Open innovation and drug discovery startups in Japan: The importance of communication in licensing

Drug discovery startups conduct research and development for open innovation by specializing in basic and discovery research. To explore the promotion strategies that these startups can apply when selling knowledge products through licensing, we conducted a survey to identify the factors that enhance open innovation performance through business negotiations in Japan. We obtained valid responses from 42 drug discovery startup executives (13.6% response rate) and tested our hypotheses through multiple regression analyses. While relevant research does not focus on enhancing communication during business negotiations, this study emphasizes its importance in open innovation. We found that communication directly affects performance in open innovation, especially customer-oriented communication. In the communication process during business negotiations, drug discovery startups must be willing to modify its knowledge products, such as candidate substances, in accordance with the customers' needs.