Innovation Management Framework

NEC has created the position of Chief Technology Officer (CTO) to help establish a companywide perspective in its effort to optimize development investment across the Company and link its corporate strategy with the planning of collaboration strategies with others. The CTO has overseen the creation of a framework for examining and promoting technology development strategies in cooperation with business units and the Research & Development Division.

We have established the Global Innovation Business Unit, which integrates our R&D, engineering, and business development capabilities to unify efforts toward innovative business development. By combining diverse knowledge that breaks through existing stereotypes, we create new value for society with the world as our stage.

In addition, NEC is ramping up research and development by deploying technologies outside the Company earlier and engaging external partners. For example, NEC has established NEC X, Inc., which uses the Company’s personnel and technologies as the basis for advancing commercialization through open innovation in the Silicon Valley ecosystem. Other initiatives include our operation of a consortium of seven companies from different industries to establish BIRD INITIATIVE, Inc., which is increasing the pace of new business creation through research and development based on co-creation.

Internally, through collaboration with other units, the Global Innovation Business Unit is accelerating the establishment of businesses that capitalize on our core technologies to create social value.

R&D Bases Tasked with Creating Social Value Globally

With a view to leveraging the merits of a global network of bases for creating leading and unique technologies and formulating social solutions both for developed and emerging countries, we have established R&D bases in Japan, North America, Europe, China, India, Israel and Singapore.

Intellectual Property Management Division: Strengthening NEC’s Intellectual Property Capabilities

NEC’s Intellectual Property Management Division collaborates with IP managers in the Company’s business units and Group companies, and with intellectual property centers in North America, Europe and China in structuring an intellectual property implementation strategy for building and utilizing a global patent portfolio of growth businesses and cutting-edge technologies. We also promote co-creation by employing NEC technologies in collaborative initiatives with external parties to support commercialization.

In addition, to enhance the deployment of intellectual property throughout Group businesses while reducing risk and increasing monetization, we have been adding diverse talent to our workforce, including attorneys and non-Japanese employees, and in 2022 we established a new organization to handle advanced intellectual property legal work.

Innovation Management Policy

Since its establishment, NEC has developed a wide range of unique technologies in the field of ICT to support social infrastructure and mission-critical systems.

To achieve the NEC 2030VISION in an era of volatility, uncertainty, complexity and ambiguity (VUCA), we are implementing co-creation in research and development, expanding open innovation, and venturing into new business areas to create businesses that will have an impact on society.

Technology Development Strategy

At NEC Corporation, the CTO is responsible for overall technology development, optimizing development investment companywide, drawing up an open innovation strategy, and formulating process design.

Research and development are a source of technological development. NEC’s basic approach to research and development is to deliver value to society as quickly as possible by identifying the solutions it should target for addressing social issues presented in the SDGs and other guidelines, and then efficiently and rapidly aligning the necessary technology assets to realize them. These technology assets include NEC’s leading and unique technologies that have been refined to a high level based on technology trends, as well as outstanding technologies actively incorporated from outside the Company through open innovation.

Concentrated Investment in Strong Technology Areas

We are concentrating investment in two areas of technology: data science and ICT platforms. NEC Corporation has many unique and competitive technology assets in these two areas, and we believe that continuously strengthening these assets will improve our competitive edge in delivering solutions for society.

New Business Development

NEC strives to create new businesses through the power of open innovation, harnessing the collective wisdom of the brightest minds of the world.

NEC's new business development process goes beyond relying solely on our technological strengths; it incorporates a systematic approach that generates ideas through a market-oriented perspective. Furthermore, the commercialization of these ideas takes various forms, carefully chosen to align with business strategies.

NEC aims to achieve innovative new business development by focusing on the six innovation models ranging from Build & Acquisition to Joint Venture, and the process of new business development introduced so far, along with the talented individuals and systems that execute them. Our goal is to boost synergy and co-creation across our organization's technological capabilities, enhancing the value of our technologies, and establishing agile business incubation as our next core business.

Furthermore, by continuously communicating these efforts, NEC generates empathy and steadily advances the creation of new social value, paving the way for the future.

Intellectual Property Strategy

NEC is particularly strengthening its intellectual property in focused technology areas that drive growth businesses and create future growth pillars toward the realization of NEC 2030VISION. Moreover, intellectual property is positioned as an important management asset for advancing business competitiveness, business stability and co-creation with customers and partners.

For this reason, in addition to its patent rights and knowledge, the Company is reinforcing and effectively deploying its copyrights and trademark rights to support its global brand.

Standardization Strategy

In order to expand business opportunities, NEC is strategically conducting standardization activities that promote the spread of advanced technologies and increase social acceptance. In key technological fields such as AI, biometric authentication, and information and communication, NEC people are leaders in standardization activities in and outside Japan, serving in key positions such as chairpersons and board members of standardization committees.

NEC promotes standardization policies in Japan, with NEC Executive Advisor Nobuhiro Endo chairing both the Japanese Industrial Standards Committee (JISC) under the Ministry of Economy, Trade and Industry and the Information and Communications Council under the Ministry of Internal Affairs and Communications. In addition,
we are reinforcing our businesses by strengthening and utilizing standardization-related patents.

Examples of Major Research Achievements Contributing to Increased Corporate Value

Open Innovation

In order to create social value and enhance corporate value, we are actively promoting open innovation with research institutions around the world, as well as commercialization partners, start-ups and others. Traditionally, it has been challenging for us to develop new businesses and necessary technologies on our own. In cooperation with external partners and specialist institutions, we now envision our ideal future and backcast to identify and focus on the key business areas and technologies for the next generation.

Results of Intellectual Property Activities and Other Matters

Results of Intellectual Property Activities

NEC Executive Advisor Nobuhiro Endo has been appointed as an Expert of the Intellectual Property Strategy Headquarters of the Government and Member of the Visionary Committee, and NEC Corporate SVP Shigeki Wada as a member of the Policy Promotion Council of the Japan Patent Office. Through their respective appointments, they contribute to the promotion of Japan’s intellectual property policy.

Examples of Initiatives to Promote Standardization Activities

NEC Corporate SVP Shigeki Wada was appointed as the chair of the International Standardization Strategy Task Force, which was newly established under the Committee on Intellectual Property of the Japan Business Federation (Keidanren). He was involved in intensive discussions on the best international standardization strategies for creating a global market. To help formulate and promote Japan’s international standardization strategy, Mr. Wada contributed to the compilation and publication of Keidanren’s recommendations, which stressed the importance of industrygovernment-academia collaboration in strategic areas such as next-generation communication technology, and called for measures to build and strengthen an ecosystem for making rules.

Indicators and Goals for Innovation Management

R&D Expenses

Our investments in research and development are concentrated in key business areas. We are also investing in collaborations with external research institutions. In fiscal 2024, R&D expenses were 115.8 billion yen.

Number of Patents Held

We enhance the value of our overall patent portfolio through initiatives to increase the proportion of high-quality patents, acquire new patents, and consistently manage the patent portfolio so that we hold the appropriate number of patents in appropriate countries according to the utilization policy.