(The original article in Japanese was posted on November 18, 2022)

 

On November 15, Shakai Jisso Suishin Center (the Japan Institute for Social Implementation Promotion Center / JISSUI), an executive body of the startup and new business promotion policy implemented by the Ministry of Economy, Trade and Industry (METI), announced the screening results of the second-public call for the FY2022 applications. But come to think of it, I am wondering how many of you actually know this system titled “Business Expense Subsidies to Support the Creation of New Businesses by Large Companies' Human Resources, etc.” In a word, it is a system that supports company employees challenging to new business creation without changing their present employment status.

The METI’s system is aimed at vitalizing large companies and creating new businesses. Employees who launch startups themselves by raising external investment from financial institutions or investing their personal funds will be “temporarily seconded" to their own startup company without leaving the companies they work for and concentrate on the management of the new company. One condition is that the parent company or enterprise of the seconded person must not own 20% or more of the startup's shares. In short, the secondee is completely separated from the previous business assignments, and the startup company is free from restrictions of the parent company in making important decisions.

Needless to say, the advantages for the startup employees are obvious. Since it is a time-bound transfer, the seconded employee retains the rights to receive payments continually from the parent company. Even when a new business ends up in failure, it is guaranteed that the secondee can return to the parent company. Similarly, from the standpoint of the parent companies, they can expect to foster capable human resources equipped with practical skills and a perspective of management and then facilitate vitalization of the company. Furthermore, taking advantage of having a preferential right in an acquisition negotiation, the parent company can expect to take up a successful startup into its main business (spin-in). It would also be another great advantage for the parent company to entrust the process of launching a new business to an experienced accelerator with use of external funding, as it is generally the hardest process for large existing organizations.

The five newly adopted startups include the following three businesses*1: Sales of a pair of uneven-sized sports shoes, which is handled by an employee of Mizuno Corporation; M&A brokerage platform specifically provided for restaurant business, which was launched by an employee of Suntory Holdings Limited; and a mail-in service of test kits for self-blood collection delivered for expatriate employees, which was developed by an employee of JGC HOLDINGS CORPORATION. All the new businesses are intended to meet the new demands identified related to the business of the parent companies and the surrounding business fields. However, the synergy with the business of the parent company is small in terms of business scale as well as business model. Besides, the know-how required to commercialize new businesses internally in the parent company is another difficult factor to overcome. Therefore, the new businesses will work effectively to make up for the gaps.

This system was started in 2019, and 33 projects have been adopted so far. It means a lot to provide opportunities to create new businesses for the quality human resources who are under control of large companies and management resources that have not been fully utilized. Above all, it will significantly inspire existing organizations that are likely to remain in their present status. I hope this system will become established as a new form of business ecosystem of creating new models.

Incidentally, Yano Research Institute Ltd. has started a next-generation business project with full use of our networks of contacts, information, and knowledge. The new business project is titled "Platform to Make Neglected Business Gemstones Shine*2”, which literally means we offer business platforms to explore and improve technologies and products that remain undeveloped in local regions or in small and medium-sized businesses; sealed business plans kept in large organizations; and business ideas that go far ahead of the times all for the purpose of realizing a better future. Yano Research Institute will make our own efforts to shed light on those neglected gemstones.

 

*1. The other two new businesses adopted were: a platform for outdoor advertising transaction developed by a SoftBank Corp. employee and a business DX tool for real estate management companies developed by a staff member of Mebuki Inc. The latter was selected under the "MBO-type company category.”

*2. Platform to Make Neglected Business Gemstones Shine – the Support Service for Business Start-up and Creation Support Service (to be provided by Yano Research Institute Ltd.)

 

This Week’s Focus, November 18

Takashi Mizukoshi, the President