“Connected Industries” Tokyo Initiative 2017Data for better productivity New services and...

“Connected Industries”Tokyo Initiative 2017

2017/10/2

Tentative translation

Five Priority Fields Tackled under the “Connected Industries”

Smart Life

Automated Driving and Mobility Service

Manufacturing and RoboticsBiotechnologies and Materials

Plant/Infrastructure Safety Management

Identifying approaches for data harmonization Enhancing AI and related human resource

development Establishing future vision of mobility service

concerning logistics and EVs

Achieving joint utilization of data across companies in harmonized fields

Establishing an AI technology platform for commercialization

Obtaining public acceptance

International standardization of data rules including formats

Enhancing inter-company collaboration in harmonized fields (e.g., cyber security and human resource development)

Environmental improvement for the IoTintroduction for SMEs, e.g., IoT tools

Improving technological capability for safety through utilizing IoT

Developing guidelines and other common rules for harmonizing data across companies

Promoting further reform of regulation systems

Discovering potential needs and materializing possible services

Data collaboration through inter-company alliances

Developing other rules for further data utilization

Developing cross-sectoral support measures that bolster these efforts.

Outline 1

1

Cross-sectoral Policies under the “Connected Industries”

Sharing and Utilization of “Real-Data”

Environmental improvement for Data Utilization

R&D, human resource development and cyber security

Further expansion of initiativesGlobal, venture and local companies

and SMEs

Establishing a new system for certifying data-sharing-businesses and introducing new tax-break programs.

Supporting measures for developing AI systems through collaboration between large/medium companies, which hold “real-data”, and AI venture businesses

Creating advanced models and then developing rules based on demonstration programs

Revising the Contract Guidelines on Data Utilization Rights

Promoting development of innovative AI chips Enhancing efforts for human resource

development in the field of data. (e.g., hybrid-type in both virtual and physical systems, and in AI technologies)

Building a framework to attract outstanding human resources from around the world

Enhancing cybersecurity measures

Enhancing worldwide cooperation especially with EU and Asian countries

Promoting exports of Japan’s systems through the International Collaboration Working Group

Further improving the quality and quantity of human resources related to international standardization efforts

Building Japanese venture ecosystems Enhancing support measures for local companies

and SMEs by providing programs for developing or dispatching experts

Enhancing support measures placing “real-data”, as its core.

Outline 2

2

Details of the“Connected Industries” Concept

3

Japanese industries are advancing digitalization of data for their establishments and factories as well as technologies andtechniques, but the companies tend to manage the data in-house and tend not to collaborate on conducting these activities.

Connecting data and using data efficiently will encourage innovation, better productivity and dissemination oftechnology.

Dissemination of know-how by dataHumans and robots working

(in concept) together

“Connected Industries” will become a strength for Japanese industries, such as Made-in-Japan products, “Industrial Robots”, “Kaizen” , etc.

Industry-academia-government

collaborative efforts for encouraging discussions

and study

Sector-based efforts, e.g., mobility, manufacturing, biotechnology and materials, plant safety, smart life

Data for better productivityNew services and solutionsbased on data

Current situation

Future goals

Cross-sectoral efforts, e.g., data utilization, standardization, IT human resources, cybersecurity, AI R&D

Disseminating to regionalcompanies and SMEs.

- New vision for future Japanese Industries -“Connected Industries”

Analyzing data by AI

4

[Reference] Birth of “Connected Industries” at CeBIT Japan attended CeBIT 2017, a global event for digital business held in Germany in March 2017, as a partner

country. Prime Minster Abe, METI Minister Seko, and other Japanese officials attended the event. FromJapan, a record-high number of 118 companies exhibited their products.

Prime Minister Abe delivered a speech concerning the “Connected Industries” policy concept as an idealapproach that Japanese industries should aim for, stressing three pillars of the concept: [i] realization of anew digital society in which humans and machines or systems work together, [ii] solving challengesthrough cooperation and collaboration, and [iii] proactive development of human resources who canaddress the advancement of digital technologies.

In addition, METI Minister Seko, MIC Minister Takaichi and Minister Zypries, Minister for Economic Affairs andEnergy, Germany, concluded and released the Hannover Declaration as a Japan-Germany joint statementconcerning the fourth industrial revolution. Taking this opportunity, Japan declared that it will advance thepolicy concept, an initiative for connecting people, machines and technologies across borders.

Minister Abe delivering speech Meeting between Minister Seko and Minister Zypries

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“Society 5.0” and “Connected Industries”

First Industrial Revolution

- Acquisition of power

(steam engine)

Second Industrial Revolution- Power

innovation (electric power,

motors)

Third Industrial Revolution

- Advance of automation (computers)

Fourth Industrial Revolution

- Autonomy based on Big-data,

AI and IoT

Primitive society

Agricultural society Industrial society Digital society Society 5.0

Ultra-smart society

<Society>

<Technology>

<Industry>

Connected Industries

Things × ThingsHumans × Machines/Systems

Companies × CompaniesHumans × Humans

(Dissemination of knowledge and skills)Suppliers × Customers

Large companies x SMEsRegions × Regions

Fields × DigitalVarious forms of collaboration

Creation of a new society

(Human-centric &Solution-oriented)

Development ofprivate companies

• New value created by various connections• Collaboration of Individuals

→Creating new business models

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What is “Connected Industries”?

Currently, businesses connect in a variety of ways depending on sectors or business conditions, levels of effort necessaryfor introducing IT, and other issues.Some businesses may keep their connection within their factories, while others may connect with their business partnersor other companies in the same sector, or directly connect with their customers or markets.Connecting industries beyond the existing business relationships may establish a new industrial structure.

Connecting a variety of industries, companies, people, machines, data and other social elements, contributing to...

Creating new added value and products/services using AI, etc., and improving productivity for...

Solving social challenges, such as “Aging society”, “Labor shortages”, “Environment and Energy restrictions”, etc.

Enhancing industrial competitiveness→ Improving people’s lives

Promoting the healthy development of the national economy

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Specific initiatives of “Connected Industries” Japan should identify five priority fields from the viewpoints of potential market growth, Japanese

industry advantages, and scale of public significance, and should accelerate efforts and investintensively in policy resources in such fields.

Moreover, it should develop support measures, legal systems and other environments to accomplishcross-sectoral tasks.

Priority Fields (Working Groups)

Automated Driving and Mobility Services

Manufacturing and Robotics

Biotechnologies and Materials

Plant/Infrastructure Safety Management Smart Life

Visions (public

significance)

• Reduction of traffic accidents• Alleviation of traffic congestion• Decrease of environmental load• Distributed Energy Management• Expansion of mobile services,

including distribution

• Overall optimization ofproduction

• Non-stop factories• Decrease of accidents and

environmental load

• Innovative materials andmedical care/drugdevelopment

• Measures for energyresources

• Creation of innovativematerials for societal reform

• Improvement of factory safetyand productivity

• Internal improvement of security and creation of “earning power”

• Effective utilization of sensors,drones and other advancedtechnologies

• Smart-life markets as analternative for unpaid workto overcome laborshortages and othersocietal challenges inJapan, amid theadvancement of the agingsociety with fewer children,thereby creatingemployment (labor hours).

Market growth,Predicted economic

effect

• Estimated effect in theautonomous-driving vehiclesmarket: Approx. 87 billion USD

• Estimated effect by havingdrivers shift their time for drivingto that for increasing productivityand consuming services: Approx.100 billion to 1 trillion USD

• The industrial internetmarket will boost the globalGDP by 10 trillion to 15trillion USD within thecoming two decades.

• Estimated growth of theglobal biotechnology marketvalue: Approx. 1.6 trillionUSD by 2030

• Estimated effect of globalfunctional raw-materialsmarkets: Approx. 50 trillionJPY

• Worldwide market valueresulting from efforts to addressaging infrastructure andexpanding demand therefor:Approx. 200 trillion JPY

• Money valuation of unpaidwork in 2011: Approx. 100trillion JPY (c.f., the homeappliances market: Approx.7 trillion JPY)

PromoterPanel on Business Strategy ofAutomated Driving (Study Groupfor Strategies for Mobility ServiceIndustries (tentative title) to beestablished)

RRI (Robot RevolutionInitiative of Japan)

COCN, Japan Chemical IndustryAssociation

Council for Promoting Utilizationof Plant Data and OtherInformation

IoT Acceleration Lab

Cross-sectoraltasks

• Data sharing and utilization including cooperative areas• Dedicated reinforcement of top human resources development• Dramatically strengthening efforts for developing world-top-class quality human

resources• Strategic application of international standards• Promoting international collaboration concerning data rules (deepening the

Japan-EU Data Economy Dialogue)• Promotion of and support for “Connected Industries” in SMEs

• Further developmental support of AI systems and overseas expansion• Embodying examination of legal matters concerning AI (“AI responsibility

theory,” etc.)• Implementation of cybersecurity measures• Further discussed: Back-office reforms, Fintech, etc.

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1. Specific initiatives of Priority Fields

－Automated Driving and Mobility Service－Manufacturing and Robotics－Biotechnologies and Materials－Plant/Infrastructure Safety Management－Smart Life

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[Automated Driving and Mobility Services] Directions of future effortsWorking Group [i]Automated Driving and Mobility Services

<Overview of efforts> Challenges that Japan needs to overcome

Japan aims to accomplish: reduction in car accidents, alleviation of traffic congestion and decrease ofenvironmental load, contributing to safe and smooth road traffic; improving the comfort of driving, supporting theelderly and other vulnerable road users in traveling comfortably and creating a society in which more and morepeople are able to travel comfortably; and international competitiveness of the automobile-related industries involvedin autonomous driving technology.

Streamlining of current situationSome businesses inside and outside Japan will launch mobility services with unmanned cars around 2020. Japaneseand western automobile manufacturers were leading the rest of the world, however domestic manufacturers have fallenbehind Western manufacturers in the components and software areas for autonomous driving. This trend isencouraging a growing number of non-automobile companies to newly enter the industry, leaving Japanesemanufacturers further behind.

Major past effortsAiming to secure Japan’s global competitiveness in the field of autonomous driving and to proactively contribute to solvingsocietal challenges, e.g., reduction of global car accidents, in February 2015, METI and the Ministry of Land,Infrastructure, Transport and Tourism (MLIT) jointly established a Panel on Business Strategy of Automated Driving asan opportunity for discussing issues between the Director-General of the Manufacturing Industries Bureau of METI and theDirector-General of the Road Transport Bureau of MLIT. The panel aims to analyze current challenges and hold discussionsconcerning necessary efforts.

Directions of future effortsImprove and deepen demonstration tests, efforts indispensable for public implementation of autonomous driving,and also advance efforts for sharing data on the test results throughout industries; organize the common use ofpotentially-shared infrastructures (maps for autonomous driving, databases for development, etc.) and public-privatecooperation so as to deepen and expand areas for cooperation initiatives in data utilization; and furthermore, startdiscussing issues involving the development of the human resources capable of developing autonomous drivingtechnology, etc., which are areas that have not been discussed enough as areas for cooperation.The Working Group will, it needs to examine ideal approaches to providing total-mobility services, e.g., connectedcars and shared services, while maintaining a focus on autonomous-driving issues in discussions.

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[Automated Driving] Working Group’s approaches to discussions [i]

Points of contention directing discussions in the working group

<Data cooperation> Utilization of map data and data on moving pictures shot from moving vehiclesthat the government has collected; maximization of scope of data to be shared

Discuss specifications and business models of high-precision maps and map data, including for generalroads.

Discuss basic policies for the utilization of images shot from moving vehicles that the government hascollected by commissioning the project to JARI.

Discuss, from the standpoint of maximizing the scope of areas for cooperation, whether or not data-sharing among industries would create more value-added data or bring about data that can be sharedacross industries, while bearing in mind matters that are sensitive to competition.

<Development of AI systems> Detection of obstacles in remote operation; utilization of data collectedduring the Last Mile Demonstration Test Project

Discuss the Last Mile Demonstration Test Project, focusing on ideal approaches to developing systemsin which AIs for machine learning are utilized along with other methods to recognize passengers andto efficiently operate vehicles even in the complex environments where passengers and vehicles interactduring remote monitoring or other operations.

Discuss basic policies for the utilization of the large amount of data to be collected during the FY2017 andFY2018 Last Mile Demonstration Test Projects, basing development efforts on AI-based systems forrecognizing environments and efficient vehicle operations.

<Human resource development> Development of human resources to lead the fields of monodzukuriand digitalization Aim to establish a system for the development of human resources with expertise in simulation,

while training human resources with the necessary development skill, against the backdrop of theshortage of human resources with expertise in the field of software necessary for developing autonomousdriving technology.

Working Group [i]Automated Driving and Mobility Services

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[Automated driving] Working group’s approaches to discussions [ii]

<Global trends Japan should bear in mind>ISO/SAE, the Working Group for Autonomous Driving and the Expert Meeting on Autonomous Steering of the UnitedNations Economic Commission for Europe (UNECE), the World Forum for Harmonization of Vehicle Regulations, andJapan-Germany collaboration

Points of contention directing discussions (continued from the previous page)<International standards> Submission of proposals for international standardization Japan has been serving in the post of chairman at the ISO subcommittees or working groups

proactively committed to autonomous driving technology, and submitting proposals to the ISO forestablishing a variety of new international standards in cooperation with other member countries, in thecontext of related projects (international standardization for advanced road transportation system andestablishment of bases for popularization of these standards). Other organizations have been handlingthis subject, so the working group will not discuss it.

<Cybersecurity> Sharing information on cybersecurity incidents; development of assessment environments(*This is a leading effort, and certain measures have already been conducted for part of the

effort.) Japan Automobile Manufacturers Association, Inc. has established a system for sharing information on

these incidents. It aims to develop an assessment environment (test beds) by the end of FY2019and commercialize the environment. The working group will discuss necessary basic policies.

<Working group’s promotion system >★Discussion opportunity: In February 2015, a Panel on Automated Driving Business Strategy was established as a

forum for discussing issues between the Director-General of the Manufacturing Industries Bureau of METI and theDirector-General of the Road Transport Bureau of MLIT (posts equivalent to vice president and managing director inprivate companies). In addition to this panel, METI established a regular meeting for manager-level posts, as aforum for discussing more practical matters. Since then, the meeting has been holding discussions.

★Member companies:Toyota, Nissan, Honda, Mazda, Subaru, Isuzu, Denso, Hitachi Automotive Systems, Panasonic, JTEKT, Fujitsu Ten,etc.

Working Group [i]Automated Driving and Mobility Services

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[Mobility Services] Popularization of MaaS (Mobility as a Service)

ApplicationPF

Infrastructures

Distribution EnergyMobile services

Entertainment, etc.

Cooperative delivery, sharing

Optimization of car allocation/positioning

Management and control

Demand forecasting

Navigation

Position, sound

Bases for data distribution and processing (API)

Communication services

Recognition/decision-making(AI) Mapping Interface

Autonomous-driving systems (software)

Vehicles, railways, drones, aircraft (sensors, storage batteries, on-board semiconductors,

etc.)

Establishing the overseas situation as a benchmark, METI should smoothly establish a study team across relatedbureaus, e.g., the Manufacturing Industries Bureau and the Commerce and Information Policy Bureau, aiming todiscuss future directions of Japan’s efforts.

Mobility service architectures Diagram of shift to new social systems

On peak-off peak

adjustmentImproving

loading ratios

Inter-supply-chain data

collaboration

Dynamic pricing

Sharing

Energy

MarketManagement

Supply-demand

adjustment

EVs/ stations therefor

Big Data

Service Transportation

Data collaboration

and optimization

Introduction of autonomous-driving vehicles, electric facilities and new services

13

[Manufacturing and Robotics] Directions of Future EffortsWorking Group [ii]Manufacturing and Robotics

<Overview of the efforts for the field of manufacturing and robotics> Challenges that Japan needs to overcome

Value creation taking advantage of Japan’s strengths (providing solutions that takeadvantage of cutting edge strengths, etc.), also from the standpoint of competing with leadingWestern and other companies, and also the need to overcome labor shortages in Japan.

Organizing of current situationFortify major countries’ efforts toward the promotion of the smart manufacturing concept; asJapan boasts outstanding manufacturers in the machinery sectors and some have significantcompetitiveness over foreign companies, such manufacturers need to win corporate value throughthe solution-oriented initiatives that solve problems faced by society and consumers, utilizing“human-centered” approaches that leverage quality technologies and factory floorperformance as their strong points.

Major past effortsRRI was established in 2015; action groups and other committees for particular area forcooperation were organized under the RRI in 2016; Japan-Germany collaboration has beenadvancing since 2016 in particular, and Japan and Germany concluded the HannoverDeclaration at CeBIT in 2017; additionally, some field-based expert meetings have been heldperiodically.

Future effortsFurther deepen discussions for maximizing the scope for areas for cooperation (internationalstandardization, cybersecurity, etc.), an effort that RRI has been advancing with the involvementof major leading companies; start new discussions concerning the development of humanresources to lead the fields of manufacturing and digitalization, considering this subject anarea for cooperation.

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[Manufacturing and Robotics]Working group’s approaches to discussions [i]

Points of contention directing working group discussions<International standards> Formulation of rules on describing data (data profiling), internationalstandardization thereof Formulate a proposal for new standards for data profiling through the Project for Smart Plant Demonstration Tests, to

ensure data collaboration inside and outside factories; discuss proposals for proactively utilizing the proposed standardsas domestic standards in industry.

Also strengthen efforts for international standardization concerning the technologies in the formulated proposal.

<Cybersecurity> Discussion on formulating guidelines for the manufacturing industry, internationalstandardization thereof Cybersecurity measures introduced into factory floors in the manufacturing industry are different from those in the IT

field in many respects. To overcome such differences, efforts for awareness-raising and enhancement measures arenecessary. To this end, the working group will fortify specific efforts, e.g., discussing the formulation of cybersecurityguidelines for the manufacturing industry, and also promote efforts aiming at international standardization of theguidelines.

<Data cooperation> Assessment and revision of the Contract Guidelines on Data Utilization Rights,maximization of the scope of data to be shared

Concerning the Contract Guidelines on Data Utilization Rights formulated in the spring of 2017, discuss issues andobstacles discovered as a result of having introduced the guidelines into demonstration projects and other actions, andalso discuss the revision of the guidelines when necessary.

Discuss, from the standpoint of maximizing the scope of areas for cooperation, whether or not data-sharing amongindustries (while bearing in mind matters that are sensitive to competition) would create more value-added data, or bringabout data that can be shared across industries.

<Human resource development> Development of human resources who lead the fields of monodzukuriand digitalization Clarify the scope of necessary human resources (e.g., those with expertise in both the fields of monodzukuri and IT

and those necessary for promoting the introduction of digital technologies and robots) and the initiatives that industry,academia and government sectors should engage in, thereby leading to specific actions (e.g., introducing theachievements of related initiatives into the development of school curricula by educational institutes or other entities fromFY2018).

Working Group [ii]Manufacturing and Robotics

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[Manufacturing and Robotics]Working group’s approaches to discussions [ii]

<Working group promotion system>★Provider of discussion opportunities: RRI - *In addition to meetings of the members of the Round Table Conference on the

Connected Industries Concept Policy with METI Minister Seko, establish a director-general-level meeting as a forum fordiscussing practical matters (also taking advantage of RRI’s existing discussion opportunities), and discuss related issues atthe meeting, bringing together representatives of venture businesses and other entities.

★Members: Mr. Inaba, Chairman (FANUC Corporation; Japan Robot Association), Mr. Omiya, Chairman of the Board(Mitsubishi Heavy Industry; RRI), Mr. Higashihara, President (Hitachi, Ltd.), Mr. Mimura, Chairman (Nippon Steel &Sumitomo Metal Corporation; Japan Chamber of Commerce and Industry), Mr. Mori, President (DMG Mori Co., Ltd.; JapanMachine Tool Builders’ Association), Mr. Yamanishi, Chairman (Mitsubishi Electric Corporation; Keidanren), and others

<Global trends Japan should bear in mind>Japan-Germany collaboration, ISO/IEC, RRI international symposiums, etc.

<SMEs> Support measures for SMEs in introducing digital and other technologies, disseminating thesignificance and importance of the “Connected Industries” policy concept to SMEs

Discuss and implement [i] support measures for SMEs in proactively introducing digital technologiesand robots (e.g., improvement of the Project for Dispatch of Supporting Teams for Smart Manufacturing)and collaboration and harmonization of the processes involving EDI from receiving orders to receivingmoney, and [ii] measures for simple communication of the policy concept to management, so as toimprove the productivity of SMEs.

<R&D> Efforts for engaging in common fundamental technologies, development of an industry-academiacollaboration framework Discuss common fundamental technologies and other issues that the government should engage in

across ministries; discuss an effective industry-academia-government collaboration framework tocommunicate specific improvement measures and other efforts to the public.

<Use cases> Acceleration of information-sharing on best practices Accelerate information-sharing on best practices for improving productivity through the utilization of

IoT and other initiatives.* Also discuss the establishment of a meeting in which robots and drones will be discussed as a priority.

Working Group [ii]Manufacturing and Robotics

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[Biotechnologies and Materials] Directions of Future EffortsWorking Group [iii]Biotechnologies and Materials

<Overview of efforts for the fields of biotechnologies and materials> Challenges that Japan needs to overcome

Establishment of counter measures against foreign companies, making use of Japan’s advantage in technologies andmarkets, promotion of utilizing biological resources maintained by companies and other entities as data, and appropriatedesigning of new systems to expand the markets of bio-materials;Creation of new business domains through data collaboration between companies and users/consumers,enhancement of companies’ abilities to develop materials (materials informatics), and measures for addressing thenext-generation production systems to create new value added, along with changes in a digital society; anddiscussions on ideal industries of biotechnologies and materials to advance these measures.

Streamlining of current situationThe OECD estimates that the global markets for biotechnologies will expand to the 200 trillion yen-scale by 2030.Western countries have formulated strategies in these fields and are promoting the shift of their current strategies tothose for a bioeconomy, while taking advantage of regulations to encourage businesses. The global market scale offunctional chemicals is approximately 50 trillion yen, of which that for electronic materials, an area in which Japan hasstrength, accounts for approximately 3 trillion yen. The user industry has been making the product cycle shorter, and thecommoditization of materials per se has been dramatically advancing due to the new entry of manufacturers inemerging countries.

Major past effortsThe Investments for the Future Strategy 2017 stipulates a policy that Japan should formulate government approaches toachieving a healthy society, or society in which people are able to identify presymptomatic health risks and acarbon cycling society enabled through innovative bio-materials. Moreover, under the industry-academia-government collaboration framework, research and development projects for establishing a data platform andother efforts were conducted.

Directions of future effortsAdvance specific discussions in collaboration with industrial players to achieve data collaboration in cooperationareas; discuss effective efforts not only for R&D but also for securing measures for promoting the introduction ofdata collaboration as well as social acceptability.

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[Biotechnologies and Materials]Working Group’s approach to discussions [i]

Points of contention on which the working group will advance discussions<Data cooperation> Establishment of data platform and setting cooperation areas Discuss approaches to cooperation areas and frameworks, e.g., rules for proving data, so as to establish

a data infrastructure for biological resources and materials development. Discuss ideal approaches to data collaboration in overall supply chains ranging from downstream

companies on the material-industry side to final users.

<International standards> Standardization of databases, labeling and certification systems, etc. Discuss standardization of data formats in cooperation areas and standardization of

characteristics assessment of new materials. Discuss ideal approaches to new frameworks and systems, e.g., labeling or certification involving

carbon-cycling materials, to implement innovative bio-materials in society, and establish a Japan-EUcooperation system.

<Human resource development> Biotechnologies/materials x IT and data Discuss and clarify initiatives that the industry, academia and government sectors should tackle to

develop human resources who have expertise in materials development or in both the fields ofbiotechnology and IT (e.g., bio-informaticians).

<Development of AI systems and other R&D> Establishment of AI technology platforms Engage in accelerated commercialization of achievements made by NEDO derived from its project for

analyzing biological information and developing design systems; also discuss ideal approaches todeveloping further data and AI systems, e.g., bioprocess control by AI, and discuss technicalchallenges therein.

Further advance collaboration with other projects, e.g., ongoing projects for establishing dataplatforms undertaken by the related ministries and agencies (e.g., the Cabinet Office and the Ministryof Education, Culture, Sports, Science and Technology).

Working Group [iii]Biotechnologies and Materials

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[Biotechnologies and Materials]Working Group’s approach to discussions [ii]

Points of contention from which the working group will advance discussions (continued fromthe previous page)

<Others> Discuss other potential data-cooperation areas (e.g., human resources, know-how and

development of shared demonstration plants) to be promoted aiming to expand theproduction scale of bio-materials for commercialization.

Discuss and clarify challenges in the introduction of outstanding food functions and bio-materialsand challenges in regulations for new technologies (e.g., genome-editing technology); discussideal approaches to the fields of biotechnologies and materials in light of the points ofcontention above.

<Working Group’s promotion system >★Provider of discussion opportunities: Joint working group of COCN and Japan ChemicalIndustry Association★ Member companies: Mitsubishi Chemical Corporation, Sumitomo Chemical Company,

Limited, Hitachi, Ltd., Kirin Company, Limited, etc.

<Global trends Japan should bear in mind>The European Commission (EC), the Global Bioeconomy Summit, the World Economic Forum(WEF; study on circular economy), the nano tech, NIST, etc.

Working Group [iii]Biotechnologies and Materials

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[Plant/Infrastructure Safety Management]Directions of Future Efforts

<Overview of the efforts for the fields of plant/infrastructure safety management> Challenges that Japan needs to overcome

Many Japanese facilities are facing difficulties in the aging instruments and the retirement ofexpert or skilled employees who played key roles in plant maintenance and safety. The possibility ofmajor accidents is increasing.

Streamlining of current situationCompanies should effectively and efficiently utilize IoT, big data and other advanced technologies,enhance their voluntary procedures addressing plant safety, and improve their earning power.Their current involvement in advancing data utilization efforts is insufficient.To address this situation, the petroleum refining and chemicals industries have conducted to thedemonstration projects for IoT and other advanced technologies to improve their techniquesfor voluntary procedures addressing plant safety, while the electricity industry has beenengaging in voluntary-basis efforts for enhancing techniques for self-motivated security, mainlyin thermal-power-generation facilities by making use of a variety of sensors so as to makemaintenance and inspection more efficient.

Major past effortsJapan continually revised related regulations (standardization of functions, introduction of positiveincentives), and supported companies in developing technologies through IoT demonstration projects.

Directions of future effortsAdvance the efforts for reviewing of the system and the demonstration projects as well as those fordeveloping systems for promoting innovations (e.g., ESG investment and procurement, and exportsof system infrastructures) making use of market mechanisms, thereby building “the safetyecosystem,” covering technologies, society, markets and other social elements, and aiming atincrease of safety and productivity.

Working Group [iv]Plant/Infrastructure Safety Management

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Corrosion Prediction of

External Surfaces (Material Industries Division)

Establishment of a

Database for General

Damage-Probability

(High Pressure

Gas Safety Office )

Corrosion Prediction of

Internal Surfaces

(Petroleum Refining and

Reserve Division)

Challenges Future prospectsAchievements

[Plant/Infrastructure Safety Management]Working Group’s approaches to discussions [i]

Achievements in demonstration projects and future prospects

[Up to FY2018]• Improve reliability of the model by adding new

real data[FY2019]• Aims to create a framework under which

participating companies can continuouslyaggregate their data in industrialassociations or vendors and accessregularly-updated data.

[Up to FY2018]• Improve the reliability of the database by

collecting domestic data• Demonstrate the quantitative RBM making

use of the database in oil refineries[FY2019]• The High Pressure Institute of Japan will sell

the quantitative RBM and other approachesmaking use of the database and aim tooperate the RBM for itself.

• Enhancement of reliability by increasing the number of samples

• Demonstration of the quantitative RBM making use of the database in plants under operation

• A shift of approach from time-based maintenance to quantitativerisk-based maintenance (RBM) wasrequired to make safety moreefficient.

↓• A foundation of such a database

was built making use of overseasdata.

• Some companies established theirown models for corrosion predictionof external surfaces of pipes, butthese models contain a smallamount of data and provide lowprediction accuracy.

↓• Past-inspection data concerning the

corrosion of external surfaces ofpipes from 13 companies in thechemical industry was aggregatedand a prediction model wasestablished.

• Facilities of oil refineries in Japanwere less reliable in terms ofoperation than those in large oilrefineries in other Asian countries.

• Pipes caused 50% of the problems insuch refineries in Japan.

↓• A prediction model of internal

corrosion of pipes was established.Versatility of the model wasconfirmed.

• Enhancement of reliability of the model by increasing the number of samples

• Application of a prediction model to a safety plan in plants under operation

[Up to FY2018]• Increase the sophistication of the model by

elaborating the function for predictingdamages

• Develop and demonstrate a platformcommonly used among companies

[FY2019]• Establish the prediction model in the

platform and conduct demonstrationtoward release to the public

• Increase the sophistication of the model

• Development of anenvironment inwhich oil companiesare able tocommonly use themodel in broadfields

Com

mon

cha

lleng

es s

een

in t

he p

roje

cts

(im

port

ant p

oint

s of

con

tent

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wor

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[Plant/Infrastructure Safety Management]Working Group’s approach to discussions [ii]

Points of contention from which the working group will advance discussionsCommon challenges discovered in conducting demonstration projects as discussion opportunities and conduct relatedefforts

<Data cooperation> Formulation of guidelines for companies in concluding confidentiality contracts and otheragreements exclusively for the fields of safety of plants and infrastructures

Cross-company data sharing has not always sufficiently advanced, while cooperation areas in the field of safetyare considered to be more extensive. To address this situation, the working group streamlined categories ofcompetitive areas and cooperation areas among companies, and then formulated guidelines exclusively forthe fields of plant and infrastructure security based on the Contract Guidelines on Data Utilization Rights.Through this effort, the working group aim to improve voluntary procedures of plant safety andproductivity.

<Human resource development> Discuss ideal approaches to human resource development, prepare educationalmaterials and other tools therefor

In introducing AI and other advanced technologies into companies, engineers with expert knowledge concerningfactory floors should effectively utilize technologies, while companies should prevent fields operators from losingnecessary skills due to decreasing opportunities to acquire experience. It is expected to establish supportmeasures for developing human resources with expertise in utilizing technologies. In addition, it will discussideal approaches to developing human resources, following streamlining of roles played by people and AI orother systems on factory floors, and will also prepare educational materials and other tools.

<Cybersecurity> Formulation of cybersecurity guidelines exclusively for the fields of safety of plants andinfrastructures

It is considered important to overcome the current situation where companies are likely to delay the introductionof IoT due to concerns over cyber attacks that may cause serious accidents and leakage of information onmanufacturing processes. And, it is important to enhance countermeasures for cyber attacks on essential utilitiesthat may cause serious adverse impact on companies. To this end, the working group will formulate guidelinesexclusively for safety of plant and infrastructure based on the existing Manual for Addressing CPS/IoT andother guidelines.


22

Points of contention from which the working group will advance discussions (continued from the previous page)<International business development> Development of the ‘Smart Industrial Safety (SIS)’ in foreign countries Sophisticated security technologies and maintenance services business should be developed in foreign countries, where the

sophisticated safety is needed. In Thailand, a Japanese company already engaged in maintenance services for regulatorvalves (important equipment in plants). Moreover, the electricity industry utilizing the big data-analysis technology forprompt failures in thermal power plants, and this technology is expected to be developed in foreign countries.

<Encouraging companies to utilize IoT equipment> Proactive utilization of drones, sensors, tablet terminals and other devices Proactive utilization of drones, sensors and other devices is indispensable for companies to efficiently collect big data

from large plants. Moreover, utilization of tablet terminals and other devices that connect systems and employees onthe factory floors are necessary for companies to be able to utilize prediction models through IoT, AI and other advancedtechnologies. METI will encourage companies to make use of such devices so as to further encourage companies to utilizedata in plants.

[Plant/Infrastructure Safety Management]Working Group’s approach to discussions [iii]

<Working Group’s promotion system >★Provider of discussion opportunities: Council for Promoting Utilization of Plant

(each three meetings are scheduled to be held in FY2018)★Members: Industrial associations

(Petroleum Association of Japan , Japan Petrochemical Industry Association, and Japan Chemical Industry Association )Experts(National Institute of Advanced Industrial Science and Technology, the University of Electro-Communications, IoT businessexperts (including venture business owners), etc.)Providers of demonstration projects (petroleum, chemical, vendor and other industries)Other businesses (electricity, gas, plant engineering and other industries)

<Global trends Japan should bear in mind>CCPS international conferences, economic missions dispatched to Thailand, ISO/IEC, etc.


23

[Source] Prepared by METI based on MHPS news releaseon Jan. 10, 2017

Linkou Coal-fired Power Plant by Taiwan Power Company

[Source] Excerpt from the material prepared byChubu Electric Power Co., Inc.

[Reference] Examples of efforts in the field of electricity

Utilization ofbig data

Utilization of AI Utilization ofthe latest

equipment○Introduction of automatic operation andoverseas development

Mitsubishi Hitachi Power Systems, Ltd. hasdeveloped a system in which boiler coalcombustion is automatically adjusted usingAI, and it achieved highly accurateadjustment of such combustion controlledby expert engineers. This system wasintroduced into Linkou Coal-fired Power Plantoperated by Taiwan Power Company, a state-run company in Taiwan, and the plant has beenrunning for commercial purposes.

○ Automatic inspection making use ofdrones, etc.Tokyo Electric Power Company Holdings, Inc.has developed a system for automaticallyinspecting power facilities using dronesflying along power cables and also introducedsensors for monitoring partial discharge. Thecompany has achieved continuous monitoringof power transmission cables.

[Source] https://drone-aerial-corps.com/2017/02/27/matrice200/

[Source] Excerpt from the material distributed at the15th meeting of the Electric Power SafetySubcommittee

○Ascertaining signs of abnormalityChubu Electric Power Co., Inc. has developedan operation support system by combiningits own sophisticated technology for operationsecurity involving thermal power plants and thedata analysis technology maintained by NECCorporation. In this system, the companyascertains changes in situation, abnormality andother events of plants based on a largeamount of plant data to be able to maintainthe optimal operation of plants (with highefficiency and high operation rates) byquickly addressing such changes and also toprevent failures of the plants.


24

[Smart Life] Directions of Future EffortsWorking Group [v]Smart Life

<Overview of efforts for the field of smart life> Challenges that Japan needs to overcome

Amid the advancement of the aging society with fewer children, smart-life markets as an alternative forunpaid work (e.g., household labor) to overcome labor shortages and other social challenges in Japan shouldcontribute to creating employment (labor hours).Scale of the household-labor market is estimated to be about 100 trillion yen, while that of the homeappliance markets is about 7 trillion yen.*According to the Report on Assessment of Household Activities released by the Cabinet Office, money valuationof unpaid work in 2011 is estimated to be from 108 trillion yen to 97 trillion yen.

Streamlining of current situationConventionally, the smart life (home) efforts have been those for making power visible, mainly placing energyconservation at the core. However, these efforts are now conducted within a very limited range, whilesome businesses have started networking of devices and providing related services. Accordingly, thedevelopment of environments for creating a smart life market effectively taking advantage of life data isimportant.

Major past effortsThe Data Distribution Promotion Working Group under the IoT Acceleration Consortium has been promotingdiscussions on formulating guidelines for data utilization. Moreover, in FY2017, the Study Group for SmartHomes started a monitoring demonstration project concerning cooperation areas (data collaboration,security/product safety, and privacy) to develop environments connectable to each other.

Directions of future effortsTo overcome the current situation where companies tend to keep data and customers and to face risks in leakageof personal information when in use, advance efforts, including [i] those for advancing inter-company alliancethrough data collaboration, and [ii] streamlining of cross-sectoral cooperation areas (e.g., dataportability) and issuance of new guidelines, by encouraging the management of major companies to engagein these efforts.

25

[Smart Life] Working Group’s approach to discussions [i]

Points of contention from which the working group will advance discussions

<Use cases> Discussion concerning policies for the creation of a smart home market The most important challenge in this field lies in the discovery of customers’ needs in the service

area. METI should hold discussions with a variety of people across industries concerning the targetvisions of everyday life, aiming to create new services that will solve challenges, for e.g., measures forthe elderly and relaxing burdens of household labor.

Moreover, through the efforts by the IoT Acceleration Lab, METI will also discuss support measures forthe establishment of inter-company alliances and the promotion of data collaboration, therebyaiming to specify services.

<Data cooperation> Discussion concerning common rules to expand the smart home market From the viewpoint of maximizing cooperation areas, hold discussions concerning data that companies

are able to gain more value from through data sharing, while bearing in mind the borders of competitiveareas, as well as data that companies are able to share in their own industries as a whole.

Discuss cross-sectoral systems and other schemes, e.g., ideal approaches to data transaction amongbusinesses

<Security, etc.> Discussion concerning the preparation of new guidelines for the field of smart homes A variety of businesses are expected to enter this field, including housing manufacturers, home

appliance manufacturers, electricity/gas utilities, retailers/distributors, and sharing businesses.Measures that they may request vary depending on their respective standpoints. METI will formulatenew guidelines for security in the field of smart life, taking into account this background.

Working Group [v]Smart Life

26

[Smart Life] Working Group’s approach to discussions [ii]

Points of contention from which the working group will advance discussions(continued from the previous page)

<Data utilization> Discussion concerning the preparation of new guidelines for the field ofsmart homes Concerning approaches to acquiring and distributing data, consider the technological,

systematic, and socially-acceptable viewpoints, expecting that a variety of businesses mayenter into the market, and based on this, discuss the formulation of new guidelines andother issues with related ministries and agencies and experts.

<Working Group’s promotion system >★Working Group: IoT Acceleration Lab

★ Members: Some members of the IoT Support Committee, Data DistributionPromotion WG;

Experts in the fields of digital, IT, standards, security, privacy, etc.;Business representatives in the fields of home appliances, housing, securityguards, insurance, data distribution, etc.

<Global trends Japan should bear in mind>CES (home appliance exhibition in the U.S.), IFA (home appliance exhibition inGermany),CEATEC (IoT exhibition in Japan), etc.


27

[Reference] Diagram of Smart Life Inter-company alliances through data collaboration will help connect all information related to

everyday life, e.g., that involving home appliances, thereby allowing businesses to provide servicesthat solve inconvenient matters in everyday life.

To achieve this goal, Japan should develop related rules, e.g., those for security and privacy, as afoundation of this goal.

Looking at overseas countries, platform creators have already embarked on provision of solutionscovering data acquisition to service provision.

Worrisome issues Solutions that may be available

Safety Cannot adjust time to receive a

parcel from a deliverer Household labor Think it trouble to go out for

shopping Have no mobility means to reach

supermarkets Have no time for cooking, washing

clothes, or cleaning Health Cannot manage daily health Wish to avoid developing dementia

Medical care Have trouble in visiting hospitals No sharing of my medical card

among hospitals Nursing care Wish to prevent elderly parents

from causing accidents in restrooms Afraid of a lonely death

Child rearing Wish to remotely confirm my kids

coming back home Printed documents as the only

means to communicate withschools

Wish to send my kids to cramschools, but cannot due toexpensive tuition

Safety IoT parcel delivery (delivery completed

even when not at home + smart locking) Household labor Services for offering recipes and online

meal delivery On-demand transportation solutions Housekeeping services, remote control of

home appliances Health Device-based data-collaboration solutions Communication robots

Medical care Remote medical examination services Digitalization of medication notebooks and

maternal and child handbooks Nursing care Bathroom-monitoring solutions Detection of abnormal situation through

monitoring by home appliances Child rearing Access-monitoring solutions ICT-based communication Online learning services

Development of related rules, e.g., those for security and privacy

New services for everyday life could be provided by data aggregation and utilization through home appliances and other devices.

Dat

a co

llabo

ratio

n an

d pr

ovis

ion

Home appliance market: Approx. 7 trillion yen

Household labor market: Approx. 100 trillion yen


28

2. Study on Cross-sectoral Policies

29

(1) Promotion of Data Utilization Including Data in Cooperation Areas

With the ever-increasing volume and flow of data due to the advancement of digitalization, IoT etc.,METI should aim to disrupt the self-sufficiency and excessive enclosure of data, encouraging theutilization of the data to solve societal problems. To this end, it should hold discussions concerning anew system in which a competent minister can certify and support efforts by private companies fordata sharing in specific areas for cooperation.

Government (Competent Minister)

Cert

ifica

tion

Data utilization for solving societal problems

(prevention of accidents, energymanagement, overcoming laborshortages, infrastructuredevelopment, etc.)

(1) Establishment of a certification system for data-sharingbusinesses

• Under this system, the government will certify plans for datasharing projects in which businesses share data in specificcooperative areas. This system will provide support measures thatencourage businesses to utilize data, aiming to collect additionaldata and solve societal problems.

(2) Establishment of a system in which businesses are ableto request data to be provided

• In this system, data-sharing businesses are eligible to makerequests of related ministries and agencies, through competentministers, to provide them with specific data that such ministrieshold.

(3) Audit of security by the public sector• Aiming to make full efforts for cyber security measures targeting

data-sharing businesses, METI will conduct audits and investigations.

(4) Support measures• METI will submit a request for a tax break system targeting efforts

under the “Connected Industries” policy concept.

(5) Guidance and advice, on-site inspection, andcancellation

Key points of the system (under discussion)Scheme (draft)

Filing request

Data-holding business

Provide Data

Example of data:Data on:・Energy,・Industrial machinery,・Distribution, etc.



・・・

Data-utilizing business



・・・

Data provision

Data-sharingbusiness

30

(2) Support for the Development of AI Chips, Support for the Development of AI Systems Aiming to promote frontier technological development, one of Japan’s strong points, establishment of core

technologies is important through collaboration between venture businesses having advanced technologies and largeor medium companies. To this end, METI will provide financial support for R&D involving such initiatives.

As global society is facing a dramatic increase in the amount of data distribution, a key to improving competitivenessof Japanese companies lies in AI system development through collaboration between large or medium companiesand AI venture businesses. METI should discuss support measures for developing such a system, also takingadvantage of MITOU human resources.

AI system development support

Accelerate the collaboration of large / medium companies and AI venture businesses / innovative human resources

[Case examples of collaboration with large companies]

• Large automobile companyx AI venture business

Joint R&D involving AI technologiesin the field of mobility business

• Large machine-tool companyx AI venture business

Design of areas for deep-leaning,development of application

• Large air-conditioner manufacturerx AI venture business

Technologies for sensing the situationof facilities under operation,detecting abnormality, finding failuresigns, etc.

Large or medium companies

(large amount of real data)

MITOU human resources / AI venture businesses

(1,700-level human resources in total)

Consultation service for AI utilization, provision of data

Provision of ideas and prototypes

×

Funding to R&D or system development / implementation31

■The International Collaboration WG aims to:

• Respond to the needs ofpartner countries and introduceJapanese companies that areable to cooperate with them

■Sub-WG• Develop a framework in

which Japan will prioritizesupport for businessesengaging in the fields withsignificant need or those thatrepresent Japan’s strengths.

• Support businesses inexporting systems throughtechnical expert organizations

(3) Development of Frameworks for Further Acceleration of International Collaboration

An International Collaboration Working Group has been established - the fifth such WG under theIoT Acceleration Consortium - and METI and MIC will cooperate in this field.

The International Collaboration WG will approve the establishment of its sub-working groups.

Enhancing the framework of the IoT Acceleration Consortium

IoT Security WG

Advanced Model Business

Promotion WG (IoT Acceleration

Lab)

TechnologyDevelopment

WG

General Meeting

Chairperson

Vice-chairpersons

Data Flow Promotion WG

International Collaboration WG

Establishment of an International Collaboration WG

METI-MIC cooperation

The government will provide support for overseas marketing of technologies.

Organizer

Member companies participate in effortsif they are interested.* About 2,700 member companies of the IoT Acceleration Lab

Systems expected tobe subject to

support measures (draft)

■Support items providedby the government (draft)

・ F/S・ Human resource development・ Subsidies

Sub-WG (utilization of a

quasi-zenith satellites)

• Highly accurate positioninformation (e.g., foragriculture), etc.

Technical expert organizations

(utilization of quasi-zenith satellites)

Sub-WG (security and safety)

• Facial recognition systems• Comprehensive Security

systems• Sensor technologies, etc.


(security and safety)

Jun Murai, Dean / Professor, Faculty of Environment and Information Studies, Keio UniversityHiroo Unoura, President, Nippon Telegraph and Telephone CorporationHiroaki Nakanishi, Chairman of the Board and Representative Executive Officer, Hitachi, Ltd.

Sub-WG (distributed energy

management systems)

• Management of powertransmission, transformation,and distribution

• BEMS, FEMS, HEMS• Demand Response systems, etc.


(distribution energy management systems)

32

(4) Measures for the Enhancement of the International Standardization Strategy As for global markets, companies cannot expand their market scale solely based on the quality of their

products, infrastructures or services. They must utilize international standards as tools for entering andgaining traction in global markets.

In the fields where ICT and other technologies are advancing quickly, major companies in the U.S. marketshave been leading consortium standards. There is no first-mover advantage unless Japanese companies jointhose consortiums in the earliest stages.

Additionally, many safety and other technological standards are established through a one-nation one-votesystem of de jure standards of international standardization organizations, such as ISO and IEC, whichcreates an advantage for European countries.

In either case, it is indispensable for Japan to cooperate with the U.S., European countries, and Asiancountries through the international standardization process. To this end, Japan needs to improve relatedstrategies by uniting efforts of the public and private sectors and it also needs to enhance the quality andquantity of human resources who can play future leading roles in international standardization.

In the U.S., companies, associations and consortium are

leading advanced fields.

Note: There are many companies in the same industries in Japan, while the industrial realignment has already been completed in Europe.

国家標準化機関

European countries have an advantage thanks to a one-nation one-vote system of

de jure standards (e.g., ISO and IEC).

JISCDomestic standardization

organizations

Representativeof Japan

Global companies

・・・

Representative of

Germany

Representative of the

UKRepresentative of France

Japanese companies

Out of 60 countries as full members of IEC, 23 are European countries.

Enhancing the development of human resources responsible for international standardization

(Enhancing measures for: expansion of the bases through training systems, seminars in universities, etc.,

fostering of professional human resources in collaboration with international organizations (e.g., IEC),

and establishing cross-generation networks)

China collaborates with Germany and other countries.Japan collaborates with the U.S., European countries,and Asian countries, depending on field.

33

(5) Revision of the Contract Guidelines on Data Utilization Rights

Data Dataset Learning Learned model Hardware Use / product

material

Data provider

Data-set composer AI business AI business Manufacturer

(seller) User

• Contract for data provision• Determination of data utilization

rights• Contract for data utilization rights

• Contract for data provision• Contract for data utilization

rights

• Contract for joint development

• Contract for commission of development to a third party

• Contract for data utilization rights

• OSS• Contract for joint development

• Contracts for trading

• Leasing

Relationships of responsibilities(additional)

[Points of contention]• Streamlining of application relationships of

the existing laws• Approaches to avoiding the situation

where a cause of an accident cannot becleared and those to the locus ofresponsibility for the cause determined;making rules for responsibility sharing; andmeans for securing evidences

• Effectiveness of terms for indemnity orlimitation of liability, etc.

[Case example]•Maloperation of AI caused manufacturing ofdefective products or product accidents.

Relationships of rights(additional)

[Points of contention]• Situation where steps of AI development and

utilization are protected by intellectual propertyrights or contract agreements

• Relationships of rights in terms of learned model• Appropriate and fair handling of intellectual

property rights based on contract agreements,etc.

[Case example]• Relationships of rights in terms of a learned

model that a company has developed or createdbased on operation data provided by amanufacturer

Data utilization rights(items to be concretely discussed)

[Points of contention]• Overall revision (review of elements to be

considered, etc.)• Enhancement of use cases in individual

fields• Dissemination and promotion (descriptions

or booklets in simple words, etc.)• Development of specific case examples and

support measures, etc.

* Discuss concretely by industrial field, e.g., theautomobile, industrial machinery and distributionsectors.

○Flow of processes for concluding a contract

The Guidelines for Concluding Agreementson Authorization for Data Utilization Ver.1.0 were formulated and released in May2017, aiming to encourage companies toconclude a contract for utilization rights ofindustrial data across sectors.

Data utilization rights Relationships of responsibilitiesin terms of AI

Relationships of rights in terms of AI

Ver.

1Ve

r.2

None None

⇒METI will hold meetings for discussing the guidelines and revise them by March in FY2018. 34

(6) Enhancement of Development of Hybrid Human Resources with Expertise in Both Virtual and Physical Worlds, AI and Other Fields In recent years, Japan is facing serious labor shortages. To address this situation, it is urgently necessary to develop

outstanding human resources, for e.g., those with expertise in both virtual and physical worlds in terms ofIoT, and those who utilize AI, big data or other advanced technologies in industrial fields that have factoryfloors in the physical world.

METI will strive to discover needs of industries for human resources through efforts under the “ConnectedIndustries" policy concept, and will also enhance efforts, in collaboration with MEXT and other ministries, forsupporting companies in building capacity or acquiring skills mainly focusing on the fields of IT and data orin developing programs for fostering human resources with expertise in AI.

Virtual world

Physical world

Advanced IT Human Resources

(in the era of the Third Industrial Revolution)

Advanced IoT Human Resources

Advanced ManufacturingHuman Resources

• Those with expertise in both the virtual and physicalworlds in terms of IoT

• This field will face serious labor shortages, in particular,of human resources indispensable for companies toaddress AI, big data and other advanced technologiesin the era of the Fourth Industrial Revolution.

• Those with outstanding skills in manufacturing fieldsin the physical world with little knowledge of IT

• Those with expertise in IT with little knowledge of work on the factory floors

Core Human Resourceswith expertise in IoT

(professionals playing a leading role on factory floors)

Discovering needs of industries for human resource developmentManufacturing/ Robotics x IoT (data analysis),

Automated driving x AI development, bioinformatics,material development x AI, etc.

35

Improvement of productivity and value added• Ascertaining overall operation situation of factories and

warehouses• Finding signs of equipment failure and addressing them• Overcoming labor shortages• Promotion of technical skills training for the next

generation, etc.

Supporting Teams for Smart Monodzukuri

• Fostering leaders (utilization ofretired employees)

• SMEs’ Kaizen activities in themanufacturing industries

• Supporting companies inintroducing IoT or robots

Yorozu Support Center• One-stop consulting counter

(7) Further Deployment of Efforts for Regional Companies and SMEs

Private associations, etc.

RRI provides information on supporttools for smart monodzukuri, etc.

Sharing knowledge cultivated at IVIregional seminars

Collecting requests from businesses andintroducing companies that acceptinternsCollaboration with the IoT Utilization

Expert CommitteeUtilization of management advisers

(about 3,400 advisers)

Colla

bora

tion

Providing management consultingservices, as well as staffing IT,designs, IP and other experts

*40 counters have opened acrossJapan.

In collaboration with the Japan Chamber of Commerce and Industry, IVI, the Robot Revolution Initiativeof Japan (RRI), private associations, Yorozu Support Centers, Local IoT Acceleration Labs, and otherentities, METI has been undertaking efforts for sharing training curricula and other efforts with regionalcompanies and SMEs across industries and throughout Japan.

METI will aim to develop bases that support SMEs in the manufacturing industries in addressing thefourth industrial revolution.

Supporting companies in developing experts or by dispatching experts

Dispatching mentors whocontribute to achieving anddeveloping regional projectsor companies’ efforts, etc.

Colla

bora

tion

Regional banks (about 170,000employees), shinkin banks (about110,000 employees), etc.

B A N K

* Target number of bases: 40 in next two years

36

Introduction of IoT, robots and other advanced technologies will help companies improve their productivity, reduce repetitive or physicallydemanding work, and cut labor costs. Combining the policy with teleworking will create comfortable workplaces for young people, womenand elderly people.→ Overcoming labor shortages, working style reforms

Artificial intelligence and other technologies will contribute to making experts’ knowledge more transferable, and this supports youngemployees in acquiring skills. → Passing down techniques

Converting craftspersons’ techniques and creativity into data and utilizing the data at production facilities will contribute to small-lot-high-variability production runs or single items with quick delivery leading to acquisition of new customers.→ Expansion of profits

The elderly people in underpopulated areas will be able to move independently, while businesses will be able to deliver parcels even toremote areas. The elderly will be able to utilize cars safely regardless of their age. In the future, automated driving technology will helppeople who cannot drive to travel to their destinations. → Solutions to societal problems (safe driving and transportation)

Case example 1: Asahi Tekko Co., Ltd.Hekinan City, Aichi Pref.; manufacturer of automobile parts with 480employees• The company developed a sensor monitoring system thatcontributes to accelerating Kaizen activities and utilized thesystem for their production facilities, exposing problems intheir parts manufacturing processes, improving productivityquickly, and decreasing labor costs dramatically.

• The company also digitalized simple work to the maximumextent possible and encouraged employees to do work thatcan only be done by human beings, e.g., Kaizen activities,thereby achieving a working style reform.

• Requiring no power cables or LANinstallation thanks to the wirelesstechnology with a low-power-consumption setting

• Minimized initial investment bymaking the system accessible bygeneral-purpose smartphonesand other devices

Monitoring system developed by the company

[Reference] Achieving Goals Set in the “Connected Industries” Policy Concept Advantages for Regional Companies and SMEs

Case example 2: Demonstration projects ongoingacross JapanAutomated driving: Eiheiji Town, Fukui Pref.; Wajima City,Ishikawa Pref. (upper-right photo); Chatan Town, Okinawa Pref.;and Hitachi City, Ibaraki Pref. (lower-right photo)Drone parcel delivery at Hamadori Area, Fukushima Pref. (leftphoto)

37

Future Directions along which the Round Table Conference of Startups on Connected Industries Advance Startups are dynamos to discover dormant resources in large companies, universities

and other organizations and to develop the resources into value and wealth.Startups, a source of creating value added by connecting management resources offunds, human resources and technologies, are indispensable for Japan in implementingthe “Connected Industries” policy concept.

METI will aim to establish an ecosystem in which these startups are able to cultivate a“metabolism” and compete with global companies.

More intense competition for

ecosystems that produce global startups in

overseas countries

Startups winning markets overseas (unicorn startups , etc.)

Creation as a key to growth and new quality employment creation

Japan is nearly completing support measures and has held discussions.

It will need to connect related measures and exploit all available policy resources to solve challenges.

In particular, it is important to utilize dormant resources in large companies, universities, and other organizations.

Global unicorn money (risk money supply)

Global unicorn talent(human resource supply)

Global unicorn tech (innovation technology supply)

Background and problem awareness

Japan will set appropriate policy indicators (KPI), while undertaking measures for

connecting money, human resources and innovation technologies.

Future policy directions

38

In addition to the five priority fields and the cross-sectoral policies, some points ofcontention can be considered as challenges to be discussed as below that could be majorfuture pillars of the policy concept.

Challenges Further Discussed

1. Back office reform

• It may be important for Japan to develop a foundation on whichcompanies are able to improve productivity and create newservices as a result of collaborative use of data across bordersbetween management and factory floors or data across priorityindustrial fields.

• To improve productivity of factory floors, it may be important toaccelerate the back office reform as cooperation areas.

2. Popularization of fintech in a variety of industries

• As fintech contributes to connecting data containing financialinformation existing across supply chains, further acceleration ofinter-company collaboration in the field of settlement may beneeded.

• It may be necessary to bring about innovations in which solvingusers’ problems and providing new value through the utilizationof big data analysis and AI can be accomplished with a farsmaller cost compared to the past cost.

Operating

activities

InventoryDistribution

Accounting

Financial

affairs

CustomersProcurement

SalesCross-sectoral data collaboration

39

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