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Japan Society – Corporate Programme – Business & Policy

The Physics of Success: Nobel Prize Laureate Dr. Shuji Nakamura on Fostering Innovation

Staff of the Japan Local Government Center in New York had another excellent opportunity to hear leading Japanese businessmen and educators. We were honoured to hear Dr. Shuji Nakamura, the 2014 Nobel Prize winner for physics. Dr. Nakamura is somewhat of a gadfly to the Japanese corporate world and his talk was an illuminating inside look at the nature of innovation in Japan.

Because of his past history with the Japanese corporate world, he began his talk with a fascinating look at the way in which his Nobel Prize was reported in Japan. (At this point, it should be mentioned that three Japanese physicists shared the Nobel Prize.) In Santa Barbara, where Dr. Nakamura is a professor of materials science in the University of California, there was a big announcement celebrating his Nobel Prize. In Japan, however, the celebration was different. Dr. Nakamura presented the official announcements, both corporate and government, and all described him as a manufacturer not an inventor of the ‘blue light emitting diode’, also known as the blue LED. He was, understandably, quite annoyed at being downplayed in Japan. To make the point even clearer, he showed the language of the Swedish Academy awarding the Nobel Prize and in it there was no mention of ‘manufacturing’.

Dr. Nakamura then went on to explain what it was that he had invented. It was somewhat technical. Nevertheless, in describing the history of the development of blue LEDs, Dr. Nakamura showed that the material composition was so important to understanding how to make LEDs not only possible but also to make them an efficient building block for a whole variety of applications. The biggest breakthrough came in 1993 with the successful development of Galium Nitride crystal layers. This allowed the LED to reproduce the light closest to sunlight. From then on, with refinement, the efficiency of the light source opened up new worlds for technology.

In the area of lighting alone, the developing world spends about $150 per year per lighting unit, but LED lighting would reduce that just $3 per year. He argued that by 2030 LEDs could account for 50 per cent of lighting – a huge reduction in power consumption. The genius of the blue LED invention is the fact that it made the developing technology possible, from backlit cell phones to blue-ray DVD players. Farming and other agricultural industries have benefitted as well. In Japan, plant factories use LED lighting to create constant daytime, using only 25 per cent of the normal oxygen required and just 1 per cent of water (owing to its ability to be recycled).

Then Dr. Nakamura discussed innovation in the corporate climate in Japan. When he spent a year as a visiting research associate at Florida State University he was asked if he had a Ph.D., to which he replied he did not. Had he written any papers? Again the answer was no. So he was treated as a technician. In Japan, he said it was unusual for corporate researchers to have advanced degrees and by the age of 35 the researcher is ready to retire! He commented that the pay differential for Ph.D.s was very small in Japan but much larger in the United States. So, he worked hard at writing papers and getting his research to qualify him as Ph.D. His goal was to come back to the United States.

Another more debilitating factor for innovation in Japan was the legal system. In disputes over patents, trademarks and intellectual copyright, he said the judicial system eschewed one of the essential elements of the adversary nature of the courtroom; discovery. In court, there is no discussion among the parties to a suit. Parties submit statements and documents and the court rules on those alone. Since there is no contest over evidence, the court can determine the length of the case and often it will take years to complete. Penalties are based on precedent rather than actual damages. They seem to be generalised (Dr. Nakamura mentioned $10,000) unlike in the United States where the penalties can run into the millions of dollars.

During the question and answer period, Dr. Nakamura was asked what advice he would give to young entrepreneurs. His answer was intriguing. He said that young entrepreneurs should travel abroad outside of Japan for at least five years. Then, they can go back. In other words, they need to establish themselves where the risk and excitement of innovation is challenging, not where they are part of a corporate organisation. They could succeed or fail but it will be on their own merits. What is more, he added, they need to see Japan from afar, as if with fresh eyes. He believed that would be one of the ways in which a change in corporate culture can be effected. In another question and answer exchange, he was asked what he thought the greatest new innovation would be in the future. His answer was medicine. The future, depending on technological advance, will see a much shorter product cycle in medical innovation. In Japan, his argument for corporate change was based on two factors. One was the difficulty in the language barrier and the other was the difficulty in adapting quickly to the ever-shortening time-period for innovation. So much can be copied instantaneously now that Japanese corporations need to have much more flexibility to keep up.

Dr. Nakamura was entertaining and, ever the teacher, delighted the audience with his vast knowledge of the sciences, with a touch of humour.