What insights did Japanese business developers gain in Finland?

In November 2019, Dentsu Inc. organized a tour to Finland for Japanese corporate professionals involved in new business development. They visited Espoo, a city gaining attention as an innovation hub, and observed "SLUSH," one of the largest startup events in the Nordic region.

What insights did Japanese business developers gain in this open innovation leader?

This report covers the "Nordic Open Innovation" conference (held at Dentsu Inc. on January 27, 2020), where tour participants took the stage.

The conference featured presentations by business developers from four Japanese companies that participated in the tour, along with members of Dentsu Inc. Lively discussions took place on topics such as the Nordic open innovation ecosystem and what is necessary for business development in Japan.

Nurturing innovation seeds together with overseas companies is the Finnish ecosystem approach

The conference opened with a presentation by Mr. Eiji Atsumi from the Commercial Section of the Embassy of Finland. He outlined Finland's distinctive characteristics from an innovation perspective.

Eiji Atsumi, who produces collaborations and investments between Finnish and Japanese companies across various industrial sectors.

"Over the past decade, Finland has been shifting its mindset from a large-corporation-based economy to a startup economy," stated Mr. Atsumi. He noted that over ten years ago, investment in startups was low both domestically and internationally. However, investment amounts have risen significantly in recent years. Data presented showed that in 2017, over three times more funding flowed into startups compared to 2007, with over half of that funding coming from overseas. "Finland is practicing a business model where it collaborates with foreign partners to nurture the seeds of new ventures into large-scale enterprises," he stated.

 He noted that more overseas companies are establishing innovation centers in Finland, a country globally recognized as an "innovation nation." Among foreign countries establishing local subsidiaries in Finland, neighboring Sweden leads, followed by the UK, the US, and Denmark. Japan ranks ninth, behind China. He conveyed that the ecosystem of establishing local subsidiaries in Finland to drive innovation is highly noteworthy for both Japanese large corporations and startups.

Experiencing Finnish Sauna Culture Locally

The theme of the conference's first part was "The Nordic Open Innovation Ecosystem." Each speaker shared their firsthand experiences of the "Finnish sauna culture," introduced in the first installment of this series.

From left: Shunpei Kondo (Dentsu Inc. Business Production Bureau), Koji Ozaki (Dentsu Inc. Business Investment Promotion Office), Yuma Kato (Tokyu Future Design Lab).

Finland, with a population of about 5.5 million, has approximately 3 million saunas. Attendees shared that when they used saunas locally, they were approached by various people, giving them a tangible sense of how saunas serve as places for social interaction. According to locals, famous investors have their regular saunas, where startup representatives sometimes visit to discuss investment opportunities. It was noted that Finnish saunas serve as places where people open their hearts and explore business opportunities, sharing similarities with Japanese traditional tatami rooms.

While major companies from around the world exhibited at SLUSH, many booths had minimal displays; some were essentially just meeting spaces. The style was to offer coffee and encourage everyone to talk freely. Furthermore, strangers would readily strike up conversations throughout the venue. This, too, reflected the sauna culture's flat, open-hearted approach to others, an energy so potent it permeated even visitors from abroad.

A defining feature of Finland's open innovation ecosystem is the strong awareness among companies to contribute to society. Crucially, they don't insist on solving societal challenges solely within their own organizations. For example, companies that can provide technology, companies that can use that technology to create products, companies that can sell those products... each brings their own strengths. By collaborating across multiple companies, they can realize faster, bolder solutions, according to comments.

The speakers also attended the seminar in Espoo and noted that they sensed no inherent superiority between large corporations and startups. It's not about large companies helping SMEs or startups; rather, large companies collaborate because they want to incorporate startup technology, while startups collaborate because they want access to the large companies' sales channels. They also learned that large companies clearly understand what startups can and cannot do, leading to effective communication and a lack of friction after matching.

In the second part of the conference, the speakers changed, and a session was held on the theme of open innovation and new business ventures at Japanese operating companies.

From left: Keiichiro Inaba (Hitachi, Ltd., Open Innovation Promotion Office), Shotaro Sanada (MBS Innovation Drive), Akira Takahashi (Adastria Innovation Lab), Ikumi Togasaki (Dentsu Inc. CDC).

The session pointed out that a key issue in business development in Japan is the tendency for definitions of new ventures to vary widely among individuals, such as differing sales targets and timelines for achieving results. Comments also noted that when vision and mission are unclear, or when proper sharing within the team is lacking, the business's purpose inevitably tends to focus on securing sales, making it difficult to see the fundamental reason for launching the venture.

The speakers unanimously agreed that communication within the business development team is crucial. They also noted that simply creating an organization isn't enough; companies need internal mechanisms to effectively gather people motivated by business development.

Other points included the recognition that not all new ventures succeed; achieving continuity with even one out of ten projects is considered success. It was also emphasized that many things cannot be judged until action is taken, making it vital to try without fear of failure.

Gaining firsthand experience of the local atmosphere and people yields significant value

Following the approximately two-hour conference, participants mingled and exchanged information. All speakers commented that visiting Finland, a leader in open innovation, provided immense value. Finally, we conclude this report by sharing the perspective of a Japanese corporate business development manager.

Seeking markets broadly overseas and dynamically expanding business
~ Mr. Yoshiaki Kato (Tokyu Future Design Lab)

In 2015, he launched and oversees the "Tokyu Accelerate Program," a business co-creation program between the Tokyu Group and startups.

Finland is a small country with a population of about 5.5 million, so its domestic market isn't large. However, its innovation ecosystem functions effectively and is growing remarkably. I felt one major reason for this is the speed and strength with which they seek and expand their market across all of Europe.

One of Finland's competitive advantages, I felt, is the "power of design" born from its unique natural environment. Brands like Iittala and Marimekko are famous, but there are many other product designs that are both aesthetically pleasing and functional. Finland leverages events like SLUSH to promote these designs internationally.

Japan also possesses numerous unique traditional crafts. I sensed that Japan's path forward lies in broadly capturing the market and exporting these crafts overseas. Wouldn't it be interesting if we could create something like a production hub that utilizes IoT to make manufacturing sites smarter, and produces products with a user experience (UX) designed to be more user-friendly and suited to modern needs?

All members take ownership of their roles and simply test ideas
　~ Keiichiro Inaba (Hitachi, Ltd. Open Innovation Promotion Office)

After working as a financial systems engineer and project manager, he was stationed in the US to support local startup initiatives. Upon returning to Japan, he established and managed public-private funds and fund management companies. Currently, he is primarily engaged in accelerating activities both within and outside the company.

It was striking how they routinely bring in foreigners—Chinese, Germans, and others—to operate right in the innovation space. Integrating the practice of gathering necessary talent from around the world as part of their ecosystem is a major difference from Japan.

Additionally, I was surprised to see staff from large corporations, startups, and government agencies connected under the common purpose of "accomplishing the mission," driving projects forward in a flat, collaborative relationship.

A local comment stuck with me: "Asians tend to want to appoint a leader first when launching a project." Finnish projects prioritize each member maximizing their abilities and proactively taking ownership of their roles over having a leader dominate and everyone follow instructions.

When testing ideas, Japan often prioritizes company rules, leading to a tendency to produce only ideas that have been cleared through regulations, often resulting in watered-down concepts. In contrast, Finnish projects are premised on testing many ideas first. By proposing ideas without discarding possibilities, it becomes easier to test truly fruitful ones. I strongly felt that this is what pursuing mission-oriented (ideology-focused) and project-oriented (project-focused) approaches truly entails.

My perception that innovation is a high hurdle was overturned.
~ Masataro Sanada (MBS Innovation Drive)

While overseeing new ventures and venture investments, he is currently busy preparing to open a "hidden gem restaurant" launched as an internal startup.

I used to think new ventures required raising large sums of money and rapidly scaling through novel methods, making them feel like a very high hurdle. However, this inspection completely overturned that image.

Finland wasn't pursuing flashy, high-revenue ventures; instead, it was genuinely driving innovation focused on solving societal and regional challenges. These community-rooted initiatives provided invaluable insights for our regional broadcaster's business development.

Another surprising aspect was the low barrier to entry. In Japan, startup events tend to attract only insiders and highly motivated individuals. Yet, when interviewing students at SLUSH, one said, "I'm not particularly interested in startups. But everyone was going to the event, and when I came, it was really fun." I was amazed to see a culture where people naturally engage with innovation in their daily lives.

Clear challenges to solve through the project
~ Akira Takahashi (Adastria Innovation Lab)

At Adastria, which handles the planning, manufacturing, and sales of casual clothing and goods, he was involved in launching e-commerce and marketing. He founded the "Adastria Innovation Lab" in 2017.

In Finland, organizations lack hierarchy. Engineers, CEOs, and founders all shared the same perspective and challenges. The absence of hierarchical relationships fostered communication and created flat interpersonal dynamics. I felt this flatness was one reason for the rapid business growth.

What impressed me was how clearly defined the problems companies wanted to solve were. For example, a product might be designed to alleviate specific symptoms of a particular disease by a certain degree.

Furthermore, social issues were directly linked to business. From the very start of a venture, the purpose was clear: what needed to be solved through the business. This stems from each project participant personally identifying with Finland's societal challenges, such as declining birthrates, aging populations, and increasing immigration. It was clear that many drew inspiration for their ventures directly from their own lived experiences. Consequently, their passion and commitment are inherently stronger than those simply told to pursue new ventures. When I ask my own team to develop new business ideas, I now recognize the need to first ensure each member is genuinely invested and committed to the effort.