Regional economic disparities, rapid ageing, low GDP growth, and the increasing importance of science-based industries induced a major shift in Japanese innovation policy over the last decades. Regional innovation clusters with collaborative research between universities and surrounding companies at their core, promising radical high-tech novelties with the potential for start-ups, have become the target of recent policy efforts and subsidy programs.

Compared to “market-based” systems such as the Anglo-Saxon economies, Japan’s “coordinated capitalism” (e.g. Streeck, Yamamura 2003) is typically associated with institutional constraints on radical innovation, like a lack of venture capital or a rigid labor protection regime. This research demonstrates the onset of significant institutional changes in Japan’s innovation regime.