This is how Japan is leading in 'deep-tech'

This is how Japan is leading in 'deep-tech'

Imagine if you could put a very thin solar sheet on your window that can generate energy not only from sunlight but also from artificial light inside the room?

The Japanese startup company Anecot Technology is trying to develop this technology called perovskite, the next generation of solar cells, which is seen as very promising. The Kyoto-based firm hopes that once the technology is ready, it will produce as much energy as regular solar panels of the same size.

"We're hoping to bring it to market in the next three to four years," said Naoya Kota, the company's co-founder and CEO, "but making them weather-resistant for outdoor use will take a little longer."

These types of startups are called 'Deep Tech'. Such small firms are combining 'high-tech' engineering innovation with scientific discovery. It is hoped that this will lead to the development of transformative products.

But it takes time to launch a successful product in this field. As a result, private venture capital has taken more precautions to invest in this type of entrepreneurship.

Yes, Kyoto University plays an important role in this. That is why it is known for producing more world-renowned Nobel laureates than any other university in Asia (in 11).

The university has also been investing in startups started by students and researchers through two venture capital funds. Anecot Technology is one of the beneficiaries, having raised a total of ¥500 million (about Rs. 45 crore).

This investment comes from the US$300 million that the university received in 2014 from the Japanese government to encourage entrepreneurship.

"Kyoto University is considered to be strong in areas of very hard science such as regenerative medicine, stem cell science, stem cell science and clean tech energy," says Koji Murota, head of the University's Social-Education Cooperation Office for Innovation.

"But commercializing these 'deep-tech' companies will require a long time and large sums of money." Murota goes on to say that a typical venture capital investment period is probably eight to 10 years, but that is not long enough for 'deep-tech', so the university's scheme provides up to 20 years of support.

Since Kyoto University launched its innovation department and investment fund seven years ago, the number of startups created by its students has more than doubled to 242.

In this way, Tokyo University is the second only university to receive the same type of investment funds from the Japanese government. But the growth rate of Kyoto University is very high.

Even before the university started providing support to entrepreneurs, the city of Kyoto was known for its work in creating startups. Which includes Nintendo.

Although it has now become a giant of computer games, when it went public in 1989, it was making watches. Another successful Kyoto-born technology giant, Kyocera, founded in 1959 by Kazuo Inamori, is one of Japan's leading business leaders.

The city's latest business success story is Philosfia, a microchip manufacturer and 'deep-tech' startup. This university-backed startup makes semiconductors specifically for energy-efficient applications.

Which works to extend the life of products like electric cars. "Kyoto's originality is to be diverse even though it is small," says Toshimi Hitora, graduate of Kyoto University and head of philosophy.

"It has a university at its heart and anyone who wants to start a business, including many researchers in a small community, can get the information they need."

"But even the founders of all the companies in Kyoto say that unlike companies based in Tokyo, they don't have enough customers here [in Kyoto], so they have to think globally from the start."

Hitora continues, "It's been more than 10 years since we started Philosophy because 'deep-tech' takes time, and I think people in Kyoto understand that."

About 30 years ago, Japan was the leader in the semiconductor industry, but today it has little more than a 10 percent market share. It will be challenging for Philips to make a significant presence in the highly competitive world market of the semiconductor industry like South Korea's Samsung and Taiwan's TSMC.

China and the US are also trying to enter this market. As an aid package for domestic chip production and research in the United States, the White House, with the help of the House of Representatives, has already passed an act with a commitment of 280 billion US dollars last July.

The US wants to reduce its dependence on other countries for supplies. But Hitora believes that the Japanese producers, including Philosophy, are strong in themselves.

"Japan is good at doing basic research and we are working with new materials. So we think we have great potential," he says.

He further adds that Flashfia has recently established alliances with most of Taiwan's major chip manufacturers. "There is a global demand for semiconductors, so some governments may be intervening to ensure supply for their domestic markets. But it takes a very long time to produce semiconductors," says Hitora.

"To produce it in large numbers, we need many stakeholders and many businesses in different countries. That's why I think alliances with other companies are important."

As Japan continues to build its grip on the semiconductor sector, Kyoto University's long-suffering battle with firms such as Philips has raised hopes for the country's success.