Friday, August 26, 2016

Open innovation in Japan: A noticeable change?

For the past 7 years, I have been visiting Japan each year to work with colleagues in Kyoto on various projects relating to the management of technology, 3D printing and open innovation. Back in 2009, we held an event at Doshisha University with members of the local business community that discussed, among other topics, open innovation. Yesterday, at the same location, a forum was organised by Professor Toshiro Kita to bring together Japanese firms that are implementing open innovation. Listening to the talks and discussion it was very clear that much seems to have changed since the start of the decade in terms of attitudes and actions relating to open innovation. This post provides some quick initial reflections on 'then and now', with a more detailed summary of the actual event to appear on the Doshisha Business School website shortly (along with the speakers' presentations). 

Then
At a general level, there was interest from companies in open innovation with much reference was made to the structure of corporate systems in Japan - in many ways closed to the outside, but open within keiretsu structures. Comment would made to the role of corporate spin-offs as one open innovation-type strategy that was well-suited to the Japanese corporate context. This was also the era when the 'Galapagos Effect' was much in the business news, reflecting one perceived consequence of the open-yet-closed environment.  The discussions would also often cover the challenges facing start-ups, and the weakness of the entrepreneurial support ecosystem when compared to Silicon Valley, Cambridge, and elsewhere. When visiting national and regional government agencies, presentations and report would frequently make explicit reference to open innovation and the need for this to be supported, though discussion of implementation activities tended to be rather opaque. The role of universities and the need to encourage higher levels of interaction between industry and academia was also a popular talking point. Overall the attitude seemed to be one of 'This is interesting, but we are not yet quite sure how this will work in Japan'.

Now
The recent publication of the Open Innovation White Paper by NEDO and the Japan Open Innovation Council is an important milestone. The differences in both attitude and activity on from companies is also very noticeable - at least from the sample of attendees yesterday. Among the +85 attendees at the event, the number of business cards that contain an explicitly open innovation-related job title was very high. The presentations given by speakers from Omron Ventures, Daikin, Horiba, Screen Holdings and Osaka Gas revealed a high level of activity (e.g. Daikin spending US$300m on a new open innovation facility) and Horiba acquiring MIRA in the UK) and sophisticated reflection on emerging issues.  This last point was perhaps particularly revealing as the willingness to discuss both success as well as failure can be an important reflection of an organisation's true attitude to open innovation. However, in term of results achieved through open innovation, the most common response to questions relating to this was: 'It is too early to say'. 

What are the emerging issues?
The final workshop session highlighted areas where more understanding is needed to improve the implementation of open innovation in a Japanese context. Discussion points included:
  • How can open innovation be managed - and activities with all partners coordinated - along different value chains?
  • What is needed to develop open innovation regional support ecosystems?
  • How do you develop specific regional specialisations for open innovation? Is it necessary?
  • How do you manage open innovation systems within one organisation that aim both to strengthen the core business as well as explore new business areas?
  • What are the capabilities needed to make a strong open innovation team?
  • Once you have developed a strong open innovation team, how can you ensure that they stay within your organisation?
The 'after-party'/飲み会 discussions also provided clear evidence of the increasing level of maturity of open innovation attitudes in Japan, with talk of the launch of an open innovation community of practice, and the explicit need for organisations to be willing to share experiences and learn from one another.  I am really looking forward to being part of these on-going discussions, and seeing how lessons can be shared within and beyond Japan.