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Fresh Approaches to Innovation and R&D: Japanese Companies Tapping into Europe's Expertise

The post-pandemic customer has become much more sustainability-oriented, leading to market shifts across a myriad of industries. Companies that once excelled in R&D and innovation now face unprecedented uncertainty due to complex customer needs and disruptive start-up technologies. In order to meet these demands, large companies are becoming more open to involving third parties in their innovation activities.

European countries are offering the best environment for R&D and Open-innovation, especially in the topics of sustainability and carbon neutrality thanks to their pool of diverse talent and systematic technology focused ecosystems. As the innovation landscape continues to globalize, it is critical for Japanese companies to take advantage of the European R&D and Innovation ecosystems to create new businesses and enter new markets.

According to the Japan External Trade Organization, 31 Japanese companies established their Innovation Hubs in Europe during 2022. These hubs aim to facilitate Japanese companies access the talent and technologies in the European ecosystem. Europe attracts large Japanese companies thanks to their diverse talent mobility, flexible innovation approach, collaboration synergies in similar industries, as well as governmental supports and incentives.

Europe’s development thrives thanks to its innovation mindset and large academic ecosystem. The start-up landscape in Europe is not solely centered around optimization of existing technology, but prioritizes in developing out-of-the-box new solutions. Start-ups in Europe focus on experimental technologies that are not yet commercially implemented, allowing Japanese companies to gain insight on the developments that will impact their innovation strategies. This future-oriented approach is driven by the large number of research universities that continuously work with start-ups and enterprises. The League of European Universities is a group containing some of Europe’s most renowned schools. Its research efforts are synergized with the innovation ecosystem, establishing a valuable dynamic. Japanese companies who have already integrated themselves in Europe are able to gain a head start on future tech compared to competitors only operating in Japan.

Europe also presents promise as a innovation destination for global enterprises thanks to its encouraging political legislations and incentives. The EU has a robust regulatory framework that minimizes confusion, allowing companies to conduct R&D efforts with clear goals. Cross-government cooperation is also demonstrating to be at an all time-high. According to the Japan Times, a recent agreement was made on data flows that will benefit cross-border information exchange between Europe and Japan. Moving forward, Japan looks to enter Horizon Europe, the EU innovation fund with a budget of over €95.5 billion. Its predecessor, Horizon 2020, saw 176 successful projects between the two markets.

Source: EU

The collaborative culture and "Monodzukuri" mindset of Europe and Japan, creates a strong synergy for partnerships and R&D between the countries. Current key players in the innovation ecosystem include nations like Switzerland, Germany, the UK and Nordic countries. While many large Japanese companies often hesitate to make the jump, a shift in collaboration philosophy has led to many success stories and many more companies making the switch. This is a trend we are also noticing with our clients at Trusted Corporation.

Japanese automotive company, Toyota Motor Corporation, coordinates many of its research and development ventures through a technical center located in Brussels, Belgium. Most recently, Japanese property development giant Tokyu Land and solar power company Renewable Japan have planned to invest 200 to 300 billion yen over the next five years to buy and develop renewable power stations across Europe.

Source: Toyota Technical Centre

After the COVID-19 pandemic, Japanese companies have sent dispatch teams to Europe in order to gather innovation and start-up trends. The problem with many of these efforts is that they are ordered without a clear strategy and distinguished objective.

The benefit of the European system lies specifically in being topic-driven, making it easy to test and develop experimental business models or technologies. It is crucial to establish a clear vision and strategy in order to maximize results involving the European innovation ecosystem.

At Trusted, our role is to act as your distinguished innovation team inside the European ecosystem. We help you create a strong plan to gain R&D advantages now for a successful future. Our network and experience allows us to match your objectives with the right talent and start-up technologies to create profitable businesses.

If you are a Japanese company that is interested co-creating solutions with the European ecosystem reach out to us at Author: Leonardo D'Amato


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