Japan New Economy Summit: How can Japan produce its own disruptive innovations?

Japan New Economy Summit: How can Japan produce its own disruptive innovations?

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This is part of our coverage of the Japan New Economy Summit happening in Tokyo. See previous updates here.

Panelists

Joichi Ito (Director, MIT Media Lab)
Akira Morikawa (CEO, LINE Corporation)
Yoshikazu Tanaka (Founder and CEO, GREE, Inc.)
Yukihiro “Matz” Matsumoto (Chairman, Ruby Association)
Masatoshi Kumagai (Founder&Group CEO, GMO Internet Group)

Moderator

  • Waichi Sekiguchi (Editorial Writer, Nikkei Inc.)

Comments below are paraphrased from the provided translations.

11:17 – On recent internet trends and changes – Joi: I want to start with the word innovation, because I think creativity is key as well. Japan was once strong and now it is greatly different. Everything was moving slow before and that’s when Japan was strong. … But after the internet, the rules that everyone was anticipated [changed everything]. When there is a concentrated control, Japan excels. But with the internet, this has changed.

11:21 – Joi speaking of agility, cites YouTube as an example. Most of the companies winning right now have changed their initial concept. So agility is key.

11:23 – Japan is known for craftmanship, but I think it’s important to have more robust plans in place, and if that’s the case, there are restrictions to how disruptive you can be. At MIT Lab, they have total freedom to study whatever they want without my approval. It’s not about profitablity or outcomes, because if you know this in advance, then it’s not disruptive. You maybe set the basic direction, but all the details you have to decide as you go.

11:27 – Mr Morikawa of Line speaking now.

11:28 – We have 140 million users, 45 million in Japan. Loved in over 230 countries. 15 million in Taiwan and Thailand, 10 million in Spain. We converted from a communication tool into a platform. We are creating an ecosystem with games, manga, and other contents.

11:31 – Japanese people love plans. But I thought it would be good to not announce our strategy. Japanese companies love to announce strategies. We don’t. People get concerned because we don’t have any plans, but from that vagueness we can create a tension that in order to survive we have to do something…

11:33 – Tanaka-san of GREE speaking now.

11:34 – Mr. Tanaka cites lessons learned from Mikitani-san in the early days.

11:37 – Regarding globalization, we are the fastest growing company in the San Francisco area, with about 2500 employees, and 40% not from Japan.

11:38 – Matz: Did I make a business model to create Ruby? No. I created it by myself. I had some spare time from work, and developed it. I thought it the documentation was in Japanese only Japanese could use it. I had an offer from an American who said he could write a book on it, and that’s how it got popular. I didn’t expect it to be a big hit. As Joi said, we can’t predict anything in the internet era. The speed of change is so fast, and is getting even faster.

11:40 – We saw how fast Line has grown. We are living in an era where it could take only one or two years to change the world. If you want to change the world, we should let these people move from the company working style, so we don’t impose an obstacle to those who want to change the world.

11:44 – Kumagai: At GMO internet we have 3200 employees, and 1000 engineers and creators. In 1995 we started our business and it has been 18 years since. Our domain name service, Onamae, is the biggest portion of our revenue. We also have shopping cart services, and media or internet advertising, as well as a net insurance business.

11:47 – It’s very low risk to fail. When Tanaka-san created GREE, VCs wanted to invest. They asked for a business plan, and he didn’t have one. He said, if you want to invest in me, you should write the business plan.

11:48 – For success on the internet, there are two important things: speed, and a willingness to take the risk. … I think we have a mid-level sort of scale in business, and we don’t have the rush to expand.

11:50 – Joi: Who drew pictures in kindergarden? [Lots of hands raised] Who draws pictures right now? [not many] When you become an adult, it’s really a minority of people who spend time creatively.

11:58 – Joi: In our lab, 50% of people are foreigners. Singapore is similar, in that it is very proactive in issuing visas to talented people. … In Japan, not only should we give visas, but we should offer something more attractive.

12:00 – Matz: Is it really necessary to have disrupted innovation from Japan? If we have innovation from Google that makes our lives better, isn’t that good? If we talk about globalization, why focus on having it from Japan. Is it loyalty?

12:03 – Matz: If I have to point out a difference between Japanese and American engineers, Japanese ones are paid much less. And that’s something I’d like to call into question.

12:07 – Morikawa: At Line we aren’t trying to innovate, but what’s important is to see how fast we can provide customers what they want.

12:10 – Joi: The companies that try to be innovative in Japan, don’t survive — the companies that try to succeed on a global scale survive.