Japan is typically perceived as a technological powerhouse awash with sophisticated industrial robots and automation, smart vehicles, bullet trains and consumer electronics wizardry. Public infrastructure technology here is also considered robust and worth emulating. Generating clean power—from solar, wind, fuel cell and geothermal technologies—is becoming a big deal as well, with Japan filing 9,394 patent applications between 2010 and 2019 alone for related tech.

But now here’s the perplexing, contradictory part: The World Intellectual Property Organization’s 2022 Global Innovation Index ranked Japan at number 13 in technological advancement out of 132 economies. And according to a 2022 annual report by the International Institute for Management Development, the country ranks just 29th out of 63 in global digital competitiveness. 

Acutely aware of these and other technological vulnerabilities, Japan is avidly seeking solutions from abroad. In 2018, for example, the country set up its Regulatory Sandbox framework, which enables prospective market entrants to fast-track demonstrations of their cutting-edge technologies and business models. The Sandbox is also designed to promote smooth commercialization and related regulatory reform here. Eligibility is broad, taking in all industries (although mentioning fintech, healthcare and mobility specifically) and encompasses Japanese and foreign companies and even individuals. The Cabinet Secretariat and JETRO are both named as points of contact.

In September 2021, the Japanese government also established a new Digital Agency as it races to embrace digital transformation in the public and private sectors. Japan could add up to US$735 billion to its economy by 2030 in the process.

Canadian companies and CCCJ members have been doing their best to provide Japan with tech coverage, and they are active in many areas you may never suspect, since their solutions often do their work beneath the surface, incorporated seamlessly into branded products and services (please also see the companion story on page ? focussing on medical technology).

Virtual Twin, Virtual Worlds

Dassault Systèmes, one of the most omnipresent and influential of those companies—a CCCJ member based in France but with a strong Canadian presence—entered the Japan market back in 1994. “We were just an R&D firm at first, developing software for the manufacturing industry and partnering with IBM Japan,” notes Philippe Godbout, managing director of Dassault Systèmes KK. “One of our early customers was actually Honda. Now we have close to 20,000 customers here, including Toyota, and an extensive network of more than 50 partners as resellers and service providers to help us work with our customers and so on.”

The company began rolling out 3D design solutions for creating complex shapes to help industrial clients understand the geometry from both the physical and manufacturing aspects. “Now most products are made using some form of our CAD systems or other technology,” Godbout states. “We also help the aerospace and defense industries with all kinds of complex, large-assembly types of products. We use our technology to track, interact and collaborate with our customers as well.”

This expertise gradually evolved into Dassault Systèmes’ 3DEXPERIENCE platform and the fascinating business of creating virtual twins and virtual worlds. “Our customers use these tools to innovate through simulation to determine how they’re going to be making products,” Godbout explains. “You need to have an environment where you can have better traceability of everything that is done end to end in production.”

Heavy equipment maker Kobelco Construction Machinery is one prominent example. “They’re using our Virtual Twin Experience to simulate everything before it’s produced, at the engineering level and from a production standpoint,” Godbout states. “It’s controlled, precise and predictable. And the reason companies like Kobelco are investing so much in virtual is because they recognize the added value, and that the business model is changing for them for every single type of machine.” 

Sustainability Superstars
Another technology facet that Dassault Systèmes is polishing has to do with the creation and operation of sustainable smart cities in Japan. Forming an alliance with NTT Communications in December 2021, the two companies will use Dassault Systèmes’ Virtual Twin technology and NTT Com’s Smart Data Platform for City—a scalable city platform—to address urban challenges related to sustainability and resilience in multiple domains such as energy use and optimized mobility. 

Japan’s lack of arable land and heavy reliance on food from abroad is another sustainability issue and vulnerability. PLANTX, an agritech startup launched by former Honda people that understood the value of what Dassault Systèmes could deliver, has a self-contained plant factory model called the Culture Machine that uses Dassault Systèmes’ industry solution experience Digital Equipment Continuity on the 3DEXPERIENCE Cloud platform to handle mechanical design, data sharing and traceability management, and to exert more precise environmental control over the cultivation environment. 

“This setup allows for stable, highly reproducible cultivation,” Godbout says. “Along with the complexity of making sustainable products, they have traceability and repeatability and precision in terms of the way agriculture is carried out.” PLANTX also avoids production problems such as infection and whatever bacteria might invade, since they don’t even have to enter the production facility unless absolutely necessary.

“Our goal is to realize a food production system that is environmentally friendly, sustainable and resilient to climate change, while providing more delicious, safe and healthy food by harnessing the potential of plant factories,” says PLANTX President and CEO Kosuke Yamada. “To achieve these goals, it is important to have manufacturing technologies that enable advanced control of the cultivation environment conditions that affect plant growth. We expect that the 3DEXPERIENCE cloud platform will enable multiple engineers to share information and develop products without waste.”

While sustainability is naturally one of the key topics for food production, Godbout explains, the same thing is actually true of other industries. “The reality is that when you are able to test virtually first you can also start planning how products are recycled and how they should be developed to ensure better recycling. We have what we call our ‘Life Cycle Assessment Solution’ that allows us to understand the carbon footprint of any product as well.”

Another aspect of what Dassault Systèmes is doing is molecular design, involving yet another technology called BIOVIA. “This lets us simulate the production of new materials and new pharmaceutical products, cosmetics and so on,” Godbout says, “so we’re working this multiple angle of technologies and counting on artificial intelligence at some point to help us understand it all.”

Immersive Impressions

Japan’s visual aesthetic influences global looks and entertainment in many ways, and businesses, cities and tourist attractions are constantly striving to gain eyeballs and visitors. Enter Montreal-based Moment Factory, a fully integrated multimedia design and production company. 

“We opened our office in Shibuya in 2016,” says Normand-Pierre Bilodeau, Moment Factory’s producer and Tokyo office director. “There was an interest in Japan’s cultural and technological aspects, and we’d already had opportunities with locally established International companies.”  

While some local and international firms offer many of the same services and products, three main elements differentiate Moment Factory from the rest, Bilodeau says: “We present complete turnkey solutions including artistic creation and technological solutions; have multiple markets involving shows, events, urban installations, theme parks, immersive experiences and nightwalks; and provide local support and creative presence for current and upcoming projects and clients.” 

In 2017, for example, Moment Factory collaborated with Sony, Kirinzi and Prism on “The Mysterious Restaurant of the Food God”—an interactive experience that presented Japanese food culture in a playful, artistic, educational and entertaining fashion. Moment Factory crafted and produced four digital installations adapted to the given environment, and partnered on the storytelling, the visitor experience, the content and the scenography as well as the interactive elements of the exhibit. 

At Lake Akan in Hokkaido in 2019, Moment Factory presented a unique take on the northern island’s Ainu storytelling tradition with a forest night walk. Visitors going on what was called the Kamuy Lumina experience saw Akan Mashu National Park from an ancient perspective but in a modern way.

“We are exploring other opportunities as well, especially with real estate and tourism clients in the wake of the post-pandemic reopening of the country and new trends in the Japanese economy,” Bilodeau mentions.

Outstanding BC Solutions

As reported by Ryo Tokunaga, the managing director representing the government of British Columbia in Japan, BC has an impressive array of solutions for Japan and several high-octane collaborations with Japanese firms, including:

• Vancouver-based Absolute Software, which provides products and solutions in the fields of endpoint security and zero trust security, established a subsidiary in Tokyo in 2016. The company’s customers already include around a dozen major airlines, more than 85 percent of US public safety authorities, more than 70 percent of UK public safety authorities, and more than 13,000 companies in the medical, manufacturing, logistics and financial sectors worldwide. 

• Copperleaf Technologies, also in Vancouver, provides enterprise decision analytics software solutions to critical infrastructure management companies. It established a subsidiary in Tokyo in 2019 and signed a reseller agreement with Mitsubishi Electric in 2020. Customers in Japan include Chubu Electric Power and Idemitsu Kosan.

• The world’s first company to utilize the quantum annealing method in business, D-Wave Systems has over forty R&D and partnership agreements with Toyota Tsusho, Hitachi, NEC, NTT, Denso, KDDI and others. Mitsubishi Estate and Groovenauts recently deployed D-Wave technology to verify the efficiency of garbage collection in twenty-six office buildings in Tokyo, with good results.

• In 2017, 1Qbit raised Series B funding, including from Fujitsu, to promote industrial applications in the field of quantum computing. In 2018, Fujitsu established a global AI headquarters in Vancouver.

• Otsuka Pharmaceutical acquired Burnaby firm Daiya Foods—a plant-based food pioneer established in 2008—for $405 million in 2017. Otsuka then established and expanded the largest production facility in North America (400,000 square feet), and is also focusing on importing to Japan.

• Redlen Technologies in Saanichton is a manufacturer of semiconductor detector modules used in medical diagnostic imaging equipment. In 2021, it became a wholly owned subsidiary of Canon Inc., and is expected to spur improvements in the diagnostic accuracy of the Canon’s CT equipment and reducing the physical burden on patients. 

• Ph7 Technologies is a Burnaby-based company that has devised a revolutionary net-zero metal extraction process that does not require hazardous chemicals or high temperature furnaces. TDK Ventures and BC-based Pangaea Ventures led the company’s $16M funding round.

The cleantech field, Tokunaga says, is a BC specialty. In early 2022, Mitsui invested in EKONA Power, which develops next-generation technology to produce clean hydrogen from methane, which is abundant in natural gas. With the company’s technology, most of the carbon content is generated as solid carbon, so there is no need to process CO2, and it is possible to produce clean hydrogen while utilizing existing natural gas and LNG infrastructure. 

Mitsui & Co. is aiming to develop business that utilizes this technology mainly in hydrogen production in Japan (Mitsui & Co. also works with Svante in BC, which develops carbon recovery and removal technology using structured adsorbent bed filters). It has also invested in HTEC, which is developing a 5.0 megawatt electrolytic hydrogen production project in the state.

Meanwhile in Saskatchewan, Saskatoon-based 7shifts—which provides tools that help restaurateurs make more profitable decisions, improve team retention, and get operations in order—attracted $80 million in Series C funding from SoftBank in 2022. 

Vital Guidance

Besides the invaluable input and knowledge that Embassy trade commissioners and provincial offices in Japan can serve up, there are a few websites—one in Japan and one in Canada—ready to shepherd companies into the Japanese market.

One is a Japan-based site (https://innovate-with-canada.com/) that Ryo Tokunaga made while he was a senior investment officer at the Canadian Embassy to promote Canada’s research strengths and value proposition. 

“Canada’s brand as a technology destination was quite hard to find, and I wanted to have a page where I could direct people to when considering Canada as destination for tech and talent,” Tokunaga says. “I focused on creating R&D collaborations between Japanese research labs and Canadian research.”

In the past, the site has highlighted Canada’s expertise in cybersecurity and entertainment tech as well as its AI research hubs. Gary Lee and the investment team at the Embassy now manage the site.

Meanwhile, a national nonprofit organisation located in Edmonton called Deep Tech Canada operates a site (deeptechcanada.ca) spurred by a bold vision: to position Canada as a global leader in tackling today’s most pressing global challenges with a collaborative approach to cutting-edge innovation. The organisation focusses on five hybrid sectors: agritech and food, climate action and energy, communication and security, health and medical innovation, and transportation and exploration.

“We’ve been to Japan many times since 2016,” says Deep Tech Canada Executive Director Janice Warkentin, noting that the most recent visit was a trade mission in early 2023 built around Nanotech Japan—one of the world’s largest technology conferences and exhibitions. The mission included visits to the FujiFilm Open Innovation Hub and to Resonac, a new corporate mashup of Showa Denko K.K. and Showa Denko Materials Co., Ltd.

These frequent visits have led to investments in Canadian enterprises, such as Brilliant Matters in Quebec. With the support of Japan-based GSI Creos, a valued partner and now investor, Brilliant Matters will scale up the production of their high-performance organic semiconductors for solar technologies. “This is a great example of the high-impact opportunities that result from our international work,” Warkentin adds. 

Canada clearly has the tech to meet Japan’s needs, and the resources and entry avenues noted above should spur Canadian tech entities that are not here yet to jump the pond.