“Entrepreneur Engineering”
with
Japanese New Business Model
Nov.4, 1999
US-Japan TMC, Stanford
Noby MAEDA
Research Fellow, NISTEP, STA
Professor, Kochi University of Technology
Mission of
US - JAPAN
Competition & Collaboration
Neuer Kombinationen
Creative Destruction
World Innovation
COC Innovation Index
3’99 Council on Competitiveness
The New Challenge to America’s Prosperity
Findings from the Innovation Index
• 1995
• 1999
• 2005
US
No.1
Japan No.1
Japan No.1
US No.3
US No.6
Japan Committed to S&T
1981
ERATO
1988
NISTEP
Up to date: 57 Projects
Exploratory Research for Advanced Technology
established
National institute of Science & Technology Policy
1991
R&D Free Ride Criticism
1995
S&T Basic Law
S&T Basic Plan $126B $170B/5years (+35%)
1999
Millennium Projects
IT, Environment, Bio etc.
USA Enhancement of S&T
1980 Stevence-Wydler Technology Innovation Act
1980 Bayh-Dole Act
1982 SBIR
1985 Young Report :
Global Competition-The New Reality
1986 Federal Technology Transfer Act
1991 Council on Competitiveness
Japanese Economy
1980‘s Japan as No.1
Three Big Tide Behind
1991
Bubble Broke Out
<Long Depression>
1998
1999
Big Bang-Japan
“Venture Congress”
Globalization
20 Years
De-Regulation 20
IT Revolution
10
IMD’s National Competitive Power: 1st 16th
R&D: 1st 2nd
Venture Boom
1st
USA: 1967~
INTEL
JAPAN: 1970~
Get Out
2nd
3rd
1978~
1993~
Micro Soft
Internet
1982~
Fin.Ind.VC
1994~Now
Gov. Policy
Many Registrations
Number of IPO per Year
Image chart
1,000-
USA
500Japan
Germany
1986
1990
1996
1999
What You Know as a History
Big Entrepreneurial Success
SONY
1946 Ibuka/Morita
HONDA
1948 Honda
KYOCERA 1959 Inamori
No Entrepreneurs to overcome them.
Company “Establish” “Shut Down” Ratio
Image chart
20%-
Germany
USA
16%
13%
10%Japan
4.7%
4.6%
1982
1996
1999
CEOs’ ages
when they founded their firms
'70-'74
70～74年
(n=66)
(66)
31.8%
Founding year
75～79年
'75-'79
(n=51)
(51)
23.5%
80～84年
'80-'84
(59)
(n=59)
8.5%
85～89年
'85-'89
(75)
(n=75)
10.7%
25.8%
47.1%
3.0%
23.5%
55.9%
5.9%
32.2%
36.0%
36.0%
3.4%
17.3%
The 20s
20代
The 30s
30代
40代
The 40s
50代以上
The 50s
and over
90～94年
'90-'94
(88)
(n=88)
95～
'95(31)
(n=31)
39.4%
12.5%
6.5%
0%
34.1%
34.1%
32.3%
10%
20%
19.3%
29.0%
30%
40%
50%
32.3%
60%
Age of founders
70%
80%
90%
100%
What You See Today
•
•
•
•
•
•
•
USA
JAPAN
IPO Ave. Year
5~6
29 Year
No. of IPO/Year
500
100 Co.
Equity % of Founder at IPO 4
70%
New Employ’t by SME/Y 1,500
90K
Univ. of Entre. Lecture 500
50
Co.Establish, Shut Down 16/13 4.6/4.7%
VC Support
Hands on Loan
Recent Development is different!!!
The yearly number of start-ups
25
20
IPO志向
IPO-oriented
Others
以外
Polynomial
approximation(IPO-oriented)
多項式 (IPO志向)
Polynomial
approximation(Others)
多項式 (以外)
15
10
5
0
14 17 20 23 26 29 32 35 38 41 44 47 50 53 56 59 62 65 68 71 74 77 80 83 86 89 92 95
Many Recent Success Stories
Some are over $2 Billion Sales
•
•
•
•
•
•
•
HIS
Travel
1980
NOVA
English
1990
Hikari
Com.Sales
1988
Plaza Create Photo
1988
Doutor
Coffee Shop 1976
Rakuten Network Shop 1988
DegiQub
Game Sales
1996
1995
Sawada
1996
Saruhashi
1996
Shigeta
1994
Ohshima
1993
Toba
2000?
Mikitani
1999
Suzuki
Very Few Tech. Oriented Entrepreneurs
Supporting Policy/Registration
US
JAPAN
V C Co.
1946
1972
- 26
SBIC
1958
1963
-5
Bayh-Dole Law
1980
1999
- 19
SBIR
1983
1998
- 15
Stock Option
1995
Angel Tax
1997
TLO
1940~
1999
10~20 Years Behind USA
- 50
Key Issue of Japan
R&D Collaboration
University
Enterprise
R&D Lab.
STRATEGY
VS KAIZEN
Prof. M.Porter says: Japan has no Strategy.
•
What
To achieve
How
To improve
New
Old
BUSINESS MODEL
OLD
US
Large→
--> Silicon
Silicon Valley
Model
Large
Ｖａｌｌｅｙ
Ｍｏｄｅｌ
Co.
Co.
EUROPE
Ｊａｐａｎ
Japan
NEW
GE Portfolio Model
GE PortfolioＭｏｄｅｌ
Ｎａｔｉｏｎａｌ →Pan
PanEuro
Euro Model
Model
National-->
Ｋａｉｚｅｎ
→--> ？
KaizenＭｏｄｅｌ
Model
?
Keyword
Net Economy
Net Economy
EURO Money
Ｍｏｎｅｙ
？
?
Manufacturing : JAPAN < USA
JAPAN 1980’s
JIT
USA 1990’s
+ IT
=
SCM
+ IT
=
Six Sigma
KANBAN
TQC
KAIZEN
US Exceeded Japan in Manufacturing
SONY`s
NEW BUSINESS
DOMAIN
Digital
Analog
Contents
Distribution
Digital
Service
Music,Movie
Game,Map
etc.
BOX
Network
Merchandise
Manufacturing Business Model
OLD
Device
NEW
Box
Device
OS
BOX
STB, Portable Phone,
Automobile, IC Card, etc
Five-Circle Model
Device
Box
OS
Manufacturing
Merchandise
Network
SONY
E-Business
Built in the Japanese Strength to
Device
OS
Box
Network
Merchandise
$
Ultra Small Motor,Bearing
KANAGATA/Mold
System LSI
Battery
Level up to IT Environment
to keep influence to the Network,
where $$$ comes in the New Age.
Value Chain Approach : US v.s JAPAN
AV1980’s
Japan
Device
USA
Box
Contents
USA
PC 1990’s
$
Device
OS
Box
Network
Merchandise
Japan
Game 1995
Japan
2000
USA
OS for Terminals
Home:
STB
Automobile: ITS Navigation System
Outdoor:
Cell Phone
Windows CE
v.s. Non WINTEL
From Professional IT Society
to Personal IT Society
Home Audio
WALKMAN
PC
Cell Phone
Cell Phone Banking, Shopping, E-mail
Other Key Factors
for
Network Economy Penetration
Japanese Advantages
1. Clever Portable Phone Terminal
2. Physical Portal : 24h Convenience Store
3. Express Distribution Service to Home
Highly IT Armed Seven-Eleven, Yamato Express
“Network” Penetration Ratio
%
80
70
60
50
40
Japan
30
US
20
I School
Internet
PC
CATV
Conbini
Car Navi
CS/BS
0
Cell Phone
10
No.of Store per 100K persons
Data: 1999 Japan Communication white Paper, etc.
Three Layers Structure of Japan
1980`s
1990`s
2000`s
2010`s
2020`s
1
High Guts Elite
Service Venture
Angels
2
Tech New Wave
High Tech Elite
3
Soft Bank
Young IT Elite
Future Angels
Internet Venture
1981
1999
Future Angels
Dynamic　Module　Combination
Dynamic Module Combination
Device　Box　Merchandise
Device
OS
Box Network Merchandise
OS　Network
University
Start up co.
Foreign co.
Large co.
Small Independent Organization is the Key.
New　Waves　in　Ｊａｐａｎ
New Waves in Japan
Technology Oriented Entrepreneur
Company Founded Founder
Business
Joint work with:
• IIJ
‘98
Suzuki
B to B Network
SONY, Toyota
•
•
INCS
Yozan
‘90
‘90
Yamada
Takatori
Mold Tooling
LSI
HONDA
NTT
•
•
•
Future
‘89
Mega Chips ‘90
Thein
‘92
Kanamaru
Shindo
Iizuka
System Design
System LSI
System LSI
Seven Eleven
Nintendo
AV Makers
• Synthesis ‘98
• Kyouden ‘83
Yoshida
System LSI
Hashimoto Print Board
Sumitomo Denko
AV Makers
Utilize Big Companies as a Equal Partner.
Characteristics of the New Waver
•
•
•
•
•
•
•
Blue Chip’s Elite Engineer
Started with Age 40’s
USA Univ. or Business Experience
Global Mind and Action
IPO or M&A Exit Strategy
Keep as a CEO, but not to their kids
Future Angel
R&D Oriented Emerging Entrepreneurial Company in JAPAN
Technology
Co.Name
CEO Found IPO Person $M
Mfg.Tech.
INCS
49
SAMCO
57 ‘79 -
‘90 - 110
3D Speed Tooling
100 33 Thin Film Tech.
System LSI Megachips 57 ‘90 ‘98 90
60
Game LSI
51 ‘92
40
95 AV LSI
Realvision 45 ‘96
40
10
Thine
IT,Network I I J
Game Soft
30
Technical Specialty
3D Image LSI
52 ‘92 ‘99 270 300 Internet Provider
Rakuten
35 ‘97 -
40
Mag Mag
29 ‘97
10
Future
44 ‘89 ‘99 150
-
60 Network Mall
5
Mail Magazine
40 System Integration
many companies
Key Issue of JAPAN
- New Combination
- Independent Personality
Japan is Ready
to Compete / Collaborate
with USA
for Global Innovation