If film making helps shine a window on a nation’s concerns and outlook then taking a long flight back from Japan and its inaugural corporate venturing meeting is a good way to catch up with the memes at issue in its society.
While there is not much that initially seems to connect Go Masao, After the Rain and Kamikaze Girls they all ask the question why people are doing something and to have the confidence to follow your path rather than obey another.
As Tayo says to her ronin husband, Ihei Misawa, in After the Rain: “It is not what you do [losing honour by fighting for money] but why you do it that is important.”
Or as a corporate venturing head at the Japan Venture Capital Association’s (JVCA) event hosted by the British Embassy in Tokyo put it about the local entrepreneurial ecosystem: “The Silicon Valley model is not necessarily transferable to Japan. We need to find our path.”
Japan’s Ministry of Economy, Trade and Industry (Meti) is attempting to help just that with planned policies to encourage corporations to buy more local venture-backed companies, especially after trade sales have outnumbered flotations since 2008, and develop their incubation and open innovation and corporate venturing programmes.
The policies follow an excellent report to the leaders of the US-Japan Innovation and Entrepreneurship Council (see news below) that identifies the record number of corporate venturing fund launches last year – a trend that has continued this year with NTT Docomo’s $125m fund – and their outperformance when compared against independent venture capital firms.
Corporate venturing units are increasingly active both in Japan and overseas, where the JVCA says its members invested more outside of the country than internally for the first time last year.
Research by Kou Yukawa, a research fellow at technology company Fujitsu, presented at a seminar in classroom number one at Hitotsubashi University found 15 of the 30 to 40 largest information and communication technology companies were responsible for Y15.2bn ($190m) of venture investments, while the small and medium-sized enterprises in the sector invested Y19.4bn.
Local VCs and entrepreneurs, however, bemoan the relative difficulty of investing alongside some traditional corporations due to their perceived bureaucratic mindset and unwillingness to consider ideas “not invented here”.
They were more optimistic about the corporate venturing units where the entrepreneurial founders, such as at Softbank, Gree, Mixi, Dwango, Kakaku, Gumi and DeNA, were still leading the parent companies.
But, outside of Japan, the reputation of corporate venturing units both from new and established companies in syndicates is highly regarded. A case study looking at how Japan-based pharmaceutical company Takeda used its Silicon Valley-based corporate venturing unit to invest in UK-based Heptares Therapeutics looked at how Takeda was able to identify the leading-edge research underpinning Heptares (stemming from the field that won this year’s Noberl Prize for Medicine) and join the consortium of top tier venture investors as a strategic partner.
A form of local venturing, therefore, is emerging – what Moburo Matsuki, managing partner at MKS Partners, called Japanese adventuring – that augers well for the country and its economy.
Still, false dawns have been seen before. Zenichi Shishido, professor of law at Hitotsubashi University, said he had been studying venture capital for 30 years and for the past decade “I have been saying it is just before dawn”. Are we seeing the real dawn now, he added?