If I asked people who invented Pfizer's Covid vaccine, many would reply, "Pfizer of course." Actually , it wasa German startup called BioNTech. It's a prime example of  "open innovation," a trend Japan is missing out on.
           Whereas closed innovation refers to a company inventing everything in-house, open innovation refers to collaboration among companies.  Older, giant companies in any country tend to dismiss new ideas that seem at odds with their established business model. So, more and more of these giants see the need to partner with startup firms.
           Half of innovative new drugs developed by America's pharmaceutical giants these days are invented for them by biotech firms, or by a university-biotech partnership. In electronics, among 149 technologies that are subsectors of the information and communications technology (ICT) sector, the average number of patenting firms per technology was a stunning 219. The share of the top three inventing companies was low compared to industries where technological change is not as rapid.
           Not only are most of Japan's leading companies resistant to open innovation, but there are not enough startups to work with. One of the reasons is that, unlike in the US and Europe, few of Japan's star scientists and engineers leave their employers to start, or work for, a new firm. It is spinoff after spinoff created by such star scientists that created Silicon Valley. It is their absence in Japan that explains why the sales of Japanese electronics firms have fallen in an era when global sales are mushrooming.
           For details, see https://richardkatz.substack.com/p/restoring-japans-leadership-in-innovation

Richard Katz