Japan: Collaboration aids competitiveness

25 October 2013 10:01  [Source: ICB]

Japanese chemical companies are increasingly collaborating with academia and customers to strengthen their R&D efforts as they learn to embrace “open innovation”

In mature chemical markets such as Europe, North America and Japan, innovation has become an essential element of company strategy to build new business and remain competitive. But with most companies upping their game in this area, innovation itself has become a competitive activity.


Japan’s chemical industry has begun to move away from centralised, corporate R&D and is reaching out to university partnerships

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One way to increase innovation efficiency and effectiveness is to adopt an “open innovation” approach. Companies have realised they cannot do everything themselves and that good ideas and expertise can be found in collaborations. So they are working with suppliers, customers and academic institutions to in-source capabilities and capacity they do not have.

While open innovation has been widely espoused in Europe and North America, progress has been slower in Japan, where innovation has traditionally been carried out in centralised departments of large corporations. The slower globalisation of Japanese companies has also been highlighted as a reason they are not so advanced in collaborative research in overseas markets.

However, the trend towards open innovation in Japan is becoming evident in the big chemical producers and also at the level of government and financial institutions. The government is keen to promote and facilitate the uptake of open innovation and has been developing a number of policies and initiatives to enable this.

The country’s Science and Technology Basic Plan for 2011–2015 emphasises collaboration between industry and universities both in education and research. In addition, more specific policies on a network-based innovation system, such as the Japanese SBIR (Small Business Innovation Research) and the R&D Partnership Program, are being implemented.

In 2009, the Japanese government and 19 major corporations established a major public-private partnership, the Innovation Network Corporation of Japan (INCJ), with the prime 
objective of boosting the philosophy of open innovation and providing capital and managerial support for development of new technologies.

To date it has supported investments in life sciences, pharmaceuticals, batteries and electronics, as well as nuclear and solar power. Corporate members of INCJ from the oil and chemicals sector include Asahi Kasei, Sumitomo Chemical, Takeda Pharmaceuticals and JX Nippon Oil & Energy.

The espousal of open innovation is now explicit in several leading Japanese companies. Mitsubishi Chemical, for example, notes that “In order to continue to produce innovative results, collaboration with research institutions both in Japan and overseas is very important…. We are proactively collaborating with research institutions and enterprises… under the key phases of ‘Breaking away from the not-invented here policy’ and ‘open innovation’.”

It is concentrating on six next-generation growth business fields: organic photovoltaic modules and materials, sustainable resources, organic photosemiconductors, advanced performance products, agribusiness solutions and healthcare solutions.

Its Mitsubishi Plastics business also stresses the role of open innovation, saying that “it is important to promote open innovation where we partner with research institutes that have strength in required fields of technology, to introduce their new technologies and ideas and develop new products.”

Other companies are on the same trajectory. Sumitomo Chemical last year moved to accelerate its development of organic light emitting diodes (OLEDs), by joining the Holst Center’s shared research programme on printed organic light and signage, to extend the programme’s research into multilayer solution processes for high-efficiency OLEDs.

The Holst Center is an independent open innovation R&D centre that brings together industry and academia to develop technologies for flexible electronics. It was set up in 2005 by Imec in Belgium and TNO in the Netherlands, with support from the Dutch and Belgian governments.

And at fibre producer Teijin, there is also an emphasis on open innovation and “acquiring new technologies through cooperation with industry, academia and government.” Teijin notes that it promotes “the provision of timely and advanced solutions to customers by building a strong and active network of collaboration for information and personal exchange related to R&D between industry, government and academia.”

In basic research, the company is networking with researchers and academic societies conducting front-line research in polymer science, drug discovery, nanotechnology and biotechnology. And at the incubation stage for commercial applications, it is aiming to combine its technologies with those of customers in its key fields and joint research partners “to accelerate development and achieve more efficient results”.

Key technologies for Teijin include carbon fibre reinforced thermoplastics, separators for lithium ion batteries (Lielsort), highly heat-resistant biopolymers (Biofront), comfortable stain-resistant fabrics and polyester fibre cushioning materials. It is also developing products and services for water purification and treatment.


Japan’s electronics industry has been identified as needing to embrace open innovation

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Toray Industries is yet another Japanese company adopting an open innovation approach. Two years ago, it opened a new integrated technology development base, the Environment & Energy Center, at its Seta facility, with a focus on environment and energy fields. The centre is part of Toray’s measures for accelerating green innovation with a focus on reinforcement of research and technology development in the environment and energy fields.

It collaborates with Toray’s Global Environment Business Strategic Planning Department, established in 2009, and reports directly to the president and, says Toray, “promotes open innovation”, which it describes as “a strategic imperative… to accelerate dynamic creation of new businesses and innovation of business models.”

The priority of the centre is the creation and expansion of new environment-related materials such as biomass materials and energy-saving housing materials as well as new energy-related innovative components including photovoltaic module, fuel cell and lithium-ion battery.

Toray defines open innovation as “the process by which the most optimum technological ideas are commercialised in the most effective investment method in a timely manner, regardless of where the idea originated.”

Building blocks of open innovation, it says, include:

■ Collaboration among industry, academia and government

■ Upstream-downstream collaboration

■ Collaboration between different industries

■ Tie-ups with ventures (in terms of capital, business)

■ Corporate venture capital

■ Strategic M&As, and

■ Carve-out.

Just last month, Daiichi Sankyo and Mitsubishi UFJ Capital launched a new open innovation business through the OiDE Fund Investment, a newly established investment fund run by Mitsubishi UFJ Capital. With the open innovation business the two companies will seek out promising research results at Japanese universities that could potentially result in platform technologies. The OiDE fund will establish venture businesses that fund entire projects from the seed to development stage.

The OiDE fund has an initial investment of yen (Y) 100m ($1m; €760,000) from Daiichi Sankyo and up to Y200m from Mitsubishi. The Japanese government’s Organisation for Small and Medium Enterprises and Regional Innovation has promised a further Y450m.

With leading companies seeking out more cost-effective ways to innovate, and with government encouragement, open innovation looks set to expand in Japan.

But there is still a long way to go, as several recent reports on Japan’s efforts in electronics and information and communication technology (ICT) indicate. Centralised corporate structures and decision-making, lack of globalisation and reduced funding of R&D all have to be balanced against the desire to change to a more open approach to innovation.

By: John Baker
+44 20 8652 3214

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