Preferred Networks co-founder Daisuke Okanohara says his company’s artificial intelligence software enables the Human Support Robot to react to changes in its environment in unique ways.
Japanese companies were known in the 1980s and 1990s for making consumer tech products lighter and thinner, said Kenji Nonaka, senior partner with McKinsey. But then the market changed. “Super engineered” products were less in demand. Consumer-driven tech, with an emphasis on software, became more important, according to Nonaka.
“To be successful for that innovation, you have to be close to the customer, you have to have a sense of those customers’ needs. And Japan is very far from the United States and far, culturally, from China,” he said.
“In Japan, there is a very limited startup community,” Nonaka said. “Everyone wants to go to large enterprise[s].”
Experts also blame the innovation decline on Japan’s homogenous work culture, combined with a risk-averse financing system that has stifled creativity and innovation.
The different approach to investment is particularly significant. Angel investors are plentiful in the United States and China, for example, where there’s more of a willingness to bet on people and companies that are taking big risks and are likely to fail.
“When you’re going for new product innovation, the money and personnel that can be attracted in a short amount of time is amazing in the United States,” said Seijiro Takeshita, dean and professor at the University of Shizuoka’s School of Management and Information. But Japan is home to “a culture that frowns on failure,” he added. “At Japanese corporations, it’s more important not to fail than to succeed.”
Some signs of progress
“We need more diversity to think or adapt more new, radical ideas,” Okanohara said, adding that Preferred Networks wants to create an environment where “new ideas [can be] easily adopted and tried.”
Nonaka, of McKinsey, said Japanese startups also need to have global ambitions.
“Many startups have been very comfortable with succeeding in Japan. Japan’s not a small market, but it’s small compared to the US and China. They need to think of their growth in the US and China when they start their business,” he said.
Okanohara shrugged off being overlooked by Son, saying the Japanese tech environment “is very challenging.”
“Compared to places like China there aren’t many opportunities,” he added.
That kind of investment has enabled some important breakthroughs for the company — like its AI software. After all, the robot that Preferred Networks is powering with its technology was made by Toyota.
CNN’s Yoko Wakatsuki contributed to this report.