Beyond being the country with more Corporate Innovation Outposts in Silicon Valley, Japan extends its reach to the East Coast

Japan confirms to be the first mover in the second-largest tech ecosystem in the world, the East Coast, that is growing at warp speed.

Data from Japanese Corporate Innovation Outposts in the US East Coast Report 2024”, produced by Mind the Bridge with the support of the Japan External Trade Organization (JETRO) New York, show that the country not only represents the largest foreign innovation contingent in Silicon Valley but that Japanese corporations are also the most active innovation seekers and investors on the East Coast as well, with an even more prevalent role.

Looking for Innovation? Scan the US coasts (both of them)

According to the Research, North Americas and the worlds innovation activity is overwhelmingly concentrated on the US ocean coasts on the West Coast Silicon Valley stands out as the dominant hub and remains the premier destination for corporates aiming to stay at the cutting-edge innovation; on the East Coast, however, the two well-connected cities of New York and (Greater) Boston have established the second-largest tech cluster of the region and the world.

In terms of the number of scaleups NY and Boston together have figures that can be compared with entire continents such as Europe and China: the New York Metropolitan Area (5,296 scaleups), complemented with the Greater Boston Area (1,875 scaleups), today hosts a total of 7,171 scaleups and represent 74% of the Silicon Valley volumes (with over 9,600 scaleups).

Japan is leading the global innovation hunterspack

It’s no surprise that the world’s innovation activity is overwhelmingly concentrated on the US coasts and global innovation hunters (VCs and multinational corporates) are increasingly expanding their presence on the US East Coast as well.

Japanese companies are confirmed to be the first country in terms of innovation presence also on the East Coast. The news here is that the share of Japanese innovation corporate presence in New York and Boston is even larger than in Silicon Valley”, commented Alberto Onetti, Chairman of Mind the Bridge.

Going deeper through the numbers, the Report highlights the Japanese lead as the first mover in the main innovation ecosystems: 90 (22%) out of 416 Open Innovation Outposts operated by 332 global corporates in Silicon Valley are run by 66 Japanese conglomerates (20% of the total). In the same way, out of the 162 Open Innovation Outposts operated by 121 global companies on the East Coast, 58 (35% of total outposts) are run by 46 Japanese companies (38% of the total).

It’s worth noting that 42% of Innovation Outposts have been established in the past 3 years, and 68% after 2015 – added Marco Marinucci, CEO and founder of Mind the Bridge We expect this presence to grow even more in the next years.”

The Japanese presence: types and workforce

Since 2010 the East Coast saw a rise in corporate innovation outposts, featuring two distinct types of presence: while Boston remained an attractive hub for global R&D, companies in New York began experimenting with new forms of innovation presence such as Innovation Labs, Antennas, and CVC (Corporate Venture Capital) offices.

Over the last three years, there has been an exponential increase in corporate outposts in New York (44 new units), whereas Boston has maintained a more linear growth trajectory (24). In both ecosystems, but more visibly in New York, this growth has primarily occurred through lean innovation presences, notably attracting the attention of corporate investors (CVC offices) and trend spotters (Innovation Antennas).

The Japanese corporate innovation presence in the two US East Coast hubs over time follows the pattern continued Marco Marinucci – shifting its approach in favor of more lean forms from 2021 onward: 9 new CVC Offices, 8 Antennas, and 3 Labs have been cumulatively established, with New York being the preferred destination.”

Nowadays in the East Coast the Research records 12 Japanese Antennas, established by corporations operating across various sectors, with a predominance in Oil & Gas (3 Antennas): 7 Japanese Labs, including 2 set up by Electronics corporations; 24 Japanese R&D Centers, with the majority established by Electronics (6 outposts), Biotech (5), and Chemicals (3) corporates; and 15 Japanese CVC Offices, typically associated with corporate R&D and Antenna activities.

However, the country seems to adopt a relatively different approach to innovation workforce deployment compared to the average. While the majority (92, 57% of the total outposts) are structured as small teams of fewer than 10 people, the Japanese presence witnesses a lean” outpost that features larger-than-average teams; on the other hand, R&D Centers are less human resource-intensive, with just 4 outposts employing more than 1,000 people, and 3 hosting between 500 and 1,000 employees.

The Research generally estimates a workforce of approximately ten thousand innovation professionals employed by Japanese corporate innovation outposts on the US East Coast.