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IP Support Institution for SMEs

Explore SME innovation policies, IP support institutions' roles, technology spillover strategies, and more focusing on SMEs' importance in business creation and competitiveness. Understand Japan's SME IP promotion policies and consult IP strategies with an innovative manual.

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IP Support Institution for SMEs

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  1. IP Support Institution for SMEs Kazuyuki Motohashi Professor, Department of Technology Management for Innovation, The University of Tokyo

  2. Outline of Lecture • Why do we need SME innovation policies? • Example of SME innovation policies • Role of IP support institutions in Japan

  3. Why SME innovation policy? SMEs as a source of new product and services Mostly large firms Half large firms A little large firms No competitor SMEs Time of entry Present Entry of large firms into market

  4. SME innovation in a context of developing economies • Innovation: a whole process of business creation based on some technological (or non technological) findings • Large multinationals + small local firms for high-tech sectors + small local firms for traditional industries : “how to promote competitive local companies?” • Strategy • How to promote innovation seeds in local companies? • How to facilitate technology spillover from multinationals? • How to capitalize on local innovation system? • How to foster innovation oriented business environment?

  5. Objectives of SME innovation policy Large firms: typically multinationals Government Funding Agency Universities and Public Research Institutions 1 1 3 2 Local small firms: subcontracting Local small firms in traditional industry 4 Business Environment, Framework Condition etc.

  6. How to promote innovation seeds in SMEs Japanese version of SBIR (Small Business Innovation Research) • Started in 1999 • Setting the target amount of R&D subsidy to SMEs • Inter-ministerial joint approach: 7 ministries in 2005 (ex. MEXT, METI etc.) • Other financial incentives • Low interest loan to SME’s innovation activities • Wider coverage of SME’s loan guarantee program Similar system in the world • US: pioneer • Korea, Taiwan • Philippines: SME loans and loan guarantee

  7. “Valley of Death” (OECD: based on NIST material) The Valley of Death Availability of Finance Basic Research Product Development Market Why SME innovation policy?

  8. Implementation of SBIR

  9. Technology spillover from multinationals? • FDI regulation: Growth by inward FDI, national strategy for industrial development (ex. China, Thailand, historically Japan) • Difference in industry (product architecture), for example, electronics (modular) vs automobile (integral) • Taiwan’s computer industry development: OEM -> ODM -> OBM • Being inside global supply chain is important. How to build indigenous capabilities? Potential role of IP

  10. SME IP Promotion Policies in Japan • Information dissemination and consulting services: JPO, INPIT, chamber of commerce, SMRJ (Organization of SMEs and Regional Innovation, Japan) • Reduction of patent application fees, free search service of prior arts: JPO and related institutions • Survey of best practices of SME IP management: SMRJ • Support to settling overseas IP infringement cases (JETRO)

  11. IP Consultation framework Business Strategy R&D Strategy • Use of IP information to evaluate a firm’s technological strength • Potential R&D partnership • Competitive analysis in market (SWOT) • Use of IP from business strategy viewpoints IP Strategy • Patent or trade secret • Re-evaluate existing patents • Use of patent map • Licensing • Dealing with infringement

  12. IP Consultation Flow What is your competitive advantage? Is this technological factor? It is brand (trademark) or channel, cost…….? NO YES Can you identify infringement? NO Know-how management YES Patent Strategy

  13. Structure of IP Consultation Manual (example by JPO) • Drafted by industry people, patent attorneys and business consultants • Case study bases (2-3 cases are developed annually • All contents are published and available via internet http://www.jpo.go.jp/cgi/link.cgi?url=/torikumi/chushou/manual_tizaikeiei.htm (only in Japanese)

  14. Conclusion • Innovation in SME becomes an important policy (even in developed countries) • IP management is an integral part of SME innovation (linchpin of business and R&D management) • IP supporting institution’s major role is consultation (depending on individual business needs) • It would be useful to have a manual for SME IP supporters

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