INCJ, Ltd. was established in September 2018 via company split from Innovation Network Corporation of Japan (INCJ).
Innovation Network Corporation of Japan (INCJ) was established in July 2009 with the aim of overcoming boundaries between companies and industries, creating and nurturing key industries via open innovation for the prosperity of future generations. With the enforcement of the Act of Partial Revision of the Industrial Competitiveness Enhancement Act, the company began a new stage of activities as Japan Investment Corporation (JIC).
All shares of INCJ, Ltd. are owned by JIC, and as before enforcement of the Partial Revision, INCJ, Ltd. operates under the framework of the Industrial Competitiveness Enhancement Act with the conditions of the company split approved by the Ministry of Economy, Trade, and Industry (METI). With a fixed contribution from the government and a mandate to continue with investment activities until March 2025, INCJ, Ltd. is continuing the activities of INCJ, engaging in "Value Up" initiatives such as overseeing additional investments and milestone investments in portfolio companies as well as investment exit-related activities.
Why INCJ was Established
At the time of INCJ's founding, the Japanese economy was facing a variety of unprecedented changes on a global scale―economic multipolarization, diversification of values, evolution of IT and communication technologies, and the emergence of environmental issues,etc.―requiring a radical transformation of the industrial structure without being restricted by the existing industry and corporate boundaries.
Issues in Japan's Industrial Structure
Industries in Japan were facing the following structural issues:
1) Limitations of older industrial structures, such as pyramid or vertically-integrated types
2) "Wasted treasure" due to an over-protection of superior technologies, services, know-how, and/or an excessive focus on self-sufficiency
3) Regarding ways on how to respond to the need to consolidate manufacturing with marketing and services
4) Regarding ways on how to transform to a more open, loosely defined industrial structure
Public-private Investment Funds as a Catalyst
In order to overcome the challenges of Japan's industrial structure, there was a need to establish limited life-time organizations that would not only help promote the industrial policy visions, but would also be equipped to actively participate in its execution.
Risk-taking beyond the Private-sector Funds
At the same time, it was also considered necessary to create and accumulate functions and human resources to become the offerors of medium- and long-term risk money (equity investment) required to transform Japan's industrial structure.
In that context, INCJ was established as a limited-time public-private investment fund with risk-taking functions that would have been impossible with private-sector funds, aiming at resolving the structural issues of the Japanese industry.All business functions of Innovation Network Corporation of Japan (INCJ) were transferred to INCJ, Ltd. from September 2018.