Interim Report of the Study Group on Innovation and Competition Policy

　　Achieving innovation that leads to the creation of innovative products, services and new markets is essential for Japan's sustained economic growth. On the other hand, in the business arena, there are concerns that the development of the digital economy and the shift to platforms and ecosystems for business will make markets further monopolized/oligopolized or even entrenched, which could reduce the dynamism of competition. Under such an economic circumstance, ensuring a competition environment that can promote innovation is an important and contemporary policy agenda in competition policy. It is therefore important to properly assess the impacts on possible long-term efficiency, or innovation, in the future.
　　On the other hand, many innovations are phenomena that occur under high uncertainty, and those are acted upon by a range of factors in a complex manner. For such reasons, the whole process of innovation has not yet been well understood. The field of competition policy, i.e. the impacts on innovation that are delivered by various kinds of corporate conduct, appears complex and dynamic. However, theoretical and empirical studies on such impacts have been advanced in the relevant research fields such as economics. Thanks to these studies, a certain extent of knowledge has been accumulated and is further being built up.
　　Given this situation, The Japan Fair Trade Commission (hereinafter referred to as the “JFTC”) launched the Study Group on Innovation and Competition Policy (Chair: OKADA Yosuke, Professor, Faculty of Social Innovation, Seijo University) in March 2023, hosted by the Director General of the Economic Affairs Bureau of the JFTC, in order to attain a deeper understanding and knowledge of the actual situation of innovation in the context of competition policy. The Study Group aims to theoretically and systematically explore the mechanisms by which business conducts affect innovation, based on the expertise in economics and relevant disciplines.
　　The Study Group has complied its interim report based on the discussion thus far and published it heirein.