Establishment of CVC will be a major management theme from 2019 to 2020.
Japanese large corporations' performance over the five years from FY 2014 is often strong. In other words, retained earnings are accumulating. Under such circumstances, what should you do when you look forward to the future of corporate management?
Even in business the life cycle exists just like a human lifetime. Consequently, businesses that have been able to enjoy sales and profits will all end. On the other hand, companies have fixed costs such as human resources and plant facilities. In order to cover those costs and further develop the business, it is indispensable to start new business continuously. However, there are limits to the creation of technologies and ideas that serve as seeds for new business within the company. We need to put the brakes on companies that try to do everything on their own through a closed-innovation strategy, which trends to NIH syndrome, ones that do not have a central research laboratory and a conservative corporate culture.
In order to promote the launch of new business, it is necessary to incorporate an open innovation strategy that is importing new technologies, business seeds and creative ideas generated by external startups inside and outside of Japan.
Corporate Venture Capital (CVC) is an important tool to promote an open innovation strategy for developing new businesses.
2019 and 2020 will be the great years that CVC is the leading role of management strategy for Japanese large and mid-sized companies.
It is also an Olympic year, and while the rise of venture business in Japan is also prosperous, large companies can revitalize the Japanese economy by investing internal retained earnings through CVC.
Of course, the investment by CVC also involves risks. If your CVC investment properly follows the investment theories such as diversified investment and milestone investment, this will reduce reckless risks.
However, generally for Japanese companies, especially conservative ones, it is very difficult to proceed to the establishment of CVC.
In such a case, it will depend on the insight and leadership of the managers who have the mindset and willingness that is necessary to prepare for developing the business pillars of the next era.
We, CVC JAPAN, wish to work hard with everyone who will set up a CVC to develop new businesses and invest in many promising startups all over the world.