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09 December 2020

Open innovation in Japan

Opportunities & new trends

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Published on December 9, 2020

Until recently, Japanese corporate innovation depended on internal R&D departments and on the successful hiring of skilled scientists as part of their teams. This means that all the innovation process, from research to testing and commercialisation, was driven independently by each individual company for its own commercial benefit.  This approach to innovation turned out to be unsustainable in the long term, because it required too much effort from internal R&D teams, and its processes soon became too slow to compete on a global scale.

Over the last decade, Japanese corporate innovators have started to turn to the open innovation model, creating partnerships with local universities. This has enabled resource and task distribution, optimising the R&D process. But, crucially, most Japanese multinational corporates have focused on building partnerships within the national ecosystem; and, despite offering advantages in terms of risk management and control, this local approach can constitute a major blocker for Japanese innovation scaling up globally.

Blockers and opportunities

One of the factors preventing Japanese corporates from seeking innovative technologies outside Japan is timing. While it is understandable that R&D departments allow time to prepare adequately to negotiate deals with potential partners, this may not always get them to where they want to be quickly enough. Just consider, by way of comparison, that in some sectors (e.g. the mega-pharmaceutical industry) companies based in the US and in Europe engage with corporate partners for open innovation projects already at the pre-startup stage. This makes them virtually unbeatable on timescales.

Another factor that can negatively impact open innovation between Japanese corporates and overseas partners is the lack of dedicated teams with strong technology scouting and negotiation skills. This is in part due to discrepancies between Japanese and overseas entrepreneurial cultures, but limited budgets and fixed team structures also play a role in this.

A strategy that many Japanese multinational corporates are adopting to overcome these issues is freelancing commercialisation, IP, and negotiation services to professionals with direct access to global innovation ecosystems. Oxentia has the pleasure to be working with many Japanese multinational corporates, supporting their R&D plans and broadening their opportunities for profitable deals and partnerships. To date, we have worked with world-leading Japanese companies, delivering specialised innovation services, from accelerators to technology scouting, IP repositioning, and networking opportunities.

New trends

Japan is an undisputed global leader in scientific research and technology production. Without doubt, the new trends arising in the innovation space will soon become popular among Japanese multinational corporates, providing yet more opportunities to optimise R&D.  One of these is intrapreneurship (also known as “corporate innovation”), that is the internal acceleration of ideas born within a company. This will allow improving the commercial potential of the high-level results achieved by corporate research teams. More timely negotiations for the incorporation of new technologies will further enable companies to gain competitive positioning in the global market, adopting R&D models commonly followed in other ecosystems.

Interestingly, though perhaps unsurprisingly, the Covid-19 pandemic has brought about significant change in the open innovation scene in Japan. Over the course of 2020, we have seen individual innovators engaging with multinational corporates for investment, collaborative projects, and distribution opportunities. If this trend will not cease with the decline of the pandemic, the Japanese innovation ecosystem will benefit from the new approaches discovered and trialled in times of crisis.

Japan and Oxford

At Oxentia, we believe that practical experience of different innovation ecosystems provides novel perspectives to analyse and strengthen R&D practice around the world. This is why we have created a series of events to stimulate a dialogue between the Oxford and Japanese innovation ecosystems. Started in November 2020, our Oxford Evening series offers a platform for the exchange of ideas on and experiences of successful commercialisation. Delivered in partnership with Link-J and Oxford University Innovation, our events aim to bring Oxford and Japanese innovation closer to one another, offering mutual opportunities for learning and development.

If you are based in Japan and would like to know more about the Oxford Evening series, visit this page.

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