Pioneering a Prosperous Future with Regional Innovations

1. Do innovations occur in Japan?

Japan is ranked sixth in the World Economic Forum’s global competitiveness ranking. However, from indicators of the country’s suitability for innovative business, Japan is ranked 14th, a low standing among developed countries. The world’s gross domestic product (GDP) has grown over the last 30 years. As part of this trend, Japan’s GDP has grown 120%. However, the GDP of European Union countries have at least doubled, while the GDP of the United States has grown 330% and China’s has grown more than tenfold. Considered in this light, Japan has become a country that really does not grow.

Can the people of a country without economic growth be happy? Japan is ranked 58th in the World Happiness Report. This suggests that the Japanese, faced with social issues such as a low birthrate, aging society and pension crisis, have a hard time feeling happiness that comes from having children with peace of mind and leaving a legacy to the next generation. Many of the top spots in the happiness ranking are occupied by small countries such as those in northern Europe. However, these countries also enjoy growing per-capita GDP. Japan, on the other hand, does not have a view that tomorrow will be better than today or a future 20 years down the road will be better than tomorrow.

2. Have innovations by GAFA (Google, Amazon, Facebook, and Apple) brought happiness?

What innovations should occur in Japan? Revenues of GAFA, which have created innovations that dominate the world, have certainly been increasing sharply. However, there is a book, titled Hired: Six Months Undercover in Low-Wage Britain about the experience of working in an Amazon.com warehouse and as an Uber driver. I went to Seattle earlier this year and observed an Amazon warehouse. I saw how artificial intelligence (AI) efficiently controlled workers and systems. Amazon workers have heavy workloads at low wages, for which Amazon is being criticized by the mass media. Labor’s share of the economy in the United States has been trending downward. The theory is that large companies, such as GAFA, have kept profits to themselves instead of returning them to their workers.

3. Open social platform

GAFA adopt a business model based on the monopolization of collected data. In this model, world data are sucked up using a variety of methods such as social networking services and advertising models, and the data are used to improve the company’s products and content. Many people worldwide are now raising their voices in concern over this business model.

At NTT, our business model does not monopolize data. Instead, we create data lakes that gather data from all sorts of places and willingly share them with the rest of society. Together with all of you, we want to create a society that can become more prosperous. If we create a model with which data are used by all of society, then Japan will once again draw the attention of the rest of the world.

4. Leverage AI so that people can do more creative work

How to promote a set of ethics of AI and people co-existing, instead of people being used by AI, is being debated (Fig. 1). If we can create AI that plays a supporting role in helping people when they are in trouble instead of AI being used in place of people, then I believe we can achieve social innovations that command the attention of the world.

Fig. 1. Shift to AI that supports humans.

5. Creating regional employment by revitalizing primary industries

I would like to reiterate the general social trend taking place throughout Japan. Japan’s population is falling, and in 2065, there needs to be 1.3 persons of working age to support one elderly individual. We must work to grow Japan and create a path to double its per-capita income.

Looking at the number of workers in each sector of the economy (Fig. 2), we see that young people are heavily employed in the service sector, whose customers are mainly based in Japan. The primary industry sector, i.e., industries concerned with providing the raw materials for manufacturing such as agriculture, fishery, and forestry, is shrinking yearly. While Japan’s regions depend heavily on such industries, the country has not focused on how to strengthen them, particularly regarding agricultural production, livestock husbandry, and fisheries. How to reinvigorate these industries will be the key to regional revitalization.

Fig. 2. Industrial structure balance and food self-sufficiency rate.

Over the past 50 years, the number of agricultural workers has fallen 80%. What’s more, 80% of these workers are over the age of 60, and abandoned farmlands are increasing rapidly. If we can effectively use land and improve productivity, then not only the manufacturing industry but also primary industries can become export industries and serve as another pillar of Japan’s economy. We therefore seek to revitalize Japan’s regions through improving SMEs’ productivity and reinvigorating primary industries.

6. Collective impact

An idea that has gained attention is collective impact, which means building up an entire industry by bringing together the strengths of companies, government agencies, and research institutes, and sharing goals, as done in the Netherland’s Food Valley, because the efforts of individual companies alone have their limits. In short, it is a philosophy that believes that combining powers results in transformations that impact society. We see countries such as the Netherlands that have succeeded with collective impact. We believe that the same can happen in Japan.

7. Two digital transformation approaches for advancing agriculture

As I have explained above, NTT EAST has begun efforts to revitalize SMEs and primary industries through digital technologies. I would like to introduce two real-world examples of efforts that we have been engaged in regarding agriculture (Fig. 4). There are two approaches to digital transformation, Mode I and Mode II. Mode I is a forward-casting approach based on the current method of agricultural practices. With this approach, productivity improves through digital technologies. Mode II, on the other hand, is a backcasting approach. It defines a completely new future condition as the starting point and considers what should be done to achieve that future. An example is completely changing the current agricultural methods by, for example, optimizing the Netherland’s next-generation greenhouse horticulture for Japan. By adopting both Mode I and Mode II, regional revitalization can blossom, attracting industries and employing young people.

Fig. 4. Two approaches for advancing agriculture.

8. Aiming for regional revitalization and community development through “Agriculture × ICT”

Summarizing Mode I and Mode II, we at NTT EAST, who are not experts in agriculture, want to form lasting partnerships with farmers who wish to leverage digital technologies to bring about mutual benefits. Looking to the Netherland’s success in agriculture, we at NTT EAST want to build up a region’s industry together with universities and consultants in that region. In line with this goal, we wish to work with regional stakeholders to support a circular society that carries out local production of energy for local consumption.

9. Networks for supporting regional social innovations

Because we are a network company, we must create networks to support regional revitalization. We wish to build them together with NTT R&D and manufacturers. Leveraging data by data scientists is the current focus. However, it is difficult to collect data pre-formatted at a level where AI analysis is possible. We want to create a framework for data lakes where reliable data are gathered. For this goal, our mission is to collect data from every conceivable source, such as from 40 billion IoT devices and drones and satellites, and create edges for computing in regions so these data can be openly used for social innovations.

Data obtained from sensor devices, drones, and satellites have different characteristics concerning data-acquisition range, resolution, and freshness. A perspective on how to gather data by combining these characteristics is critical. Previously, satellites have used optical sensors to capture images; thus, images of ground surfaces could not be obtained in bad weather. However, ground-surface information can now be obtained regardless of the weather by using microwave radar. By launching several hundred low-earth orbit satellites, whose cost has fallen sharply, and obtaining images with microwave radar in regular intervals, information can be obtained at very short cycles. NTT EAST became a member of the xData Alliance on October 24, 2019 and announced that we are fully participating in space ventures.

With regard to local fifth-generation mobile communications (5G), we cannot simply deploy local 5G. To solve a region’s difficulties, we must build networks that use a best mix of all network types, including optical fibers, Wi-Fi, low power wide area, and local 5G.

10. Toward developing secure IoT

There are security issues with IoT technology (Fig. 6). Many IoT devices have low-spec processors and memory and are not updated, leaving them with many security holes. Their data handling is thus not reliable, and they cannot be used for mission-critical purposes such as medicine and automated driving where lives are at stake. Therefore, our mission is to make IoT technology trustworthy for handling data. It is critical to have an environment where data entrances and exits are robustly protected, even when a variety of devices are connected, clean up data while processing appropriately at edges, and enable the data to be used by data scientists in the upper layer. We wish to build next-generation edge networks that draw out wisdom from a variety of users for social innovations such as AI.

Fig. 6. Social infrastructures that guarantee the reliability of data.

Specifically, through IoT gateways, we carry out alive monitoring of devices and use inference techniques to remove data determined suspicious when abnormal behavior is observed during monitoring. We wish to create a regional edge network with Innovative Optical and Wireless Network (IOWN) as a set. We want to engage in this effort with the help of researchers, developers, and manufacturers.

11. To bring about regional social innovations

Finally, NTT EAST is visiting municipalities, farmers, and universities to build partnerships to promote digital-technology-based regional revitalization and a circular society (Fig. 7). Thanks to our partners, this effort has been well-received. Many municipalities and JA said that until now, no large companies have worked with them in this field, so they are eager to work with us. There have been many companies that immediately disappear after reaping the benefits of a partnership. Therefore, they said they wanted us to put down roots in their communities. I want to answer with confidence that we are working on regional revitalization and industrial development with the support of everyone in the community. To strengthen Japan, it is necessary to solve challenges faced by regions and SMEs. We appreciate support from research institutes and related companies concerning this endeavor.

Fig. 7. To generate regional social innovations.