4 November 2018 | The nine-day trip to Japan consists of (a) attending STS Forum, focusing on connecting to and discussing with international representatives of governments, universities, and corporations about innovation ecosystem development with triple helix; (b) exploring ecosystem in Kyoto – including visits to Kyoto University Venture Incubation Center, Privately-run Kyoto Research Park, and an Innovation Consortium; and (c) exploring ecosystem in Tokyo – including visits to Finolab, Creww, and Kanagawa Science Park, and a number of entrepreneurs and founders. The discussions highlight the following.
City, not country, Ecosystem. Efforts into building entrepreneurship ecosystem should focus on city ecosystem, not country ecosystem. Two major reasons are geography and density of entrepreneurs and entrepreneurial activities, in addition to culture and socio-economic settings. Many entrepreneurship support services are voluntary and pro-bono. Mentors and angel investors are often busy people thus cannot afford much time on traveling. Although remote and online communication works, in-person meetings are the most effective way to build relationship at the beginning. Supporting evidences to this point are (a) Startup Genome Report which assesses ecosystem in various cities, and (b) many angel investors in the Peer2Peer Exchange in Switzerland, organized by Swiss EP, share a rule of investment decision is the close distance between the startup’s location and the investor, specifically some say “less than 2-hour flight.”
Triple Helix that works. Triple helix is praised by most, if not all, stakeholders. The triple helix consists of (a) Government – who should cover early stage risks and need to move faster with simpler and less administrative procedure; (b) Academia – who solve the problems and need to think about collaboration with industries, especially about IPs; and (c) Industry – who get things done with commercialization and need to focus on strategic thinking and long-term vision, not short-term profits.
Innovation Center or Venture Incubation Center based in university or science park plays a central role of the triple helix. The model of such center is similar to that of Swiss EP VNM partner organizations BKHoldings, VNU ITP, and SHTP IC. In terms of services, in addition to training and mentoring, Japanese players emphasize business matching, technology scouting, and investing. Business matching can be organized as open innovation while investing is arranged through venture investment funds where private corporations and VCs play large roles. The Innovation/Incubation Center can be general partner or limited partner of the funds.
Innovation/Incubation Center is established first by a public-private partnership where the grants from public partners (municipal governments and universities) are critically major source of income. Private partners – i.e., big corporations – gradually increase their equity stake by financing operation and providing expertise to the center year by year. In the first years, leasing space, laboratory, and equipment is accounted for 80%, even higher, revenue of the center. The center may take 8 to 10 years to reach break-even point. This number is in line with the expectation of 8.5 years of Swiss Innovation Park (shared in Peer2Peer Exchange).
Japanese startup service providers offer membership to corporations who are looking for both talents and promising technologies.
Cultural Uniqueness that matters. No doubt that cultural uniqueness defines the ecosystem. The statement of Sorato Ijichi – the founder of Creww, a successful entrepreneur returned to Tokyo after selling his Silicon Valley company – that “Japan’s ideal startup ecosystem is very different from what we see in Silicon Valley” makes sense to any other city in the world.