Innovation Network Corporation of Japan
Japan

In 2009, Japan’s Ministry of Economy, Trade and Industry launched the Innovation Network Corporation of Japan (INCJ), a sovereign wealth fund specifically targeted to promote innovation in Japan. The INCJ offers financial backing and managerial and technological support to businesses with high-growth potential, innovation capacity, new technologies, and social benefits. To date, the government has given 142 billion yen, with 27 corporations contributing a total of 14 billion yen, to the partnership. Over its life (a period of 15 years), the INCJ is expected to have investment capability of approximately 2,000 billion yen.⁴⁸

The INCJ is highlighted as a best practice in public-private collaboration based on conversations with manufacturing leaders during the World Economic Forum private session in Tokyo in April 2012. They believed that the INCJ holds tremendous promise as a way to develop Japanese ventures and facilitate R&D in the areas of environment, energy, electronics, bio-technology and infrastructure. 

Representative Best Practices

• A focus on open innovation: The INCJ model emphasizes open innovation, “facilitating the flow of technology and expertise across the traditional boundaries of existing organizational structures”.⁴⁹ In its attempt to promote innovation collaboration among Japanese enterprises, the INCJ serves as an active broker – “an honest catalyst” – for networking among technologists, functional and operational experts, and business builders.⁵⁰ As part of this core principle, the INCJ sponsors three key bodies:
  • Innovation Design Laboratory – Leaders of medium-sized enterprises create deals and partnerships related to high-potential technological spin-offs.⁵¹
    
  • KK Forum – Experts in intellectual property, finance and management meet to review the commercialization potential of underutilized intellectual property held by universities and businesses.⁵²
  • Roma no Ichiba nite – A monthly gathering of entrepreneurs and experienced mentors to discuss new business ideas with the goal of accelerating the growth of the most promising ones.⁵³
    
• An emphasis on fostering partnerships between competing enterprises: The INCJ helps to identify promising opportunities for and facilitates the integration of smaller businesses (or business units) to become next-generation Japanese businesses. With INCJ financing and expertise, the resulting enterprises can pool expertise, capabilities and human capital to become global players. Notably, in August 2011, the INCJ effected the integration of the small- and medium-display businesses of Sony, Hitachi and Toshiba, forming Japan Display Inc. This new company is poised to take advantage of growing demand for high-resolution small and medium-sized displays used in smartphones and tablet computers.⁵⁴ More recently, the INCJ played a key role in fostering the integration of Nissan Motor’s and Hitachi Construction Machinery’s forklift businesses.⁵⁵ The INCJ’s is in a unique position to help break down barriers between competing Japanese companies and improve overall national competitiveness, creating value for all entities involved.
• A relationship that leverages financial, technological and managerial resources: In addition to providing medium- and long-term patient risk capital, the INCJ also offers its investment targets’ managerial expertise. INCJ employees have a broad range of backgrounds in areas such as manufacturing, banking, private equity, venture capital, research and government.

Furthermore, the INCJ’s cooperation with other non-profit and government organizations, including the Kauffman Fellows Program, the National Institute of Advanced Industrial Science and Technology, and the Japan Science and Technology Agency, further augment the INCG’s ability to promote next-generation businesses.