At the “Building the Virus-Resistant Company” conference, Professor Daisuke Matsushima of the University of Kanazawa described how and why Japan in general should change its innovation strategy.
Daisuke Matsushima, a graduate of Tokyo, Harvard and Nagasaki universities, has worked extensively (1998-2015) in the Japanese Ministry of International Trade and Industry, helping to launch innovation projects with developing Asian countries. At a recent entrepreneurship conference organised by the Estonian Entrepreneurship University of Applied Sciences in cooperation with Ülemiste City, Professor Matsushima, who joined Kanazawa University last year, gave an overview of the training programme, which he hopes will greatly jumpstart the development of the entire region.
“Traditions and customs often play a decisive role in Japan. However, we must realise that the time for change has come. Japan’s innovation strategy should focus on encouraging companies to restart up rather than on starting new ones,” said Matsushima.
In his presentation “Startup or Re-Startup?”, he described the differences between the two business models and explained with examples why he sees ever-growing potential in the latter.
Stable or transformative innovation? Or both?
“Everyone knows that the Japanese giants Toyota and Bridgestone grew out of start-ups. However, this is not quite the whole truth. In fact, both sprouted a century ago as re-startups – Toyota from Sakichi, and Bridgestone from a shoe and sock manufacturer,” Prof Matsushima explained, eliciting a meaningful comparison from the distant past.
When mapping the situation, he added that although Japan has the third largest GDP in the world, in 2023 it is estimated that Japan will be ranked 32nd in terms of GDP per capita. “This, like the low efficiency of innovation, is a very serious problem for the economy. The trend is most affected by the aging of the population – almost a third of people in Japan are over the age of 65.”
The Kanazawa University professor emphasised the importance of small and medium-sized enterprises (as many as 99.7%!) in the economy.
“The structure based on the classic pyramid model of parent and subsidiary companies is being replaced by the so-called horizontal structure and set-up that are based on necessity and networking. In Japan, it is difficult to learn something new or get rid of what has already been learned in order to develop innovation, because everything is based on a deep-rooted, rigid and over-regulated outsourcing system,” he said, citing examples of ultra-innovative (small) companies that have started their own business in Thailand instead of their homeland.
“Innovators face a dilemma: to invest in more sustainable innovation or in a more transformative one? Ideally, you want to use both directions, but in reality, it is not so easy to combine them successfully,” Prof Matsushima outlined.
Unique concept that creates ground-breaking values
To help bring solutions, the Kanazawa University has launched the REP – Re-startup Entrepreneur Education Programme, about which Matsushima boldly stated: “We are talking about a unique concept, the long-term goal of which is to make the local Hokuriku region a home for re-startups in cooperation with all parties!”
As part of the programme, students get to know more than one hundred affiliated companies, research the relevant markets and ultimately create hypotheses about the possibilities of business renewal with the help of their mentors. Cooperation has also been started with other universities in Japan, as well as in India, Thailand and Hungary, and Prof Matsushima expressed hope that interested parties would also be found in Estonia.
“The idea of the solution is really simple: for companies – especially smaller ones – an external outlook and support are essential in the search for change. The university can help collect data, conduct research and find new sources,” explained Prof Matsushima. “In the long run, we are building the Kanazawa Innovation Network, where we want to create new and ground-breaking values by involving different parties.”
The KINTSUGI Association (Kanazawa Innovation Network by Transdisciplinary Science among University-Government-Industry) is a brand. Kintsugi (literally “golden joinery”) is also known as a dish-repair technique known in Japanese handicrafts, for which a special varnish mixed with gold, silver or platinum is used. The mixture fills the cracks in the broken ware and instead of hiding them, the mixture reveals the cracks much more. According to tradition, the purpose of the kintsugi technique is to respect the lifespan of the ware and to show that its breakage is only part of its history.
Professor Matsushima said that the project had already resulted in various great solutions and used an ironic example to describe it: “When one of my students went to the elderly owner of a company and proposed a significant change, there was a negative response. But the owner's son was fascinated by the idea immediately, and it became very successful. An excellent example of the need to create chemistry between new technologies (e.g., the digital revolution) and knowledge, traditions and experiences. The younger and older generations must not be in conflict but instead carry life forward by working in harmony.”