Innovative region: Japan

Japan is the world’s third-largest economy, with a gross domestic of nearly $5 trillion, the country has been home to some of the most successful electronics and automotive businesses, such as Canon, Casio, Nikon, Sony, Panasonic, Nintendo, Hitachi and Fujitsu for electronics, and Yamaha, Toyota, Nissan, Mitsubishi, Honda, Suzuki and Mazda for automotive, to name just a few. Many of these have conducted strategic investments, and some have their own specialised corporate venture capital (CVC) vehicles. Japan Venture Capital Association (JVCA) has some 90 CVC members, most of whose publicly disclosed deals have been tracked by Global Corporate Venturing Analytics. Regarding the Japanese innovation ecosystem, Gen Tsuchikawa, chief executive and chief investment officer for Sony Ventures Corporation, the newly formed subsidiary of electronics manufacturer Sony that oversees various vehicles including Sony Innovation Fund and Innovation Growth Ventures, told GCV: “We can attribute the recent significant growth of Japan’s venture capital market, to the size gap of the VC market compared to the whole economy and infrastructure of large companies.” Yuko Sasahara-Watanabe, president and chief executive of NTT Docomo Ventures, NTT Docomo Ventures, the corporate venturing unit operated by telecommunication firm NTT Group’s mobile network subsidiary, NTT Docomo, identified two challenges within the Japanese CVC industry. She said: “First, a lack of open innovation culture on the part of large corporations. It is culturally difficult for startups to collaborate with them. I think that because Japanese companies have mainly employed people for life so far and there is little diversity of people within the company, communication with a diverse range of people outside the company has not been developed well. “Second, by thinking about synergies from a relatively short-term perspective, it is possible to collaborate in the immediate future, but it is not likely to result in innovative business creation or trigger a major societal change a little further down the line. “This is because corporate top management team often changes in a short time and the policies also change as a result, and there is also a lot of turnover on the CVC side in terms of management and investment teams. “I believe it is necessary for business companies, startups and CVCs to consider business concepts and stories of social change from a long-term perspective and walk hand-in-hand to create a meaningful social impact.” Naoki Kamimaeda, UK-based partner and Europe office representative for Global Brain, a Japan-headquartered VC firm that oversees multiple corporate venturing vehicles, pointed out three unique points to the Japanese ecosystem when…

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Edison Fu

Edison Fu is a reporter and Asia liaison at Global Corporate Venturing.