Innovation and Cluster Policy in Japan - · PDF fileInnovation and Cluster Policy in Japan...

Innovation and Cluster Policyin Japan

Yuko HARAYAMA

Tohoku University

[email protected]

13/11/2008 Competitiveness Clusters Forum 2

Facts• “Innovation” & “Cluster” becoming key policy issue

– US, European countries, Asian countries, …• Innovation hotspots, InnoRegio, VINNVÄXT, Pôles de

compétitivité, European Cluster Alliance, …• JAPAN is no exception!

– Convergence (globalization oblige!) or isomorphism?• “Cluster policy” in Japan

– Into practice since 2001– Two approaches

• Ministry of Economy, Trade & Industry (METI) & Ministry of Education, Culture, Sport, S&T (MEXT)

• Complement, in competition, toward coordination or integration?

– Accumulation of experiences on the ground!– Policy learning?


Science & Technology Policy


Policy Framework for S&T• Science & Technology Policy

– The S&T Basic Law (1995)• Background

– Economic recession ⇒ To legitimate investment in R&D– Government’s agenda: “Nation based on the creation of S&T”

• Implication– Toward a “National Policy”!

– The S&T Basic Plans (5-year)• 1st BP(96-00), 2nd BP (01-05) , 3rd BP (06-10), & 4th BP( )

Cluster Policies initiated & implemented by

•Ministry of Economy, Trade & Industry (METI): 2001-•Ministry of Education, Culture, Sport, S&T (MEXT): 2002-

Innovation Policy initiated by•Council for S&T Policy (CSTP)

Implemented by•MEXT, METI, ・・・

Strategy for Regional S&T initiated by•CSTP

Relation?


What is a “Basic Plan”?• “Basic Plan” express

– Government’s vision of S&T– Priority Setting in S&T– Strategies to promote S&T– Total budget for 5 coming years

• “Basic Plan” implies– Implementation of S&T related policies– Budget allocation– System reforms in S&T

http://www8.cao.go.jp/cstp/english/basic/index.html


3rd Basic Plan• Evolving scope and use of S&T

• Toward Innovation• Contributing to Regional development and Society• Promoting cooperation with Asian countries

• Total budget– 25 trillion yen (≈ 150 billion €)

– 1st BP: 17 trillion yen (≈ 102 billion €)– 2nd BP: 24 trillion yen (≈ 144 billion €)

Innovation 25Projects for accelerating the transfer to society

Science & Technology DiplomacyStrategy for Regional S&T

Beyond the scope of S&T?


Innovation 25• Former Prime Minister Abe’s vision (2006)

– “Innovation” and “Openness”

– Innovation 25 Strategy Council (Cabinet Office)

• Long Term Strategic Guidelines “Innovation 25”– Adopted at a Cabinet meeting (June 2007)

– Policy roadmap towards Japan based on innovation• Strategies for social system reform

• Roadmap for technology innovation strategies

• Institutional reform, including inter-ministry cooperation


“Projects for Accelerating the Transfer to Society” (CSTP)

• Characteristics of “Projects for Acceleratingthe Transfer to Society”– Interdisciplinary approach– Public-Private cooperation– Inter-ministry approach– Embedded system reform

• Projects aiming for:– “A society where all can stay healthy throughout life”– “A safe and secured society”– “A society with diversified lifestyles”– “A society contributing to resolve the global issues”– “A society open to the world”


Cluster Policy


In the Past…• Constitution of industrial agglomerations in the Pacific Belt Zone

(After WWII)• Comprehensive National Development Plan (since 1962)

�Ministry of Land, Infrastructure, Transport and Tourism: MLIT– Balanced development (60th)– Decentralization + Habitat(70th)– Formation of Network(mid-80th)– Four National Axial Zonespromoting international interactions (00th)

• High-tech Industrial Zone Promotion Act : TechnopolisAct (1983-1998)

� MLIT , METI, Ministry of Agriculture, Forestry and Fisheries: MAFF

• Knowledge-Intensive Industry LocationAct (1988-1998)� MLIT , METI, Ministry of Agriculture, Forestry and Fisheries: MAFF

• Law for Facilitating the Creation of New Business (1998-2005)� METI

– Formation of Regional Platforms• SMEs’ New Business Activity Promotion Law (2005)

� METI


Genesis of “Cluster Policy”• Ground broken by

– National land development policy– Regional economic development policy– Industrial policy– SME policy

• Increasing interest in (knowledge based economy & Globalization obligent!)– Science & Technology– Innovation, in particular Open Innovation– Economic Competitiveness

Industrial Cluster ProgramKnowledge Cluster InitiativeStrategy for Regional S&T


Information Source• METI

– http://www.cluster.gr.jp/relation/data/brochure_e.html

– http://www.rieti.go.jp/users/cluster-seminar/pdf/023_e.pdf

• MEXT– http://www.mext.go.jp/a_menu/kagaku/chiiki/cl

uster/h20_pamphlet_e.htm– http://www.rieti.go.jp/users/cluster-

seminar/pdf/027_e.pdf


METI versus MEXT (1)METI MEXT

“Region” National territory divided into 9 blocks (METI regional bureaus)

Localities (local authorities)

Target •Developing innovationfriendly business environment

•New business↑

Forming regional cluster:•World-class innovative clusters

•Medium-size clusters (City area program)

Design METI’s regional bureaus’ vision

→ Proposal for Industrial clusterprogram

Local government’s cluster vision

→Proposal for the Knowledgecluster initiative

Approach •Networking & Promoting collaboration (cross-sectoral & University-Industry-Government)

•Implementing incubators

•Exploiting regional resources

•Conducing joint research

•Promoting business development

•Promoting cross-regional collaboration (expansion program)


METI versus MEXT (2)METI MEXT

Phase I Launch (2001-2005)

•Formation & Expansion of Networks

•On-the-ground experience of different schemes

Launch (2002-)

•Preparation (2001)Conceptualization of “Cluster” & Identification of regions for feasibility study (→30 regions)

Feasibility study lead by local authorities

•Inducing local initiative

Phase II Development (2006-2010)

•Promotion of product commercialization & self-sustaining networks

•On-the-ground experience of different schemes

World class clusters (2007-)

•More selective

•Local authorities’ enrollment↑Matching-fund

•Inducing synergy with other initiatives

•Global dimension

Phase III Growth (2011-2020) ?

15

REGEIONAL REVITALIZING PROJECTTAMA AND OTHERS

BIO VENTURE SUPPORT PROJECTIT VENTUER SUPPORT PROJECT

IT, BT MANUFACTURING PROJECT / RECYCLING INDUSTRIAL PROJECT

18 Projects

Networkof 5800 Companies & 220 Universities

KINKI BIOINDUSTRY PROJECTMANUFUCTURING-SUPPORT PROJECTIT CLUSTERKINKI ENERGY PROJECT

SHIKOKU TECHNO-BRIDGE PLAN BIO

KYUSHU RECYCLING PLAZA /KYUSHU SILICON CLUSTER

CHUGOKU MANUFACTURING PROJECTRECYCLING INDUSTRY PROJECT

OKINAWA INDUSTRY SUPPORT PROJECT

HOKURIKU FANUFACTUR-ING PROJECT

TOKAI MANUFACTURING PROJECT / IT, BIO

Industrial Cluster Phase I

HOKKAIDO SUPER CLUSTER

IT, BIO

Source: METI

Source: METI

17

Sapporo [ IT ]

Hamamatsu [ IT, Life Sciences]

Kyoto[Nanotech/ Materials]

Keihanna [IT, Life Sciences, Environment]

Kobe [Life Sciences]

Hiroshima[Life Sciences]

Takamatsu [Life Sciences]Kitakyushu [IT, Env’ t]

Fukuoka [ IT ]

Knowledge Cluster Initiative Phase IKnowledge Cluster Initiative Phase IKnowledge Cluster Initiative Phase IKnowledge Cluster Initiative Phase I

Osaka [Life Sciences]Kansai Wide Area ClusterKansai Wide Area Cluster

Kyushu Wide Area ClusterKyushu Wide Area Cluster

Sendai [ IT ]

Toyama-Takaoka [Life Sciences, Nanotech/ Materials, IT]

Nagoya [Nanotech/ Materials Environment]

Tokushima [Life Sciences]

Kanazawa [Life Sciences]

Gifu-Ogaki [Life Sciences]

Ube [Life Sciences]

12Cluster(Started in 2002, end)

3Cluster(Started in 2003, end)

3Cluster(Started in 2004)

１８１８１８１８ clusters１８１８１８１８ clusters

Nagano-Ueda[Nanotech/ Materials]

Source: MEXT

18

Hokkaido Area （With Sapporo as the core）[Life Sciences,IT ]

Hamamatsu[Life Sciences,IT, Nanotech/ Materials]

KANSAI （Saito & Kobe）

[Life Sciences]

Fukuoka Kitakyushu Iizuka[ IT ]

Knowledge Cluster Initiative Phase IIKnowledge Cluster Initiative Phase IIKnowledge Cluster Initiative Phase IIKnowledge Cluster Initiative Phase II

Greater Sendai Area[Life Sciences,IT ]

6Cluster(Started in 2007)９９９９ clusters９９９９９９９９ clustersclusters

Nagano Prefecture region[Nanotech/ Materials]

Tokai Greater Area[Nanotech/Materials, Environment]

Kyoto and Keihanna [Nanotech/Materials, Environment]

Toyama / Ishikawa[Life Sciences]

3Cluster(Started in 2008)

Source: MEXT

CENTRAL IWATE-KAMAISHI (07)

[Nanotech/Materials]

CENTRAL SAITAMA(07)[Life Sciences]

YOKOHAMA MIDLAND (07)[Manufacturing]

CENTRAL OSAKA (07)[Nanotech/Materials]

KORIYAMA(06)[Life Sciences]

CHIBA-TOKATSU (08)[Life Sciences]

KANAGAWA EAST COAST (06)[Env’t /Nanotech/Materials]

TONO WAST(08)[Manufacturing]

NAGAOKA (07)[Nanotech/Materials]

THE FOOT OF MT. FUJI (07)[Life Sciences]

WAKAYAMA NORTH(07)

[Nanotech/Materials]

CENTRAL AKITA (07)[Life Sciences]

YAMANASHI KUNINAKA(06)[Environment, Energy]

KURUME (06)[Life Sciences]

ONODA-SHIMONOSEKI (06)[Nanotech/Materials]

YONAGO-SAKAIMINATO (06)

[Life Sciences]

LAKE BIWASOUTH (07)

[Life Sciences]

CENTRAL FUKUI(06) [Nanotech/Materials]

HAKODATE (06)[Life Sciences]

HIROSAKI (07)[Life Sciences]

THE YONESHIRORIVER BASIN(06)

[Environment]

5 areas (Started in 2007)4 areas (Started in 2008)

5 areas (Started in 2006)Basic Stage : 14 areas

FUKUI WAKASA(08)[Energy, Env’t]

MUTSU-OGAWARA HATHINOHE(08)[IT]

MIYAZAKI COAST (08)[Life Sciences]

OKINAWA COAST(08)[Life Sciences]

MIE-ISE BAY (08)[Nanotech/Materials]

KANSAI SCIENCE CITY(08)[Life Sciences,IT]

HIROSHIMA AREA(08)[Life Sciences/ Manufacturing]

TAKAMATSU (08)[Life Sciences]

NAGASAKI (08)[Life Sciences]

City Area ProgramCity Area ProgramCity Area ProgramCity Area Program＜＜＜＜30areas (except end 50 areas)30areas (except end 50 areas)30areas (except end 50 areas)30areas (except end 50 areas)＞＞＞＞

Development Stage : 16 areas5 areas (Started in 2007)7 areas (Started in 2008)

4 areas (Started in 2006)

19Source: MEXT


Strategy for Regional S&T (1)

• Rational– 3rd Basic Plan & Innovation 25

→To promote Regional S&T

– To empower innovation capacity of regions→Through Regional S&T

• CSTP’s view– Key actor = Region– To guarantee the diversity and identity of regions– Globally acting clusters and regionally oriented cluster

in symbiosis→ Ecosystem


Strategy for Regional S&T (2)

• Key issues to be tackled– Against the phenomenon of hollowing out of the labor

force• Vis-a-vis metropolitan areas

– Empowerment of local governments’ capacity to design their own policy

– Structural reform to support innovative regions• Deregulation, tax system reform, etc.

– Management of regional assets

– Local universities’ contribution in regional development

Policy Coordination (1)• Decentralized coordination

– Joint actions initiated by METI & MEXT’s heads of cluster policy

• Top-down coordination– CSTP’s initiative (2005-2008)

→ “Group of Coordinated S&T Policies”

• Horizontal coordination– Initiative of METI & MEXT → Joint Preparation

Committee (2008/11-)

→ “Centers of Industry-University-Government Collaboration” forthcoming?


Policy Coordination (2)

• On-the-ground joint actions– Through “Committee for Regional Cluster

Promotion”, “Joint Conferences to Discuss Projects Results,” etc.

– Preliminary discussion to prepare the budget– Shared objective

• To exploit the complementarity between et “Industrial Cluster program” and “Knowledge Cluster Initiative”


Policy Coordination (3)• Group of Coordinated S&T Policies (CSTP)

– Compartmented central administration

�Duplication, Competition, Conflict among Ministries & Agencies

– Need for a coordination of S&T policies• 8 themes selected

� Among them, Regional Clusters

– Means• Liaison Meetings & Coordinator



Policy Coordination (4)• Group of Coordinated S&T Policies (cont’d)

– “Regional Clusters”• Participants

– Cabinet Office, Ministry of Internal Affairs and Communications,Ministry of Health, Labour and Welfare, Ministry of Agriculture,Forestry and Fisheries, Ministry of Land, Infrastructure and Transport, Ministry of the Environment

• Information sharing via “Portal Site”– Under the responsibility of the Ministry of Internal Affairs and

Communications

• “Liaison Meetings” among representatives of related ministries

• “Supporting Meetings” at the regional level

(http://www.chiiki.go.jp/)

Global Dimension• Region’s Initiatives

– Direct contacts, Through matching events, Visitors from abroad, etc.

• Knowledge Cluster Initiative Phase II– Expansion Program

• Japan External Trade Organization’s Role– Services provided

• Invest Japan Business Support Centers

• Regional Information

• Industrial Cluster, Local companies, etc.

– Supporting Programs• Local-to-Local Project (1996-2006)

• Regional Industry Tie-Up Program (2006-)


Key to success:•Link with region’s development policy•Involvement of active companies•Taking advantage of industry-university-government networks•Sufficient communication•Long term perspective

Source: Survey on success factors for international partnership in industrial cluster, JETRO


Lesson From the Japanese Case

1.00

1.09 1.15

1.23

0.85 0.93

1.01

1.02

0.8

1.0

1.2

1.4

2000 2001 2002 2003 2004 2005 2006

0.960.84

0.86

Leading medium-sized firms and SMEs participating in clusters

Nationwide trend (among companies with capital of \1 billion or less)

Sales: 22% increase

1.01

1.00 1.02

0.980.980.980.99

0.870.85

0.87

0.91

0.940.96

0.8

0.9

1.0

1.1

2000 2001 2002 2003 2004 2005 2006

1.00



0.95

Achievements of Industrial Cluster ProgramsAchievements of Industrial Cluster Programs

・・・・Degree of satisfaction: 62.4%・・・・Degree of expectation: 73.9%

・・・・Wide-range cooperation or cooperation with businesses or research institutes: 29.9%

・・・・Launches of new products or services: 21.0%

Participating university ventures: 425 (1590 in total)

IPO companies among them: 13 (19 in total)

Result of monitoring survey (2007)Result of monitoring survey (2007)

University ventures (2006)University ventures (2006)

Total budget of \7.5 billion (2001-2007) contributing to total sales of about \40 billion

[ 2007 annual performance ]

・・・・Participants at business confab events: 165,000 persons

・・・・Individual business meetings: 14,300

・・・・Company visits and researcher visits: 65,000

・・・・R&D budget adopted at industrial cluster-related businesses: \12.9 billion

・・・・E-mail publication subscribers: 73,000

・・・・Access to websites: 5.7 million hits (5,800 hits per support organization)

Approximately five times thecost-benefit performance!

Successful cases/technology transfer: 2,219 cases

６６６６

1.00

0.67

0.88

1.221.47

1.66 1.87

0.480.31

0.74

1.08

1.301.27

0.0

0.4

0.8

1.2

1.6

2.0

2000 2001 2002 2003 2004 2005 2006



Net income: 47% increase

Number of employees: 6% increase

Source: METI

What has changed after 8-year experience?

• Learning effects– Ability to self-evaluate, to project in the future, to formulate a

vision, to exploit external resources, etc.� Institutionnal, political, & cultural barriers↓

• Effect on the human ressources– New professions (technology transfer, Intellectual property

management, Venture capital, Incubator, Coaching, Coordination, etc.

� Professionnalisme↑• Increased visibility

– New structures or institutions � Fonctionning ↑– Switchboard companies, or those acting as an incubator

� Emergence of the 2nd generation– Key players � Capacity to evolve ↑


Difference among regions!

Exit Strategy• The aim of Cluster Policy

– Supporting regions to become “cluster”

– Industrial agglomeration• To become a “Center of Excellence” in a specific industrial sector

– Or/and Innovation hub• To equip region with capacity to generate new ideas, incubate, design,

& translate them in terms of business model

– Or/and Innovation eco-system• To become a self-evolving region through learning process

• Fundamental– Region’s vision & engagement!

• Need for a candid dialogue between “policy maker” and “region” to find out an exit strategy!


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