Directions of Innovation in a Post-COVID-19 Society–Three years have passed since the outbreak of COVID-19 pandemic.
How has the world and Japan changed during the years in which theRussian invasion of Ukraine has also occurred, and what will be
required from now on?–Excerpt From the Original Report in Japanese

New Energy and Industrial Technology
Development Organization (NEDO)

Technology Strategy Center (TSC)©NEDO 2023

Preface
Technology Strategy Center

In June 2020, as COVID-19 became a global pandemic, theTSC released a report titled “Social Changes and Expected
Innovation Visions after the COVID-19 Crisis.” Since then, we
can say that it has been a tumultuous three years in which theglobal situation has changed dramatically and various issues
have been highlighted, such as the new crisis of the Russian
invasion of Ukraine, as we fight against the fear of the virus.
Under these circumstances, people are becoming increasingly
anxious, and the social situation is becoming increasingly
uncertain. NEDO’s Technology Strategy Center (TSC), whose
mission is “to catch moves, design our future, and show
strategies forward,” conducted a survey and analysis to lookback and reassess how the world and Japan have changed
over the past three years, and what will be required in the future.

TSC Executive Director
Dr. KISHIMOTO Kikuo

The world will continue to change from moment to moment, and we hope that the issues
outlined in this report will serve as a basis for discussion toward a better society and therealization of people’s wellbeing, even if only a little.
NEDO’s TSC will continue to provide timely information from global and diverse
perspectives to help solve the social issues we face in the future.
If you have any questions or comments, please feel free to contact us at the TSC.

2

Table of Contents
Technology Strategy Center

Introduction

1. Global Trends in the Three Years Since the COVID-19 Pandemic Outbreak
2. Understanding of the Present Situation–Social Change in the Three Years After the Outbreak of the COVID-19
Pandemic–i. Social Change and Challenges for Japan as Seen Through the Survey
ii. Before and After COVID-19 in Data

3. Future Prospects – Directions of Innovation in a Post-COVID-19 Society–i. Important Innovations in a Post-COVID-19 Society as Shown in theSurveyii. Direction of International Collaboration to Realize the Innovations From theSurvey4. Conclusions –Social Change, Expected Innovations, and NEDO’s Efforts–

3

Introduction
Technology Strategy Center◼

At the time when humankind faced the unknown novel coronavirus (COVID-19) and uncertainty for the
future, NEDO published a report titled “Social Changes and Expected Innovation Visions after the COVID19 Crisis” (hereinafter referred to as the “COVID-19 Report 2020”) in June 2020 to predict and outline thesocial changes and values to be brought by COVID-19 and directions of innovation after the COVID-19
pandemic.

◼

Three years after the COVID-19 pandemic, the world has changed rapidly not only because of COVID-19
but also due to the Russian invasion of Ukraine, the intensifying of the battle for supremacy between the
United States and China, and the growing momentum toward carbon neutrality by 2050. For this reason,in this report, we have surveyed and analyzed the changes and trends over the past three years without
limiting ourselves to factors related to COVID-19 to see how much progress has actually been made in thepredictions assumed in the COVID-19 Report 2020 and what new trends and innovations are emerging ina post COVID-19 society.

◼

Specifically, the survey was conducted with the following two themes, based on the six social changes and
13 fields of innovation envisioned in the COVID-19 Report 2020 as the starting points.
① Social change in the three years after the outbreak of the COVID-19 pandemic
How have social and value changes brought during these years after the pandemic began?
② Directions of Innovation in the post COVID-19 society
What key innovations should NEDO focus on in the future?
What are the possible technologies required to realize them, and what are the technical fields and areasin which Japan needs to collaborate internationally?

◼ A survey was conducted on TSC fellows and advisors (hereinafter referred to as the “Fellows”), who areexperts in various fields, as well as staff at NEDO overseas offices, and the results were analyzed for thisreport. (The survey was conducted in February 2023 on 27 Fellows and staff at six overseas offices.)4Technology Strategy Center

1. Global Trends in the Three Years
Since the COVID-19 Pandemic
Outbreak5

Situation in Major Countries From the Outbreak of the COVID19 Pandemic to Its Convergence

Technology Strategy Center◼

6

On May 5, 2023, the WHO announced the end of the state of emergency caused by the spread of
COVID-19. The peak of infections in Japan came later than in Europe and the United States. As aresult, deregulation also came later than in Europe and the United States.
Trends in the number of COVID-19 infections in each country

Japan-October 2022
Relaxation of immigration restrictions-April 29, 2023
End of border measures-May 8, 2023
Change of COVID-19’s classification

Accumulated infections
33.8 million

2020

US

Germany

China

Deregulation in each country

2021

2022

2023

Accumulated infections
103.4 million

Accumulated infections
38.4 million

Accumulated infections
99.3 million

Source: Created by NEDO’s TSC based on WHO “COVID-19 Dashboard” (as of May 31, 2023)-Beginning of 2022
Restrictions on activities were
gradually lifted-June 2022
Inspection requirements for
air travelers were lifted.
-May 11, 2023
State of emergency was lifted-March 2022
Sequential lifting of restrictions-June 2022
Elimination of restrictions on entry(excl. China and some other countries)-April 2023
Mandatory requirement for wearing
masks was completely abolished-December 2022
Zero COVID-19 policy was withdrawn-May 2023
Restrictions on entry of foreign
nationals remained(Inspection at the time of entry, and so on)Macroeconomic Conditions and Prospects in Major Countries
Technology Strategy Center◼
◼

The global economy rebounded sharply in 2021 after falling in 2020 due to the COVID-19
pandemic. However, it has slowed down since 2022 due to rising inflation.
15.0
Compared withthe rest of the world and other advanced economies, Japan’s recovery has beenless robust.
％
10.0

コロナ前後の世界のGDP成長率推移
Global GDP
growth before and after COVID-19

5.0

0.0

2018

2019

2020

-5.0

World
Japan
US
EU
Developing countries

2022

2018
3.6
0.6
2.9
2.3
4.7

2019
2.8
-0.4
2.3
2.0
3.6

2023

2024

世界
World

日本
Japan

米国
US

英国
GB

EU
EU

新興国・途上国countries
Developing

中国

インド
India

China

-10.0

-15.0

2021

2020
-2.8
-4.3
-2.8
-5.6
-1.8

2021
6.3
2.1
5.9
5.6
6.9

2022
3.4
1.1
2.1
3.7
4.0

2023
2.8
1.3
1.6
0.8
3.9

2024
3.0
1.0
1.1
1.6
4.2

Source: Created by NEDO’s TSC based on IMF report “World Economic Outlook 2023”

7

What has Happened in the World in the Three Years Since
the COVID-19 Pandemic

Technology Strategy Center◼
◼
◼

In the three years since the outbreak of the COVID-19 pandemic, the Russian invasion of Ukraine, astruggle for dominance between the United States and China, and an acceleration of
decarbonization efforts have all happened simultaneously internationally.
These developments have led to a variety of global events, including supply chain and energy
issues.
As a result, many countries pursue national sufficiency and show the move to secure a stable supplyof energy and other resources, and the world is becoming divided.

COVID-19 pandemic
Supply chain
dysfunction,
Semiconductor
shortages

Commitment to carbon neutrality by 2050

Progress in digitaltransformationWorld
division

Countries pursue supply
chain resilience policies
Competition andregulation ofadvanced
technologies

Rapid inflation

Intensified US – China competition forsupremacy

Progress in renewableenergy investment,
Manifestation of NorthSouth issues

Countries implement large-scaleeconomic measures anddecarbonization investments
Energy issues(Price, supply andsecurity)
Russian invasion of Ukraine8

Technology Strategy Center

2. Understanding of the Present Situation–Social Change in the Three Years
After the Outbreak of the COVID-19 Pandemic–

9

Six Aspects of Social Change Predicted in the COVID-19 Report 2020
Technology Strategy Center◼
◼

NEDO’s COVID-19 Report 2020 published in June 2020 predicted that the COVID-19 pandemic
would drive changes in society and people’s behaviors in six aspects.
We have tried to examine, through a survey of TSC Fellows and staff at NEDO overseas offices,
whether such social changes were in line with the predictions, what changes appeared beyond thepredictions, and what issues became explicit for Japan against global trends in three years since
the beginning of the pandemic.

Six Aspects of Social Change From the COVID-19 Pandemic(Predictions as of June 2020)

Digital shift
Changes in political frameworks and international conditions
Changes in industrial structures and corporate actions
Changes in moving from centralization to decentralization
Changes in individual behaviors
Changes in awareness of environmental issues
Source: NEDO, “COVID-19 Report 2020”10

i. Social Change in the Three Years After the Outbreak of the COVID-19
Pandemic

11“Working from home," “Deteriorating US-China relations," “Communications infrastructure development," and “Online events" haveprogressed more than expected.
No progress was seen in "AI, infection tracking notification systems," “Total optimization through openness and standardization
through digitization," “Society to reduce CO2 emissions," and “From centralized urban to a decentralized and networked society."
Technology Strategy Center◼

◼

〈From the TSC fellow survey results〉

Robotics, unmanned logistics,
cashless payments
Total optimization throughopenness and standardization
through digitization, Industry 4.0

Environmental
Awareness

Industrial Structure

Improving the value of things thatcannot be digitized or imitated
Communication infrastructuredevelopment→ working from home, online
classesSociety to reduce CO2 emissions→ reduced migration, break awayfrom mass
production/consumption
Self-sufficient supply chain,domestic production
SME (esp. transport) predicament,
Re-recognizing environmental
co-creation with startups
issues triggered by COVID-19
Promotion of green policy foreconomic recovery→Green energy, CN

No change

International Conditions

Digital Shift

Work from home

As expected

Examples of socialchangeOpposite of
expectation

Centralization to
Decentralization

AI、infection tracking notification
systemDegree of change
More than
expected

Individual Behaviors

Examples of socialchangeState-led economy(Large-scale economic recovery
measures)
Strengthening of state control (ITcompany control, monitoring ofindividual activities)
Deteriorating US-China relations(democracy vs. IT monocracy)
Weakening of EU solidarity(border closure, national crisis)
response)
From centralized urban to adecentralized and networked
society

Remote and flexible working
styles, incl. childcare and nursing
Regional dispersion of offices andworkplaces, collaboration withlarge cities even in rural areas
Fusion of real and virtual(Convergence of 5G/VR/AI/IoT)
Online events
Increased individual discretion
and responsibility→ Remoteworkers
Communication and collaboration

Degree of change
More than
expected

As expected

No change

Opposite of
expectation

i. Social Change and Challenges for Japan as Seen Through the Survey
Technology Strategy Center

Changes

DigitalShift

12

Key Comments from the Survey on Social Change and Issues for Japan• Working from home and online meetings became popular in Japan and were established as new lifestyles, whilesome issues became apparent regarding the digital transformation (DX) in a society as a whole.
• Issues include a human resource shortage, a disparity of SMEs, inconsistency between IT use and social
systems, and partial improvements in operational efficiency. The conservatism of Japanese society was exposed.
• It is necessary to develop human resources who drive DX overall and in a strategic manner and to implement
digital technologies that match with the needs of people and organizations.
• Changes in international conditions are largely affected by the situation in Ukraine.

Changes inInternational
Conditions• The perspectives of economic security (supply chains), energy security, and food security became essential.
• It is high time to consider who Japan shall partner with in the midst of a divided world with a block economy, as it
cannot survive on its own.
• Japan is lagging behind in greening its industrial structure and transitioning to a society that limits CO2 emissions.

Changes inIndustrial
Structures• Supply chains have become increasingly fragmented since COVID-19 began, making economic security everimportant.

• Reconstruction of industrial supply chains that are not restricted to specific regions is required in all sectors,
including food, raw materials, and goods.
• Regional distribution was limited. Measures for decentralization, measures by region, infrastructure development,
Moving fromand so on are necessary for further progress.
Centralization
to Decentra- • For a networked society, it is necessary to spread DX to SME’s and in rural areas.
lization

Changes in
Individual
Behaviors• For a happy society, the participation of women, diversity, and digitalization in childcare and nursing care are necessary.
• The fusion of the real and the virtual requires virtual technology that matches human sensibilities with a sense ofrealism and the speedy linkage of elemental technologies to services. It is also necessary to discuss what
happiness and well-being look like in the virtual world.
• Remote work strengthened the management of the supervisors and reaffirmed the importance of face-to-face communication.
• Not only COVID-19 but also the Ukraine crisis has brought about a rise in environmental awareness.

Changes inEnvironmental • The COVID-19 crisis brought about increased plastic waste with increased home delivery. No major changes seen in
Awareness

people’s individual environmental awareness. The realization of sustainability and a circular society are essential.

ii. Before and After COVID-19 in Data –Digital Shift–Technology Strategy Center

◼
◼

13

During the pandemic, the world’s expenditures on DX technologies and services increased.
Investment in AI also jumped, and it is expected to increase further.
World’s Expenditures on DX Technologies/Services

Expenditures in Trillion USD

Private AI Investment in Pre-COVID-19 Times
Investment in Billion USD

Source: Stanford University, “2023 AI Index Report” (comment added by NEDO TSC)

US Leads World Private AI Investment, Japan in 14th
Source: IDC (from Statista, with a comment added by NEDO TSC)

Investment in Billion USD

Key comments from the survey:➢ TSC Fellows expressed concerns about Japan’s
delay in global trends of digital shift due toinsufficient ability to adapt DX technologies to society,people, and organizations.
➢ Also, NEDO overseas offices pointed out the lack ofsocial systems in Japan for deploying digitaltechnologies.
Source: Stanford University, “2023 AI Index Report” (Red frame added by NEDO TSC)

ii. Before and After COVID-19 in Data
–Changes in International Conditions–◼

Technology Strategy Center

These changes over the last three years have emphasized the importance of energy security, economic
security, and food security. They have reminded us of the need of not being dependent on specific countries ina supply chain.
Natural Gas Price Increases due toAdvanced Semi-Conductor
Global Food Prices Have Surged
Manufacturing Dependent on Taiwan
the Ukraine Situation
単位：％

Source: World Bank, “Commodity Market Outlook
April 2023”

Source: Boston Consulting Group, SEMI Fab Database(from Statista)

Index: 100 = Average price during 2014–2016
Source: Food and Agriculture Organization of
the United Nations (from Statista)

Clean Energy Device Manufacturing
Dependent on China

World Competes for Investment in
Semi-Conductor Plant Building

Rapid Change in Destinations of
Ukraine Grains

High growth expected in US and Europe

Exports to Africa/Asia decreased

Solar Panel

China

Others

Wafer
Cell

USA
TaiwanEurope/M.East
Korea

Polysilicon
EV Battery

Japan

Graphite

China

CobaltS.E.Asia

Aluminum

China

Others*Country share of processing, smelting, manufacturing
Source: Nikkei Newspaper, "New decarbonization framework
by G7 within this year" (Translation added by NEDO TSC)

*Front-end processes, Country/Regions where investment executed
Source: JETRO, "World semiconductor market outlook and US strategy"

Source: UN Comtrade (from Statista)

14

ii. Before and After COVID-19 in Data
–Changes in Industrial Structure–◼
◼

15

Technology Strategy Center

In response to changes in international conditions over the last three years, the US, Europe, and Japan haverecently introduced policies for energy, climate change, and strengthening supply chains with large budgets.
They tend to be new industrial policies that promote technology development in an integrated manner.

Large Scale Policies for Energy, Climate Change, and Supply Chains over the last three years↓Announced

Green Deal Industrial Plan

Jan.
2023

REPowerEU
Accelerate renewable energy and energy
efficiency to break away from thedependency on Russia (€300B)

EU Chips Act
Strengthen semiconductor industry
with R&D and manufacturing inside EU(€43B)

Green Innovation Fund

Specified Semiconductor
Funding Program
May
2022

Supply Chain↓Legislated↓Established
Mar.
2021

R&D and demonstration projects towards
CN (￥2,754B)

Develop net zero industries incl. thefinancial support for manufacturing plants
inside EU. (EU budget €250B)

Energy/Climate Change

Mar.
2022

Mar.
2022

Project for Supportinga Secure Stable Supply
Support stable supply of goods for living
and economy (￥828B)

Mar.
2023

Nov.
2021

Infrastructure investments and largescale demonstrations for climatechange and so on ($555B)

R&D for key technologies of economic
security (￥250B)
Apr.
2022

Jul.
2022

Incentivize climate change actions in
production and deployment through tax
credits and so on ($437B)

Infrastructure Investment andJobs Act

Support advanced semiconductor
manufacturing facilities (￥1,067B)

Program on Technologies
for Economic Security

Inflation Reduction Act

Chips and Science Act
Support “made in America”
semiconductors and advanced science/research ($52.7B)

In addition, cooperation with the Global South in various formats has expanded.
G7 Hiroshima Summit (Leaders’ Statement on Economic Resilience and Economic Security),
IPEF（Indo-Pacific Economic Framework for Prosperity), Mission Innovation,
AZEC (Asia Zero Emission Community, led by Japan), Clean Energy Ministerial (led by the US).
Source: Created by NEDO TSC, referring to government announcements, JETRO and other news coverage

Aug.
2022

ii. Before and After COVID-19 in Data
–Moving from Centralization to Decentralization–

Technology Strategy Center

◼

◼

16

There was a large disparity in the development of working from home during the pandemic between metropolitan
areas and regional cities. It can be said that the transition to decentralized offices and workplaces did notnecessarily progress as expected.
Various digital infrastructure investments are expanding globally. This is one key element that may lead toeliminating disparities.
Significant Difference Between Metropolitan Areas and Regional
Cities in the Ratio of People Working From Home

Metropolitan Area
Kinki Area
Chukyo Area
Regional Cities
National Average

IoT Investment Increases Worldwide
Investment in Billion USD

Source: JSR (from Statista, a comment added by NEDO TSC)

Dramatic Expansion of Commercial Satellites–New Communication Infrastructure–
Source: Ministry of Land, Infrastructure, Transport and Tourism, “FY2022 Telework Population Survey”

From various news reports:

6,905 satellites in operation as of 2022
Number of satellites➢ COVID-19 has brought about progress in working from home worldwide,
leading to diverse work styles, especially among large companies.
➢ Meanwhile, U.S. Big Tech was quick to mandate a return to the office.
➢ Globally, there are regions with high office occupancy rates at the end of2022: Asia Pacific, about 85%,; and Europe/Middle East, about 70%; in the
U.S. it is about 45%.
➢ Even Tokyo, which temporarily experienced an excess of out-migration,
showed a trend of centralization, with an excess of nearly 40,000 people
moving into the city in 2022.
Source: Nikkei Newspaper and other news media

Source: IDC; Exploding Topics (from Statista, a comment added by NEDO TSC)

ii. Before and After COVID-19 in Data –Individual Behaviors–
Technology Strategy Center

◼
◼

17

The XR market is expected to expand worldwide and there are signs that virtual reality, symbolized byonline events, will further develop. Cashless payments are progressing in Japan as well.
At the same time, the number of home deliveries, which can increase environmental impacts, has rapidly
increased, and food delivery has also rapidly become popular.
Global XR Market Will Expand in the FutureMarket size Billion USD
市
場
規
模
（
単
位
：
10
億
ド
ル
）

Home Deliveries Increased Rapidly
Increase of more than 1.5 times from 2019 to 2021
159 billion parcels shipped worldwide in 2021
Number of deliveries (billions)

Source: ARtillery Intelligence (from Statista, Comment added by NEDO TSC)
Source: Statista; Pitney Bowes (Comment added by NEDO TSC)

Cashless Payments in Japan are Increasing Year by Year
Cashless ratio in 2022 in Japan was 36%
Cashless ratio

Source: Statista, “Ratio of Cashless Payments in Japan 2013-2022”(Red circle and comment added by NEDO TSC)

Online Food Delivery is Popular Around the World
Unit: Trillion USD*Blue: Food delivery, Black: Meal delivery
Source: Statista, Market Insights, “Online Food Delivery” (A comment added by NEDO TSC)

ii. Before and After COVID-19 in Data
–Changes in Awareness of Environmental Issues–◼
◼

Technology Strategy Center

18

Since 2021, global clean energy investment has expanded. Climate tech attracts funding.
Recycling of ever-increasing plastic waste remains at a negligible level. There has yet to be a major change
in people’s environmental awareness.
VC Expanding Funding to Climate Tech Companies

Global Clean Energy Investment Increasing

Rapid increase in 2021, steady growth in 2022

Expected to exceed $1.7 trillion in 2023

Unit: Billion USD

Unit: Billion USD←Left:
Clean Energy←Right:Fossil FuelSource: IEA, “World Energy Investment 2023”

Do You Consider Recycling Packaging When Purchasing
Food?
Even in developed countries, few people consider recycling packaging*Survey done in Feb. and Mar. 2021
Source: Statista, ”Plastic Packaging Still an Afterthought for Most”

Source: Dealroom.co, “Climate Tech”

Only 9% of Plastic Waste is Recycled Worldwide
Unit: Million tons

Source: OECD, “Global Plastic Outlook 2019”(from Statista, red frame added by NEDO TSC)

What We Have Learned From the Survey Results on Social Change
Technology Strategy Center◼

The characteristics of social changes in the world and Japan during the three years after theoutbreak of COVID-19 as seen from the results of this survey are as follows:✓ A digital shift has steadily progressed globally, including in Japan. Japan, however, is notnecessarily enjoying the benefits of such a digital shift in a profitable way, as can be seen in theslight decline of the sales of Japanese IT platforms and services in the global market share.
✓ The international situation over the past three years has also made the world face up to thechallenges of energy security, economic security, and food security. At the same time, the world
became strongly aware of the need to break away from dependence on specific countries. Manyof the major countries and regions have introduced large-scale budgets for addressing energy andclimate change issues and supply chain resilience. Japan also created the Green Innovation Fundand a fund for economic security. It can be said that these efforts reflect recent industrial policies
in which policy and technology development are being promoted in an integrated manner.
✓ It was pointed out in the survey that Japan tends to fall behind global trends due to the lack ofsystems and infrastructures for social implementation of technology rather than technologicalfactors. It is, therefore, necessary for industry, academia, and the government to work together topromote not only research and development but also market introduction and commercialization oftechnology by focusing on industrialization and social implementation in a multifaceted andmultilayered manner.
✓ In addition, it was also pointed out that COVID-19 did not lead to changes in behavior ofindividuals in the environmental field, either in Japan or in the world. Rather, the restrictions during
COVID-19 resulted in an increase in plastic waste due to increase in home delivery and policies
that focus on individuals may be necessary in the future.

19

Technology Strategy Center

3. Future Prospects–Directions of Innovation in a Post COVID-19 Society–20Expected Innovations in the COVID-19 Report 2020
Technology Strategy Center◼

◼

In this survey, experts were asked to select the top three most important innovations that NEDO should
focus on in the future, from the 13 fields of innovation (① through ⑬) envisioned in the COVID-19 Report
2020, and any other fields of innovation (⑭) that were not originally expected.
Experts were also asked to make comments on possible technologies and issues to be resolved to realize
the selected innovations as well as technology fields in which Japan needs to collaborate internationally inthe future (e.g., joint research and international deployment of Japanese technologies).
Expected Innovation

Innovation Category

Fields of Innovation① Business meetings

Services in virtual space② Online classes and lessons③ Medical services

Services in real space④ Medical and nursing care
⑤ Retail and distribution infrastructure

Expected innovation through digitaltransformation
Data-driven industries⑥ Infrastructure and mobility⑦ Manufacturing and production site
⑧ Design and manufacturing

Expected innovation toward therealization of a sustainable society

Manufacturing and production of
goods⑨ Supply chain for manufacturing industry

Circular economy⑩ 3R

Bioeconomy⑪ Environmental materials andbiomanufacturing⑫ Plastics materials

Sustainable Energy

Other fields of innovation that were not originally expected⑬ Renewable energy and energy system⑭ Others21

i. Important Innovations in a Post COVID-19 Society
as Shown in the Survey◼
◼
◼

Technology Strategy Center

The survey results showed that “renewable energy and energy systems” was selected by far the mostimportant innovation that are expected to be important in the future.
The responses for the other fields of innovation were generally balanced, with the results showing that they
are of equal importance.
It was suggested by some experts that it is also necessary to pay attention to recent trends such as“generative AI” (e.g., ChatGPT), “quantum computing,” and “nuclear fusion.”〈From the TSC Fellow survey results〉
Expected innovation toward the realizationof digital transformation

Expected innovation towardrealization of transition to asustainable society

Number of responses
16
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0

Quantum
computing,financial sector

22

i. Most Important Innovation Shown in the Survey
Technology Strategy Center

Expected innovations toward the realization of a transition to a sustainable society

Renewable energy and energy systems〈From the TSC Fellow survey results〉• Since the conflict in Ukraine began, it has become clear that reliance on foreign
products and technologies involves high risk. Therefore, it is ideal to manufacture andmaintain infrastructure equipment for renewable energy such as PVs and wind power
within a country, creating a value chain of its own in a sustainable manner.
• It was reconfirmed that steady efforts to realize the transition to renewable energy andthe resilience of energy systems are crucial in order to achieve carbon neutrality.
• It is difficult for Japan alone to keep the economy going in introducing renewableenergy. It is, therefore, also important to develop projects through international
collaboration.
• What lies beyond solar and wind power are important technological issues, which
include energy storage, efficient conversion of electricity into thermal energy (heatpumps, electric heating, and so on), synthesis of renewable energy-derived liquid
fuels (SAF, and the like), and the use of water as a hydrogen source (waterelectrolysis, artificial photosynthesis, and so on).
• Power generation systems suitable for local production for the local consumption ofenergy and minimization of energy loss from electricity transmission are necessary.
• In addition to the development of innovative technologies that contribute to expanding
the use of renewable energy in urban areas, it is also important to develop systemdesign for the promotion of renewable energy.

23

i. Technologies and Issues Toward the Realization a Transition to a
Sustainable Society

Technology Strategy Center◼ In light of issues such as energy security and economic security that have been highlighted insocial changes over the past three years, there were many comments that we shouldemphasize circular systems in order to transform to a sustainable society.
〈From the TSC Fellow survey results〉

Fields of Innovation

Technologies to realize the innovation

3R• DX needs to be deployed to enable reuse and recycle throughout the course of manufacturing,sales, and consumption of all industrial products without limiting it in the field of food and waste.
• The 3Rs (reduce, reuse, recycle) of food are important for improving food security and food selfsufficiency. It is particularly important to develop technologies that contribute to reducing food loss
by individuals, which accounts for about one-third of food loss.
• In addition to the 3Rs, we should consider the 5Rs that include refuse and repair. Accelerating thedevelopment of technologies such as the promotion of the blue economy, mass production
technology (factories) for land-based aquaculture and cultured meat, and optimization of supply anddemand using AI is required in this context.

Environmental
materials andbiomanufacturing
Plastics
materials• It is necessary to develop technologies and materials in hitherto unexplored areas such as blue
carbon and blue resources. For this purpose, we must understand the necessary amount, theavailability of raw materials, and consider the regional merits in terms of transportation andconsumption.
• Biomanufacturing must be incorporated into all manufacturing fields in the future.
• The development of bioplastics and biodegradable plastics is still in its infancy. There are many
issues, including cost, in realizing a cycle of separate collection to reuse. As the USA leads indecomposition technology using microorganisms and enzymes, there is an urgent need to develop
technologies utilizing AI to catch up.
• The early social implementation of material and chemical recycling is necessary. Regarding
chemical recycling, it is important to identify low-temperature and energy-saving technologies.

24

i. Technologies and Issues Toward the Realization of
Digital Transformation ①

Technology Strategy Center

25◼ Many respondents emphasized the need to further utilize AI for digital transformation.
◼ This applies to various kinds of fields including “supply chain for manufacturing industry” to secure aworkforce in the face of a declining birthrate and aging population, and “medical and nursing care” toimprove medical care quality.

〈From the TSC Fellow survey results〉

Fields of Innovation

Technologies to realize the innovation

Businessmeetings• Current teleconference systems have advantages and disadvantages, and the basic functions are often insufficient. A
completely new and different AI-assisted co-working system for entire meeting workflows such as materials
preparation before a meeting, automatic document projection at meetings, and taking meeting minutes after meetings
is required.
• Solving the problem of time differences in international conferences would be appreciated.

Online classes
and lessons• It is believed that the education system will change completely in the future. For example, by making online classes
more realistic, it will be possible to receive a much richer variety of online lectures than are currently available.
• In the re-skilling of industrial workers, it seems that rather than quitting their jobs, workers will be required to find ways
of working that allow them to balance work with re-skilling. For this to happen, legal reforms and corporate support by
the government are necessary.
• If we do not analyze the educational effects that can only be achieved by face-to-face teaching, there is a risk that theeducation system will collapse.

Medicalservices• As the population continues to age and the number of medically depopulated areas increases, the first step of DX
needs will be at health monitoring devices, followed by medical measuring devices, and finally robots including thosefor medical treatment. As the latter is more difficult to achieve, if a system that includes machine learning andprediction or health guidance can be developed and disseminated, it will be possible to make a difference in tacklingthe medical depopulation problem.

Medical &nursing care

• There is a sense of crisis that Japan’s robotics technology is behind that of Europe and America. In particular, themedical and nursing care field is a treasure trove of information. If foreign robots are allowed to enter this field, there isa very high risk that foreign companies will obtain personal information, including genetic information, information
about social systems, medicines and diagnostics, and all other information related to the medical system.
• Digital health systems for health maintenance, management, and diagnosis using digital technologies such as AI and
IoT, are necessary to improve medical quality. The key is how those technologies are friendly to people.
• Collecting high-quality data, developing efficient data storage, and establishing rules regarding ethics are important.

i. Technologies and Issues Toward the Realization of
Digital Transformation ②

Technology Strategy Center

26〈From the TSC Fellow survey results (cont’d)〉Fields of Innovation

Technologies to realize the innovation

Retailand distribution
infrastructure• Research on how to transport goods at low cost is essential.
• Because of the growth of online shopping and home delivery, it is necessary to further develop
autonomous vehicle and mass transportation technology. Accelerating the involvement of thegovernment is important to reach the practical phase of development.
• The problem is that there is a mismatch between new technological infrastructure and existingorganizations and systems, which is often a difficult gap to fill.

Infrastructureandmobility• It is necessary to develop infrastructural mobility that aims to solve social issues rather than provide
convenience, and to optimize seamless transportation, including not only automobiles but also railways,
ships, aviation, drones, personal mobility, and so on.
• Data sharing mechanisms, inexpensive sensors, and deregulation/system reform should be taken care of.

Manufacturing • Japan’s productivity is low; thus, it is necessary to improve productivity in agriculture and fisheries.
• Decentralization makes the concept of producers closer to that of consumers.
and• It is important to strengthen the foundation of Japan’s industrial competitiveness through saving labor by
production site
robot technology and material DX.

Supply chain for
manufacturingindustry• We have faced supply chain problems twice in the last ten years due to the rare earth issue and the
Ukraine crisis. Although it is a company issue, using AI to understand and visualize the increasingly
complex supply chains (confidentiality is also important) is important for maintaining and developing
industry. In addition, horizontal (same industry) collaboration is also important to simultaneously
strengthen the commonality and differentiation of technologies.
• Currently, data produced by each company’s activities is disparate, and translation work is required forcompanies to communicate with each other. Efforts toward standardization are progressing among large
companies, but little progress has been made among small and medium-sized enterprises, making it
important to create rules, standardize, and share the future we aim for.
• NEDO’s efforts are essential, as companies cannot achieve this alone and collaboration with thegovernment is essential.

ii. Direction of International Collaboration to Realize theInnovations From the Survey ①

Technology Strategy Center

◼
◼

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Based on the results of the survey, the direction of international collaboration required for Japan in
the future in order to realize the important innovations in a post COVID-19 society is as follows:
Japan will be required to engage in international joint research in the field of basic research, secureinternational competitiveness in the fields of cutting-edge technologies, and create areas ofcooperation. Also, considering the importance of economic security, instead of the conventional
omnidirectional international collaboration, it is important for Japan to develop strategic
collaboration with countries that share the same values, and promote appropriate cooperation andshare technology information proactively in order to create innovations together.

〈From the TSC Fellow survey results〉

Direction of international collaboration to realize the innovations① International joint research in the field of basic research:•

International joint research is essential for accumulating knowledge and advancing it through discussion. Particularlyin the field of basic research, international brainstorming can dramatically improve knowledge.

② Ensuring international competitiveness in advanced technology fields:•

In the field of advanced technology, it is possible to utilize Japan’s cultural background and knowledge of past
technological development at a global level, and it is important to ensure international competitiveness with ideas
unique to Japan.

③ Creation of areas of cooperation:•

When conducting international collaboration, discussions from the perspective of the benefits (technology acquisition,market acquisition, standardization) not only for Japan but also for partner countries should be taken into
consideration. From that perspective, collaboration in cooperative fields (technology development/standardization) is
more appropriate than in competitive fields.

ii. Direction of International Collaboration to Realize theInnovations From the Survey ②

Technology Strategy Center〈From the TSC Fellow survey results (cont’d)〉Direction of international collaboration to realize the innovations④ Economic security:•

In the future, from the perspective of economic security, it will become increasingly important to consider how far
the risk of dependence on other countries can be reduced, and whether a country can circulate its own resources.

•

In terms of resources for which there is no choice but to depend on other countries to obtain, it is important tocooperate with the resource-producing countries on technologies that have a low environmental impact and are
beneficial to the region, in a fair manner.

⑤ Global talent development and utilization:•

In order to create new industries in the future, we need a society where young people (Generation Z andmillennials) can demonstrate leadership in promoting research and development. To this end, an urgent issue is
how to increase opportunities for young people overseas and increase the mobility of talent with other countries,
as well as how to secure the human resources needed for future Japanese industries.

•

Countries such as the United States and China are drawing in excellent researchers from overseas to create newtechnologies. It is also important to investigate how the system and benefits for securing highly skilled humanresources overseas are structured from a security perspective.

⑥ Problem solving for social system development:•

In addition to technological development, it is also beneficial to learn and share know-how through international
collaboration for building social systems and standardization that will allow such technology to be accepted bysociety.

•

For example, there are many things to learn about citizen consensus building in multi-ethnic countries such as theUnited States and Canada.

⑦ Further relationship building with ASEAN countries:•

In addition to Western countries, Japan, an island nation, is close in culture (food culture, and so on) to Southeast
Asia, which also has island nations, and it is considered easy to share values and issues. It is necessary to further
accelerate cooperation and collaboration that will lead to a future with trustworthy countries.

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What We Have Learned From the Survey Results on
Expected Innovations

Technology Strategy Center◼ The following are important innovations suggested by the results of this survey:✓ “Renewable energy and energy systems” was considered the most important issue inrealizing a sustainable society as energy security and economic security have become
critical issues. In addition, circular systems such as “3R” and “environmental
materials/biomanufacturing” were frequently mentioned to be considered as important.
✓ For digital transformation, many comments were made on the importance of the further
utilization of AI. AI applications for “supply chain for manufacturing industry” to solve futurework-power shortages in an aging society with population decline, which is a specific issue
to Japan, and “medical and nursing care” to improve medical quality were highly expected.
These were also desired in order to prepare for future pandemics and crises.
✓ From these results, this survey suggests that “the realization of a circular and decarbonizedsustainable society” and “digital transformation through further utilization of AI” areimportant innovations in a post COVID-19 society.
◼ For the implementation of technology development necessary for these innovations, supply
chain and economic security, which were not being strongly emphasized before COVID-19,
should be considered and for this reason, the importance of international collaboration needs
to be highlighted. In particular, the importance of international joint research in advanced
and/or basic fields as well as partnerships for building social systems and standardizations
were pointed out. Moreover, because economic security will become more critical, it was
implied that Japan should strategically build a relationship of trust with nations that have thesame values and not the all-around international collaboration that has been the norm so far.

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Technology Strategy Center4. Conclusions–Social Change, Expected Innovations, andNEDO’s Efforts–

30

Conclusions–Social Change, Expected Innovations, and NEDO’s Efforts–

Technology Strategy Center

31◼ In the three years since the outbreak of the COVID-19 pandemic, there have been big social changes such as new lifestyles and work styles
caused by the progress of digitalization, the growing importance of three securities (energy, economy, and food), and an increased awarenessof environmental issues and momentum toward decarbonization.
◼ “Realization of a circular and decarbonized sustainable society” and “digital transformation through further utilization of AI” targeting a wide
range of fields were once again revealed to be important for innovations in a post COVID-19 society. To realize these expected innovations,strategic international collaboration and international cooperation will be important when taking into consideration the perspectives of supply
chains and economic security.
◼ NEDO’s TSC is currently working on clarifying the path to social implementation of technologies, such as analyses and development oftechnology strategies, in the fields whose importance were highlighted in this survey. NEDO’s TSC will continue to pursue its mission to “catchmoves, design our future, and show strategies forward.”

Social change and trends
in the last three years
New lifestyles and work styles
brought about by the progress ofdigitalization(e.g., working from home,cashless payments, online
classes)

Growing importance of thethree securities:① Energy security② Economic security③ Food security

Increased awareness ofenvironmental issues andmomentum toward
decarbonization

Expected Innovations and NEDO TSC’s Efforts“Comprehensive R&D Principle for Sustainable Society 2023”
To realize a sustainable society, integrated promotion of three social systems,
a “circular economy,” a “bioeconomy,” and “sustainable energy” with “digitaltransformation” as the basis of the three are mandatory.

Realization of a circular anddecarbonized sustainable
society

Digital transformation
through further utilizationof AI○ Renewable energy and energye.g., Social implementation of AI

systemse.g., Wind power generation○ 3R○ Environmental materials,
Biomanufacturinge.g., Biomanufacturing, blue resource○ Supply chain for
manufacturing industry○ Medical and nursing care
○ Business meetings

Social system/infrastructureInternational collaboration

References
Technology Strategy Center
Slide

Source6WHO, “COVID-19 Dashboard” （as of 2023.5.31）

7

IMF, “World Economic Outlook 2023”

13

Stanford University, “2023 AI Index Report”

14

World Bank, “Commodity Market Outlook April 2023”

14

Nikkei Newspaper, "New decarbonization framework by G7 within this year" (2023.5.13, Japanese)

14
14

Boston Consulting Group, SEMI Fab Database（Quoted from Statista "Advanced Microchip Production Relies
on Taiwan"）
JETRO, "World semiconductor market outlook and US strategy" (2023.5.8, Japanese)32

URL
https://covid19.who.int/
https://www.imf.org/en/Publications/WEO/Issues/2023/04/11/world-economicoutlook-april-2023
https://aiindex.stanford.edu/report/
https://openknowledge.worldbank.org/server/api/core/bitstreams/6864d537-d4074cab-8ef1-868dbf7e07e2/content
https://www.nikkei.com/article/DGKKZO70963230S3A510C2EA4000/
https://www.statista.com/chart/30041/global-semiconductor-wafer-fabricationcapacity-by-type-and-location/
https://www.jetro.go.jp/biz/areareports/special/2023/0501/f407d28bc70f206c.html

14

Food and Agriculture Organization of the United Nations（quoted from Statista "Global Food Prices Surge
Amid Russia-Ukraine War"）14

UN Comtrade（quoted from Statista "How the War Redirected Ukraine's Grain Exports "）15

JETRO, "European Commission announces Green Deal Industrial Plan" (2023.2.3, Japanese)exports/
https://www.jetro.go.jp/biznews/2023/02/61fa6e9285deed7f.html

15

JETRO, "REPowerEU" (2022.9.1, Japanese)

https://www.jetro.go.jp/biz/areareports/special/2022/0802/22edf85aa93cf592.html

15

Asahi Newspaper Digital, "EU agrees on semiconductor act" (2023.4.19, Japanese)

https://www.asahi.com/articles/ASR4M5R8SR4MUHBI01M.html

15

NEDO, home page for "Green Innovation Fund" (Japanese)

https://green-innovation.nedo.go.jp/

15

NEDO, home page for "Program on Technologies for Economic Security" (Japanese)

https://www.nedo.go.jp/activities/k-program.html

15

NEDO, home page for "Specified Semiconductor Funding Program" (Japanese)

https://www.nedo.go.jp/activities/ZZJP_100212.html

15

NEDO, home page for "Project for Supporting a Secure Stable Supply" (Japanese)

https://www.nedo.go.jp/activities/secure_stable_supply.html

15

Congress.gov. "H.R.5376 - Inflation Reduction Act of 2022" (2022.8.16)

https://www.congress.gov/bill/117th-congress/house-bill/5376

15

Congress.gov. "H.R.3684 - Infrastructure Investment and Jobs Act "(2021.11.15)

https://www.congress.gov/bill/117th-congress/house-bill/3684

15

JETRO, "President Biden signs CHIPS and Science Act" (2022.8.10, Japanese）

https://www.jetro.go.jp/biznews/2022/08/50bd3e1715a7131c.html

21

Nikkei Newspaper, "Population concentrated again in Metropolitan Tokyo" (2023.1.20, Japanese）

https://www.nikkei.com/article/DGXZQOUA300JW0Q3A130C2000000/

21

Nikkei Newspaper, "Returning to office, 70% work at office" (2023.4.23, Japanese)

https://www.nikkei.com/article/DGXZQOUC223J30S3A320C2000000/
https://www.statista.com/statistics/668996/worldwide-expenditures-for-the-https://www.statista.com/chart/20165/un-global-food-price-index/
https://www.statista.com/chart/29750/top-10-destinations-of-ukrainian-cereal-

16

IDC; Exploding Topics（quoted from Statista "Prognosis of worldwide spending on the Internet of Things(IoT) from 2018 to 2023"）
JSR（quoted from Statista, "Number of active satellites from 1957 to 2022"）

17

Statista, “Ratio of Cashless Payment in Japan 2013-2022”

17

ARtillery Intelligence（quoted from Statista "Extended reality (XR) market size worldwide from 2021 to2026"）

17

Pitney Bowes（quoted from Statista "Global parcel shipping volume between, 2013-2027"）

https://www.statista.com/statistics/1139910/parcel-shipping-volume-worldwide/

17

Statista, Market Insights, "Online Food Delivery"

https://www.statista.com/outlook/dmo/online-food-delivery/worldwide

18

IEA, “World Energy Investment 2023”

https://iea.blob.core.windows.net/assets/54a781e5-05ab-4d43-bb7f-

18

Dealroom.co, “Climate Tech”

18

Statista, "Plastic Packaging Still an Afterthought for Most"

https://dealroom.co/guides/climate-techhttps://www.statista.com/chart/30016/shopping-decisions-based-on-recyclable-

18

OECD（quoted from Statista "Recycling Efforts Not Enough to Solve Plastic Waste Problem"）

16internet-of-things/
https://www.statista.com/statistics/897719/number-of-active-satellites-by-year/
https://www.statista.com/study/88496/cashless-payments-in-japan/
https://www.statista.com/statistics/591181/global-augmented-virtual-realitymarket-size/

packaging/?utm_source=Statista+Newsletters&utm_campaign=108590fe36-All
https://www.statista.com/chart/27756/global-waste-management-projections/Technology Strategy Center

Technology Strategy Center Report

Directions of Innovation in a Post COVID-19 Society–Three years have passed since the outbreak of COVID-19 pandemic. How has the world and Japanchanged during these years in which the Russian invasion of Ukraine has also occurred, and what will be
required from now on?–Published in August 2023
New Energy and Industrial Technology
Development Organization (NEDO)
Technology Strategy Center (TSC)■ Executive Director■ Director General

KISHIMOTO Kikuo
UEKI Kenji
IIMURA Akiko (until July 4, 2023)■ Global Technology Research Unit
TOKUHIRO Masayo, ISAKA Mirei, SUZUKI Shigeo, GOTO Kenji,
MITSUYA Nobuaki (until March 31, 2023)■ Sustainable Energy Unit
NIKI Sakae, MATSUDA Yoshiji, OKADA Mitsutoshi■ Digital Innovation Unit
ITOH Satoshi, YOSHINO Junya■ Bioeconomy Unit
MIZUNASHI Wataru, MIMAKI Yoshiya, MINAMI Seiko■ Macro Analysis Unit
YAMADA Hidenori, SHINOZAKI Tadaaki• The copyright of all documents, images, and so on published inthis material belongs to NEDO’s TSC, unless otherwise stated.
• The contents of this report may be quoted, reprinted, andreproduced in whole or in part as long as such actions are
permitted under the Copyright Act for private use, quotation orother use, with clear indication of the source in an appropriate
way.
However, if the contents are specified from other sources than
NEDO’s TSC, please use them according to their terms of use
set by the respective copyright holder.
• If you wish to reproduce any copyrighted material contained inthis document for commercial purposes, please contact us inadvance at the contact information below. Reproduction forcommercial purposes refers to copying and selling copyrighted
works for the purpose of making a profit directly.
• Alteration of all or part of this report without the permission of
NEDO’s TSC is prohibited.

・Contact Information:
New Energy and Industrial Technology Development Organization(NEDO)
Technology Strategy Center (TSC)
Phone: +81 44 520 5150
E-Mail: tsc-unit-2023@ml.nedo.go.jp

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