Hitachi, Ltd. is one of the world's leading conglomerates. With operations in over 50 countries, the company has a diversified business portfolio that ranges from construction machinery to healthcare. However, in recent years, Hitachi has been focusing more than ever on the Social Innovation Business. In this blog, we will explore what this means for the company and why it is essential for its future growth.
What is Social Innovation Business?
Social Innovation Business (SIB) is a term coined by Hitachi to describe its ultimate goal of creating sustainable solutions that benefit society. It is characterized by the use of advanced technologies such as big data analytics, IoT, and AI to solve complex social challenges. Hitachi believes that by working on these challenges, it can create value for its customers, shareholders, employees, and society.
The Social Innovation Business is an umbrella term that encompasses several business segments, including power and infrastructure systems, information, and telecommunication systems, high functional materials and components, automotive systems, and healthcare, among others. These segments are interconnected and complement each other, providing integrated solutions that deliver superior performance, reliability, and safety.
Why is Hitachi Focusing on Social Innovation Business?
Hitachi's focus on Social Innovation Business is driven by several factors. Firstly, the company recognizes that there is a growing need for sustainable solutions that address social challenges. These challenges include climate change, urbanization, aging populations, and the digital divide. Hitachi believes that it has a role to play in addressing these challenges, as it has the expertise, resources, and technology to deliver innovative solutions.
Secondly, Hitachi's focus on Social Innovation Business is a response to changes in the business environment. The company recognizes that traditional business models are becoming less effective, as customers' needs and preferences are evolving. For example, customers are increasingly seeking solutions that are more efficient, cost-effective, and environmentally friendly. Therefore, Hitachi is shifting its focus towards solutions that meet these changing needs.
Thirdly, Hitachi's focus on Social Innovation Business is a strategic move that aligns with the company's long-term vision. Hitachi aims to become a global leader in social innovation and to create sustainable value for all stakeholders. To achieve this vision, the company is investing in research and development, strategic partnerships, and talent development.
Impact of Social Innovation Business on Hitachi
Hitachi's focus on Social Innovation Business has had a significant impact on the company's performance. In the year ending March 2021, Hitachi's revenue from SIB increased by 2.9% to ¥9,258 billion, representing 59.1% of its total revenue. Hitachi's operating income from SIB increased by 13.3% to ¥183.0 billion, representing 75.6% of its total operating income.
The company's focus on Social Innovation Business has also helped it to win new contracts and expand its customer base. For example, Hitachi has secured several contracts for its high-speed rail technology, including the UK's Intercity Express Programme and Italy's Frecciarossa 1000. Hitachi's healthcare business has also expanded, with the company acquiring Sota Omoigawa Hospital, a leading hospital in Japan that specializes in cancer treatment.
Moreover, Hitachi's focus on Social Innovation Business has helped the company to create a culture of innovation and collaboration. The company has established several innovation centers, such as the Hitachi Global Center for Social Innovation, which bring together diverse stakeholders to co-create solutions that address social challenges. Hitachi has also established partnerships with other companies, universities, and governments to leverage their expertise and resources.
Conclusion
Hitachi's focus on Social Innovation Business is a strategic move that aligns with its long-term vision of becoming a global leader in social innovation. Through its focus on SIB, Hitachi is using its advanced technologies and expertise to address complex social challenges and create sustainable value for all stakeholders. The company's performance highlights the success of this strategy, with SIB contributing significantly to its revenue and operating income. As Hitachi continues to invest in research and development, strategic partnerships, and talent development, we can expect to see more innovative solutions that benefit society.