Exploring the Innovation Network Corporation of Japan (INCJ)

Exploring the Innovation Network Corporation of Japan (INCJ)

A KIN Innovation Communities Case Study -

The Innovation Network Corporation of Japan (INCJ) was launched in 2009 as a public-private partnership between the Japanese government and major corporations.  INCJ makes investments aimed at fostering  “flow of technology and expertise beyond the boundaries of existing organisational structures”—be they start-up companies, medium-sized enterprises or large, established firms—and at building an ecosystem of innovation.

The INCJ is capitalized at 92 billion yen, with the Japanese government providing 82 billion yen and 19 private corporations providing 10 billion yen.  The government also provides guarantees up to a total of 800 billion yen for INCJ investments, giving it an investment capability of approximately 900 billion yen (US$10 billion).  This funding is used partly as a combination of venture capital and “buy-out fund” to provide risk money to support a growth strategy of small and mid-size companies and to facilitate consolidation among established companies for the purpose of helping them become global leaders, as well as directly invest in new ventures.

In addition to being a patient investor in new ventures and fostering industry consolidation, INCJ seeks to serve as an active broker—an “honest catalyst”—for networking among technologists, functional/operational experts and business builders.  In Japan, many industries retain “silo” mentalities and many companies have a tradition of “going it alone.” Not-invented-here mentality is a psychological barrier to foster innovation across boundaries, and INCJ’s undertakes a variety of activities to actively counter these tendencies in order to facilitate/generate successful innovations and partnerships.

For example, INCJ has created Open Innovation Platforms, which are independent from investment activities.   At one forum, “Roman Market,” roughly sixty entrepreneurs, inventors, functional and operations experts meet monthly to discuss new business ideas.  About one third are regular, core members, including seasoned entrepreneurs and VCs.  After the meeting, participants continue their discussion informally at a nearby restaurant.

Through their Open Innovation Platforms, INCJ has found that there were many more technical innovations than the pool of those who had the capacity to build a business.  INCJ is working closely with the Ministry of Economy, Trade and Industry (METI) on establishing a Policy Research Committee to come up with tangible recommendations on how to “grow innovators” and how to spread an innovative management style among traditional corporations.  The committee, comprised of innovative business executives and leading scholars, started in November 2011 and will provide its recommendations in March 2012.

Editor’s Note: This is the fourth in a series of case studies on Innovation Communities being created by the Kellogg Innovation Network here at Innovation Excellence. They would sincerely appreciate it if you would contact them if you know about INets that they should consider including in their database. If you’re a leader of an INet, they will invite you to join a gathering of INet leaders that they hope to arrange next year, to review the findings of the study and take this research to the next level: What are lessons to be learned in creating INets and making them successful? It’s kind of the meta-meta level. Innovation results are the base. INets are the first meta level, which is learning about how to manage innovation to produce results. And if we can form a network of INets, that will be about learning about how to produce powerful new learning environments.

To participate in KIN’s research, please fill out their data form and they will contact you!

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Exploring the Knowledge Center for Innovation – Case StudyMike Lippitz is a Research Fellow with the Center for Research in Technology and Innovation at the Kellogg School of Management in Evanston, Illinois, a Senior Policy Analyst with the Institute for Defense Analyses in Washington, DC., and a Principal at Clareo Partners LLC.  Prior positions include Special Assistant for Strategic Technology Planning in the Office of Director for Defense Research and Engineering, US Department of Defense and product line manager at Hewlett-Packard Company.

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One Response to Exploring the Innovation Network Corporation of Japan (INCJ)

  1. Pingback: Innovation Network Corporation of Japan’s Strategy | Leveraging Japan's Innovation Capacity

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