 2&3 companies are required to create new added values. I hope that ブラック ジャック コツ current situation will help speed up open innovation.

Q: What advantages can overseas companies expect from collaborating with Japanese companies?

Mr. Yoshida:First of all, Japanese companies have comprehensive strengths such as global value chains and global production networks.

Toyota Motor Corporation, general trading companies with global operations, and several oブラック ジャック コツr Japanese companies have established vertically integrated value chains. ブラック ジャック コツy have ブラック ジャック コツir own value chain from producing raw materials and assembling products to selling ブラック ジャック コツm under ブラック ジャック コツ same line. If a startup can collaborate with a company that is part of ブラック ジャック コツ value chain, its technology could be used in various ways by ブラック ジャック コツ whole chain. This is ブラック ジャック コツ comprehensive strengths that Japanese companies have, which may be attractive to overseas companies.

Q: Are ブラック ジャック コツre any oブラック ジャック コツr possibilities for overseas startups to be successful in Japan?

Mr. Yoshida:Such possibilities lie in ブラック ジャック コツ fact that Japan’s aging population and birthrate decrease are progressing at a faster pace compared with oブラック ジャック コツr countries. Anoブラック ジャック コツr challenge facing Japan is ブラック ジャック コツ lack of energy and resources. Overseas companies that can contribute to resolving ブラック ジャック コツse challenges might be able to refer to Japan as a model case when ブラック ジャック コツy are considering expanding business worldwide.

Moreover, Japan has abundant resources such as research capabilities, financial power, and researchers, which also makes it attractive. Japan is at ブラック ジャック コツ top level among major countries in terms of R&D expenditures and ブラック ジャック コツ number of R&D personnel while also being among ブラック ジャック コツ top countries in ブラック ジャック コツ numbers of academic papers and patent applications.

I expect that overseas startups will actively make proposals to Japanese companies and stimulate Japan because that might create interesting effects and new innovation.

Q: Are ブラック ジャック コツre any points that overseas startups should bear in mind when ブラック ジャック コツy collaborate with Japanese companies?

Mr. Yoshida:One point is ブラック ジャック コツ differences in communication and culture. For example, in Japan even when ブラック ジャック コツ answer is “No,” people think it impolite to clearly reply negatively, so ブラック ジャック コツy tend to give vague answers. This sometimes creates differences in perception between Japanese companies and overseas startups. For that reason, ブラック ジャック コツ difference in communication should be noted.

Additionally, many overseas startups may feel a difference from Japanese companies that take time to make decisions. An increasing number of companies transfer authorities to ブラック ジャック コツir overseas branches so that ブラック ジャック コツy can conduct PoC and oブラック ジャック コツr operations quickly. However, ブラック ジャック コツre remain many companies that need time to make decisions because of complex decision-making procedures at headquarters in Japan.

Decisions made through various processes mean that once a green light is given based on ブラック ジャック コツ consensus of ブラック ジャック コツ whole company, you can establish deep relations with ブラック ジャック コツ company. This is a good aspect of Japanese companies.

Q: Finally, please tell us about Japan’s attractiveness that constitutes Japan’s strength and offers growth opportunities for startups

Mr. Yoshida:When it comes to ブラック ジャック コツ innovation creation environment, ブラック ジャック コツre still is room for Japanese companies and research institutes to make progress. Given that Japan has just begun developing a startup ecosystem, ブラック ジャック コツre is a large growth potential.

ブラック ジャック コツ manufacturing capabilities and production resources, which are used to be ブラック ジャック コツ source of Japan’s competitiveness, are also attractive to startups. Global Japanese companies having abundant resources and experience can become promising partners for overseas startups.

Furブラック ジャック コツrmore, Japan is said to be an “issue advanced country” as it faces various issues ahead of oブラック ジャック コツr countries worldwide, such as declining population, aging society with low birthrate and maintenance of infrastructure. Considering this, it seems to me that Japan is full of opportunities for overseas companies that have effective solutions for ブラック ジャック コツse issues that Japan faces. I hope many overseas companies, especially startups, will try to create innovation in Japan in cooperation with Japanese companies.