Mitsubishi Heavy Industries Technical Review Vol. 58 No. 1 (March 2021)
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MHI FUTURE STREAM:
Indicating MHI Group’s Direction

YO AKIYAMA*1

TAKAAKI FURUYA*2

To continue to contribute to society and humanity through the provision of machine systems,
it is necessary for Mitsubishi Heavy Industries (MHI) Group to be a company that can sustainably
grow with the capability of responding to rapid changes in the social agenda, people’s values,
technological innovation, etc.
MHI FUTURE STREAM is an activity for setting MHI Group’s business direction according
to several possible scenarios that are formulated based on the big picture of changes in the political,
economic, social, and technological situations surrounding our business from a medium- to longterm perspective. With regard to the three approaches of “Mega Scan”, “Shift the Path” and“Technology Scouting”, which were described as components of MHI FUTURE STREAM in
previous Technical Review (1), this report describes the notable megatrends, the direction of ourgroup’s business shift theretoward, and the activities of Yokohama Hardtech Hub, which was newly
inaugurated as a co-creation platform.

|1. Introduction
Since its founding, MHI Group has contributed to the progress of society through the
manufacture of machine systems that make up social infrastructure. Under such circumstances, inrecent years, complicated social agendas, the diversification of people’s values, technologicalinnovations such as digitization, functional materials, and biotechnology, as well changes in people’s
behavior due to the COVID-19 catastrophe, have been superimposed, and the needs and values
surrounding social infrastructure have been changing uncertainly and discontinuously.
MHI group will continue to be a machine system manufacturer that contributes to society.
However, in order to continue to contribute to and provide value to the stakeholders surrounding us,
our group needs to draw a picture of the future society we are aiming for, reaffirm the role we shouldplay, and continue to make changes theretoward.
MHI FUTURE STREAM is an activity to discover the direction in which our group’s businessshould go.

|2. MHI FUTURE STREAM looks toward future society andencourages business shifts
Three approaches are taken in MHI FUTURE STREAM: “Mega Scan”, “Shift the Path” and“Technology Scouting” (Figure 1).

*1Manager, Business Intelligence & Innovation Department, Technology Strategy Office, Head Office, Mitsubishi Heavy*2

Senior Fellow, Technology Strategy Office, Head Office, Mitsubishi Heavy Industries, Ltd.

Industries, Ltd.

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Figure 1

Three approaches of MHI FUTURE STREAM

In “Mega Scan”, society 10 to 20 years in the future is predicted from a broad, comprehensive
perspective, and based on the obtained image, possible change pattern scenarios are formulated
considering wide-ranging possibilities in markets and technologies to suggest possible business
opportunities. Through this approach, many dialogues are held with experts and innovators both
inside and outside our companies, and insight into the future and vision are created with multiple
perspectives in terms of markets and technologies. Especially in recent years, major movements that
may affect the future society occurred at the same time, such as the social agenda including
sustainable growth with a view to preserving the global environment with regard to climate change,
etc., and utilizing limited resources, cross-border regulations starting from U.S.-China friction, etc.,
the acceleration of technological innovation including digital and biological technologies, changesof people’s behavior triggered by the COVID-19 catastrophe, and supply chain vulnerabilities
exposed against the background of the globalized economy. “Mega Scan” does not consider thesechanges as a set of single phenomena, but gives insight into the overall picture of these changes.
“Shift the Path” generates innovation hypotheses of market and technology based on theinsights and perspectives of “Mega Scan” and “explores” the business opportunities found fromthem. “Shift the Path” deals with themes that are difficult to sprout and nurture in the current business
functions, such as new businesses that are not related to existing businesses and business
opportunities that cross multiple businesses. The agile business development team, which is led by
the shared technology function and also includes external partners such as venture companies,
conducts verification through prototyping and trials, and hands the fruit over to the “exploitation”
process (Figure 2).
“Technology Scouting” has two key concepts. One is a disruptive technology that has thepotential to have a significant impact on the medium- to long-term insight and vision obtained in“Mega Scan”. The other pertains to a technology needed to realize the innovation hypotheses
generated through “Shift the Path”. These technologies are created together with external partners.
By taking these three approaches alternately, we will draw a picture of the future society anddetermine the direction of the business shift of our group, which is a supplier of machine systems
that make up social infrastructure.

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Figure 2 From MFS, business model shift/new business conception to development ofgrowth strategy (Blue: led by Shared Technology Function, Red: led by Business
Function)|3. Advancement of machine systems and relationship between
nature, humans, and machines
This chapter describes the direction of the advancement of machine systems to look toward
the future society centering on them. Machine systems have changed discontinuously along withtechnological innovation. The invention of external combustion engines promoted the mechanizationof factories and freed humans from hard physical labor and repetitive work. The invention of internal
combustion engines gave humans the freedom to move and carry things through the advancement ofmoving vehicles. Now, with the progress of power electronics technology against the background ofinnovative materials and microfabrication technology, machine systems are advancing from internalor external combustion engine drive to electric drive (or hybrid drive). The electrification of machine
systems improves environmental friendliness, maintainability, controllability, functions, andperformance, as well as changes in the form of machine systems due to miniaturization and increased
design freedom brought by functional consolidation and increase rotational speed. This
electrification of machine systems is considered to be essential for a future decarbonized society.
At the same time as the electrification described above, the intelligence evolution of machine
systems is accelerating against the background of the advancement of digital technology. The
intelligent evolution of machine systems described here do not simply refer to machine systems thatare autonomized or automated for obtaining accuracy, speed, and sustainable durability, but are
defined as machine systems that collaborate and coexist with humans while coordinating themselveswith the judgment of humans based on their knowledge of business or operation and ethical sense ofsafety, security, etc.
In the past, the automation of machine systems has progressed in the form of dividing the workwith humans while automating the repetitive work that was performed by humans. However, therecent advancement of AI technology has made it possible to extract features quantity frominformation such as vision, and its application has expanded. The operation of machine systems haschanged from a planned type where humans input behavior patterns one by one in advance to a
prediction/learning type that uses past operation data, and machine systems have been advancing so
as to take a form where they accumulate the knowledge of skilled humans and coexist with humans.
As a result, the functions and performance of machine systems have been improved not only in termsof their long PDCA cycles such as hardware modifications, but also in terms of their short OODA
cycles in software enhancements*.
(* PDCA: Plan-Do-Check-Action (improvement), OODA: Observe-Orient-Decide-Act)

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For collaboration and coexistence between machine systems and humans, it is necessary toreconsider not only the value and role of machines, but also the humans, organizations, and decisionmaking that incorporate the machines. Machines are usually better than humans in terms of speed,
accuracy, and repeatability. However, blindly relying on the increasingly complex operation ofmachines poses the risk of malfunctions and the inability to deal with emergent or exceptional events.
In order to become familiar with the use of a machine, humans perform many simulations and tests
to understand its operation. It is necessary to have a mechanism to accumulate these understandings
as organizational knowledge. Especially for applications related to human safety and security, it isnecessary to define the roles of humans and machines in light of not only business and operation
knowledge, but also values and ethics for labor (Figure 3).

Figure 3

Evolution of machine systems and electrification/intelligence evolution

Machine systems are integrated with digital technology, and their forms change. In recent
years, the range of use of intelligent machine systems has expanded not only to large-scale production
and supply equipment such as factories and plants, but also to consuming and demanding sides. It is
expected that machine system functions will be divided in order to flexibly meet the diverse needsof individuals, etc., and interconnected machines will work together to provide value as a group.
Such progress in machine intelligence changes the relationship between machines and humans,
evolves to be closer to humans, and also changes the relationship between humans and nature. They
will no longer be just tools, but partners for building symbiotic relationships between humans andnature. It is expected that as human augmentation technology, such as AR (Augmented Reality) andVR (Virtual Reality), and sensor technology advance, scientific understanding of medical/health andthe substance metabolism mechanism of biological/natural environment ecosystems will advance,
the substance metabolism processes of plants, microorganisms, animals, humans, and the naturalenvironment and the functions of machine systems will be complemented gradually, and symbiotic
evolution will occur while guaranteeing the finiteness of earth resources.

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5|4. Changes in social infrastructure needs and provided value
4.1

Changes in social infrastructure for a decarbonized society

As mentioned in the previous chapter, machine systems continued to change their appearance
due to technological innovation. At the same time, however, the value they provide changed in
response to changes in social needs according to the stage of economic development, which resulted
in changes in human livelihoods and the industrial structure.
Toward improvement in people’s living standards while responding to the increasing demandfor energy and industrial goods during postwar reconstruction and economic growth, the need for thedevelopment of large-scale energy and industrial infrastructure to prevent environmental pollution
and the transportation infrastructure responsible for the transportation of people and goods linked toeconomic growth grew significantly. Our group has contributed to the progress of global society bysupplying machine systems such as energy/environmental plants and ships/aircraft in response to theneeds of society.
In recent years, the need for decarbonization against the background of climate change has
become a major trend throughout the world. Toward the realization of carbon neutrality, our groupis working on the development of new machine systems based on three directions (Figure 4):“Reduction” of CO2 emissions by improving machine performance and operational efficiency, “No
Emission” of CO2 by using renewable energy, electrification, and manufacturing/using carbon-freefuel, etc., and “Utilization” of CO2 by capture/fixing emitted carbon and generating valuable
resources.

Figure 4

Directions of efforts toward carbon neutrality (created based on reference (2))

Specifically, we are working on, in addition to the “reduction” of CO2 emissions by improving
the efficiency of conventional equipment, the use of hydrogen and ammonia for “no emission” of
CO2 and carbon capture and storage/conversion for the “utilization” of CO2 in the energy field,
electrification and “defossil” fuel utilization in the mobility field, and conversion to carbon-free fuelin the industrial field for large-scale demand such as ironmaking (Figure 5).

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Figure 5 Examples of approaches in energy, mobility, and industrial fields toward carbon
neutrality

4.2

Exploration of integrated solutions for sustainable growth

While awareness of climate change issues has increased and taking approaches toward acarbon-free society has become an urgent task worldwide, approaches toward a circulating societythat effectively utilizes and conserves the finite resources of the earth and toward a society thatcoexists with nature including diversified organisms have been actively taken. These approaches fora future sustainable society depend on diverse local cultures and values and are interconnected.
Therefore, rather than independent solutions, integrated solutions are needed. For example, theproblem of marine plastics, the impact of which on the ecosystem is problematic, also includes
various social issues in terms of the overall plastic material flow, such as the mass consumption of
exhaustible resources, increased greenhouse gases due to incineration and landfill site shortages, so
a well-balanced and integrated solution is required, such as reducing, recycling, reuse, and energy
recovery in anticipation of an increase in the use of biomass plastics such as polyethylene andpolypropylene (Figure 6).

Figure 6 Social issues related to plastic material flow (entire world, 2016)(created based on reference (3))

In the field of mobility such as automobiles, the assessment of environmental load has
progressed from that for a single vehicle (Tank to Wheel) to that up to energy resources (Well to
Wheel). In addition, the assessment of environmental load of the entire value chain (Life Cycle
Assessment) from the mining and development of automotive materials and fuels to manufacturing,
disposal and recycling of those products is attracting attention. Furthermore, against the backgroundof progressing digital technology, various means of information transmission have been developedMitsubishi Heavy Industries Technical Review Vol. 58 No. 1 (March 2021)
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and communication without physical movement is becoming possible, so it is expected that theexistence of mobility infrastructure in society in general will change significantly.
In order to respond to such a change, it is necessary to develop not only decarbonization
solutions for products themselves, but also products and services that consider their impact that tends
to be invisible for business activities. In response to these complex social needs, our group is focusing
on “life” as a business region in which the scientific understanding of the material metabolism
mechanism of nature and life has progressed in the medium to long term and the equipment industry
will be developed through innovations in digital and biological technologies.
Figure 7 shows the result of a rough calculation of the breakdown of greenhouse gas emissions
by field with reference to the existing materials released by institutions. Through an overview ofgreenhouse gas emissions conducted in this manner, not only can energy systems such as power
generation and transportation systems be seen, but also can various approaches to decarbonization inagriculture and livestock fields.

Figure 7 Breakdown of greenhouse gas emissions (2012,
rough calculation based on references (4) to (7))

Such approaches not only reduce greenhouse gas emissions in a certain industry itself, but also
have ripple effects on adjacent regions. For example, efficient agriculture using plant factories, etc.,
increases the absorption of greenhouse gas and brings about the diversification and conservation of
the ecosystem due to the planting of trees in the areas gained by reducing agricultural lands. It also
reduces food loss and provides a stable supply of food against climate change due to the realizationof food production and supply in which supply and demand are integrated, and contributes to the
reduction of greenhouse gas emissions during transportation. For another example, cellular
agriculture, such as cultured meat production, which is being developed against the background ofadvances in biotechnology, realizes a stable supply of food against epidemic infections and reduces
greenhouse gas emissions such as CO2 and methane derived from livestock. In this way, various
means can be considered. By incorporating the equipment industry in these life regions into the cycleof local production for local consumption, it is possible to contribute simultaneously to the realizationof not only a carbon-free society, but also a circulating society and a society that coexists with nature.
Aiming at the realization of a decarbonized, circulating, and coexisting-with-nature society,our group will capture the entire flow of substances and energy including areas that were previously
invisible, and explore approaches that take advantage of the characteristics of our group, whichhandles various machine systems for social infrastructure.

|5. For creating innovations and initiating changes
There is no doubt that the role of achieving reliable manufacturing through division of laborand efficient production that our group has played will continue to be important. On the other hand,as mentioned in the previous chapters, the business environment has undergone major changes, andour group is required to evolve constantly in response to social needs. In order to respond to thesechanges, it is necessary not only to “exploit” conventional efficiency, reliability, and accuracy, butalso to “explore” based on a wide range of knowledge and insight obtained by an overview or long-Mitsubishi Heavy Industries Technical Review Vol. 58 No. 1 (March 2021)
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term observation, or by prototyping and trial based on a hypothesis. Therefore, MHI FUTURE
STREAM strengthens an agile prototyping and trial system in which a small team works
independently, without exchanging opinions or division of labor with various stakeholders of ourgroup or experts in different industries.
Specifically, the shared technology function strengthens proposal-based research in which thecreators themselves verify their created idea as a product or business hypothesis in a short period oftime and perform prototyping and trial. It also works on efforts to accelerate ties with venturecompanies at the newly opened Yokohama Hardtech Hub (YHH) in Honmoku, Yokohama, in
addition to joint research it has been carrying out with outside researchers and collaborative projects
with venture companies.
YHH advocates “environment and energy”, “next-generation mobility”, “intelligenceevolution and electrification of machine” and “next-generation agriculture & food” as regions thatwill form future social infrastructure, and builds a platform for the support of and co-creation withventures of the “seed” or “early” stage without presupposing collaboration with our company. YHH
focuses on venture companies that take on the challenge of “Hardtech,” which will be the core of
future machine system advancement, in a technological area where digital technological innovations
such as AI (Artificial Intelligence) and IoT (Internet of Things) are combined with innovations ofphysical technologies such as quantum, material design, microfabrication, and biological
technologies, and repeated prototyping and verification are important. Aiming to create machine
systems that meet future social needs, YHH has the largest facilities in Japan for prototyping andpractical verification.
In the future, by having entities within our group participate in YHH as a member of theventures, we will realize and review the future image found in “Mega Scan” materialize the business
opportunities found in “Shift the Path” and co-create technological innovation in “Technology
Scouting” as well as ingrain into the company not only “waterfall-type exploitation” work
streamlined by division of labor, but also “agile-type exploitation” work that improves the successrate by taking the initiative and quickly conducting prototyping and trials on a wide network. As aresult, MHI FUTURE STREAM will evolve so as to connect the process of exploration andexploitation. We believe that this approach can improve technological innovation that is rapidlychanging due to advanced specialization, as well as business judgment abilities that respond todiversifying social needs. This can also provide a place to foster the development management ability
to quickly repeat failures and improvements and human resource development of an entrepreneurial
spirit that allows for recruiting colleagues beyond the framework of the current organization, in orderto take on the challenge of realizing a new society (Figure 8).

Figure 8

Characteristics of exploration and exploitation|6. Conclusion
MHI FUTURE STREAM overviews social issues, technological advancement, and theassociated relationships between humans, nature, and machine systems, and discovers the directionin which our business should proceed from a medium- to long-term perspective. We believe that the
future vision that our group should aim for is to contribute, through these approaches, toenvironmental adaptation and symbiotic evolution through technological innovation including

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machine systems, while considering other ecosystems and minimizing impact, as a resident of theearth.
In the future, MHI FUTURE STREAM will become more important for confronting theuncertainty of the business environment surrounding our group and contributing to the sustainablegrowth of a society in harmony with nature. Our group will not be limited to the conventionalframework of business areas, but will be working on exploration and co-creation with external
partners in various areas to continue to evolve.

References
(1)
(2)

(3)
(4)
(5)
(6)
(7)

Yo Akiyama et al., MHI FUTURE STREAM“MHI FUTURE STREAM” – Creating Group’s Future,
Mitsubishi Heavy Industries Technical Review, Vol.57 No.1 (2020)
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CLIMATE CHANGE 2013: THE PHYSICAL SCIENCE BASIS (2013)
http://www.climatechange2013.org/images/uploads/WGIAR5_WGI-12Doc2b_FinalDraft_Chapter06.pdf
Mckinsey, How plastics waste recycling could transform the chemical industry (2018)
IEA, Energy technology Perspectives, (2015),
https://www.iea.org/reports/energy-technology-perspectives-2015
FAO, FAOSTAT, http://www.fao.org/faostat/en/#home
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WRI, CREATING A SUSTAINABLE FOOD FUTURE, (2019)https://research.wri.org/sites/default/files/2019-07/F_REP_Food_Course4_web.pdf