How Information Technology Drives Social Innovation
Hitachi Builds a Sustainable Society Through a Social
Infrastructure Based on Information Technology
VIRTUAL BIG DATA SOLUTION ROI FLEXIBLE DATA DRIVEN VIS
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Contents
Introduction: IT Is a Tool to Achieve Social Innovation in Business 3
What Does Today’s World Require? 4
Advance of Globalization 4
Paradigm Shift in the Global Economy 4
Advance of Urbanization 5
Merits and Demerits of Urbanization 5
From Competition to Coexistence 5
Social Innovations of Hitachi Group 6
Social Innovation Business by Hitachi 6
Expansion of the Total Solution Business 7
How Information Technology Drives Social Innovation
Introduction: IT Is a Tool to Achieve Social Innovation in Business
Hitachi, Ltd., President Hiroaki Nakanishi defines the social innovation business as business that achieves a sustain-able society in which environmental friendliness and economic needs are balanced.1 He explains that, to innovate
society, it is necessary to solve many diverse issues. For example, the world faces social issues such as chronic traf-fic congestion, environmental pollution, global warming, and depletion of energy resources. Hitachi is committed to solving these and other social issues. We seek to make business and life more comfortable and richer by enhancing social infrastructure through information technology (IT), as shown in Figure 1. In short, Hitachi strives to make social innovation a reality.
To achieve a sustainable society, Hitachi aims to bring the world’s ecosystems and people into harmony, reducing the load on the environment, and increasing comfort, safety, convenience and enjoyment. Hitachi believes that social infrastructure systems should play a role in achieving these goals. We have incorporated these goals into the IT infra-structure we have been building over many years.
Recently, rapid developments in IT have required equally rapid and dramatic changes in infrastructure capabilities. Earth’s population is creating more digital data than ever before. At the same time, IT infrastructure has evolved to enable us to capture and capitalize on greater amounts of data, transforming our ability to create value from it. By collaborating among the different types of infrastructure, Hitachi further harnesses the power of data to create new services and social innovations. And, our endeavors to create new possibilities for people and companies are becom-ing more and more important for society.
Figure 1. The Social Innovation Business
What Does Today’s World Require?
Advance of Globalization
The pace of globalization is increasing in all areas, including politics, economics, culture and the environment.
The Great East Japan Earthquake and the floods in Thailand delayed shipments by the myriad of affected companies, and caused global economic confusion. These tragedies are a reminder that all things, including politics, economics, the environment and culture, influence each other at a global scale.
Paradigm Shift in the Global Economy
With the advance of globalization, developing countries are playing a bigger role in economic growth than developed countries. The global economy has almost tripled over the past 20 years, from US$23 trillion to US$74 trillion. In addi-tion, it is expected to double over the next 20 years.
As shown in Figure 2, China, India and the Association of Southeast Asian Nations (ASEAN) now play a central role in the world’s economic growth. The economies in South America and Middle East are also expected to grow in the future.
The paradigm shift will be evident, as the Asian gross domestic product (GDP) is expected to account for half of the global GDP in 2030. It is expected that the GDP per person will exceed US$10,000 in China and US$3,000 in India by 2016, and the incomes in these most populous countries will increase.
Advance of Urbanization
The activities that support economic growth have advanced as urbanization has progressed. Urbanization requires increased investment in social infrastructure to support a growing population. The Asia region, for example, is making significant investment, as many cities in the region are experiencing high population growth. In fact, by 2025, it is expected that Asian cities will make up three-quarters of the world’s 20 cities that have the fastest-growing popula-tions (see Figure 3).
Construction investment includes investment for housing, transportation and energy infrastructure. The need for such investment is expected to increase as the numbers in the middle class increase.
Figure 3. Advances of Urbanization: Regional Investment and Population
Merits and Demerits of Urbanization
In conjunction with economic development in Asia, South America and other emerging countries, urbanization brings convenience and comfort to the people living there.
However, if social infrastructure development cannot keep pace with rapid urbanization, a variety of issues result. For example, social issues may arise involving the environment, security, traffic congestion, waste and energy problems, slums and economic gaps. Other challenges may rise in education and healthcare. There may also be concerns about how to address aging social infrastructure and a lack of disaster planning.
From Competition to Coexistence
Although the principle of competition accelerates economic development, the concept of coexistence is expected to become more important for the solutions of many social issues in the future. Because the resources of the Earth are limited, there is a need for mechanisms to ensure good balance and operation.
At Hitachi, we believe that the goal of coexistence cannot be met just by expanding the existing infrastructure. We believe that an advanced social infrastructure that is based on IT will make innovations in business and society pos-sible and will take the world to the next level. It is on this new, combined infrastructure that we can build a sustainable society. Hitachi is committed to achieving a sustainable society by providing systems and services that combine IT with social infrastructure. We are putting all our effort into the social innovation business to achieve balance of opera-tions and resources, and thus, coexistence.
Social Innovations of Hitachi Group
Social Innovation Business by Hitachi
We define the social innovation business as establishing an IT-based advanced social infrastructure while ensuring a balance between the economy and the environment. With a good record of establishing social infrastructure, Hitachi is committed to the social innovation business and to enhancing mutual innovation among the many Hitachi groups involved (see Figure 4).
Expansion of the Total Solution Business
Hitachi already builds innovative social infrastructure for smart cities, healthcare, water, transportation, energy, mining and industrial parks. We innovate to meet future needs, beyond just currently optimal products and services. And we deliver these solutions flexibly to address the changing environment and to balance both the economy and the environment.
To deploy such an innovative business, Hitachi is investing heavily in customer-oriented engineering (see Figure 5).
Customer-Oriented Engineering
Through customer-oriented engineering we build and deliver products and systems that are driven by the needs of our customers. Our customer-oriented engineering ensures that we correctly monitor situations, analyze problems and propose solutions. We create these solutions by considering what organizations and businesses need, rather than focusing on what our products and systems can do. We also add value to our social infrastructure solutions through innovative services, including:
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■ Operation and maintenance services. Hitachi not only supplies products and systems but also uses operations
technology to collect system information and IT to analyze and respond to system conditions. Operations tech-nology and IT will support operation and maintenance services throughout the entire lifecycle of systems. These systems include railways, energy and other social infrastructure.
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■ Total engineering service. In addition to operation and maintenance services, Hitachi coordinates and provides
comprehensive business operation services, including finance and partnering, to help advance social infrastructure and business innovation, such as those related to smart cities and mining.
Information-Driven Social Infrastructure Solutions
Operations technology includes the plant control and automation technologies that we have cultivated through col-laboration with customers in traditional social infrastructure and other systems. Information technology includes various technologies, such as big data management and cloud computing. When we bring them together, the result is transformative. We reach higher levels of information and insight that generate new value and drive new innovation. An end-to-end, information-driven solution that is driven by intelligent data delivers optimal service levels to meet business needs, while ensuring safety and continuity. As shown in Figure 6, we can continuously collect information about the health and operation of the system through operations technology. Through IT, we can analyze, predict and recognize patterns to fine tune the system, identify early indicators of problems, and enable fast and flexible response to disasters.
Collecting, analyzing and predicting the supply-side control data and the demand-side data can improve value for both sides, including:
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■ Assurance of safety and continuity. ■
■ Balance between demand and supply. ■
■ Matching of needs and service levels. ■
■ Coexistence of environmental friendliness and convenience.
Promoting the use of information through the integration of operations technology and IT creates new business and value.
Social Innovation Example: Railway Business
Hitachi Rail Europe is part of our social innovation business and is a representative example of integrating social infra-structure and IT.
We run a railway vehicle business in the United Kingdom (see Figure 7). Our high-speed railway vehicles run 109 km between London and Ashford in the southeast of England in 37 minutes. For the 2012 Summer Olympic Games, the railway ran shuttles between Olympic Games sites and London.
We built a rail yard in Ashford by sharing the skills and technologies of Japan and the U.K.
Figure 7. Railway Business Example: Hitachi Rail Europe
Use IT to Create Value in the Railway Business
To expand the railway business globally, Hitachi uses IT to improve maintenance and to reduce maintenance costs to the optimal level. We will use the distributed autonomous technology that we have cultivated in Japan to globally pro-vide detailed control and regulation of railway operations. Hitachi will also offer services such as a train card system that is based on a rechargeable contactless smart card.
This strategy:
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■ Optimizes maintenance costs through on-demand maintenance.
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■ Gathers real-time information from onboard sensors; through pattern matching, it can identify early indicators
of problems.
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■ Reduces the need for scheduled downtime and improves safety through on-demand maintenance. ■
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■ Achieves stable traffic.
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■ Promotes the knowledge Hitachi has in traffic management. ■
■ Provides flexible traffic plans and quick recovery of operations in case of a failure.
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■ Provides ancillary services.
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■ Globally promotes smart card ticket system.
Innovation in the Hitachi Railway Business
Hitachi integrates operations technology with IT in our railway business in the U.K. We provide a value-added railway infrastructure, advanced operation, and various services by combining our expertise and technologies with IT (see Figure 8). This expertise includes :
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■ “Monozukuri” or product manufacturing. ■
■ Operations technology, such as technology for safe and reliable vehicle control and operation. ■
■ System operation management and maintenance.
We innovate for U.K. railway services in operations management, maintenance and the provided services themselves.
Summary: Hitachi Works to Achieve a Sustainable Society
Hitachi will continue to make efforts to advance social infrastructure and innovate business by integrating opera-tions technology and information technology and by promoting the use of information. We also aim to solve social issues and achieve a sustainable society based on safe and secure social infrastructure. We will achieve this through innovation.
Notice: This document is for informational purposes only, and does not set forth any warranty, expressed or implied, concerning any equipment or service offered or to be offered by Hitachi Data Systems Corporation.
