Innovation Network Corporation of Japan (INCJ) is a public-private investment fund that was established in July 2009 to create and nurture industries that will play a key role in increasing national wealth for future generations through open innovation across industries and organizations.
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.