Open Innovation for Regaining SME Power in Japan
Prof.Kazuyuki Motohashi,The university of Tokyo

1st Article: Open innovation = Redefining Client Relations

Spread of the COVID-19 strikes a serious blow to economic activities. Aside from the direct impact caused by the stay-at-home request on the restaurant and retail businesses, various effects are beginning to appear due to the disruption of the global supply chain, such as parts not coming in or inability to ship parts out due to client factory shutdowns. The business environment for many small and medium enterprises (SMEs) is severe due to the uncertainty of whether economic activity can completely recover by the end of this year or whether activities will have to be balanced with the spread of infection on a long-term basis. Under these circumstances, many business owners would most likely feel that surviving this situation takes precedence over “Open Innovation”. However, this difficult situation may actually lead us to a better understanding of the significance of “Open Innovation”.

Most of the SMEs that are interested in J-GoodTech or those already registered on the platform operate a B to B business, and the essence of open innovation for technology-based SMEs is “redefining client relations”. Although the activity which creates value in client companies based on your own technology is “innovation”, but in order to achieve this, it is critical to engage in diverse "open" efforts, in addition to the fundamental “client relations”, such as cooperation with universities, public testing and research institutions, and maximizing cross-industry network. "Redefining client relationship" mentioned here means having a closed one-to-one relationship with the client and further creating an open relationship that is beneficial to both the company and the customer through engaging in diverse collaborations. Although for the business owners who seek gaining new clients on J-GoodTech, this may not sound anything new, but the act of taking advantage of various outside resources is indeed Open Innovation.

In the midst of waves that shake the industry structure such as economic globalization and catch-up of emerging countries, the development of the digital economy and the transformation of management systems, securing management adaptability through open innovation has become a requirement. This shift from "closed" to "open" is becoming more important as the outbreak of the COVID-19 increases uncertainty about the future. Due to the nature of SMEs having scarce management resources, it is even more necessary to approach sustainable business development through various collaborations. From the next article, we will focus on technology-based SMEs and I will explain it step by step on how to proceed with open innovation.

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