2015 R&D strategy
Global R&D leading Social Innovation Business
15 April 2015

Keiji KOJIMA, Ph.D.
Vice President & Executive Officer
Chief Technology OfficerPresident & CEO, Research & Development Group
Hitachi, Ltd.
© 2015 Hitachi, Ltd. All rights reserved.

Contents
1.

Realignment of global R&D structure2.

For new growth

3.

Strategic steps for the future4.

Summary© 2015 Hitachi, Ltd. All rights reserved.

1-1 2015 Mid-term Management Plan: Management Focus

2015 Mid-term Management Plan- Achieving Growth and Hitachi’s Transformation -Innovation

GlobalTransformation

Strengthen service
businesses that maximize
the utilization of IT andbring about innovation

Deliver Innovation toCustomers and Society
globally

Transform Hitachi:
To deliver innovation bystandardized and speedy
operation© 2015 Hitachi, Ltd. All rights reserved.

2

1-2 Contributing to Social Innovation Business
Pursuing transformation to fulfill 2015 Mid-term Management Plan
'12

'13

’14 (Forecast)'15 (Target *2)

Revenue
Operatingincome ratio% overseas

JPY9,041B

JPY 9,616.2B

JPY9, 600B *1

JPY10,000B

4.7%

5.5%

6.0% *1

Over 7%41%45%

47% *2

Over 50%*1: as at 2015/2/4, *2: as at 2014/5/12

Timely integration of R&D results in products for the global market
Storage systems'14/4

Proton beam therapy '14/8

Railway systems'15/1

VSP G1000

PROBEAT-RT *3

Class 800 series

Uninterrupted
service throughvirtualization
technology

Improved precision
through moving tumor
tracking irradiation
technology

Simplification ofimpact absorption
structure throughanalysis-led design

VSP: Virtual Storage Platform

Elevators'14/4

World’s fastest elevator
Improved riding comfort
through active control
technology

Eco-friendly vehicles '14/12

UPSInverters

Reduced inverter
size throughPower dual-sided cooling
Inverter module power modules*3: Developed with Hokkaido University under the FIRST Program (Cabinet Office of Japan),‘14/8 Approval granted for partial amendment of previously approved items under Japan’s
Pharmaceutical Affairs Law (tumor tracking system).

'15/6
'15/2

UNIPARA
30% size reduction
through modularpower conversion unit

Strengthen innovation for new growth

Mgmt. index© 2015 Hitachi, Ltd. All rights reserved.

3

1-3 Benchmarking Innovation Strength

R&D investment as a ratio of sales profit(Sales profit/R&D investment)

Strengthen innovation transforming R&D investment into businessearnings to take on the challenge of global major players
4.0Company A

3.5Company B
3.0Company C
2.5Hitachi

2.0
1.5
1.0
0.5
0.0

’09

’10

’12
’11
Fiscal year

’13

’14

’15~

(Forecast)

R&D investment as a % of revenue 4.2% 4.2% 4.3% 3.8% 3.7% 3.7%
*Figure for FY2014 is given as forecasted on 2015/2/4© 2015 Hitachi, Ltd. All rights reserved.

4

1-4 R&D for New Growth
R&D: From generating technology to driving innovation$TechnologyResearchinvestmentKnowledge

ResearchR&D until today$Business
profitInnovation

R&D which addresses innovation© 2015 Hitachi, Ltd. All rights reserved.

5

1-5 R&D Policy

Hitachi Gr. business policy: increase business income
From “product-out” to “market-in”
Shift to “customer-driven”

Realign R&D organization, enhance innovation strength
1. Assign researchers close to customers to expand
collaborative creation
2. Create innovative technology that satisfy market needs© 2015 Hitachi, Ltd. All rights reserved.

6

1-6 Realignment of Global R&D Organization
2011/4: Consolidate sites,integrate technology areas
R&D Group

R&D GroupTechnology
Strategy Office

Technology
Strategy OfficeCentral ResearchLaboratory

Central ResearchLaboratory

Hitachi ResearchLaboratory

Hitachi ResearchLaboratory

Yokohama
Research Lab.

Yokohama
Research Lab.

Design Division

Design Division

Overseas research
centers

Overseas research
centers

Power Systems Co.
Energy and Environmental
Systems Research Lab.

Consumer Electronics
Laboratory© 2015 Hitachi, Ltd. All rights reserved.

7

1-7 Realignment of Global R&D Organization
2011/4: Consolidate sites,
integrate technology areas

2015/4 : Global realignment to speed-up
collaborative creation

R&D Group

R&D Group

R&D GroupTechnology
Strategy Office

Technology
Strategy OfficeTechnology Strategy OfficeCentral ResearchLaboratory

Central ResearchLaboratory

Global Center for Social Innovation

Hitachi ResearchLaboratory

Hitachi ResearchLaboratory

Yokohama
Research Lab.

Yokohama
Research Lab.

Design Division

Design Division

Overseas research
centers

Power Systems Co.
Energy and Environmental
Systems Research Lab.

Consumer Electronics
Laboratory

Overseas research
centers

CSI

Global Center
for Social Innovation(TYO, NA, CHN, EUR)
Center for Technology Innovation

CTI

Center forTechnology Innovation(Energy, Electronics, Mechanicalengineering, Materials, System engineering,
Information & Telecommunications, Control
systems, Production engineering, Healthcare)

Center for

CER Exploratory Research© 2015 Hitachi, Ltd. All rights reserved.

81-8 Research Sites & Personnel
CSI North America [100]Santa Clara

Farmington Hills

Sao Paulo

CSI Europe [50]London• Sophia
Antipolis• Munich• Copenhagen• Cambridge

CSI Tokyo (APAC) [250]Bangalore

Singapore

Akasaka

CSI China [100]BeijingShanghai

CTI [2,000], CER [100]Kokubunji

Hatoyama

OhmikaKatsuta

Yokohama[ ]: Head count, APAC: Asia-Pacific© 2015 Hitachi, Ltd. All rights reserved.

9Contents
1.

Realignment of global R&D structure2.

For new growth

3.

Strategic steps for the future4.

Summary© 2015 Hitachi, Ltd. All rights reserved.

2-1 Hitachi’s Social Innovation Business

Serving the world with our Social Innovation Business
SOCIAL INNOVATION - IT’S OUR FUTURE“IT × Social infrastructure”

EnergyWater andNatural resources

Urbandevelopment

Transportation

Healthcare

Logistics

Manufacturingand Construction

Finance© 2015 Hitachi, Ltd. All rights reserved.

11

2-2 Hitachi’s Social Innovation Business
Build-up solutions utilizing IoT and big data
Renewable energy

Safe & secure cities

Rail systems

Raise facility output by detecting PV
module failure or deterioration

Secure safety & comfort by using widearea surveillance & high-speed image
search to protect communities

Raise reliability by remote monitoring ofcarriage condition to predict failure

Mega solar

Community

Sensing

Security

Rail cars

SensingPreventive medicine

Distribution

Mining

Predict and reduce lifestyle disease
related medical costs in groups by big
data analytics on health check-up data

Improve retail performance by analyzing
customer behavior patterns with AI

Improve productivity by optimizing
dispatch through big data analytics ofequipment position & operational status

Lifestyle disease

Human behavior

Mine devt.

Big data analytics

IoT: Internet-of-Things

AI: Artificial intelligence

AIBig data analytics© 2015 Hitachi, Ltd. All rights reserved.

122-3 Evolution of Social Innovation Business
Build-up common platforms, accelerate business expansion

EnergyUrban
development

Transportation

Healthcare

Logistics

Mnfg. &Construction

Accelerate global collaborative creation with customers

Job

Job

Job

Job

Job

Job
Security

Sensing

IoT (Internet-of-Things)

yxz

AI・・・

Proof of value
Issue analysis

Service business Build-up solution
Robotics
Operation

Big data

Scale-up using symbiotic ADS platform
ADS: Autonomous Decentralized System© 2015 Hitachi, Ltd. All rights reserved.

132-4 Accelerate Global Collaborative Creation with Customers
Position researchers close to customers to accelerate collaborative creation
RegionResearch strategy
Co-create solutions with key accounts in the APAC region

Tokyoleveraging customer collaborative creation methods developed(APAC) through service design research
Construct big data analytics platforms, and pursue collaborative

Northcreation with customers in areas such as energy,
America telecommunications, finance and healthcare
ChinaStrengthen collaborative creation with key accounts in elevators/
escalators, ATMs, etc. to realize solutions to industrial policies
such as low-carbon society and new-type urbanization

EuropeTogether with major institutions, participate in market creation
through standardization activity in Europe, to realize solutions fordeveloped nations which resolve issues in mature society© 2015 Hitachi, Ltd. All rights reserved.

14

Contents
1.

Realignment of global R&D structure2.

For new growth

3.

Strategic steps for the future4.

Summary© 2015 Hitachi, Ltd. All rights reserved.

3-1 Pursue Vision-based Basic Research
Pioneer new frontiers through creative vision-driven exploratory research

Open innovation

Country/Governments
Regional
communities

Agriculture
Space

Education

Societal
information
AdvancedInnovative
medicalmaterials
care
Symbioticrobot

Center for
Exploratory ResearchPhysicalsciences

Informationsciences

Life sciences

Frontier

Center forTechnology Innovation

Universities

Research
institutes
Privateindustry

Hitachi Group

Global Center forSocial Innovation

FutureSocial Innovation
Business areas

Information &Telecommunication
Systems

Power &Energy
InfrastructureUrbandevelopment
Transport
Healthcare
Financial
Healthcare
Waterservices& Natural resources
Logistics
ManufacturingHigh
Automotive & Construction
functionalFinancesystems
materials

Construction
machinery© 2015 Hitachi, Ltd. All rights reserved.

16

3-2 Case Examples
Physicalsciences

Realize an eco-friendly society bycreating innovative material using theholography electron microscope

Hitachi, Ltd.
NIMS
Overseas/domestic
Holography EM
research institutes &World’s highest
user companies
resolution: 0.043 nm

Realize a smart society by newparadigm computing

RIKEN
Prof.
TOKURA
YoshinoriProf.
SHINDO
DaisukeSupported by the FIRST program (Cabinet Office) through JSPS

Life
sciences

Information
sciences

Realize a healthy high QoL society byinnovations in automatic cell culturing“Ising chip” solving
combinatorial optimization
problem at ultra-high-speeds

Prototype

Develop applications for the “Ising Chip”
through industry-academia-government collaboration

Frontier

Realize increased organizational
productivity & satisfaction
through human big data analytics

Manage-ment

HRR&D

Design& Mnfg.

Sales &Marketing

Services

Applicable to many industries & operations
Transport-ation

Automated cell culturing equipment

Cell sheet

Devt. with the Tokyo Women’s Medical University
through broad industry-academia-government collaboration
Supported by MEXT program for the creation of innovation centers for advanced
interdisciplinary research. This work was based on the results of research supported
by NEDO.

NIMS: National Institute for Material Science, EM: Electron microscope
CMOS: Complementary metal-oxide semiconductor, QoL: Quality-of-Life

EnergyBuildings

Healthcare

Logistics

Finance

Realize corporate
management
focusing on collective
happiness

Wearable sensor

Collaborationwith MIT & other
US universities© 2015 Hitachi, Ltd. All rights reserved.

17

Contents
1.

Realignment of global R&D structure2.

For new growth

3.

Strategic steps for the future4.

Summary© 2015 Hitachi, Ltd. All rights reserved.

4 Summary

Global R&D leading Social Innovation BusinessRealignment of global R&D structure● Realign R&D organization to strengthen innovation
・ Global Center for Social Innovation
・ Center for Technology Innovation
・ Center for Exploratory Research

For new growth● Build-up autonomous ADS platforms, expand business● Accelerate global collaborative creation with customers
Strategic steps for the future●As an innovation hub, pioneer new frontiers© 2015 Hitachi, Ltd. All rights reserved.

19

END
2015 R&D strategy
Global R&D leading Social Innovation Business
15 April 2015
Keiji KOJIMA, Ph.D.
Vice President & Executive Officer
Chief Technology Officer
President & CEO, Research & Development Group
Hitachi, Ltd.

© 2015 Hitachi, Ltd. All rights reserved.

20