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“Entrepreneur Engineering” with Japanese New Business Model

“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.

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“Entrepreneur Engineering” with Japanese New Business Model

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  1. “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

  2. Mission of US - JAPAN Competition & Collaboration Neuer Kombinationen Creative Destruction World Innovation

  3. COC Innovation Index3’99 Council on CompetitivenessThe New Challenge to America’s ProsperityFindings from the Innovation Index • 1995 USNo.1 • 1999JapanNo.1 US No.3 • 2005 Japan No.1 USNo.6

  4. Japan Committed to S&T 1981ERATO Up to date: 57 Projects Exploratory Research for Advanced Technology 1988NISTEPestablished National institute of Science & Technology Policy 1991 R&D Free Ride Criticism 1995S&T Basic Law S&T Basic Plan $126B $170B/5years (+35%) 1999 Millennium Projects IT, Environment, Bio etc.

  5. 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

  6. Japanese Economy 1980‘s Japan as No.1 1991 Bubble Broke Out <Long Depression> 1998 Big Bang-Japan 1999 “Venture Congress” Three Big Tide Behind Globalization 20 Years De-Regulation 20 IT Revolution 10 IMD’s National Competitive Power: 1st 16th R&D: 1st 2nd

  7. Venture Boom 1st 2nd 3rd USA: 1967~ 1978~ 1993~ INTEL Micro Soft Internet JAPAN: 1970~ 1982~ 1994~Now Get Out Fin.Ind.VC Gov. Policy Many Registrations

  8. Number of IPO per Year Image chart 1,000- USA 500- Japan Germany 1986 1990 1996 1999

  9. What You Know as a History Big Entrepreneurial Success SONY 1946 Ibuka/Morita HONDA 1948 Honda KYOCERA 1959 Inamori No Entrepreneurs to overcome them.

  10. Company “Establish” “Shut Down” Ratio Image chart 16% 13% 4.7% 4.6% 20%- Germany USA 10%- Japan 1982 1996 1999

  11. CEOs’ ages when they founded their firms '70-'74 (n=66) '75-'79 (n=51) '80-'84 (n=59) '85-'89 (n=75) '90-'94 (n=88) '95- (n=31) The 20s The 30s The 40s The 50s and over

  12. 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!!!

  13. The yearly number of start-ups IPO-oriented Others Polynomial approximation(IPO-oriented) Polynomial approximation(Others)

  14. Many Recent Success Stories Some are over $2 Billion Sales • HIS Travel 1980 1995 Sawada • NOVA English 1990 1996 Saruhashi • Hikari Com.Sales 1988 1996 Shigeta • Plaza Create Photo 1988 1994 Ohshima • Doutor Coffee Shop 1976 1993 Toba • Rakuten Network Shop 1988 2000? Mikitani • DegiQub Game Sales 1996 1999 Suzuki Very Few Tech. Oriented Entrepreneurs

  15. 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- 50 10~20 Years Behind USA

  16. Key Issue of Japan R&D Collaboration University Enterprise R&D Lab.

  17. STRATEGY VS KAIZENProf. M.Porter says: Japan has no Strategy. What To achieve New Old How To improve

  18. Large --> Silicon Valley Model Co. GE Portfolio Model Net Economy National--> Pan Euro Model EURO Money Japan Kaizen Model --> ? ?

  19. Manufacturing : JAPAN < USA JAPAN 1980’s USA 1990’s J I T + I T = SCM KANBAN TQC + I T = Six Sigma KAIZEN US Exceeded Japan in Manufacturing

  20. BOX Network Merchandise

  21. Manufacturing Business Model OLD NEW Device Box Device OS BOX STB, Portable Phone, Automobile, IC Card, etc

  22. Five-Circle Model Device Box Merchandise OS Network Manufacturing SONY E-Business

  23. Built in the Japanese Strength to Device O S 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.

  24. Value Chain Approach : US v.s JAPAN Japan USA AV1980’s Device Box Contents USA PC 1990’s $ Device OS Box Network Merchandise Japan Game 1995 Japan 2000 USA

  25. OS for Terminals Home: STB Automobile: ITS Navigation System Outdoor: Cell Phone Windows CE v.s. Non WINTEL

  26. From Professional IT Society to Personal IT Society Home Audio WALKMAN PC Cell Phone Cell Phone Banking, Shopping, E-mail

  27. 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

  28. “Network” Penetration Ratio % No.of Store per 100K persons Data: 1999 Japan Communication white Paper, etc.

  29. Three Layers Structureof 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 Future Angels 3 Internet Venture Young IT Elite Future Angels Soft Bank 1981 1999

  30. Dynamic Module Combination Device OS Box Network Merchandise Small Independent Organization is the Key.

  31. New Waves in Japan

  32. Characteristics oftheNew 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

  33. R&D Oriented Emerging Entrepreneurial Company in JAPAN Technology Co.Name CEO Found IPO Person $M Technical Specialty Mfg.Tech. INCS 49 ‘90 - 110 30 3D Speed Tooling SAMCO 57 ‘79 - 100 33 Thin Film Tech. System LSI Megachips 57 ‘90 ‘98 90 60 Game LSI Thine 51 ‘92 40 95 AV LSI Realvision 45 ‘96 40 10 3D Image LSI IT,NetworkI I J 52 ‘92 ‘99 270 300 Internet Provider Rakuten 35 ‘97 - 40 60 Network Mall Mag Mag 29 ‘97 - 10 5 Mail Magazine Future 44 ‘89 ‘99 150 40 System Integration Game Soft many companies

  34. Key Issue of JAPAN - New Combination - Independent Personality

  35. Japan is Ready to Compete / Collaborate with USA for Global Innovation

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