What Japanese Companies Should Do to Achieve Global Open Innovation



The Tokyo Metropolitan Government’s held the fifth seminar on January 22nd with the topic titled as “What Japanese Companies Should Do to Achieve Global Open Innovation”as part of X-HUB TOKYO project, which supports global expansion of startups in Tokyo,

In this event, three invited speakers gave talks on their first-hand experiences on global open innovation:Mr. Naoki ‘Nick’ Sugimoto from Honda Innovations Inc and Honda Motor Co., Ltd, Mr. Takashi Sunaga from Mitsui Fudosan Co., Ltd., and Mr.,Masaru Kusutani(Max)from Tokyo Marine & Nichido Fire Insurance Co.,Ltd..

The talk cvovered the latest information that would be useful not only for startups but also for organizations such as VCs and corporations offering various supports to startups.

A case study of Honda’s open innovation

Honda Innovations, Inc. CEO,
Honda Motor Co., Ltd.,
Corporate Venturing Supervisor, Corporate Planning Supervisory Division,
Mr. Naoki ‘Nick’ Sugimoto

We would like to open this event with the history of global expansion of HONDA from Mr. Naoki ‘Nick’ Sugimoto.
Founded in 1948, our company has developed a variety of products. Currently, we are developing more than 30 million products per year, mainly in the mobility and robotics fields. Our open innovation history dates back to 2000, when we set up an office in Silicon Valley, the U.S. as the base for research and development. At that time, we conducted research and development primarily focused on computer science with much trial and error. With the rise of more interesting startups in Silicon Valley, we began to pay more close attention to startups trends. In order to engage in open innovation in earnest, we established a CVC(Corporate Venture Capital)around 2005 and actively invested in startups which built synergies with us as potential collaborators. It resulted in hundreds of collaborations. Through various collaborations, we also accumulated knowledge and expertise on how startups raise funds and attract people. Later in 2011, we reformed the organization system from CVC, and established the current open innovation lab and accelerator program.
Could you tell us more about the accelerator program?
Honda’s accelerator program, “Honda Xcelerator,” is for innovators and startups which aim to enhance transformation of current technology and business and contribute to challenge the current manufacturing processes. This program is open to startups of any stage. We are collaborating with more than 10 startups at any time. We provide not only funding for development of prototyping, but also comprehensivesupports offered by mentor, assistance in developing test products and collaboration opportunities. We offer a wide range of support and funding for speedy proof of concept (PoC) . Our philosophy is to promote open innovation in win-win relationships as equal partners . Then we established a system that allowed both parties to use the products we have developed together without restrictions. We intended not to set any rules such as, “You can’t provide the technology you developed to our competitors”. For instance, in a joint project with Drivemode, a U.S. based startup that provides IT services to drivers, we developed a smartphone application that allows drivers to use navigation systems safely and do a phone call. Now we sell motorcycles in which the app is installed in India. The collaboration between Drivemode and Honda has led to the commercialization of this product and we acquired Drivemode in 2019. Looking back on our experiences, when you collaborate with startups, it is important to foresee things from the same perspective as that of startups.They don’t have enough people or funds. I think it is worthwhile standing on the same field and being aware of how we can build a win-win relationship with each other.

Exploring the possibilities of real estate and mobility through open innovation

Mitsui Fudosan Co., Ltd.
General Manager, Business Innovation Planning Dept.,
Mr. Takashi Sunaga

Next, we will learn from Mr. Takashi Sunaga about the open innovation of Mitsui Fudosan Co., Ltd.
We established the Business innovation planning department in fiscal 2020, which aims to bring about new changes through the launch of new business. Currently, we focus on developing new businesses by bringing real estate and technology together, aiming to produce new customer experiences that could possibly go beyond the existing framework for real estate. We also have a business proposal system that gathers a wide range of business ideas from across the companies to encourage creations of new businesses. At the moment, however, only one project has been approved by our management committee. We are now very conscious of speeding up the process of creating new businesses. Meanwhile, we have been actively engaged in creating an environment where people who are core of business and ideas themselves can fully exert their power. I believe that invensting in innovative human resources will become more essential in the future. As our example of open innovation with global startups, we formed a capital and business alliance with Maas Global, a Finnish startup engaged in next generation transportation services. We feel a lot of potential in the crossover between real estate and mobility. Covid-19 has changed the way we work and live completely. As people’s behavior has also become more diverse, what city and real estate means to people is needed to change. In this context, we believe that mobility can make significant synergies with real estate. We will continue to collaborate with startups to realize new customer experiences through real estate and mobility.
What is the important point when we collaborate with global startups?
There are four main points. The first one is to try to collaborate in a way that allows you to demonstrate your strengths fully. In our cases, we always think of specific ways in which we can utilize our real estate knowledge and assets. The second point is to clarify what you want to do and your intentions. It is important to think about your purpose and what you want to offer to your customers. If you and your partner are not satisfied, do not proceed with a transaction or collaboration. The third one is to set a “point of agreement” with your partners while you take the concrete interactions into consideration. Thinking about a stream of business in advance will make it easier to reach an agreement. The final point is to build a relationship. I think it is important to build a relationship where you can talk frankly with your partners and change opinions.

To become an industry frontrunner, combining insurance and technology

Tokyo Marine & Nichido Fire Insurance Co.,Ltd.
General Manager
Digital Innovation Dept.
Mr. Masaru Kusutani(Max)

Finally, we will ask Mr. Masaru Kusutani from Tokyo Marine & Nichido Fire Insurance Co.,Ltd. about their case studies of global open innovation.
We established the Tokyo Marine Innovation Lab in Silicon Valley, the U.S. in 2016 to find global technology companies and startups. Since 2018, we have focused on investments to learn insurance technologies and business models. Currently, we aim to become an “industry frontrunner” by combining insurance and technology. In order to enhance the value of our insurance services, it is worthy for us to collaborate with startups while building relationships with VCs and universities. We formed alliances with a variety of companies in healthcare and mobility fields, as well as startups involved in automobile insurance and solving problems of natural disasters.
What advice would you give to those who aim to collaborate with global startups for innovation?
Looking back on our experiences, we think there are five key points. The first point is to value the right partner so that you can achieve results in your core business. Partnering with global startups is often much more difficult than partnering with domestic startups because of language and cultural barriers. Therefore, it is significant to define clearly the areas in which you should engage in open innovation. Second point is not to stick to the Japanese rules. Laws, regulations and communication environment differ greatly from one country or region to another. Conducting sufficient research from the trial stage is important so that you can respond to changes flexibly. Third point is to be flexible enough to collaborate with companies that may appear to be disruptors in your industry at first glance. In our cases, we collaborated with Metromile, an American insurance startup, to promote AI in our businesses. If the culture of the company you collaborate with does not seem to be a good fit, do not push it. This is the fourth point. It is difficult to bridge the culture gap and so you need to take time to find out compatibility. The last point is to benchmark foreign companies in your industry. If you can build a relationship with them where you can exchange information freely, you can expect synergies in your respective businesses. The future development and services will be changed drastically if you take global expansion and open innovation into consideration. Please gather information actively and work on your business strategically.

The event introduced the key points to realize global open innovation, sharing various examples. Through upcoming events, X-HUB TOKYO will continue to provide useful information for startups looking to expand globally as well as the latest trends in open innovation.