Nippon Navigator #4 - Corporate Innovation & Startups in Japan

Innovation and tradition: a look at Japan's business world

In the current issue of Nippon Navigator, Gregory Glanzmann and Maximilian Böger take a deep dive into the facets of Japan's business world together with their guest, Fuminori Gunji. The Land of the Rising Sun, known for its leading role in hardware and materials science, is nevertheless reticent when it comes to software innovations. But what about Japan's ability to keep up in the global innovation race?

Japan, a country with deep-rooted traditions and a history that still shapes its day-to-day business, faces the challenge of maintaining its position in an increasingly digitalized world. While Japanese companies are leading the way in areas such as robotics, sensor technology and nanotechnology, software development seems to be lagging behind. But is this really a disadvantage, or is it a deliberate strategy?

Tradition meets innovation

Japanese companies, especially the giants among them, are known for their risk aversion and focus on long-term, stable growth. This is in stark contrast to the often short-term oriented drive for innovation that prevails in Silicon Valley. Yet it is precisely this stability and long-termism that could be Japan's hidden strengths, especially in a world where technological leaps happen ever faster and can become obsolete just as quickly.

The role of Sōgō Shōsha

The role of Sōgō Shōsha, Japan's major trading houses that play a central role in the global marketing of Japanese products, is also interesting. These companies, which originally began with the import and export of physical goods, are now involved in all areas of the economy and promote the global expansion of Japanese innovations. They could serve as a model for a modern, globally networked business model that is still deeply rooted in its own culture.

Corporate venture capital as a driver of innovation

Another interesting aspect is the increasing use of corporate venture capital (CVC) by Japanese companies. Given the internal challenges in generating disruptive innovations, many large Japanese corporations see CVC as a way to incorporate external expertise and new technologies. This approach offers an exciting perspective on the interaction between established companies and start-ups.

What can Europe learn?

Europe, which is also in a phase of technological upheaval, can learn a lot from Japan's approach. The focus on long-term goals, the stability in promoting innovation and the strategic use of external sources of innovation are aspects that could also be groundbreaking for European companies. Last but not least, Japan's approach to its traditions shows that a modern economy does not have to be at odds with its own history, but can use it as a strength.

The discussion with Fuminori Gunji shows that Japan has more to offer than just the stereotypes of punctuality and precision. The country is on the threshold of a new era of innovation based on deep roots in its own culture. For Europe, this could be an inspiring example of how to successfully leverage its own strengths in a globalized world.

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