RIETI-NISTEP Policy Symposium Open Innovation as a Key Driver of Japan s Industrial Competitiveness Handout NAGAOKA Sadao Program Director and Faculty Fellow, RIETI Visiting Research Fellow, NISTEP Professor, Tokyo Keizai University August 21, 2015 Research Institute of Economy, Trade and Industry (RIETI) http://www.rieti.go.jp/en/index.html
RIETI NISTEP policy symposium Comments: from a US and Japan comparative perspective Sadao Nagaoka August 2015 Program Director for Technology and Innovation, RIETI Visiting Research Fellow, NISTEP Professor, Tokyo Keizai University 1
Innovation as combination Innovation as combination knowledge creates knowledge team production of knowledge combinations between the technology and complementary assets (including risk capital) Market failures for combination? high externality from the new combinations Human resources infrastructure Coordination failure (e.g critical mass for start up system) 2
1. Knowledge sources External knowledge sources are very important for suggesting R&D in both the US and Japan. Overall similar four most important sources: science and technical literature, patent literature, users and internal Differences US inventions are relatively more science based. Absorptive capability 3
Figure 1. Sources of knowledge for suggesting a R&D project (%, very important, US JP common weight) ) (Source) Walsh and Nagaoka [2009a] 4
Figure 2. Relative importance of science literature as the knowledge source of an R&D yielding the patent (base: the importance of patent) 1.40 JP US 1.30 1.20 1.17 1.22 1.25 1.08 1.10 1.00 0.93 0.96 0.92 0.80 0.84 0.81 0.86 0.60 High school or lower Tech college or junior college University Master degree Ph.D. Total (Source )Walsh and Nagaoka [2009b] 5
Table 1 Basic profiles of the surveyed inventors and their organizational affiliations trilateral patents Japan US Europe Sample size 3,658 1,912 9,017 Academic background Organizational affiliation University graduate (%) 85.9 93.7 76.9 Doctorate (%) 12.4 45.3 26 Female (%) 1.5 5.4 2.8 Age (years old) 39.5 52.7 45.4 Employed at large corporation (251 or more employees) (%) 87.8 81.1 70.6 Employed at small or medium-sized corporation(%) 8.7 14.0 22.6 Institutions of higher education(%) 2.3 2.2 3.2 National research institutes or other government organs (%) 0.7 0.1 2.2 Foundations and other organizations (%) 0.5 2.1 1.4 self-employed and students 2.0 Source: RIETI Inventor Survey (2007) for Japan, Europe s PatVal for EU (covering six countries: Germany, France, England, Italy, Spain, and the Netherlands). See Nagaoka and Walsh [2009a], Note: Self-employed individuals can be affiliated with organizations. 6
2.Co inventions and the collaborations Research collaborations across organizations are substantial in both countries: Co inventions with external co inventors are significant (around 12%) The other collaborations 20 to 30%. Similar level and structure in terms of the type of the partners Co inventions with a researcher in the University or PROs (3% +) and the other collaborations ( around 6% )exist at similar level for the two countries. Vertical co inventions with a supplier or with a customer are also similarly important. Major difference: Co inventions across borders and with foreign born 7
Figure 3. External Co-inventors by organization type, US and Japan (NBER weights) Figure 1. External Co-inventors, by Organization Type, US and Japan External co-inventors 13.1 12.3 Government Research Organization 0.5 0.6 University and education Other firm(s) Non-competitor(s) within the same industry Competitor 2.5 2.7 2.0 2.0 1.2 1.3 0.4 1.5 JP US Customers and product users Suppliers 3.6 4.3 3.5 5.5 0 2 4 6 8 10 12 14 (Source) Walsh and Nagaoka [2009a] 8
Figure 4. Formal or Informal Collaboration with Outside Organizations, by Organization Type, US and Japan (NBER weight) External collaboration 22.5 27.6 Government Research Organization 1.5 1.7 University and education 4.0 4.4 Other firm(s) 2.1 3.1 JP US Non-competitor(s) within the same industry 1.8 1.3 Competitor 0.8 0.7 Customers and product users 7.4 9.1 Suppliers 10.8 13.8 0 5 10 15 20 25 30 (Source) Walsh and Nagaoka [2009a] 9
Figure 5. Co inventions with foreign born and those with foreign residency (US, JP; DE, GB) Tsukada and Nagaoka(2015) 10
3.Mobility and start ups Mobility as a mechanism for new combinations University startups for assessing new technologies Disagreements in a firm as sources of startups (Klepper). Significantly lower mobility in Japan. In Japan, very limited mobility for the reason of promotion or higher salary (In the US they are the most important) Mobility due to job loss is also small in Japan. Startup/Move for attractive research environment more frequent in the US. Majority of movement in large Japanese firms is secondment. 11
Figure 6 Inventor Inbound Mobility, US and Japan University 33 Very small firm (<100) 45 Japan US Small firm (100-250) Medium firm (250-500) Large firm (> 500) All University Very small firm (<100) Small firm (100-250) Medium firm (250-500) 10 15 9 10 30 21 26 4 2 4 5 41 Move Secondment Large firm (> 500) 3 6 All 5 6 0.0 10.0 20.0 30.0 40.0 50.0 (Source )Walsh and Nagaoka [2009b] 12
Figure 7. Reasons for the change of employer Based on PATVAL-2 survey (Source)Nagaoka, Tsukada, Onishi and Nishimura (2012) 13
Table 2 Funding sources: share (%) of funding for the research by organization type Own(including Venture capital and Government User Supplier Other firms No. of sample debt) angels Japan USA Japan USA Japan USA Japan USA Japan USA Japan USA Japan USA Large firm 96.4 92.2 0.9 2.0 0.8 2.0 0.5 0.5 0.9 0.3 0.0 0.2 2,865 1,389 Mediumsized firm 94.3 86.6 0.9 5.1 3.2 4.0 0.8 0.0 0.8 0.0 0.0 0.0 198 74 Small firm 92.8 84.1 1.2 1.7 4.4 3.2 0.2 0.0 0.6 2.0 0.1 1.7 127 60 Smallest firm 85.6 70.0 2.9 3.1 3.9 3.9 0.5 1.3 2.7 1.7 0.7 16.5 176 216 University or college 44.1 40.4 26.1 40.6 0.8 1.0 3.5 0.0 15.1 8.7 0.0 2.8 79 42 Other 69.8 66.8 17.4 19.6 2.4 2.7 0.0 0.0 2.3 0.0 0.0 0.0 42 12 All 94.1 87.5 1.7 3.3 1.3 2.4 0.6 0.6 1.3 0.7 0.1 2.3 3,487 1,801 Note. Large firm has 501 or more employees, Medium-sized firm has 251-500 (250-500 in the US) employees, Small firm has 101-250 (100-249) employees, Smallest firm has 100 (99) or less employees (Source) Walsh and Nagaoka [2009a] 14
Conclusions Strengthen the absorptive capability for science Strengthen the collaborative capability across borders employment practices and language capability Startup system critical mass of the startup system 15
References Walsh John and Sadao Nagaoka [2009a], How open is innovation in the US and Japan? :evidence from the RIETI-Georgia Tech inventor survey, RIETI Discussion Papers, 09-E-022. Walsh P. John and Sadao Nagaoka [2009b], Who Invents?: Findings from the US-Japan Inventor Survey, RIETI Discussion Papers Series, 09-E-034. Nagaoka Sadao, Naotoshi Tsukada, Koichiro Onishi and Yoichiro Nishimura, 2012, Innovation process in Japan during 2000s as seen from inventors, RIETI Disucssion paper, Tsukada Naotoshi and Sadao Nagaoka, Combining knowledge and capabilities across borders and nationalities : Evidence from the inventions applied through PCT, forthcoming as a RIETI discussion paper 16