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Innovation Management Policy
In an era of volatility, uncertainty, complexity and ambiguity (VUCA), we are faced with the question of how we can achieve the NEC 2030VISION. We believe that a key part of the answer lies in the idea of “seizing the future together,” multiplied by “technology.”
Our belief is that there are four key elements important for actually implementing technology in society: market intelligence, technology development, business development and social acceptance.
Therefore, NEC is working to expand R&D co-creation and open innovation, venturing into new domains to create businesses that can impact society, and acting as thought leaders.
Innovation Management Framework
NEC has created a Chief Technology Officer (CTO) position to 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 at innovative business development and create new value for society with the world as our stage, by combining diverse knowledge that breaks through existing stereotypes.
In addition, NEC is ramping up research and development by deploying technologies outside the Company earlier and involving 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.
We have set our investment in research and development at approximately 4% of revenue. To ensure that these investments are used effectively and efficiently, we are also investing in collaborations with external research institutions, in addition to concentrated investments in key business areas. In fiscal 2023, R&D expenses were 3.7% of revenue.
Major Research Achievements for Leading and Unique Core Technologies
To expand the scope of value in social value creation, we are actively promoting open innovation with research institutions around the world, as well as commercialization partners, start-ups and others. By promoting collaboration with external partners and specialist institutions, we envisage the development of the technologies needed for new businesses that are difficult for NEC Corporation to develop alone, as well as our vision for the future, and then backcast from there to study the key business areas of the next generation.
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 open innovation strategies and 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 best solutions it should create for 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 No. 1/Only 1 core 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.
NEC’s Approach to Business Innovation
Expose NEC’s technologies externally at an early phase, taking in complementary technologies from start-ups and funds from customers/venture capital to accelerate research and development. Systematize the process of open innovation of an inbound/outbound fusion type and expand business entries and exits.
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 building strength in these areas will improve our competitive edge in delivering solutions for society.
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 Japan and overseas, serving in key positions such as chairpersons and board members of standardization committees. NEC promotes standardization policies in Japan by chairing councils of the Ministry of Economy, Trade and Industry and the Ministry of Internal Affairs and Communications. In addition, we are reinforcing our businesses by strengthening and utilizing standardization-related patents.
Business Development Strategy
We are promoting a transformation into new business models that transcend existing business frameworks and the development of business from NEC’s core technologies.
We will realize significant social value and sustained growth through business development that establishes and implements new business models by taking social issues, in-house core technologies, or leading-edge business models as starting points, formulating hypotheses on issues, and then verifying the hypotheses through practical field testing.
Among these activities, NEC not only establishes businesses in-house but also promotes business development activities through joint ventures, spin-outs, and carve-outs and various other schemes.
Intellectual Property Activities
Intellectual Property Strategy
NEC is particularly strengthening its intellectual property in technology areas that drive growth businesses and create future growth pillars toward the realization of the 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 utilizing its copyrights and trademark rights to support its global brand.
Intellectual Property Management Division: Strengthening NEC’s Intellectual Property Capabilities
The 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.
This division undertakes activities that enhance the value of NEC’s overall patent portfolio by increasing the proportion of high-quality patents, acquiring new patents, and consistently managing the patent portfolio so that NEC holds the appropriate number of patents in appropriate countries according to the utilization policy.
Results of Intellectual Property Activities
- NEC received the Top 100 Global Innovator Award for a 12th consecutive year from Clarivate Analytics (Only 18 companies worldwide have received this recognition for 12 consecutive years).
- First worldwide* in the number of international patent applications in the area of biometric authentication + image recognition + AI technology
- *NEC survey covering international patent applications (PCT applications) published internationally as of January 2023