Productive innovation ecosystems rely on universities generating strong ideas and human talents, industry engaging with academia in research collaboration and government setting conducive framework conditions, said speakers at the 2023 Switzerland-Japan Economic Forum in Tokyo. Before an audience of approximately 200 government, business, and academic leaders from the two countries, panellists also underlined the necessity for adequate public-private funding, in particular regarding inevitable transitions, such as climate change and the energy transition.
Key factors behind Switzerland as an innovation leader?
Opening the Forum, Dr. Andreas Baum, Ambassador of Switzerland to Japan, noted that 2024 marks the 160th anniversary of the establishment of diplomatic relations between Japan and Switzerland. To this day, a pioneering spirit, entrepreneurship and economic exchanges remain at the core of ties. On the topic of fostering innovation, he asked, “do we provide the right conditions and the right incentives for that individual to take a risk and pursue an unconventional idea, to make mistakes and learn from them, to openly collaborate in teams, and to actively reach out to other organizations?”
In her keynote, Prof. Dr. Martina Hirayama, the Swiss State Secretary for Education, Research and Innovation, gave insight into why Switzerland is recognized as an innovation leader in various rankings. Firstly, Switzerland is home to top universities providing strong research as a basis for innovation. The dual education system and the low density of regulation were also highlighted as contributing factors. Moreover, Switzerland’s pursuit of international openness, ensuring Swiss researchers and companies the opportunity to engage in global networks, is another “key factor for nurturing a thriving and successful innovation ecosystem” she said, adding “today’s forum represents an excellent opportunity for us ... to gain insights from best practices and to take away new and creative ideas”.
Framing the subsequent panel discussions, Prof. Mikołaj Jan Piskorski, Dean of Asia and Oceania at IMD, pointed out that, like Japan, where the economy has been built on the back of innovation, Switzerland is also a leader in this area. Referring to generative AI as a product of deep collaboration between universities and companies in California, he argued that for Switzerland and Japan to maintain their position and accelerate innovation amidst fierce competition, it is essential for their universities and companies to continue to cooperate.
Panel 1 - The innovation ecosystem created by academia and corporations
The first panel discussed about "Companies and Universities: How to capture value from innovation ecosystems?", with representatives from both sectors sharing successful collaborations in areas like healthcare and mobility. They also highlighted strategies for building effective platforms and allocating funds efficiently.
Ambitious research born out of Tokyo Institute of Technology’s ‘creative jungle’
Prof. Dr. Osamu Watanabe, Executive Vice President for Research at Tokyo Institute of Technology, shared how his university’s Open Innovation Platform, set up in 2018 to promote industry-government-academia collaboration, has led to a shift from individual joint research projects to collaborative research initiatives between organizations.
The platform, he said, creates and manages collaborative research clusters between universities and companies, involving people as diverse as executives, corporate planning managers, engineers and scientists.
In these new collaborations, the research management role of the “Universal Research Administrator (URA)” becomes crucial. “They work as a key person to recruit and search for appropriate professors and researchers from various departments to make the best team possible and run the collaborative research clusters”, he explained.
During the discussion, Prof. Dr. Watanabe compared the diversity and richness of university research to the Amazon jungle, with its variety, complexity, and endless new discoveries. “I sometimes say the university is like the Amazon jungle”, he said. “We have many creative researchers who are like creatures in the jungle. And we create new projects with something we find there.” He also spoke of his future hopes to create a university town, where “many startups and companies and ordinary people can come together to create something together”.
Focusing investment on Zurich University’s strengths
What is the role of universities in the Swiss ecosystem when it comes to driving innovation? Prof. Dr. Christian Schwarzenegger, Vice President, of the University of Zurich, shared his views.
Zurich accounts for 20% of Switzerland's GDP. Factors such as advanced industries, top-ranked universities, research institutes, think tanks, highly qualified human resources, living standards, transportation systems, and tax incentives make up the region's ecosystem.
The UZH Innovation Hub at the University of Zurich provides support from the early stages of research to its later stages. At an early stage, companies bring in businesses and research issues and get interactions with students, offering a creative environment and fruitful connections.
The university has adopted a focused approach to funding. It concentrates its resources on areas such as life science, biomedicine, digital society, and healthy longevity. It invests $150 million a year in life science. Prof. Dr. Schwarzenegger emphasized the importance of accumulating human resources and experts as well as facilities that can bring ideas into crucial phases, such as the genomics center and the translational research and development center at the university.
Prof. Dr. Schwarzenegger also introduced the collaboration with a Japanese oral healthcare manufacturer to develop sensor technology that identifies biological markers from breath and oral health, as well as research exploring the use of data held by mobility companies. During the discussion, he cited the benefits and concerns of generative AI, including the need for future regulation, and referred to the creation of international rules through the Hiroshima AI Process, which was agreed at the G7 Hiroshima Summit in May. The university is also involved in setting standards.
Talent, technology, and exploration – Sony's university collaboration objectives
Mr. Allan Sumiyama, Head of the Corporate Technology Strategy Division, Sony Group Corporation shared his view on the theme from a corporate perspective. He explained that his department seeks to expand innovation by acting as a bridge between internal and external research and development. He listed three objectives for promoting collaboration with universities: recruiting technology talent, strategically acquiring technology, and exploring new research areas.
One initiative he introduced was the Sony Research Award Program. The program provides funding to research institutions and promotes the development of innovative technologies through joint research. The program receives applications from over 100 top universities in the world.
“We work together with the professors and the students to gain knowledge while at the same time supporting their work. It’s a mutual partnership and I think it's doing quite well”, he said.
Mr. Sumiyama also introduced a project in collaboration with the Tokyo Institute of Technology on sensing technology that can monitor the entire earth. He emphasized that continued conversations with the institute have made the relationship functional.
Panel 2 - Objectives for government-company collaboration
The second panel discussed the topic of government-company collaborations to accelerate innovation ecosystems. Moderated by Ms. Kyoko Marumo Suzuki, Head of Science and Technology Office, Embassy of Switzerland in Japan, participants exchanged their views on the current state of government support and challenges faced by companies.
METI unveils new 'win in business' support measures
The first input talk by Mr. Tetsuya Tanaka, Deputy Director-General in charge of the Industrial Science, Technology and Environment Policy Bureau at the Ministry of Economy, Trade and Industry (METI), presented how the Japanese government is expanding initiatives aimed at supporting startups and innovation with increased budget as well as tax benefits.
For example, Japan is increasing the scale of investment by tenfold to 10 trillion yen as part of its "Startup Development Five-Year Plan" finalized in November 2022. To foster young innovators, there will be additional support for university spin-offs and higher R&D tax credit for companies that hire individuals with doctoral degrees.
While Japan has the highest number of international patent applications per 1bn yen of total private R&D expenditures, they are not yielding actual business. “Even if we win in technology, we tend to lose in business”, Mr. Tanaka explained. To counter this, the government is considering tax incentives for commercializing and industrializing intellectual property, and to expand support for government R&D projects that achieve desired results.
Public-private partnership cultivates a thriving ecosystem
The second input talk came from Mr. Raymond Cron, from the Switzerland Innovation Foundation. The CEO of the public-private partnership introduced Innovation Parks established in six locations around the country. As a platform for innovation, the Parks are supported by 60 research partners and have attracted over 400 resident companies not only from Switzerland but also from abroad such as Yokogawa Electric and FANUC from Japan.
The federal government is only involved in the coordination, as Parks are legally independent organizations that make bottom-up decisions. This has resulted in diverse and rapid development.
He cited three main reasons companies join Switzerland Innovation: the international research community at top-ranked universities such as ETH Zurich, the startup ecosystem, and the R&D activities of major companies such as Roche, Novartis, and Nestlé.
Keidanren calls for deregulation to boost startup growth
In response, Ms. Naoko Ogawa, Director of the Industrial Technology Bureau at the Japan Business Federation (Keidanren), remarked, "I'm envious to hear that there are innovation parks in each region of Switzerland. Keidanren also proposes building ecosystems centers around regional universities", alluding to the untapped potential in the "seeds" (early-stage technologies) that lie dormant in universities.
Directing her attention to government efforts, she appealed, "I wish the government would eliminate any regulations that might hinder the growth of startups, even slightly. We need to cultivate an environment where startups can grow without stress. If we can increase startups by tenfold in five years through collaboration among industry, academia, and government, it would be ideal".
Startups struggle through 'Valley of Death' in scaling up
Following up on her comments, Dr. Gianluca Ambrosetti of Synhelion stressed that in addition to such good framework conditions and ecosystems, financial support at the stage of scaling up innovation into a major business is critical.
The CEO and co-founder of the ETH Zurich spin-off producing fuel from solar energy started by saying “the innovation ecosystem in Switzerland is flawless“, stating there is sufficient support in the early stages of starting a company.
However, "to be economically competitive, we need a very large-scale factory, which demands substantial funding. We must bridge this gap”. Considering return-on-investment, early-stage funding may seem more attractive, but this entails greater risks, he said, and stressed that “to cross the 'valley of death', (start-ups) need resources".
Mr. Tanaka from METI acknowledged that startups in Japan are facing similar challenges. "In the initial stages, the government provides significant support, but as startups advance, they won't grow unless large corporations and investors participate. Especially for startups in the Green Transformation (GX) sector, the establishment of a market is a matter of life and death. But the involvement of the private sector is moderate, and the fact that it is so hard to build unicorns is a concern".
Investment in knowledge always pays the best interest
At the conclusion of the forum, Prof. Dr. Michael O. Hengartner, President of the ETH Board, highlighted recurring three key themes from the day's forum: talents, funding, and a good framework. These elements, he suggested, are crucial for fostering innovation.
“If you're looking to establish strong cooperation, to bring ideas into the industry, it is pivotal to ensure good economic boundary conditions and provide the necessary financial support. The industry is in dire need of talent, and it falls upon universities to cultivate this talent, ensuring that they find the appropriate platforms to excel."
Drawing a parallel with the profound impact of academia-industry-government collaboration, he brought the event to a poignant close by invoking the words of American luminary Benjamin Franklin: "An investment in knowledge always pays the best interest".
At the dinner reception following the Forum, Mr. Thomas Brodbeck, President of the Swiss Chamber of Commerce and Industry in Japan, spoke about the numerous similarities he has felt between the two countries during his four years in Japan.
He pointed out, "those similarities are a crucial element for joint projects and innovation". He further urged, "the high rankings of both countries regarding innovation should not be a sign to rest. Let’s stay ambitious, and together we can drive innovation and maintain our position in the forefront".