At Stanford, innovation experts cultivate US-Japan ties


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A Stanford conference brings together 21 experts on innovation in Japan and Silicon Valley.
Photo credit: 
Rod Searcey

Innovation is a vital component of economic development, and the United States and Japan provide clear examples of how a knowledge-based economy can lead to sustainable growth. But Japan has sometimes encountered obstacles in bringing its wealth of ideas into the global market. A conference at Stanford seeks to help shift that reality.

“Japan is changing,” said panelist Gen Isayama, founder of the World Innovation Lab. “We’re seeing entrepreneurs…but we need a new role model – new stars emerging in Japan to excite younger people.”

For two days, 21 experts from Japan and the United States gathered at the Stanford-Sasakawa Peace Foundation New Channels Dialogue to discuss innovation, promote exchange of best practices, and enhance connections between the two countries.

The conference was sponsored by the Sasakawa Peace Foundation (SPF) and organized by the Japan Program at the Walter H. Shorenstein Asia-Pacific Research Center (APARC), in association with the U.S.-Japan Council.

“The New Channels project is intended to open a new arena of dialogue between new voices, and a new generation of experts and policymakers on both sides of the Pacific. And to tie them back into the existing structure of alliance governance,” said SPF President Yuji Takagi, in his opening remarks.

“The complex challenges of today’s world provide even greater momentum to work together across sectors,” Shorenstein APARC Director Gi-Wook Shin added.

In its second year, the conference hosted more than 100 attendees from the San Francisco Bay Area, drawing students, scholars and industry and government people to Encina Hall for the daylong public forum on Jan. 22. The first and second panels focused on the state of innovations in Silicon Valley and Japan, the third and fourth panels examined how the two countries could better work together toward innovation-driven growth.

The first set of panelists started by discussing characteristics of Silicon Valley, and how it defined itself during the tech boom of the 1980s/90s, and led to the rise of the Internet and telecomm industries that rapidly spread around the world.

Silicon Valley is often identified for its innovative ideas, and its ability to convert those ideas into market-ready goods and services. Panelists said that networks and open access to venture capital drive that ability to push ideas through quickly, an essential characteristic in today’s real-time world.

“It’s never been easier to start a company,” said Patrick Scaglia, a consultant at Startup Ventures and former senior executive at Hewlett Packard.

Silicon Valley continues to attract entrepreneurs and potential investors, and is positioned to continue to do so. Scaglia noted that 47.3 million dollars was invested in startups last year alone, the highest seen since 2009.

Areas currently being pioneered by Silicon Valley entrepreneurs include medical and mobile technologies. Norman Winarsky, president of SRI Ventures, pointed to breakthroughs in robotics and wearable devices, showing a clip from a TED talk on bionic prosthetics. Additional predicted trends include a return to hardware and possibly greater entrepreneurism coming directly out of universities, particularly from students.

(Left photo) Tak Miyata (left), a general partner at Scrum Ventures, talks with Ryuichiro Takeshita (right), a corporate affiliate visiting fellow at Shorenstein APARC. (Right photo) Japan Program Research Associate Kenji Kushida leads a discussion on Japan's innovation ecosystem. A gallery of photos from the public forums can be viewed here.

Japan has historically produced successful entrepreneurs such as Konosuke Matsushita (founder of Panasonic Corporation), Akio Morita (founder of Sony Corporation), and Soichiro Honda (founder of Honda Motor Company), but large firms have come to dominate the economy. Recently, however, the country has been producing a cadre of successful startups, some of which have already grown to become quite large. For example, Japanese companies Rakuten and DeNA have commanded the e-commerce space, and similarly, Mixi in the social media space.

Panelists noted that more Japanese startups are going global compared to a decade ago. Yusuke Asakura, a visiting scholar at Stanford’s U.S.-Asia Tech Management Center, pointed to companies that produced applications like Metaps, an Android monetization app, and Gumi, a social networking gaming app.

But Japan hasn’t reached its greatest potential due to various barriers – market, institutional, and cultural. Mr. Isayama said, at the moment, there aren’t enough ventures and risk capital in Japan. Greater accessibility to both could propel startups more fully into the global market.

C. Jeffrey Char, president of J-Seed Ventures, said another obstacle was the quantity of mergers & acquisitions (M&A).

“If there was more M&A, it would actually improve the ecosystem a lot more – it would turbocharge it,” he said. “Because when investors get their money back quicker and when entrepreneurs get paid off quicker, a lot of times they will go and start another company.”

If greater M&A existed in Japan it would create a “benevolent cycle” of funding and inject the momentum necessary to support an environment for entrepreneurial success.

Networking, labor mobility, and a highly skilled workforce are additional components that aided in Silicon Valley’s success, and areas that Japan could learn from. Government support for entrepreneurs is rising; the third arrow of ‘Abenomics’ policy aims to jumpstart growth based on a number of measures, including diversification of its workforce through increased immigration and female participation.

Offering an additional point, Professor Kazuyuki Motohashi, the Sasakawa Peace Fellow at Shorenstein APARC, suggested that cultural differences might pose one of the biggest challenges to U.S.-Japan collaboration.

Americans are more likely to embrace failure as an essential part of the creative process; Japanese typically don’t celebrate failure as much nor valorize the entrepreneur to the same degree.

“We don’t have to change the culture,” Motohashi said. “The important [thing] is to overcome these differences and develop a mutual understanding.”

Teaching younger generations about the entrepreneurial mindset could also improve societal attitudes toward risk-taking. Former U.S. Ambassador to Japan John Roos said celebrating the entrepreneur was the most important factor in creating a vibrant innovation ecosystem in Japan. “In the end, if you have the proper mindset, you can overcome everything else."

A detailed summary report of the New Channels Dialogue will be released in the coming months on the Shorenstein APARC website.

Panelists pose for a group shot outside Encina Hall. A conference agenda, final report and listing of the panelists can be viewed here.