Lessons from Tokyo on How to Drive Innovation

Over the last three decades, Japan lost ground to rising tech economies in countries such as China and South Korea. But the country and its capital city are on track to come back.
Big companies tend to have rigid organization structures or monoculture, and that’s not good for revitalizing the corporations.

Many of the world’s most innovative brands — Honda, Sony, Fuji Xerox — call Tokyo home. But tech experts have long said the city’s tradition for innovation isn’t what it used to be, as disruptors from around the world, including many from cities in neighboring China and South Korea, have stolen the spotlight. That may be about to change.

For change to happen, though, people familiar with the Japanese tech scene say a key aspect of the country’s culture needs to change: aversion to failure. Start-ups in Silicon Valley and elsewhere have succeeded, in most cases, thanks to an approach that allows and actually welcomes failure on the path to innovation. Emerging product-design methodology, including Design Thinking, even includes failure as a step. “One of Silicon Valley’s strengths is its celebration of ‘noble failures’ as badges of accomplishment amongst its start-up culture members,” says Kevin Ready, an entrepreneur who has worked on projects for Tokyo-based companies such as Sony and Toshiba, and who contributes to Forbes. “In Japan, the dominant norm of corporate culture values low-risk, step-by-step improvement and predictability.”

Start-Up Spirit

The enterprising, risk-taking spirit born out of college classwork often doesn’t find a place in corporate culture. It’s a reality that isn’t unique to Tokyo or even Japan — and it’s one that corporations, including FedEx, are addressing. But finding ways to encourage and energize start-up-style thinking are taking shape in a unique respect there. What started in 2016 with young employees at Panasonic — and a group called One Panasonic — has since grown to about 1,200 people in 50 large companies, including Canon and Fuji Xerox in Tokyo.

The expanded group, called One Japan, aims to harness young professionals’ ideas and passions by connecting them within and across companies, with the hope of boosting innovation. “Big companies tend to have rigid organization structures or monoculture, and that’s not good for revitalizing the corporations,” Makoto Hamamatsu, founder of One Japan, recently told the Japan Times. “I want people to create an enterprising atmosphere rather than sensing the existing corporate culture and going along with it. I want to see more people take a step forward.”

Those connections are working, he says. “The biggest result we’ve achieved through the activities is elevating members’ motivation, and more people have started to take initiative.” He’s especially gratified to see it working at Panasonic, where he works in consumer electronics business development. “Some people told me that they were thinking about quitting the company but decided to remain, in the end, because of One Panasonic.”

Innovation Meets Purpose

Not all cultural norms in Japan, however, are at odds with the needs of innovation. Many Young Innovators are finding new meaning in a traditional Japanese business perspective: a sense of purpose in work. Foundational statements for many of the country’s companies, including Tokyo-based Mitsubishi, say that the purpose of business is to create not only financial value, but also societal value. Experts say that leveraging this long-built-in mindset may very well inspire younger generations of innovators, who tend to place an even higher priority on finding purpose than previous generations did. The idea is in line with learnings from the Economist Intelligence Unit, in a report sponsored by FedEx, that revealed that 70 percent of Young Innovators worldwide say social responsibility matters more today than it did five years ago, and two-thirds call it essential to the success of their business.

Poised for More

A CompareCamp analysis of the supply chain for Apple’s iPhone presents an interesting example of Tokyo’s — and all of Japan’s — role in innovative products. Of the 700 companies involved with manufacturing an iPhone, 349 come from China, followed by 139 from Japan and 90 from the United States. The ranking is enviable and encouraging for innovation across industries. And plenty of innovations are in the works. One comes from a robotics company based in Tokyo named Seven Dreamers, which recently debuted a robotic home appliance that will fold and sort laundry. Another, Usockets, has developed electronic supermarket price tags that connect with a centralized system to manage a store’s inventory and sales in real time. Even Panasonic is getting in on the action. One of the company’s latest innovations uses infrared signals to measure the nutrients of a meal in a mere 10 seconds — with an accuracy range of 20 percent.

   Entrepreneur, SME