Technical conversation - The ideal form of R&D management required in uncertain times -: Fujifilm Business Innovation Co., Ltd.

(Titles omitted below)
This time, as society, the market, and the business environment undergo major changes, how should companies manage research and development that requires medium- to long-term time? BIRD INITIATIVE Co., Ltd. (hereinafter referred to as BIRD INITIATIVE Co., Ltd. We asked the two leaders, Mr. Satoshi Morinaga, who is CDO of BIRD and an expert in the AI/data analysis technology field at NEC Corporation (NEC), to explain the key points.

01as an engineer

First of all, please tell us about your career to date.

Kikuchi:When I joined the company, I was designing power supply circuits in the product development department. After that, I was interested in the image quality of copiers, so I transferred to optical system technology development for scanners. At the time, there were hopes for lead-free glass to be environmentally friendly, but the difficult task of improving performance without adding lead to increase the refractive index required a lot of trial and error. When designing a lens, it was necessary to find a local solution from among a huge number of parameter evaluation functions, and we were dealing with something similar to current machine learning algorithms, in which the function was applied to the local solution as well. After that, in order to strengthen the production system in China, I oversaw the quality control of parts delivered by local vendors at a group company in Shenzhen for about three years, and led both technology and management between local companies, sites, and headquarters. I was able to gain valuable experience. After returning to Japan, I was expected to utilize my experience in production and development, and as the director of the Marking Technology Research Institute and the System Technology Research Institute, I worked with about 50 to 100 members to develop technologies for 3D printing and AI utilization. .

Morinaga:When I joined the company, I was assigned to the research institute, and since the company was about to start researching fault-tolerant systems, I was put in charge. This field deals with how to express system reliability mathematically, and I was researching the balance between system reliability and backup system redundancy as a mathematical model. Later, when the government established the Financial Supervisory Agency (currently the Financial Services Agency), it was recruiting people skilled in financial engineering for system vendors, so I was sent on secondment from the company. I thought it would be a technical job, but I was assigned to handle negotiations with various countries as an administrative officer, and I conducted international negotiations with representatives from various countries. It was a little different from what we would call social implementation in the private sector, as we had to negotiate with people who had a completely different culture and environment within NEC, but it was a valuable experience to learn tough negotiations and cooperation for implementation from just a mathematician. Although I was seconded for about a year and a half, I continued to work for the Financial Services Agency in a concurrent capacity for eight years. Since returning to NEC, I have been conducting research and development in areas centered on the construction and analysis of mathematical models, such as AI, data science, and big data, in collaboration with AIST and RIKEN.

02Research and development in companies

How do you feel about the changes in the social environment in recent years?

Kikuchi：I feel that the speed of social change is becoming overwhelmingly fast. In particular, social changes in China are rapid, and when I was working in Shenzhen, many subways were built in no time with 24-hour construction work. In particular, I was shocked to see that existing buildings were changed in the blink of an eye due to the government's decision to use Scrap & Build. In addition, when I started working in China, I used cash at ATMs, but by the time I returned three years later, I was using electronic money, so I realized that society, both public and private, has changed dramatically. I witnessed it. On the other hand, when I returned to Japan, I found that the situation had not changed since I was assigned to China, and I felt a huge gap. Still, although Covid-19 was a hard landing, it brought about rapid changes in Japanese society. I believe that work styles are becoming more diverse and flexibility is required.

Morinaga：As you said, there are huge changes in China. I feel that China is gaining momentum, especially in the academic field. I have been attending AI-related academic conferences for 20 years, and in the past, Western researchers were the main speakers, but now the number of participants from China and India has increased rapidly, and some prominent I was very surprised when I was unable to attend an international academic conference because the tickets were sold out. The speed of research and development in both countries is fast, and the amount of goods produced is large, so I feel that Japan's presence in the international community is declining. However, since Japan has the basic research that has been accumulated over the years, I think Japan must find a way forward in these fields.

Have there been any changes in your company's business environment?

Morinaga：In my area, expectations for AI and data science have changed significantly. Before 2000, if you were doing research in machine learning or data analysis, people would ask you, ``What are you playing with?'' However, with the big data boom of the 2000s, research began to shift from hardware to analysis technology. research trends have changed rapidly. However, research in the AI ​​field has had many ups and downs, and although there were a couple of times in the past when it attracted attention from the world, it never saw the light of day. It's a funny story now, but at the time, the word "AI" was considered unlucky, so I even tried to stop it from being used in the name of our internal organization. (lol)

Kikuchi：Most recently, in 2019, our capital structure underwent a major change and we made a new start as a wholly-owned subsidiary of Fujifilm Holdings. Our internal structures and systems are also changing to increase synergies within the group. From July 2022, to further accelerate the solutions and services business, the research institute, which has been responsible for everything from basic research to applied research for the entire company as a cost center, will become a member of the business division responsible for solutions and services. I am also becoming more conscious of contributing to the division I work for. Up until now, even if you wanted to commercialize a research theme, you had to get approval from some business department, but with the current system, those barriers have been removed, and I think it has become easier to speed up the process. think.

What do you think about the role of research and development in companies in the future?

Kikuchi：Of course, corporate research and development is required to contribute to the company's sales and profits with new technology and new value. While it is necessary to contribute to existing projects, I also believe that it is important to maintain a balance between looking ahead and setting new research themes.

Morinaga：As Mr. Kikuchi said, it is important to maintain the theme while maintaining the overall balance. As I briefly touched on earlier, NEC started research into AI and machine learning, but in the 1990s social implementation did not make much progress, and competing companies withdrew from research and development. Even so, NEC patiently continued its research, and to put it another way, it might be said that it was just late in the race (lol), but it has now achieved advances in fields such as image recognition, machine learning, AI, and quantum computers. running at the tip. We believe that it is necessary to cover not only immediate themes, but also fields that can be expected to grow over the medium to long term.

Kikuchi：I agree. To that end, I think that having a "connoisseur" is extremely important. I feel that R&D management is required not only to have a keen eye for technology but also to be able to grasp changes in the world.

Morinaga：Discernment is indeed really important. In addition, I feel that in this rapidly changing world, it is becoming extremely difficult to foresee the future. Although portfolio management is now commonly talked about in various situations, it was originally a management method used to hedge the risks of various financial products with high volatility. In today's social and business environment, where uncertainty is high, I think it is becoming extremely important to manage a company's R&D theme portfolio in a fundamental sense.

What challenges do you need to overcome to develop a new business?

Morinaga：There are two patterns for creating business from research and development. One is to provide new value from research into existing markets. The second pattern is to develop new markets that have never existed before. The problem with existing markets was that it was not possible to utilize sales channels to quickly penetrate the market. On the other hand, in new markets, there are almost no people with the capabilities to begin with. I think there were only a handful of people in a group company with 100,000 people. A methodology has finally been established within the company, but up until then it had only been an individual activity and could not be called an organized activity.

Kikuchi：When it comes to creating new businesses, I believe that businesses that were highly successful in the past can become a brake. This is the so-called innovation dilemma, and to minimize the impact on existing businesses, some people are afraid of failure or are unable to wait until success occurs, and their experiences of success are holding them back. I feel that there is. I think that an optimal system that does not fail and a system that allows you to pioneer new things with a sense of speed are completely different things. I also think that evaluating business feasibility is an issue. If the period of successful experience is long, the evaluation method will be based on existing business, and may not be suitable for new business. Sales of 1 million yen from an existing business and sales of 1 million yen from a new business should have completely different meanings when calculated from the net present value based on the market growth rate. Although the amount stated in the materials is the same, I believe that we have to look at business feasibility with future growth in mind.

03Technology development management

What will be required of technology development management in the future?

Kikuchi：Looking back at technology development to date, there are cases where business planning takes the lead and technical development cannot keep up, or conversely, there are cases where technological development takes the lead and then you realize that it is far removed from the market needs and you end up going back to square one. had. That wasn't a very good idea. In recent years, social issues have become increasingly complex, and I feel that they cannot be solved by a single company alone and that we must develop business through a variety of combinations of technologies and partners. In that sense, we can take a bird's-eye view of technology development as a whole,Both technology and business must be developed in parallelThat's what I think.

Morinaga：We are talking about management based on BRL-TRL assessment, which is one of the BIIM services that our company provides.

Kikuchi：I agree. This made me realize how important it is not only to monitor the conventional technical development status, but also to understand the progress of commercialization at the same time. In particular, the R&D department did not have the business development process up until now, so it was very helpful. Additionally, when proceeding with business development, the positioning of activities may change significantly depending on the customer's needs and the state of technology development, but since the situation is visualized, it is possible to share a common understanding between those in charge of business and management. Communication has also become smoother.

Morinaga：At NEC, we have finally established a business development process, and we are now able to move forward with a common understanding of how to proceed with new businesses. Furthermore, although experimental, we have also begun efforts to advance business development activities in parallel at the basic, application, and implementation stages for research themes in new areas. In the past, the linear model of basic research, applied research, and commercialization sometimes took about 10 years to verify and determine the marketability of a new business, but now customers' needs, etc. are considered from the early stages of research. Understanding has become a standard for Gate. Both research and development and business development involve solving various issues to move forward, so although it is a difficult part, I believe that it is right that we are moving forward despite the ups and downs.

What about the future consciousness of researchers?

Kikuchi：I tell the members that three things are important in New Year's greetings. The first is to "spare no effort to make society better," the second is to "move forward with speed while making minor adjustments to the plan," and the third is to "respect diversity and embrace diverse opinions." To sublimate and make something better.” Business feasibility is important, but I think it's more important to have an image of ``I wish I could do something like this'' than to calculate the money. For example, sometimes some researchers come to me with research themes that I don't understand. Even if I don't understand what is being said at first, I try to understand it by changing the way I listen many times. If he's trying his best to explain things, I think there must be something wrong with him, so I try to get him to try it once. Although it may not turn out well in the end, I want to cherish the energy and passion of the researchers.

Morinaga：This is a very embarrassing story, but NEC's white box data analysis is now becoming socially recognized, when my subordinate at the time first brought it up as a research topic, I This technology that I rejected because I thought it was technically impossible. Still, I was shocked when the researchers managed to bring it back to me, and since then I've started doubting my discerning abilities. At the time, I took pride in being an expert in this field, so I thought that something that could do something I thought was impossible would shock the world. There are two patterns when it comes to thinking that you should give up on a research topic. One is that it's boring to try. The other thing is, ``There's no way I can do it.'' After this incident happened, even when I thought "There's no way I can do it," I started saying "I should try."

Kikuchi:I'm also someone who doesn't give up easily, so there are some things I just can't give up on even if management tells me to quit over and over again. Although it may be difficult for my subordinates to create materials. (Laughs) There are times when I think it would be amazing if this technology could be released into the world. I don't want to give up on something that I truly believe in. Another thing is that, as I mentioned earlier, in today's society there is a growing need for collaboration with other partners to solve problems that cannot be solved by a single company alone, so engineers are also required to collaborate with various partners. I would like to interact with you. Although researchers have interacted with each other in the past, there have been few opportunities to have sessions with business development professionals, so working with BIRD was very refreshing.

Morinaga：As with NEC, many of our researchers are unique and charming. (Laughs) We had a lot of heated discussions during our activities with your company, and I felt that there were many engineers with great passion and a strong desire to move things forward. In the many work sessions that are held in the world, there are many cases where the problem is that the discussion is not deep enough, but I think the BIRD consultants did a good job of facilitating this time. Although it's a little more miso (lol)

Kikuchi：After all, even if you bring in people who can't say what they think, no chemical change will occur. We sent people within the company who can clearly express their thoughts to the program with BIRD. Morinaga-san's use of the word charming is new (lol)

04At the end of the technical discussion

Finally, what is the appeal of BIRD?

Kikuchi：After all, diversity and professionalism are the attractions of BIRD. Especially in the field of business design, we have a track record of working with major companies, including Mr. Kitase, so we are a very reliable partner. Also, it is a place that understands the circumstances of large companies. I have worked with various venture companies in the past, but there are some areas where the culture is slightly different. BIRD provided accurate advice even in cases where it was ifficult for venture companies to understand, such as how to approach decision-makers within the company and the speed of approval. I think our combination of good footwork as a venture company and understanding of large companies is a strength that other companies don't have.

Morinaga：thank you. BIRD has also strengthened its management structure from October 2022, so we hope to be even more helpful to everyone.

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