Post on 21-May-2018
Business Symposium
‘Open Innovation In Global Networks’
26 Feb 2008
Futoshi NASUNO
METI, JAPAN
"Current Status and Future Development
of "OPEN INNOVATION" in Japan"
1
The Era of Innovation
2
Aging economy
with less population
→Smaller domestic
market
Globalization
→ Global Competition
Creating values/profits by making products or services
different from others is essential for business.
Knowledge Economy
→Knowledge in
Intangible assets
became more valuable
-S<D → Supply>Demand esp. after the end of Cold War
=Product oriented→ Value/Human oriented
-Differentiation, coming from its own personality is the key
factor in the competition, or corporate benefit.
Why does innovation matter now?
3
Elements of Innovation
Creation of brand new knowledge through some fusion of
different kinds of existing knowledge
= The element of ‘managing knowledge or intellectual assets
incorporating the peculiar knowledge’ is essential.
New Convergence
Differentiation, coming from brand new knowledge does not
necessarily result in the realized value.
→Only when the newly created knowledge meets the needs of
many customers, the value is realized with destructive impact.
Destructive Impact
4
Combination of
technologies necessary
→Companies need to
rely on outside
resources
ICT improvement→
Outside knowledge
can be achieved in
easy, costless and
speedy way.
More importance
on knowledge
fusion→ Outside
knowledge could
be a trigger of
fusion
Open innovation or reliance on outside knowledge is a
rational choice because
-it could also reduce the cost and risk due to the utilization
of existing result of investment.
-the attitude to open some part of the achievement could
make it easier for a company to grasp further knowledge
which would raise the ability for innovation.
Open Innovation
5
1.Status of Innovation in Japan
6
- Huge amount of investment into innovation- Abundant outcome in the shape of patents- Limited values and profits being generated- Mainly caused by poor corporate management
- Scientific knowledge rarely utilized in industries- A lot of nuisance in the Knowledge convergence- Mobility of highly skilled people limited.
Present Situation of Innovation in Japan
7
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
(年度)
(%)
日本
米国
ドイツ
フランス
イギリス
中国
韓国
The ratio of total R&D expense in Japan vis-a-vis GDP exceeds 3 % which is extremely high
level compared with those in other countries.
Sources
①WIPO「 INDUSTRIAL PROPERTY STATISTICS」②JPO annual report in 2005
Trend in the ratio of R&D expense/GDP (%)
Source: METI (calculated from Science & Technology Summary
published by MEXT)
JAPAN
US
Germany
France
UK
China
Korea
R&D Expense
8
Large amount of R&D investment generated lots of seeds, especially when compared
by the number of registered patents.
0
50,000
100,000
150,000
200,000
250,000
1980 1985 1990 1995 2000 2001 2002 (年)
(件)
日本
米国
ドイツ
フランス
イギリス
韓国
中国
Registered Patents(right holders nationality basis)
Japan
Germany
year
US
France
UK Korea
China
Achievement from R&D investment
JAPAN
US
Germany
France
UK
Korea
China
9
Large amount of R&D investment generated lots of seeds, but limited values/profits.
More companies have a short sighted view on investment affected by the too much
attention on short-term profit by stakeholders especially by shareholders.
経済成長における技術進歩の伸びの変化
←増大
減少→
←減少 民間研究開発投資の対売上高比率の変化 増大 →
出典:OECD
【主要国の民間研究開発投資と経済成長の技術進歩との関係】(80年代と90年代の比較;OECD)
【我が国製造業の研究開発効率の推移】
(出典)科学技術の振興に関する年次報告(平成15年度)
Limited profits
R&D Expenditure (right)
Operating Profit (right)
Profit/R&D(%)(left)Profit/R&D/firm (%)
Operating Profit/firm
100
mil.yen
R&D expenditure/firm
(%)
Source: Annual Report on
promoting Science and
Technology in 2003
10
Strength and shortage from the viewpoint of competitiveness (Fy2004)
Source:survey on science technology development in 2004, METI
328 companies with large R&D investment were selected . Left: N=175 Right: N-177
Poor quality in corporate management
It is commonly believed that problem in corporate management is the cause of small profit.
Ratio of people who responded that the element is recognized as the origin of competitive strength (%) competitive weakness (%)
42.3 R&D capability 17.543.4 Application of technology 10.750.3 production /manufacturing technology 7.9
13.7 business strategy 24.96.9 Management (related to technology) 20.39.7 Product Planning / Design 36.2
17.7 Leadership of corporate manager 5.628.0 Quality of human resources 13.64.0 Quantity of human resources 25.47.4 Collaboration with other companies 15.310.3 Challenging spirits 22.06.3 Absence of global competition 10.7
3.4 Miscellaneous 4.0
11
- Science linkage in patent is limited.
- Radical transformation in business model is scarce.
Science linkage in US patents
From HP of MEXT
Sceience linkage is the number of citation of scientific articles described in
the examination report of US patent.
Limited substantial research
United States
EU-15
Japan
Year
Number of science
linkage
US
12
○Opportunities and occasions are scarce for substantial convergence of
knowledge.
○Open innovation is more valuable and necessary than before
○Some companies have already taken some measures to accelerate the
fusion of knowledge with somebody outside the companies.
○Some affiliates of foreign companies have progressive mechanism for
accelerate knowledge fusion.
○Most companies see that core technology and know-how should be
confined inside the company since they are the origins of competitiveness.
○NIH syndrome is still evident in general.
6) NIH (Not Invented Here) Syndrome
13
(Recognition of the industry side)
○Capable colleges, which usually have abundant financial resources
provided by the government, are not eager to voluntarily attempt the real
collaboration with companies.
○Most colleges have deficiencies in the ability for R&D management or
contract and operating staff.
○Excessive focus on IPRs or short-term profit tends to undermine the
substantial research.
○Companies themselves is less strategic in utilizing colleges.
○Colleges are failing to provide human resources which meet the needs of
industries.
7) Industry – Academy Collaboration to be improved
14
Due to the lack of forward-looking vision and the viewpoint
to other areas, the flow of knowledge is limited, short, one-
way and stagnant.
Science Technology
College/public research institutes Company
Research
division
Business
division
Too much focus on
short-term competition,
NIH syndrome and
sectionalism
One way with selfish
participants, and small
collaboration
Lots of nuisance
in a company
and between
companies
Compartmentalize
d and little respect
on application
Business/Management
8) Nuisance against Knowledge fusion
15
Percentage of foreign-born persons and of foreigners in the total population in OECD
countries, circa 2001
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Ko
rea
Jap
an
Mexic
o
Tu
rkey
Po
lan
d
Slo
vak R
ep
ub
lic
Fin
lan
d
Hu
ng
ary
Italy
Czech
Rep
ub
lic
Sp
ain
Po
rtu
gal
Den
mark
No
rway
Un
ited
Kin
gd
om
Fra
nce
Neth
erl
an
ds
Gre
ece
Irela
nd
Belg
ium
Sw
ed
en
Un
ited
Sta
tes
Germ
an
y
Au
str
ia
Can
ad
a
New
Zeala
nd
Sw
itzerl
an
d
Au
str
alia
Lu
xem
bo
urg
Percentage foreign-born
Percentage foreigners
9) Limited inflow of human resources
- No specific common goals, resulting in inadequate performance and limited attractiveness to
foreign people, especially to highly skilled ones.
Source: OECD 16
Immigrants as a % of highly skilled native population Emigrants as a % of highly skilled in the country of origin
OECD STI Scoreboard 2005
- Mobility of highly skilled people are extremely limited.
17