Research Programs

JFIT supports, conducts and connects ongoing research on Japan’s current business, economy, society, politics and political economy. Our approach is interdisciplinary, multifaceted and associates are well-known for their original, timely, rigorous and policy-relevant research. In addition to the individual work done by our associated scholars, the JFIT research agenda can be categorized into four main areas.

Innovation and Corporate Strategy

“Open innovation” is Japan’s new business catchphrase, and JFIT is keenly interested in the corporate response to ongoing changes in Japan’s national systems of innovation and entrepreneurship, as well as in and corporate repositioning and global M&A and venture capital investments.

Project: “Corporate Venture Capital and Open Innovation in Japan”

In cooperation with Professor Masato Sasaki from Hitotsubashi University, we are exploring global corporate venture capital (CVC) activities by large Japanese companies. In contrast to about 20% in the U.S., CVC accounts for about 60% of VC investments in Japan. We are interested in this topic for 3 reasons: (1) “Open innovation” is the current catchphrase in Japanese business, and it refers narrowly to corporate investments in the “market for ideas” (i.e., M&A and start-ups); yet, we have no systematic information on Japan’s global CVC activities. (2) The rapid increase in Japanese CVC investments is bound to reposition Japan’s technology and competitive strengths over the coming decade; yet, we are largely unaware of this strategic repositioning. (3) The “open” concept is rather alien to Japanese firms which have historically focused R&D in their in-house central labs and lifetime-employed researchers, and therefore causes intricate management challenges; our study will allow us to speak to the broader business/management literature on how to manage innovation.

We are building a unique database consisting of CVC investments by Japanese companies outside Japan, and for those same companies within Japan, using U.S. and Japan website services. Our dataset currently includes about 5,000 deals in 3,000 startup companies globally with Japanese investments; we estimate that this covers more than 70% of total Japanese CVC activity in dollar terms. We are currently in the final stage of merging these start-up data with accounting data for the large investor companies (including R&D expenditures, income, sales by industry, etc.), so as to assess the relevance of CVC investments on their business. We have begun the data analysis and will present first insights from these data at the annual Academy of Management meeting in August 2017. We expect several publications to emerge from this dataset.

Artificial Intelligence, the Internet-of-Things and the Future of Work

Project: Artificial Intelligence, the Internet-of-Things and the Future of Work: A Comparative, Interdisciplinary Social Science Project for the U.S., Germany and Japan

JFIT is organizing a multi-year, interdisciplinary research between the Max-Planck Institut in Munich, Germany; the German Institute for Japan Studies, Tokyo, Japan; and UC San Diego. Please note our upcoming conference on this topic in April 2018.“

IOT”, “industry 4.0” and “artificial intelligence” (AI) are emerging as the leading themes to describe the emerging technological disruption of production processes, urban design, health sciences, robotics, consumer relations, work relations and many more areas of business and personal life. This project explores the “state of the art” of thinking about the ongoing technological disruption, innovation and national policy responses in different countries. We pursue a high degree of interdisciplinary exchange, and are open to many different lines of inquiry, including but not limited to:

  • What are the new complexities of the man-machine relationship, ongoing societal challenges, and new issues such as job replacement?
  • How are large companies responding to the disruption: what are new business models, corporate strategies, or operations management and human resource practices?
  • How should we think about new regulatory structures and global agreements, e.g. on privacy and cybersecurity, in the health sciences, or for robots and drones?
  • What are the legal, ethical and societal challenges associated with the fast pace of technological change?
  • What is the impact of these developments on innovation and entrepreneurship, including government policies and market responses, such as newly emerging corporate strategies and start-up activities?

Corporate Governance, Financial Markets and Regulation

Project 1:  The Decline in Bank-Led Corporate Restructuring in Japan: 1981-2010

Co-authors Takeo Hoshi, Saothsi Koibuchi and Ulrike Schaede have constructed a unique dataset on all major corporate restructuring events in Japan between 1981 and 2010, in order to examine how bank-led rescue operations in Japan have changed over time. They find that the incidence of restructuring by distressed firms has become less frequent after the 1990s. When firms undergo restructuring, they adopt real adjustments in terms of labor, assets and finance, but the intensity of these adjustments has also declined over time. These findings underscore the ongoing changes in Japan’s corporate governance in Japan, in particular in terms of corporate restructuring and the decline in corporate monitoring functions of main banks.

The paper can be downloaded here.

The database will be made available to the public soon.

Project 2: Changing Shareholder Structure and the Rise of the Institutional Investor

In collaboration with Yuri Okina, Ulrike Schaede is exploring the rise of the role of trust banks as shareholders. Are these “Old Japan”-type stable and silent investors, or are they “New Japan”-style return-driven investors that practice exit or voice instead of loyalty? The question matters because a rise in proactive institutional investors would mean the emergence of a market for corporate control, and this would greatly affect the strategic decision-making by large Japanese companies.

Research Reports

San Diego’s IOT Innovation Ecosystem

JFIT, with the support of Japan’s NEDO, has published an in-depth study about San Diego’s IOT innovation ecosystem, and business opportunities for Japanese companies in San Diego. The report can be downloaded here (PDF).