Giving shape to Japan’s invisible assets
Each of Mitsui’s 11 regional offices office maintains close contacts with local businesses, universities and governments, generating networks that constitute a major competitive advantage. For example, when Hiroshima University approached our Chugoku Office—Chugoku is the westernmost part of Honshu, the biggest of Japan’s four main islands—seeking to monetize its intellectual property (IP) portfolio, we saw the opportunity to road-test an innovative business model likely to be of benefit to the wider Japanese economy.
Firstly, the IP business is expanding at a breakneck pace. According to the World Bank, IP-related global royalty and license fees are expected to increase almost twentyfold—from $27 billion to $500 billion—between 1990 and 2020. Secondly, despite ranking third after China and the United States in patent application numbers, Japan remains a relative laggard when it comes to exploiting IP.
We were confident that through our networks we could find companies eager to commercialize Hiroshima University’s IP. After reviewing all the IP assets in the portfolio, we selected L8020—a lactic-acid bacterium that helps foster stronger teeth—as having the most commercial potential. And sure enough, a Kansai-based confectionery company with which Mitsui had a preexisting relationship proved eager to incorporate L8020 into its products.
The confectionery company began marketing tablet (January 2017) and candy (April 2017) featuring L8020 with its promise of healthier teeth and gums. Mitsui and Hiroshima University, meanwhile, will receive a licensing fee from every packet sold.
For a company best known for extracting tangible commodities like iron ore and crude oil from the ground, generating value from licensing intangible IP represents a new and exciting business model. With Japan among the world’s most innovative nations, the potential gain in national wealth from more creative management of its IP could be enormous.