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The Minerva Report Revised 20200515 by Toru Kodama

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EU-Japan Centre for Industrial Cooperation Opportunities for venture firms, universities, and research institutes in the EU to conduct knowledge transfer with Japanese counterparts in nine digital technology areas Tokyo, March 2018 Minerva Fellow Toru Kodama Acknowledgements I would like to express my deepest gratitude to the EU-Japan Centre for Industrial Cooperation and Mr. Silviu Jora for giving me the precious opportunity to conduct this research work within the Minerva Research Fellowship program. March 2018 Toru Kodama 1 Executive Summary The purpose of this report is to show a map of opportunities for venture firms, universities and research institutes in the EU to conduct knowledge transfer with Japanese counterparts in nine digital technology areas: automated driving technology, cybersecurity, fintech (financial technology), blockchain technology, edtech (education technology), martech (marketing technology), game, IT for fashion business, and IT for art and music business. For this purpose, this report identifies several key factors to be taken into consideration, including technology development trends, relevant industry policies and social backgrounds, the technology areas to be targeted, potential Japanese counterparts, potential rivals, and business events through which to approach potential Japanese partners and investors. This report also provides several policy recommendations for policymakers in terms of facilitating knowledge transfer from EU entities to Japanese counterparts. 2 Contents Introduction・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P. 4 Section 1: Automated Driving Technology・・・・・・・・・・・・・・・・・ P. 6 Section 2: Cybersecurity・・・・・・・・・・・・・・・・・・・・・・・・ P. 43 Section 3: Fintech (Financial Technology)・・・・・・・・・・・・・・・・・ P. 61 Secretion 4: Blockchain Technology・・・・・・・・・・・・・・・・・・・・ P. 82 Section 5: Edtech (Education Technology)・・・・・・・・・・・・・・・・・ P. 110 Section 6: Martech (Marketing Technology)・・・・・・・・・・・・・・・・ P. 126 Section 7: Game・・・・・・・・・・・・・・・・・・・・・・・・・・・ P. 144 Section 8: IT for Fashion Business・・・・・・・・・・・・・・・・・・・・ P. 163 Section 9: IT for Art & Music Business・・・・・・・・・・・・・・・・・・ P. 169 Conclusion・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P. 176 Abbreviations AI Artificial Intelligence EUR Euro GBP Great Britain Pound IoT Internet of Things IT Information Technology JPY Japanese Yen METI Ministry of Economy, Trade and Industry (of the Japanese government) USD United States Dollar 3 Introduction The advancement of digital technologies is one of the most important forces for innovation. Innovation - the transformation of novel ideas into marketable products – can bring prosperity and economic growth. Innovation is a force causing major shift in the paradigms of daily life. All over the world, national leaders are looking to innovation and entrepreneurship to revive economies. Business leaders espouse innovation as the means of creating new revenues and shareholder value. Companies promote their capability to be innovative to attract customers and recruit high-quality employees. Academics conduct R&D to create innovation for society at large. This is why the creation of cutting-edge digital technologies is a matter of the utmost importance for industry, academia and government in Japan. At the same time, Japan has some weaknesses regarding its R&D capacity in IT. For example, according to a survey published by the Ministry of Economy, Trade and Industry (METI) of the Japanese government, Japan already suffered from a shortage of 170,000 experts in the general IT field in 2015, and will be suffering from a shortage of 790,000 experts in the general IT field in 2030.1 And, according to the same survey, Japan suffered from a shortage of 15,000 experts in the advanced IT fields of AI, IoT and big data in 2016, and Japan will be suffering from a shortage of 48,000 experts in those advanced IT fields in 2020. Key Japanese players in industry, academia and government are now attaching the vital importance to nurturing IT experts and upgrading their innovation capacity in a diverse range of digital economy fields. However, to continuously generate digital innovation, Japan needs knowledge transfer from other countries. In fact, there are many Japanese entities that are eager to invest in or ally with cutting-edge ventures, universities, and research institutes in other countries in diverse IT fields. The purpose of this report is to show a map of opportunities for venture firms, universities and research institutes in the EU to conduct knowledge transfer with Japanese counterparts in nine 1 METI, 2016, Study of Recent Trends and Future Estimates Concerning IT Human Resources (Japanese). Available at: http://www.meti.go.jp/press/2016/06/20160610002/20160610002.html. 4 digital technology areas: automated driving technology, cybersecurity, fintech (financial technology), blockchain technology, edtech (education technology), martech (marketing technology), game, IT for fashion business, and IT for art and music business. In order to create a “knowledge transfer opportunity map” in this regard, this report indicates information regarding the following points in each of the nine technology areas: • technology development trends in Japan; • examples of particular technology fields that can be targeted for knowledge transfer; • industry policies and/or social background relevant to the targeted technology; • examples of Japanese entities engaging in business and/or R&D in the targeted technology area (they can be a partner for or a rival against EU entities in that technology area); • examples of European entities that have already partnered with or are attracting or may attract attention from Japanese counterparts in the targeted technology area (they can be a rival against EU entities or may provide EU entities with bench mark information about corporate alliance in the targeted technology area); • examples of entities from other countries than the EU that have already partnered with or are attracting or may attract attention from Japanese counterparts in the targeted technology area (they can be a rival against EU entities or may provide EU entities with bench mark information about corporate alliance in the targeted technology area); and • examples of events and programs through which EU entities may approach possible Japanese counterparts. In terms of successfully conducting knowledge transfer with Japanese counterparts, it is of fundamental importance for EU entities to formulate and implement alliance strategies while taking all the above-mentioned factors into consideration. It is my hope that this report will prove useful to people in industry, academia and government in the EU who wish to promote knowledge transfer with Japanese counterparts in the nine digital technology fields. 5 1. Automated Driving Technology 1.1 The emergence of the concept of “vehicle-to-everything” Automated driving technology has emerged as a hot topic worldwide. Being a type of technology available to assist the driver so that elements of the driving task can be transferred to a computer system, and being an important component of Internet of Things (IoT), automated driving technology has “vehicle-to-everything (V2X)” communication as its core concept. Table 1.1 The concept of vehicle-to-everything The concept of vehicle-to-everything (V2X) communication consists of various elements, including vehicle-to-vehicle (V2V) communication, vehicle-to-infrastructure (V2I) communication, vehicle-to- pedestrian (V2P) communication, and vehicle-to-home (V2H) communication. For example, vehicle- to-vehicle communication will allow the permanent exchange of information on the position of all vehicles in proximity on the road and help with warnings to avoid crashes. Connectivity makes 'platooning' possible, i.e., a coupling of several vehicles within minimal distance of each other, so that they automatically and simultaneously accelerate or brake. Not only makers of vehicles or autoparts but also a wide array of IT companies are now competing as well as cooperating with each other, in order to take the lead in developing various elements of automated driving technology. Artificial intelligence (AI) is the most important element of automated driving, particularly because of its ability to recognize and handle the nearly infinite number of scenarios encountered on the road. Technologies for computer vision, predictive algorithms, decision algorithms, maps, sensors, actuators, simulation, and “vehicle-to-everything (V2X)” communication are also vital elements of automated driving.2 In addition, there are diverse technologies supporting R&D activities for the development of automated driving. Examples in this regard include virtual simulation technology for model based development (MBD). Furthermore, there are a wide range of technologies supporting a 2 For the brief information on the elements of automated driving, see the website of Toyota: http://automatedtoyota.com/elements-of-automated-driving/. 6 variety of commercial business relating to automated driving. Examples in this respect include technology for telematics insurance products and technology for real-time ridesharing. 1.2 The visions for “Society 5.0” and “Level 4” Around the world, public authorities in many countries have presented industry promotion visions and plans in support of the development and introduction of automated vehicles. Examples in this regard include the US government’s ITS Strategic Plan 2015-20193 as well as the initiatives taken by European governments such as the Roadmap on Automated Driving
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