Fernando Fischmann

Japan’s Emerging Culture Of Innovation: The Invisible Things Can Be The Hardest To Change

26 November, 2015 / Articles

Over the past 50 years, Japan has helped to shape the world’s technology landscape. Looking at the massive global impact made by companies like Sony and Toshiba , we can see an interesting comparison to the nature of technology developments in Silicon Valley and the United States. While Silicon Valley is populated by companies that have emerged from startups over the past decade or so, Japan’s technology landscape is still very top-heavy with little to show of ‘idea-to-company’ success stories. The large corporations command such an influence over the talent pool, legislation, market channels, and a thousand other aspects of the economy that what is less well seen and talked about is the Silicon Valley-style startups that could be changing and molding the technology and cultural landscape.

Change from the bottom up is not happening in Japan. Is it just a matter of time?

While startups like Facebook FB -0.95%, Amazon, Tesla and Google GOOGL -0.91% are changing the way Americans live, and indeed how the American economy as a whole functions, this kind of disruptive innovation from upstart groups is not yet a common occurrence in Japan.

Why is this? Capital, talent, and a reliable legal framework are all present in Japan, so what is missing from the scene? What elements are still needed for Japan to begin to produce more of the generative, disruptive, and economically stimulating effects from a robust and active innovation ecosystem?

The challenge for Japan with regards to startups, and the process that fosters them is principally a matter of culture, and such conversations often beg comparisons to innovation’s powerhouse example: Silicon Valley. What are the norms that we see in Silicon Valley that support the rampant pace of innovation and constant refinement and recycling of ideas through iteration after iteration? There are several core social and cultural norms that support this kind of innovation, that are still nascent in Japan.

Startups require risk-taking. They require testing hypotheses by trying ideas and seeing what happens – and by definition not all ideas are going to work out as hoped. The cultural norm of risk-tolerance is a tough one in many cultures including Japan’s, which has a strong built-in aversion to failure. One of Silicon Valley’s strengths is its celebration of ‘noble failures’ as badges of accomplishment amongst its startup culture members.  In Japan, the dominant norm of corporate culture values low risk, step-by-step improvement, and predictability. The Japanese social structure highly values business leaders that can correctly prognosticate both action and outcome and the framework of control in organizations can quickly strip leaders of their social currency when predictions fail to materialize. In a culture where failure likely marks the endpoint of a career, the field of pure innovation fails to bloom.

An entrepreneur puts his relationships with parents, friends, family, and colleagues at serious risk when pulling away from existing social expectations and declaring an intention to build something new – and in Japan the social price for this step is still very, very high.

Precedent in Culture/Storytelling

If you live in the U.S., you have heard the story of how Mark Zuckerberg started Facebook at Harvard? You probably have. Everywhere you look these days, Startups are a part of the social narrative at every level. In Silicon Valley and across the United States, there is a strong social narrative around building startup companies and becoming an entrepreneur. While this is part and parcel to the U.S., there is not yet a strong culture of storytelling about successful startup entrepreneurs in Japan. While the social narrative in the US actively supports the idea that it is possible to create a new venture from nothing (even if it is hard!), the pattern of storytelling in Japan does not yet support this vision of possibility. There is not yet a sense of ‘social license’ that says to each and every talented potential entrepreneur that it is “OK to make the choice” to pursue a dream and do something radically different like start a new company.

Things are changing in Japan, but this kind of unspoken social permission does not yet exist widely – at present it is centered among young students around the country’s top universities, primarily in Tokyo.

Barrier to Trust

When an entrepreneur seeks to create something new without precedent or an existing support network (such as that found within a corporation), he or she must synthesize new relationships spontaneously and at low cost to take the many steps required to pull to the new venture together. Legal assistance for company formation, software and design engineering expertise, marketing, messaging, business acumen – these various skills represent a focused contribution from a collection of individuals when they come together to create a new business. When limited resources are available, you need a low barrier to trust and cooperation in place in your social network in order to pull them all together. The ambient barrier to trust for such things is still relatively high in Japan, putting a damper on innovation.

Making a Change

At Stanford University this month, a community of academics, investors, and industry participants gathered to discuss Japan and its innovation ecosystems. This event, called Moment 2015 is sponsored by the Ministry of Economy, Trade and Industry of Japan (METI)  together with Deloitte Touche Tohmatsu LLC, World Innovation Lab (WiL), and Stanford University’s Shorenstein Asia-Pacific Research Center (APARC).  The thought is that through the free exchange of ideas, connecting across the Pacific ocean to Silicon Valley from Tokyo, and through wider education, Japan can accelerate its innovation ecosystem development.  Will events and organizations like this make a difference? They are certainly part of the solution. What is even more central to the growth of bottom-up innovation in Japan is for individuals to learn and change, to talk to each other, to try, fail, and celebrate the entrepreneurial journey.

For Japan, as all of us: The Next Step is Always the Most Important One




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