entrepreneurs assemble!!

[2nd Featured Article] Promoting the Spread of Japanese Energy-saving and Environmental Technologies in China

Celebrating the 20th Anniversary of the Opening of NEDO Representative Office in Beijing

[1st Featured Article]Turning Innovative Technologies into Businesses!

Entrepreneurs Assemble!!

2016No.60

Reporting on Today and Tomorrow’s Energy, Environmental, and Industrial Technologies

[INTERVIEW]06 NEDO Staff Zeros in on Entrepreneurs’ Inner Thoughts[REPORT]14 Asking the NEDO Representative Office in Beijing: Changing China

[INTRODUCTION]04 Turning Innovative Technologies into Businesses! Entrepreneurs Assemble!!

A Three-way Conversation between Two Catalyzers and NEDO Staff Reveals the Keys to the Success of Technology-based Ventures

[DISCUSSION]08[MESSAGE]11 A Message to Everyone Involved in Technology-based Ventures

st1

02

2016No.60


“Focus NEDO” is the public relations magazine of the New Energy and Industrial Technology Development Organization (NEDO), introducing the public to NEDO’s various projects and technology development activities related to energy, environmental and industrial technologies.

Technology-based ventures aim to develop new markets and businesses using innovative technologies. NEDO is expected to serve as a bridge linking their R&D results to commercial development. This article introduces the activities started in recent years to support entrepreneurs from the start-up stage alongside with interviews with entrepreneurs and catalyzers who have actually been involved in the support programs.

Featured Article on Support for Entrepreneurs

03focus NEDO 2016 No.60

Cover IllustrationA symbolic depiction of the efforts of NEDO to nestle up to and nurture an egg (an entrepreneur) and support its growth, as well as the birth of new innovation from it.

November 2015 marked the 20th anniversary of the opening of NEDO Representative Office in Beijing. We spoke with the NEDO Representative Office in Beijing about the long history of NEDO’s initiatives aimed at spreading Japan’s advanced energy-saving and environmental technologies, as well as the current trends in technology development and the latest situation in China which economy has been rapidly growing.

Featured Article on Beijing

[INTRODUCTION]12 Promoting the Spread of Japanese Energy-saving and Environmental Technologies in China Celebrating the 20th Anniversary of the Opening of NEDO Representative Office in Beijing

A hydroelectric power plant in Jiangxi Province, which the United Nations approved under a Kyoto Protocol mechanism and NEDO obtained credits.

nd2

Valley of Death

Time

Degr

ee o

f diff

iculty

pro

curin

g fu

ndin

g

Commercialization of technology

seeds

Bridging to the Commercialization

to overcome “Valley of Death”

Provides funding for R&D across a variety of technological fields to support small-

and medium-sized companies and start-up companies that engage

in the commercialization development, helping companies to bridge

the gap between the promising technology seeds and their

commercialization.

Advice andsupport for

new businesses and productdevelopment

Providing opportunities for identifying

new business area and expansion

Support forthe venture

creation

We discover entrepreneurs and seed-stage companies who are developing new technologies and boldly challenging traditional business models, and provide support for business plan development and R&D during the early phases of venture creation by giving them advice from experts.

NEDO provides business matching, sample matching, and patent matching services, creating opportunities for cooperative research and technology alliances with NEDO project performers and external companies, universities, and other organizations.

NEDO Arranges a Variety of Matching Services

TCPTechnology

Commercialization ProgramOffers university researchers guidance and advice from mentors as well as training to develop business plans, and provide an opportunity to present their business plans.

SUIStart-Up Innovator

Provides R&D support and advice from business experts (“catalyzers”) to technology-based startups.

STSSeed-stage

Technology-based Start-upsSupports R&D for seed-stage technology ventures through investment and hands-on support from venture capital firms certified by NEDO (“certified VCs”).

Discoveringnew technologies

and venturecompanies

Discoveringentrepreneurs

Advicefrom

experts

Support for commercialization and development

Valley of Death

The gaps and barriers that exist between R&D and commercialization and productization due to various resource shortages.

Catalyzer

A specialist in business development who provides advice and guidance to entrepreneurs on preparing a business plan. In addition to investors and experienced entrepreneurs, catalyzers can include specialists in technology, law, and accounting as well.

Providing thorough support to a funded venture company. This includes providing management consulting and sending executives to be involved in actual business management.

Venture Capital

Investment companies and investment funds that conduct high-risk, high-return investments targeting primarily unlisted companies that have a high rate of growth. One of the typical features of these firms is to enhance the value of the ventures being invested by providing hands-on support.

Start-up Innovator (SUI)

A technology-based venture entrepreneur candidate who receives NEDO’s support. Started in fiscal year 2014, NEDO provides support to work on R&D as well as create a business plan with the advice of catalyzers.

Venture Ecosystem

A system that functions autonomously like a type of ecosystem involving not only entrepreneurs but also various actors including investors, business firms, experts giving relevant advice, and universities and research institutions providing technology seeds in an integrated manner that fosters new ventures and gives birth to new ventures and supporters through successes and failures of ventures in the system.

04 05focus NEDO 2016 No.60

Entrepreneurs Assemble!!Turning Innovative Technologies into Businesses!

Currently, NEDO is taking on a new challenge. This is to support technology-based ventures from the start-up stage who aim to develop new markets and businesses using innovative technologies. NEDO is standing by new leaders in innovation to support their growth.

Featured Article on Support for Entrepreneurs

st1

Technology-based ventures, boldly challenging the competition with new technologies and businesses, are expected to become a mainstay of creating new innovations in the field of manufacturing that supports Japan’s future. However, since R&D and the cultivation of new markets requires enormous investments of money, personnel, and time, the current situation is that the risk facing the commercialization is extremely high and there are insufficient investment funds available.

For this reason, NEDO seamlessly supports technology-based ventures from the start-up stage, across the “valley of death”, through commercialization stage with the goal of spurring innovation to strengthen Japanese industrial technological capabilities.

Examples of the support programs targeting start-up stage ventures started on a full scale over the past several years include the launch of three support projects for entrepreneurs: TCP, SUI and STS (see pages 4 and 11). In order to determine the course of development for R&D and business strategy from the early stages, we not only promote the R&D activities of entrepreneurs selected but also ask them to develop a business plan at the same time. Through this approach, NEDO aims to create a “venture ecosystem” that acts as an important mechanism in society and generate mega-ventures that can “win in both technology and business alike.”

With this background in mind, this featured article will cover NEDO’s efforts related to entrepreneurial support as well as the latest trends in technology-based ventures and the keys to entrepreneurial success, along with voices from actual entrepreneurs and specialists (catalyzers) participating in the projects.

Hands-on SupportKEYWORD

Our ultimate dream right now would be to show the world a moment where an athlete wearing one of our competition-use prosthetic legs is able to surpass the

results of an able-bodied person at the Olympic and Paralympic Games in Tokyo in 2020. We’d like to develop the brand through the

06

NEDO Staff Zeros in on

I was at a drinking party with my friends and as we were discussing that we might be able to do something interesting by combining IT and manufacturing, the

conversation grew heated on the topic of the inconvenience of house keys. We got excited about the idea that a smart phone that you carry around with you on a regular basis could become a key to unlock a door. As we ran through some prototypes, we got covered by the media, and we thought we’d try starting a new company to launch this.

NEDO began the SUI support project in July 2014. For the first round of the project, 14 teams were selected from about 30 times as many teams who responded to the announcement. We spoke with two noteworthy recipients from this first SUI cohort about the course of their startups and business outlook.

●Product Developed　Akerun: Smart lock that can be retrofitted on

existing doors. It can be simply attached to the thumb turn lock on the interior of a door and is capable of opening and closing a lock with the use of a smart phone. It also can be used for self-locking doors for apartment buildings and for hotels.

●Members during Start-up Phase　Friends from university and former colleagues.

Members include people who had developed apps and web services for fun and people who had become full-time employees at manufacturers to engage in product manufacturing. The start-up was launched with both members competent in hardware and members competent in software.

March 2014: Began building a “lock robot” prototype product with friends from inside and outside the company.

September 2014: Completed the prototype product in six months and established Photosynth Inc.

October 2014: Received NEDO SUI support project.September 2015: Became the first company to graduate from the SUI

support project after raising 450 million yen in funding.

Graduated from the College of Chemistry, School of Science and Engineering, University of Tsukuba. Joined Gaiax Co. Ltd. in 2011 and was active on the forefront of marketing operations. Became responsible for the launch and management of a “social listening” business while there.

2012: Started working at Sony Computer Science Laboratories.

May 2014: Formed Xiborg and became CEO.February 2015: Received support from NEDO’ s SUI support project.

International prosthetic leg engineer. Graduated from Keio University Faculty of Science and Technology in 2001, and completed a Master’s at the same school in 2003. Studied abroad at MIT in the U.S. from 2005, where he was engaged in research on robotic prosthetic legs and earned his PhD from MIT Media LAB’s Biomechanics Group.

Entrepreneurs’ Inner Thoughts

~ Developing “Akerun,” the Smart Lock Robot ~Photosynth Inc. President & CEO, Kodai Kawase

~ Research and Development of Competition-use Prosthetic and Robotic Legs ~

Xiborg Inc. President and CEO Ken Endo

What do you think was your trigger to launch a start-up using a “smart lock robot?”

Given that costs are 60% hardware and 40% software in developing a product in the manufacturing sector, investments pile up in the initial period when compared

with the expenses involved in developing an IT service. In this sense, since we were able to get early stage funding through the SUI support project, it provided our start-up company with a boost. Additionally, although engineers tend to think in technical terms when dealing with development, we were able to see much better how the two wheels of business and technology needed to work together for starting a company, as the catalyzer advised us from a business perspective including identifying “who our customers are.”

Please tell us some of the positive aspects about utilizing support from the NEDO SUI support project.


Shinichiro Ibuki

Interviewer

NEDO Innovation Promotion Department

Start-up Group Chief Officer

Featured Article on Support for Entrepreneursst1

Receiving support accelerated the speed of development, making it possible to get the product on the market and get feedback more quickly. It is even more important to see

whether we can make what the market is demanding now that there are competing products coming out. I think that this sense of speed to make that possible has become one of our strengths.

What are some of the takeaways regarding development and business since the company was launched?

We began pre-orders for “Akerun” in March 2015 and received a big response. In the future, with a commonplace item like a lock, I think that the bottom line

is that in order to expand sales further we need to effectively recommend the product to people who feel that keys are inconvenient. Although the current product simply opens and closes a lock, in the future we believe we could integrate the device into a door to create something with the functionality of a concierge. Since we have put together a long-term business plan and secured financing, this is the goal that we want to work towards.

Please tell us your outlook going forward now that you have completed the SUI support project after having succeeded in procuring 450 million yen in funding.

●Product Developed　Competition-use prosthetic leg [on right in

photo]: Reproduces the running operation of a human with only a small amount of force through the use of a carbon fiber spring.

Robotic prosthetic leg [on left in photo]: Perceives the movements of the user via sensors and provides support while walking through the use of motors.

●Members during Start-up Phase　Four colleagues including Dai Tamesue, a

former Olympic track and field athlete. The company was formed in May 2014 to provide the joy of movement to people everywhere, starting with competition-use prosthetic legs.

I became interested in prosthetic leg technology because I wanted to help my friend who had his leg amputated due to osteosarcoma. After studying abroad at Massachusetts

Institute of Technology (MIT) in the U.S. and working on research into “robotic prosthetic legs” to faithfully recreate a person’s leg movement using a motor, I started developing competition-use prosthetic legs and began to feel strongly that rather than just do research I’d like to get them out in the society and try to sell them. In order to make this happen I thought that it would be best to start a business that could partner with a wide range of different people.

Please tell us about why you decided to work on prosthetic legs and the circumstances that led you to start your company.

When selling robotic prosthetic legs in Japan there are no set standards that need to be satisfied. In the U.S., prosthetic legs are regulated under the Federal Food,

Drug, and Cosmetic Act and are expected to meet specific safety standards, but in Japan no standards have been defined. The current situation is that even the widely-used JIS (Japanese Industrial Standards) does not include a standard for robotic prosthetic legs. Also, with regards to venture support in Japan, people tend to have a strong aversion to using tax money to create companies that make profit, but I wonder if there is a strong connection to the public interest if, for example, SUI support project promotes the development of a mega-venture that leads to increased tax revenue.

With regards to the business environment and the like, are there any differences between Japan and the U.S.?

What is your strategy for marketing artificial legs?

Although there’s a tendency to see putting on a prosthetic leg as something special, we think that it would be great to reach the point where it’s just as natural as putting on

glasses. Currently there is a sponsor supporting us that shares our philosophy, and I think it would be nice if doing what I find interesting could lead to creating a society in which everyone moves their bodies and woks in an active and healthy way.

Please tell us about your outlook going forward.

I was right in the middle of preparing to launch my company with a group of colleagues when the SUI support project was announced. “This is a system just for us!” was my gut feeling, and I immediately raised my hand to participate.

“It has been one year since receiving support from NEDO’s SUI support project. Our branding and market strategy is based on our goal to create a society where putting on an artificial leg is as natural as putting on glasses.”

competition-use prosthetic legs and carry that over to selling robotic prosthetic legs.

Yoshioka: First of all, I often hear that the commercialization of technology developed at universities is not going very well. What do you think about this issue?Ito: One factor to note is that there are many businesses that consume a great deal of money in the seed stage, which makes the risk high and the number of people willing to support it extremely small. In addition, another factor might be the fact that some businesses take five to six years to succeed, and depending on the situation there are many cases where it takes as long as ten years. With few examples of success under these kinds of circumstances in general, people on the entrepreneurial side as well as the support side have unfortunately come to share the same mentality that university startups are something that does not work very well. The result is a situation in which the number of players and supporters involved hasn’t been growing, and that has unfortunately continued to the present.Yoshioka: Success certainly takes time and money. In addition, I’ve come to feel that there are cases where academic researchers launch ventures with themselves as the president, but it’s often too difficult for people who are not suited as managers.Tsushima: In FY 2001, when the Ministry of Economy, Trade and Industry announced the “Plan to Create 1,000 University-Spinoffs” as an attempt to increase the number of university startups across the country, I think the situation was that academic researchers went ahead and started companies without much knowledge because there was no one available to provide guidance on things such as management systems for start-up phase ventures. Although there were a few very rare researchers with potential as managers, in most cases they were not successful as managers.

Yoshioka: Even with NEDO’s venture support we don’t have a mechanism for supplying CEO talent, and this is a major challenge. Still, there are lots of talented people with experience launching new business projects within large companies, and we are thinking that we might be able to utilize these people. What do

you think about this?Tsushima: Since the Japanese society is still based on the lifetime employment system, I wonder if it is difficult for people in their thirties or forties who are suited to be managers to quit their positions at the large companies where they are working now. I think we first need to create an environment where it is possible for them to take a step to try, while taking the living and work situations of each person into account.

Also, while in the case of Japan there are some virtues to continually working diligently in the same field, in the U.S. and Europe there are many CEOs in venture companies who have learning experience in different fields, who might, for example, get an MBA degree after studying engineering. I feel that this type of experience creates opportunities to build talent as managers.Ito: The idea of what is the best team structure for a venture company varies depending on the person, but ultimately you need someone on the team who will pull things along. There is always discomfort if this is someone other than the president. Even with a

The Current State of University Ventures: High Risks and Limited Support

People with Learning Experience in Different Fields are Suited for Managing Venture Companies

It is Important for Management to Put Together a Team and Clear Roles

How can exceptional technological seeds be led to business? To find out the current situation and the secrets of success for tech startups, NEDO Innovation Promotion Department DirectorHisashi Yoshioka spoke with two of the catalyzers who provide guidance and advice to entrepreneurs as part of NEDO’s SUI support project to promote the growth of technology-based ventures: Tsuyoshi Ito, who manages venture capital investments as president of a venture capital firm, and Tatsuro Tsushima, who works on innovation consulting for large enterprises and seed acceleration.

A Three-way Conversation between Two Catalyzers and NEDO Staff Reveals

to the Success of Technology-based Ventures

“We are thinking about involving more large companies in technology-based venture support.”

“It’s important that a president has leadership qualities to gather funding and talent.”

“It would be good if the ideas of young entrepreneurs and the personal networks and manufacturing knowhow of older experienced people could be tied together.”

Joined the Technology Development Promotion Department (now the Innovation Promotion Department) in 2013, where he works on entrepreneurship support services such as technology development grants for venture companies and the Start-up Innovator (SUI).

Received his Master’s Degree in Chemical Engineering from the Graduate School of Engineering, School of Engineering at the Tokyo Institute of Technology in 2003, after which he joined JAFCO Co. As the person in charge of the Industry and Academia Collaboration Investment Group, he engaged in investing and support activities for seed-stage university startups in robotics, medical devices, and new materials. In 2014 he established Beyond Next Ventures Inc.

Catalyzer Tsuyoshi ItoPresident and CEO, Beyond Next Ventures Inc.NEDO Innovation Promotion Department

Startup Group

Group Manager/Director Hisashi Yoshioka

08

Received his ME in Aerospace Engineering from Osaka Prefecture University. After leading the establishment of a semiconductor manufacturing equipment venture and starting new businesses, he joined iTiD Consulting Ltd. In addition to supporting the establishment of new business operations, new product development, and business climate reform at major Japanese manufacturers, he organized various seminars with a focus on human resources development. In 2011 he formed INDEE Japan.

Catalyzer Tatsuro TsushimaCEO and Managing Director, INDEE Japan Ltd.


president in place sometimes a researcher without management experience can rise to the fore of the team, but in terms of team structure I think that the person who will be a leader in the future has to be someone who comes to the fore as the president.Tsushima: There are young faculty members and researchers who have the potential to grow into managers. Meanwhile, given that technology isn’t built in a day, senior researchers who have worked on R&D for many years may entrust useful technology to the younger generation such as their own students which then leads to commercialization. If we can take advantage of this, I think there could be many seeds to develop here in Japan.

Yoshioka: It is certainly true that technology is not built in a day, meaning that it takes time for technology-based ventures to become successful. What do you think are the key points regarding how to succeed or areas where startups need to be supported?Ito: The first important area is the team and the team members who are involved. Has management formed a team with clearly defined roles that is advancing the project? In particular I think it’s important for the president as leader to have the leadership and gather the funding and human resources to push forward commercialization.

Tsushima: Although there are a variety of technology-based ventures, I think that with regards to manufacturing in particular there is an extremely difficult industrial structure to deal with. Even if someone in their twenties has an idea, all they can do is create a prototype and they can’t easily put it into mass production. Since the process of mass production requires a great deal of experience, it’s the senior people who have the knowhow. Furthermore, young people don’t have the knowledge about what factories are able to build the product or what companies are able to sell it. If this gap can be overcome I think it will be easier for more new hardware startups to succeed in Japan. Ito: It is clear that university startups can accomplish R&D, but when it comes to other things such as actually manufacturing products, doing quality management, and reducing costs they don’t have this kind of knowhow in many cases. They need to add people with such expertise in accordance with the course of the company’s growth. Or they need to collaborate with people from outside the company. If they don’t build a team in this way with the company’s organization in mind, it is unlikely that things will go well.

In addition, if the wrong approach is taken in procuring funding in the early stages, sometimes it can lead to a situation where you cannot gather funding going forward. It might be good to have a procurement professional on the team from the early stages. I think it’s important to establish a plan for which people to approach at what time to gather funding within the first five-year period.

The Keys


Don’t make mistakes in early stage fundraising. Develop a funding plan for how to gather funds during the first five years in accordance with the company’s growth.

Don’t focus too much on technology. Interact with the market during the early phases of R&D.

“People” come first. Build a team with clearly defined roles under a leader who can serve as an executive.


Yoshioka: NEDO is primarily supporting R&D activities of technology-based ventures, but I think the support to overcome hurdles such as mass production and customer development to promote the growth of ventures is not sufficient yet. Generally speaking, I think there are some parts where cooperation between large companies and ventures is not going very well in Japan. It seems to me that ventures need access to the power of existing large companies with their wealth of funding, human resources, sales channels, and technology.Ito: First of all, I think that both need to build up a wider range of cooperation examples going forward. Currently, venture companies think “we can’t partner up at such an early stage,” while large companies think “it’s too early to collaborate with a high risk venture,” leading to a situation where both sides are hesitant to engage each other. It seems to me that if we could build up more cases of cooperation it could become more widespread in the future.Tsushima: There is no doubt that among large companies the idea that they “want to do” new things, or rather that they “must do” new things, has been becoming stronger. However, the innovation’s dilemma acts as a very strong constraining force, and it is extremely difficult for from management to the factory floor to take on risks themselves to convince people inside the company. I have no doubt that this isn’t an issue of comprehending the problems or ideas but rather a problem with practical execution.

For this reason, if a third party such as NEDO or a government agency proposes a mechanism to lead them from the outside to do what they want to do, I think that they can move more easily.Ito: When large companies are not serious obviously projects will not go well. Because ventures operate in a kind of live or die world, I think that it’s no good unless the partner that they are

going to team up with can share the same temperament. I also think that the SUI support project launched by NEDO is very good. If NEDO can further enhance this system by supporting the labor costs for human resources who can later become candidates for entrepreneurs while ventures develop their business plans, I think that large companies will also spin off more ventures.Yoshioka: From NEDO’s perspective as well, we think that we can draw on the power of large companies more actively, and NEDO is considering a variety of projects to involve more large companies in “venture ecosystem” in which technological achievements can become business.

Tsushima: One thing that I’ve noticed lately is that most of the Japanese people who want to create start-up companies are liberal arts majors. There’s a strong tendency among science and engineering people to want to do research or try something new rather than launch companies. On the other hand, liberal arts people are increasingly seeing starting a company as one means to create an impact on the world. Still, the problem is that they don’t have the material to be able to compete in the world. For this reason, I think that one of the ecosystems that should be built to increase the number of entrepreneurs is the one that links science-and-engineering-related people and liberal arts people together.Ito: Overseas there is something called an “entrepreneur in residence.” For example, when an entrepreneur becomes “free” because their company gets purchased or fails they may accept an entrepreneur in residence position at a venture capital firm similar to if they were an employee, and as soon as the next start-up project is found they will be in charge of management.

Yoshioka: That is a mechanism NEDO would like to consider. From speaking with you two, I get the feeling that there’s still much more that NEDO can do to support technology-based ventures. I hope that NEDO’s venture support system will establish a “venture ecosystem,” as a societal mechanism in order to create more links between publicly-funded R&D results with businesses and to speed up the industry’s metabolism.

Collaboration with Large Companies and the Role of Public Institutions in Venture Support

By Connecting People to People, as well as People to Technology, We Can Increase the Number of Entrepreneurs

NEDO’s entrepreneur support project is celebrating its third year in FY 2016, and with advice from specialists including catalyzers we have gradually seen more and more success stories. With this momentum, NEDO hopes to further improve the support environment for Japanese technology-based ventures.

In addition, NEDO is also implementing activities to provide seamless support for startups through the commercialization phase, such as providing financial assistance to support commercialization development as well as matching services to help ventures find businesses and investment companies to collaborate with. NEDO also organizes information seminars across Japan to promote our support system so that these activities are more widely known and understood.

In order to take advantage of these projects, we ask to submit proposals in response to our solicitation announcements. In the proposal documents, we require not only a description of the technology involved but also an explanation of the business plan.

“What are the target clients and market for your business, and

what is the size of the market you anticipate?” “What kind of important problems can be solved?” “What sort of advantages do you have compared to competing solutions?” These are points that are important in the actual business world. For this reason, we ask that you clearly explain both technology and business when applying to the NEDO technology-based venture support project.

NEDO will be here to provide nurturing support for those of you in technology-based ventures that boldly take on the challenge of becoming a business that is needed by the world and that can change the world, overcoming many difficulties such as the high cost of creating a prototype and the long time to take to establish mass production. As a first step, we would like you to apply to NEDO’s support projects.

We’ll be waiting for your proposals!

Support Project Overview

Technology Commercialization Program (TCP)

Seamless Support from R&D to CommercializationSeminars Being Held Across Japan

Please Take Advantage of NEDO’s Entrepreneur Support Projects!

A Message to Everyone Involved in Technology-based Ventures

Mayu Ishio, Staff Member / Masaaki Sato, Chief Officer

Innovation Promotion Department Planning and Coordination Group

Three Conditions for Technology-based Venture Success

Researchers and others who aim to launch a business using technology seeds such as those developed at universities, etc. (individual researchers affiliated with companies and universities, etc.)

Eligibility

Business plans utilizing “technologies” in environment/energy, electronics/information and communications, biotechnology/health care, mechanical system/robotics, materials/nanotechnology, etc.

Requirement

Advice and training from Japanese and international experts

Type of Support

Around April 2016 plannedProposal Submission Period

Business Feasibility Study Support through SUI

Eligibility

Commercialization Support for R&D-focused Seed-stage Technology Startups (STS)

R&D-focused venture companies with a business concept to utilize specific technology seeds (ventures must not have engaged in business activities or have received outside funding yet)

Eligibility

Advice from catalyzers and financial assistance up to 35 million yen in principle (covered 100% by NEDO)

Type of Support

To be determinedProposal Submission Period

Seed-stage R&D-focused ventures with a business concept focused on utilizing specific technology seeds as well as with investment from a venture capital firm certified by NEDO

Eligibility

Financial assistance up to 70 million yen in principle (NEDO will cover up to 85% of the total amount of allowable cost incurred)

Type of Support

Around April 2016 plannedProposal Submission Period



Celebrating the 20th Anniversary of the Opening of NEDO Representative Office in BeijingA Look Back at the Timeline of 20-year History of the NEDO Representative Office in Beijing

Activities by NEDO Representative Office in Beijing

Activities in China

In November 2015, we celebrated the 20th anniversary of the establishment of the NEDO Representative Office in Beijing. In commemoration of this milestone, we spoke with Chief Representative Eiji Tanaka once again about the history of NEDO’s efforts to spread Japan’s advanced energy-saving and environmental technologies, as well as the current situation in China in the midst of remarkable economic growth.

Promoting the Spread of Japanese Energy-saving and Environmental Technologies in China

NEDO Chairman Furukawa (sixth from the right) celebrating the 20th Anniversary Accomplishment Report Meeting with Chief Representative Eiji Tanaka (eighth from

the left) and successive NEDO Representative Office in Beijing staff members.

Left: 2014 Nobel Prize in Physics recipient Professor Hiroshi Amano of Nagoya University (second from the left) visiting the NEDO Representative Office in Beijing

Right: Chief Representative Eiji Tanaka giving a speech at the Accomplishment Report Meeting

Humanoid robot “HRP2” being exhibited at the Expo 2010 Shanghai China

19931992 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

With support from the National Planning Commission, NEDO established an office in Beijing and began work in China

General Secretary Jiang Zemin’s conveyed Deng Xiaoping’s “Southern Tour Speeches” (later “Southern Talks”) to the enlarged meeting of the Central Committee Poliburo of the Communist Party of China

NEDO Chairman Seiji Murata met with Chinese Academy of Sciences President Lu Yongxiang (Vice Chairman of the National People’s Congress)

The first Japanese-Chinese summit meeting in two and a half years occurred during the 22nd APEC Economic Leaders’ Meeting in Beijing

At the “Sixth Japan-China Energy Conservation and Environment Forum” the Chinese government leaders expressed great expectations for NEDO’s demonstration projects

NEDO Chairman Furukawa (left) and National Development and Reform Commission Vice-Chairman Xie Zhenhua signed an MOU on projects related to the environmental field

NEDO Chairman Kazuo Furukawa signed an MOU with National Development and Reform Commission Vice-Chairman Xie Zhenhua on projects related to circular economy

Emissions trading projects began in China based on the Kyoto Protocol

NEDO Chairman Tsutomu Makino met with National Development and Reform Commission Vice Chairman Xie Zhenhua and National Energy Administration Deputy Direcctor Zhao Xiaoping to discuss Japanese-Chinese collaboration on energy projects

Solar power generation demonstration projects began in China

China successfully launched its first manned space vehicle, “Shenzhou 5”

First MOU in the medical field was signed in China

20th anniversary of the establishment of the NEDO Representative Office in Beijing

NEDO Chairman Furukawa and National Development and Reform Commission Vice-Chairman Zhang Yong signed an MOU on projects related to the field of new energy technology

NEDO implemented a research cooperation project relating to solar power generation in regions of China without electricity

China’s “Protocol of Accession” to the WTO took effect and China formally joined the WTO

The first “Japan-China Energy Conservation and Environment Forum” was held in Tokyo

Beijing Olympics was held

Three Gorges Dam is completed

Expo 2010 Shanghai China (“Expo 2010”) was held

NEDO Chairman Hachio Iwasaki and National Planning Commission Vice-Minister Ye Qing concluded a comprehensive MOU

NEDO began research cooperation projects on energy conservation and clean coal technology in China

Sovereignty over Hong Kong returned to China

NEDO’s history of activities in China is long, beginning with exchanges with Chinese government agencies in the 1980s shortly after NEDO’s launch. Following two oil shocks in the 1970s, NEDO and the Chinese Coal Industry bureau signed a joint research agreement in 1981 to demonstrate coal liquefaction process technology (the NEDOL method) that was developed by a consortium led by NEDO. In 1983 a 0.1t/per day pilot plant was installed at the China Coal Research Institute (CCRI) in Beijing. Since then, through technology transfer projects in areas such as mine safety, NEDO has developed a lengthy track record working in China.

In 1992, the Minister of International Trade and Industry at the time, Kozo Watanabe, signed a comprehensive agreement with the Chinese Vice Premier, Zou Jiahua, for an energy and environmental technology collaboration called the “Green Aid Plan” (GAP Plan). In 1993 NEDO signed an MOU with the China’s National Planning Commission related to promotion of

energy conservation, clean coal technology and joint technology research. Based on this agreement, NEDO began a range of demonstration projects in China. In order to make progress on these efforts, the Representative Office in Beijing was established in 1995 with support from the National Planning Commission. Since that time, the NEDO Representative Office in Beijing has functioned as the point of contact for Chinese government officials, and has implemented a variety of projects with an emphasis on demonstration operations.

Based on the GAP Plan, NEDO expanded efforts in three areas, “Demonstration Project for Energy Conservation and Coal Alternative Energy Technology,” “Demonstration Project for Clean Coal Utilization Tehnology,” and “Research Cooperation Project to Resolve Environmental Issues in China,” in addition to other efforts in the fields of “Demonstration Project for Solar Power Generation System,” “Demonstration & Research Project for Environmental Protection and Medical Areas” as well as “Project Related to Clean Development Mechanism (CDM) for Carbon Dioxide Emission Rights.”

The content of the projects NEDO works on changes to meet the needs of the times. For example, although energy conservation

NEDO’s Early Activities in China that Prompted the Establishment of the Beijing Office

The Future Direction of Activities of the NEDO Representative Office in Beijing

demonstration projects have been a central to NEDO’s efforts in China, at first energy use maximization at plants and factories through the introduction of energy-saving equipment was a key emphasis, but this has been expanded to target societal systems such as building design and ITS while the content of demonstrations has shifted from a focus on updating equipment installed at facilities alone to the comprehensive management of systems. Through these projects, we have achieved the broad dissemination of a variety of technologies throughout China by both Japanese and Chinese companies that participated in demonstration projects as well as by join ventures established following demonstration projects. To date, we estimate technology and equipment has been spread through over 300 projects and a yearly reduction in CO2 emissions is 20 million tons.

In the twenty years since the establishment of the NEDO Representative Office in Beijing, NEDO projects have been

expanding from energy conservation in plants and factories to energy-saving in building and societal systems, as well as from solving energy problems to promoting environmental protections and realizing circular economy society. NEDO’s track record of changing the focus of its projects in China to meet societal needs is not only good for China but a useful experience that can be helpful outside of China as well. Going forward, Chinese as well as global energy and environmental problems cannot be resolved using a single technology or effort, but will likely demand a response to complex challenges composed of various intertwining factors. Although resolving these problems will not be easy, NEDO would like to contribute to the diffusion of Japanese technology and the expansion of Japanese businesses in China and elsewhere through problem solving by utilizing achivements from each of NEDO’s projects in “energy conservation,” “new energy,” “clean coal technology,” “circular economy,” and “climate change.”

nd2Featured Article on Beijing

AnhuiProvince

InnerMongolia

AutonomousRegion

Sichuan Province

TibetAutonomous Region

JiangxiProvince

JiangsuProvince

Jilin Province

Qinghai Province

TianjingCity

Beijing City

Ningxia HuiAutonomous

Region

ZhejiangProvince

GuangdongProvince

ShaanxiProvince

FujianProvince

HunanProvince

HubeiProvince

ChongqingCity

Heilongjiang Province

HenanProvince

HebeiProvince

ShanxiProvince

ShandongProvince

YunnanProvince

LiaoningProvince

ShanghaiCity

Xinjiang UyghurAutonomous Region

HainanProvince

GuangxiAutonomous Region

GuizhouProvince

GansuProvince

Through international demonstration projects related to energy conservation, new energy, environmental protection and clean coal technology, NEDO has been implementing impact demonstration projects in the Chinese market utilizing technology and equipment developed in Japan.

Amid the daily flood of sensational media reports in Japan about such things as “buying frenzies” and “PM 2.5” (particulate matter that is 2.5 microns or smaller in size), it seems that there are some things seen locally in China that differ from people’s preconceived images. What is it actually like on the ground? What are the trends for the future? Let’s hear about the latest news on China.

Demonstration Projects Implemented by NEDO in China

Asking the NEDO Representative Office in Beijing

“NEDO Energy Conservation & Environment Technology Forum” was held in Beijing


nd2 Featured Article on Beijing

Although air pollution remains a serious problem, countermeasures are making progress and results are beginning to show. In January 2015 an “Environmental Protection Law” accompanied by severe penalties was enacted, and companies that cannot meet the standards are being eliminated. On January 1, 2016, a new air pollution prevention law was put into effect and the effectiveness of the environmental countermeasures has become evident. Although it will take time, improvements are steadily being made from a legal standpoint.

Compared with the previous year, in 2015 the days within air pollution standards increased by 10%.

The term “FinTech” has just begun to take hold in Japan, and in China as well mobile SNS and mobile payment services have been widely used by young people, and businesses utilizing such data are being expanded. Many never seen before services such as “WeChat Payment” and “Alipay” are being born and be used for transactions in many stores and online. It seems likely that the number of situations where actual cash is used to pay will decrease in the future. App-based professional services are also flourishing and are quickly becoming integrated as a part of life at a speed unique to China.

On November 14, 2015 the NEDO Energy Conservation & Environment Technology Forum was held in Beijing. On the occasion of 2015 being the 20th anniversary of the establishment of the NEDO Representative Office in Beijing, the event was held with the goal of sharing NEDO’s efforts in China up to now among Japanese and Chinese officials, as well rebuilding and revitalizing networks, and disseminating information on future project activities and results. Over 170 officials from China and Japan were in attendance. NEDO Chairman Furukawa provided greetings and former National Development and Reform Committee Energy Administration Deputy Director Xu Dingming gave a special speech. Project results were also reported.

Mr. Xu Dingming giving a speechNEDO Chairman Furukawa greeting the audience

Screenshot of an SNS app capable of making payments using a convenience store bar code reader. Source: “Study Report on Alibaba’s Development Strategy” (2015)/ Beijing Practical Knowledge Consulting Ltd.

Basic Information about China (sources: Ministry of Foreign Affairs and JETRO materials)

* Defined as the total number of Japan-affiliated businesses in China minus Japan-affiliated businesses covered by the Consulate-General of Japan in Hong Kong.

AreaPopulationGDPMajor Industries

About 9.6 million km2 (about 26 times Japan)About 1,367,820,000 (as of the end of 2014)About $8,250.2 billion (2012, IMF estimate)Textiles, food, chemical raw materials, machinery, non-metallic minerals

Major Trade Products

Number of Japanese ResidentsNumber of Japan-affiliated Businesses (locations)*Volume of Trade with Japan

(export) Automatic data processing equipment, clothing, cell phones (import) oil, iron and other minerals, automobiles131,534 (2010)31,279 (as of October 1, 2014)About $149.4 billion in exports to Japan; about $162.9 billion in imports from Japan (2014)

Changing ChinaDifferent from the Image!?

With the rapid decline of stock price and other factors, the future of the Chinese economy is increasingly unclear. However, within China there is also a sense of “exaggeration” in response to extreme news reports. Individual spending is expanding due to increasing personal incomes, and many new businesses, many of which are IT-related, are emerging. The mobile economy sector in particular is growing rapidly and online business sales are also continuing to expand every year.

RENEWABLE POWER IS THE ESSENTIALREPLACEMENT FOR FOSSIL ENERGY

Change in percentage of total amount of mobile ecommerce (EC) retail sales accounted for by Alibaba

Although at present the primary energy source is coal, there is a large effort to move away from coal underway driven by policies to combat climate change and PM2.5 emissions. The government has set ambitious targets of increasing the proportion of renewable energy used in China to 50% or more by 2030 and 80% or more by 2050 while conversely reducing the proportion of coal-fired power used to 40% or less by 2030 and 7% or less by 2050. Source: Energy Foundation China

16000

14000

12000

10000

8000

6000

4000

2000

0

800

600

400

2002013Q3

374

14.7%

24%

19.7% 17.4%32.8% 35.8% 41.5%

50.6% 55.0%61.7%

529 430501 556

787600 673 713

2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1 2015Q2 2015Q3

706050403020100

100

90

80

70

60

50

40

30

20

10

0

（％）（TWh）

2011 2015 2020 2025 2030 2035 2040 2045 2050

28%

34%46%

57%

53%

71%

67%

82%

78%

88%

84%

91%

86%

41%

23%29%

■COAL■NAT_GAS■FUELOIL■NUCLEAR■Hydro■WIND■SOLAR■MUNI_WASTE■BIOGAS■STRAW■WOOD

■Total EC transaction amount (1 billion yuan)● Mobile transaction expansion rate (%)

■GEOTHERMAL■WAVE● RE share● Non-fossil energy Share

22%

Demonstration Project of International Energy Consumption Efficiency Technology and System (including previous programs) (25 projects/20 cities)International R&D and Demonstration Project in Environment and Medical Device Sector (4 projects/4 cities)

International Coal Use Countermeasure Project (20 projects/18 cities)

Kyoto Mechanism Credit Acquisition Project (4 projects/3 cities)

Research Collaboration Project (20 projects/15 cities)

International Joint Demonstration Development Projects in Solar Electric Generation (7 projects/21 cities)

[Energy] [Environment]Demonstration Project for Bioethanol Production from Potato Starch Residue

Model Project for Increasing the Efficient Use of Energy Utilizing Municipal Waste High-efficiency Energy Recovery Technology

Model Project for Auto Combustion Control in Coke Oven

Model Project for an Energy Efficient Building in Shanghai

R&D and Demonstrative Project for Constructing a Dialysis Management System

Model Project for Reducing Energy Consumption in a Commercial Building

Model Project for Increasing the Efficient Use of Energy Using A Fluidized Bed Type Coal Moisture Control System

R&D and Demonstration Project for Sewage Reduction and Recycling in Guangdong Province

Demonstration Project for Lake and Pond Cleaning Technology Using Ozone

2015-

2008-2009

2008-20112009-2011

2009-2011

Demonstration Project for Advanced Automobile Recycling Technology

2011-2013

2010-2012

2013-

2014-

Project for the Technical Demonstration of the New Traffic Information System

2010-2012

2014-2015

Major NEDO Projects in China

Cement waste heat recovery power generator. Over 200 systems have been put in place thanks to NEDO projects.

[IT] [Economics/Business]

[2nd Featured Article] Promoting the Spread of Japanese Energy-saving and Environmental Technologies in China

Celebrating the 20th Anniversary of the Opening of NEDO Representative Office in Beijing

[1st Featured Article]Turning Innovative Technologies into Businesses!

Entrepreneurs Assemble!!

2016No.60


MUZA Kawasaki Central Tower, 1310 Omiya-cho, Saiwai-kuKawasaki City, Kanagawa 212-8554 JapanTel: +81-44-520-5100 Fax: +81-44-520-5103URL: http://www.nedo.go.jp/english/index.html July 2016 (1st Edition)

● Head OfficeMUZA Kawasaki Central Tower, 16F-20F1310 Omiya-cho, Saiwai-kuKawasaki City, Kanagawa 212-8554 JapanTel: +81-44-520-5100Fax: +81-44-520-5103

● Kansai Branch OfficeUmeda Dai Building, 6F, 3-3-10Umeda, Kita-kuOsaka 530-0001 JapanTel: +81-6-6341-5403Fax: +81-6-6341-5405

● Washington, D.C.1901 L Street, N.W., Suite 720Washington, D.C. 20036 U.S.A.Tel: +1-202-822-9298Fax: +1-202-822-9259

● Silicon Valley3945 Freedom Circle, Suite 790Santa Clara, CA 95054 U.S.A.Tel: +1-408-567-8033Fax: +1-408-567-9831

Domestic Offices

Overseas Offices

● Europe10, rue de la Paix 75002Paris, FranceTel: +33-1-4450-1828Fax: +33-1-4450-1829

● New Delhi9th Floor, Hotel Le MeridienCommercial Tower, Raisina RoadNew Delhi 110 001, IndiaTel: +91-11-4351-0101Fax: +91-11-4351-0102

● Beijing2001 Chang Fu Gong Office BuildingJia-26, Jian Guo Men Wai StreetBeijing 100022, P.R. ChinaTel: +86-10-6526-3510Fax: +86-10-6526-3513

● Bangkok8th Floor, Sindhorn Building Tower 2130-132 Wittayu Road, LumphiniPathumwanBangkok 10330, ThailandTel: +66-2-256-6725Fax: +66-2-256-6727

entrepreneurs assemble!!

Documents