Challenges and opportunities in Japan's innovation ecosystem

Published on November 14, 2019

Challenges and opportunities in Japan’s innovation ecosystem

Innovation ecosystems vary enormously from one context to another. In this short interview with Dr Masashi Matsunaga, we explore some of the challenges and opportunities that Japan is facing, unlocking the commercialisation potential of cutting-edge science and technology research.

What is the innovation ecosystem like in Japan?

Japan is known as one of the leading countries in the science and technology sectors, a place where research excellence has always been celebrated and promoted.

Yet until recently, despite the advanced research outputs produced by Japanese science, the country had not managed to create a system to enable the easy commercialisation of research outcomes. This has made Japanese innovation somewhat slower in comparison with the systems that one finds in the US and in Europe.

Things have changed significantly over the last 20 years, thanks to governmental initiatives aimed at supporting startups with tax relief and the creation of private and public venture funds for innovation [1, 2].

What are the challenges faced by research entrepreneurs in Japan?

The biggest of all is mindset. Japanese research is extremely focused on technical knowledge, often at the expense of effective business skills. This is a big blocker for innovation, which requires individuals and teams trained in business strategy to develop and market products.

Another challenge is the relatively small size of Japanese VCs, which often end up struggling with cash flows from the very early stages of business ventures [3]. This prevents startups from growing at the pace that would allow them to compete internationally.

Are there any cultural blockers?

Yes, Japanese SMEs tend to collaborate with local corporates and the government to secure quick wins and cash recovery. With this local, risk-adverse approach deeply engrained in the Japanese business culture, startups can become stunted and unable to penetrate the market outside Japan [4].

What can Japan learn from other systems, and what can other systems learn from Japan?

I think there is an opportunity for Japan and other countries to share their knowledge and strengths in research and development. Japan can continue to learn strategies to improve its innovation programmes taking other countries as examples. In the past, Japanese institutions have been able to emulate and adapt innovation models and programmes to their national context [5]. On the other hand, Japan has a lot to teach in terms of advanced techniques for research, which are key to pioneering new technologies. International collaboration seems to be the way forward for everyone involved in innovation.

What is Oxentia doing for Japanese research entrepreneurship?

Oxentia has a strong presence in Japan, where it works with organisations in various branches of science and technology. Earlier in 2019, we created a business development programme for science entrepreneurs in collaboration with the Mitsubishi Research Institute, one of the biggest think tanks in Japan. Through structured business training, the programme was designed to increase the chances for Japanese researchers to secure funds to develop further their products and launch them on the market. After an enterprise bootcamp that took place in Tokyo in September 2019, we selected the 10 most promising life-science entrepreneurs, who will join us in London for a pitching and partnering event on 21 November. VCs from all over the UK will be in attendance. We look forward to a successful evening for Japanese startup companies.

The Japanese Life Sciences SME Pitching & Partnering Event takes place on the 21st November 2019 at 58 Victoria Embankment, London. For more information about the participants and to register, download a copy of the brochure.

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