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Corporate Japan to launch a consortium to create new businesses

consortium to create new businesses

It is reported that a consortium called “InnovationTech Consortium” launches in Japan on April 15 2019. In this consortium, the member companies share and exchange information on technologies and know-hows that lead to new businesses.

Reportedly, more than 40 Japanese companies will participate in the consortium at first, which include Toyota, All Nippon Airways, Asahi Group, ITOCHU, Takeda Pharmaceutical, Sumitomo Mitsui Banking, and Dentsu, which are all Japanese leading companies. They expect 100 companies to join the consortium by 2020. Also, they will not prevent their competitors from joining the consortium.

In the consortium, a company shares a business model and/or technologies under consideration, and other companies having an interest in such a business model and technologies vote and evaluate them on a scale of one to three. They expects that such an activity creates an opportunity for them to collaborate.

By the way, reportedly they use an artificial intelligence (AI) based system developed by a startup company to evaluate such an evaluator’s judgement, in order to improve the evaluation of business models and technologies. Probably, this system is based on a technology described in the patent document of PCT/JP2017/004603.

Japanese companies have not been able to effectively use open innovation so far. (Please read a related article “Japan still a developing nation in open innovation“). Now they are going to try it on a scale of All-Japan.  

In my view, however, it is unlikely to work so easily and effectively. My current concerns are as follows:

Diversity

The consortium expects collaboration between different industries. That is a good idea. But, after all, it will be a place for only Japanese companies and only Japanese persons to exchange views about the shared business ideas. It’s about time to stop thinking about the idea of ​​All-Japan. Japanese companies need to overcome the language barrier to do so, first of all, though. In this respect, Rakuten, which declares English as the official languages in their office and multinational staff works together, could be a good model.

Confidentiality

The consortium may treat the exchanged information and discussion as confidential. However, more than 40 companies (100 companies by around 2020) will know the disclosed information or business ideas. That is, such ideas are open secrets. Also, competitors will not be prevented from participating in the consortium. Many of companies may hesitate to share their new business ideas of importance. As a result, this consortium may be a place where the companies share no great ideas and just attend for information gathering.

Intellectual Property

The consortium expects that a company shares a new idea, and then other companies evaluate and discuss it to improve the idea. Who will own such improved ideas? Some companies may take office the shared ideas, and intentionally or unintentionally improve the ideas to use for their business. A consortium agreement may stipulate the ownership of the idea which is created based on the shared idea. It may stipulate that the improved idea belongs to a company which shared an original idea for the improved idea, and other companies cannot use the improved idea without permission from the company having shared the original idea. In such a case, some companies may regard participation in the consortium as a risk. Because similar ideas may be created without accessing such a shared idea.

As mentioned above, this consortium sounds interesting, but it also seems to have some challenges. I would like to pay attention to how this consortium will be operated and what results it will achieve.

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