As the world is becoming more globalized, Japan faces a more competitive environment. Emerging countries are growing their economies rapidly while advanced countries are losing competitiveness. Multinational corporations are increasing their presence in the global market as well.

Japanese society is also changing. The birth rate is declining and the population is aging rapidly, and experts warn that hundreds of municipalities could disappear in the future. Furthermore, the number of Japanese who feel uneasy about the future is increasing. It is expected that growth and development of Japan would contribute to improving the quality of life of individuals.

Amid dynamic changes in social conditions both inside and outside of Japan, science and technology-based innovation is increasingly required to create new value and make changes in society for the better. There are two conditions to boost innovation: industry and universities should seriously team up; and social activities should be promoted to create a better society.

To boost social innovation through collaboration between industry and universities, developing new products and services for the global market with cutting-edge research and technology is not the only thing, but creating a better local community with known technologies is also significant. Industry, university, the government, municipalities and local communities should all seriously team up and make changes in both global and local communities for the better.

Let's take an example. The bus services were terminated in a rural small town which struggles to deal with a declining birth rate and an aging population. While buses remain an important mode of transportation for the residents, the town is not able to provide a regular service due to their financial conditions. The unavailability of bus services leads the aged residents to avoid going out, which causes their health to deteriorate, and, as a result, increase the financial burden of health care on the town. One of possible ways to address the problem is to provide on-demand bus service. Information and communications technologies (ICT) can provide a traffic management system to improve convenience for the residents and reduce the running cost. Setting up events and places to visit will stimulate the residents to go out, and enhance communication between them as well as reduce the medical costs.

Such a social innovation is not created by the town municipality alone, but by teamwork with industry and universities to contribute to demand system development, along with the government and funding agencies to support the service development, and the residents of the town. A person or an organization is also expected to join the team and function as an association between different team members. Furthermore, it is required to develop the next generation of the leaders of the town, to share the experiences with others both inside and outside of Japan, and to improve collective performance as well as demand systems and transportation services in different places.

To boost social innovation through collaboration between industry and universities, basic, applied, and development research should be conducted concurrently and coherently, and the findings should be implemented through field experiments. An integrated system needs to be established for implementing all of these activities to achieve the vision of the future.

The integrated system should provide an optimal environment for teamwork between industry and universities and also with the government, municipalities and local communities. Collaboration between small and medium enterprises and universities in each region is crucial to revitalizing regional economies. Some policy measures are needed to strengthen collaboration between industry and universities as well. Industry investment in university research should be promoted to secure university research funds across Japan. It is also essential to develop skilled human resources for innovation in industry.

This proposal recommends three policy priorities and actions, supported by evidence from a case study of 30 successful projects both inside and outside of Japan. The leaders are strongly expected to emerge from everywhere including industry, universities, government and municipalities, funding agencies and local communities, then take action to make changes in society for the better.