Achieving sustainability through Social Innovation
6 November 2018
Hicham Abdessamad, President & CEO, Hitachi Consulting
Hicham Abdessamad describes how Hitachi is using Social Innovation to address global issues of sustainability such as climate change, pollution, inequality and a lack of diversity.
Read the transcript of Hicham Abdessamad’s interview on Hitachi’s approach to sustainability and Social Innovation.
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Anna Delaney (interviewer)
Hicham, we hear a lot about social innovation. But what exactly is it?
For Hitachi, social innovation is simply using innovation and technology to solve some big problems in the world, especially around society. There's many challenges in society, whether it's aging population, or cleaner water, or sustainable energy.
And Hitachi believes that innovation is one of the key enablers to solve some of these problems. So it's a culture, and it's a way for us to actually go to market and leverage in all of our capabilities to solve big problems in society. That's what we're trying to do.
And what exactly is driving the need for social innovations? Maybe you touch on the social and the environmental...
Well, obviously, you have social and environmental issues, right? Whether it's health care, or energy, or public safety, or urbanisation, things like that. But then you have the emergence of a lot of disruption happening around us, as well, right? So there's disruption happening in every industry. Every company and every industry is being disrupted by digital technologies, by newcomers that are changing the paradigm.
You think about whether you're a television network provider that's being disrupted by content providers. You're talking about all the digital platforms that are out there, how people buy, consume. The whole consumption economy - people are moving away from ownership to sharing, and sort of consuming. So those things disrupt ecosystems that have been created for years and years and years.
So for us it's about, OK, how do you leverage technology to overcome some of those disruptions, but also take advantage of them to create new opportunities for new business models, or drive better optimization? And we tend to focus on industries where there are big problems.
So for example, leakage is a big problem in water utilities. So we know that utilities, they lose about 30% to 40% of water just due to leakage across their entire network. How do you solve that problem? Can technology solve it? Can you start to build predictive models that will allow you to pinpoint things before they happen? Can you use technology to determine where things actually are in real time?
It's taking technology and bringing it to industries that have been around a long time to solve some of the problems around that as well. So it's kind of a perfect storm of disruption that's happening around us.
There's so much data that's being created every day. And in fact, more data was created in the last two years that's been ever created in the history of mankind. So machine data, user data, everybody is creating information. And at some point, we need to start to put that information for use, and good use.
So why Hitachi, in a sense, is because we've been a company that's been around for 107 years. We started as an industrial company, and then we built an IT business 50 years later that's focused on software and IT. So an industrial company means we make nuclear power plants, bullet trains. We're in pretty much every industry you can imagine. 45% percent of the car parts that you see out there are manufactured by Hitachi.
So we have so much capability and IP in what we call the OT world, the Operational Technology world. We have a lot of experience in the IT world. And then we also have a consulting capability through Hitachi Consulting, our consulting arm. So it's kind of like a perfect storm to bring IT and OT together, and build some solutions that drive real business outcomes and solve some real problems for our clients.
So let's talk more about this meeting of the old and the new. The new-- disruptions, yes? But the old problems still linger. We've got inequality. We've got inequalities, lack of diversity in the workplace, we've got water shortages, and global warming. So how can social innovation be used to address these?
So in a sense, social innovation aim and goal is to do exactly that. We're not going to solve all the problems, but we're certainly focused on the big ones. You know, health care: quality of care, cost of care. Obviously we're talking about water and energy. You know, there's this whole inequality that's happening around us.
There's still poverty around the world. There's hunger around the world. It does take a consortium of companies coming together, and government to partner. For Hitachi, it's more about, all right, which industries should we focus on where we can make the biggest impact, where we have capabilities.
We have a water business that we built from the ground up. So can we take the water business that we have an expertise and add new digital technologies, and can you marry the two to go solve some water problems? Energy is the same way. We've been in the nuclear power business for a long time. So I think it's not us alone. It takes everybody working together.
So why is social innovation important to Hitachi?
Well, it's in our DNA. Hitachi started out in a small factory in the garage, and our founder at the time says that we're going to use innovation to develop new products and technologies to help society. It's inside our DNA, because it's a Japanese company and it's heritage.
In Japan, there is a sense of social responsibility. Social responsibility of creating employment opportunities for people, social responsibility to be part of society and solve some of the problems within the Japanese government, and what's happening in Japan. They have challenges like aging population, less immigration. There's a lot of things there where technology can start to play a role in doing that.
And then of course being a global company, we wanted to be a great ambassadors for this concept of innovating not just for innovation's sake, or innovating to make money, but you innovate to solve some societal problems that will obviously commercially be also viable for us. So it is embedded in our DNA, and also our collaborative creation and our partnering is also very core to our culture.
So in the spirit of collaboration, who does Hitachi collaborate with?
Well, we partner with pretty much everybody. In this new era of disruption and technologies, you compete with others, you partner with the same ones that you actually compete, and it depends on the opportunity and where things are. And then also the industry and the region.
So one of the examples I'll say, for an example: Google. A lot of people know Google for their search and their various content platform like YouTube. But Google is a great innovative company, as you know. But they've been very much focused on consumer. They don't have a lot of enterprise or industrial experience. So a Google and a Hitachi make a lot of sense. We have a lot of the industrial capabilities and experience. We've been around a long time. We have innovation, and so do they. They have a great cloud platform that they've been promoting, and they have connectivity, and they have a network around the world.
So you can start to imagine some of these solutions, like IoT where you're taking sensor data from trains, they get processed on the train, and then the data goes over to a Google Cloud for further analytics. So you can start to see that ecosystem work, and leveraging the Google network as an example.
So in this ecosystem, if a company tells you they can do it all on their own themselves, it's really not true. You can't be good at every single area. Hitachi does not have a cloud. We don't want to be in that business, so we leverage partners there. We work with ERP partners, companies like SAP Oracle, because they own the enterprise value chain. So if we're now talking about digital transformation we have to touch to those systems.
So it is an ecosystem of partners that could work together to drive a solution. However, there are some partners that are better to work with than others. And I think we tend to gel well with partners that share the same values-- the same sort of, hey, we really want to make an impact. We want to work together.
And we find companies like Google, for example, is a very partner-friendly company that wants to do more, and wants to find key companies to work with. Partner strategy is very important for us, and selecting the key partners is also just as important.
Our world faces a number of challenges, from climate change and pollution to population growth and urbanisation. Hitachi believes that it must help to find innovative and commercially viable solutions for these challenges.
Visit Social-Innovation.Hitachi to learn how Social Innovation is helping Hitachi improve lives across the world.
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