USJC 2022: Digital Transformation to the Whole Community

Mr. Kazuhiro Gomi (President and CEO, NTT Research, Inc.) began by introducing the concept of digital transformation (DX), and how Japan is falling behind other countries. DX started from the need to improve the definition of products, but now it is affecting whole cities and communities. He then introduced the panelists and asked them for their presentations.

Dr. Ayako Kameda (General Manager, Shell Energy Japan | President, Nagaoka Power Generation Ltd) began by introducing Shell Energy and its global strategy called “Powering Progress,” made up of four pillars: financial sustainability by generating shareholder value while accelerating energy transition; commitment to net-zero emissions with the goal of reducing emissions by 2050 and cutting absolute emissions by 50% by 2030; powering lives, which means equality, inclusiveness, and making people’s livelihoods better; and respecting nature, for environmental sustainability and looking at reducing waste while accelerating the energy transition. Dr. Kameda’s team’s specific mission is to become the trusted energy transition partner for Japan as a supplier of secure and stable power solutions. To achieve this, the team has been listening to communities to understand what their needs are, and they have found there is a strong will and passion for renewables, but a lack of technologies or skillsets in power. Shell can offer these skillsets to complement communities’ objectives and achieve sustainability. She also commented that it is important to both decarbonize and revitalize, and that using a “locally-produced locally-consumed” model will help solve many problems and become a role model for the energy industry.

Dr. James Kuffner (CEO, Woven Planet Holdings, Inc. | Member of the Board of Directors and Operating Officer, Toyota Motor Corporation) then talked about how digitalization is impacting mobility. Reflecting on human activities, he stated that humans have built transportation technology to help move further and faster, manufacturing technology to help build things with precision and scale, and now artificial intelligence to help humans think. When thinking about technology innovations, the goal is helping people and having human-centered technology development, and bringing health and happiness to people and communities. He then explained the Woven City project, whereby different modes of mobility within a city are divided and interconnected to create safer cities and roads, as a test course for mobility and innovation, where new methods of mobility and connected infrastructure can be tested with agility and speed to improve safety. Testing real-life applications in a real-life setting is a wonderful way to innovate, and it is very well suited to Toyota’s tradition of improving. He concluded by expressing the hope that Woven City will become a center of innovation for Japan that will help lead the world towards a more sustainable future and safer mobility for everyone.

Mr. Gomi asked the panelists whether they see any similar projects going on in the rest of the world and how they evaluate their projects’ uniqueness, advancement, etc.

Dr. Kuffner responded first by saying that digitalization efforts are also part of the customer experience, sales experience, and how to transform the way we work with better tools, with the goal of happier customers and employees. Toyota was successful in its early days by having a lot of regional autonomy, but this meant that each region chose different tools to get things done. Now it is trying to globalize and standardize, by building common global data platforms that can allow companies to compete for business by providing good requirements. As globalization progresses, there will be better economic value, and hopefully better value for customers and employees using better digital tools.

Dr. Kameda then answered that Shell is in the power business, so projects are not ranked based on digitalization. It is up to the Shell teams to choose what to do with the technology that is available to achieve Shell’s Powering Progress mission. For business in Japan, Dr. Kameda goes to the front line and determines what is right for the customer, prioritizing the customer over global economic value.

Mr. Gomi then asked what the panelists think are the most important aspects to make their respective projects successful.

Dr. Kuffner responded that Woven City, from the beginning, was not something that could be achieved alone. Toyota has already been partnering with many organizations to invest in it, focusing on sustainability, safety, energy, and the goal of leveraging the strength that Toyota has in automotive technology to create safer mobility. Toyota is working on a partnership strategy that brings together the right skills, technology and community, and government support to make it successful.

Dr. Kameda supported this comment and added that in Japan credibility and track record are extremely important. Shell has a lot of track records in LNG, oil, and gas, but not in renewables and smart cities. It is very important to have trusted partners who give Shell a chance to build that track record. This will lead to more opportunities in the future.

Mr. Gomi picked up on the concept of trust and in trying to get the whole country to transform, to ask what the panelists thought of the recently established Digital Agency, as well as whether there were any suggestions or recommendations for Japan.

Dr. Kuffner commented, referencing the Japanese My Number Card system, that there are a lot of challenges, particularly with the amount of paper forms still being used in Japan. Toyota wants to support DX, showing how the industry can help lead and help the government and society. There is a plan to unify the driver’s license with the My Number Card going forward, so Toyota is offering advice on how to do that. He believes it is very important for Japan to increase its DX ranking, and so would like to support Japan in its efforts to digitalize.

Dr. Kameda supported the statement, adding that Japan—a technologically advanced country—still lives in a seals and paper-based society. She added that data energy has to be more uniform and accessible. Without access to the needs of communities, it is not possible to plan solar panels or batteries, etc. Getting the government’s help with that will make it possible to visualize where the energy is being used, and that will lead to efficiency improvements.

Dr. Gomi then stated that projects need to be financially sustainable to run for a long time. Based on this perspective, he asked the panelists to share their plans and perspectives.

Dr. Kameda answered that some of the specific projects were meant to create sustainable business models and success cases, showing they were good for the environment and community, and that there is financial sustainability.

Dr. Kuffner explained that Toyota has been building test courses for better cars, and Woven City is meant to be a foundational investment as a test course for mobility, leading to more innovation. One of the challenges of testing new kinds of mobility is heavy regulations making it difficult because safety is not confirmed yet and cities are not sure how to adapt to them.

Dr. Gomi then opened the floor to questions. One member asked about possible opportunities for the panelists’ projects in Japan to go overseas, and how they can solve social challenges facing emerging economies across Asia.

Dr. Kameda responded that if Toyota and Shell work together and change communities by solving the challenge of sustainability and aging populations, it will be possible to become a role model for the rest of the world. She also applauded Toyota for its efforts to make a difference in mobility, particularly for those who are struggling with mobility, as it is a problem that affects everyone.

Dr. Kuffner commented that the loss of mobility can be a loss of freedom and self-worth. Therefore, Toyota wants to provide mobility for everyone. Woven City is not just for Woven City, it is meant to be a place where Japan can export new technology and innovation to the world, to help the world’s cities solve their problems of safety and sustainability.

Another member asked, based on the size of the challenges, how Toyota sets priorities of what it can do, due to the need to pick and choose where to invest.

Dr. Kuffner responded that one of the things Toyota is trying to do is a Silicon Valley style of prioritization, agility, and ranking impact based on clear goals and measurable results.

Another member asked the panelists how they built their skills of driving transformation, and how they can be applied to what other companies are doing.

Dr. Kameda answered that it took many decades, and it required stepping out of her own organization, and working with different people, and in doing so she found that she could hone her skills in understanding, listening, and empathizing.

Dr. Kuffner answered that upon coming to Japan he learned to listen more. There is tremendous opportunity to unlock full human potential, whether it is through DX and technology or empathizing and listening. That is going to be the desired workforce skill of the future.