New Value Creation
In order to meet diverse customer needs and create new value that contributes to society, it is important that Daikin first build up its technological superiority by leading further advanced technologies: inverters, heat pumps, and fluorochemicals. It is also important to combine state-of-the-art technologies from around the world—such as information-communication, sensors, materials, processing, medicine, and healthcare—with Daikin technologies to come out with products and services that provide new value to customers.
Today's world of unprecedented and rapid technological change requires the creation of new value, which is only possible through collaborative innovation that fuses a wide range of knowledge and technologies and takes us beyond current boundaries. To this end, Daikin established the Technology and Innovation Center in November 2015 with the aim of promoting collaboration with external partners in order to contribute to society through the creation of new value. We also have R&D centers at 25 sites around the world at which we develop products in order to promptly and accurately respond to the needs of regional customers.
In November 2019, we established the Technology and Innovation Center CVC Office to promote collaborative creation with startup companies as a mean to accelerate open innovation integrating technologies and knowledge from both inside and outside the company. We will aim to quickly verify hypotheses to create new products, services and business models through collaborative creation with startup companies around the world practicing fast-paced management with advanced technologies, innovative ideas, and a spirit to challenge.
In November 2015, Daikin established the Technology and Innovation Center (TIC). As a core base of technological development, the TIC brings together approximately 700 technicians in a range of fields. Amassing the strength of Daikin Group technicians, and strengthening cooperation and ties among companies, universities, and research institutes possessing unique technologies in differing industries and fields, the TIC is aimed at combining the strengths of people, information, and technologies from inside and outside Daikin in order to come up with innovation through collaboration.
To maximize this collaboration between Daikin and its partners, the TIC has gathering rooms, which can be used for anything from technician meetings to exchange unbridled opinions, to gatherings of opinion leaders from universities and industries around the world to use as they wish in spreading their ideas. These rooms have been used extensively: Eiichi Negishi, winner of the Nobel Prize in Chemistry and Distinguished Professor at Purdue University, has used them to provide technological guidance; and they act as satellite offices of industry-academia collaboration projects between Daikin and the University of Tokyo, Osaka University, and other universities.
Daikin has over 100 production bases around the world and does business in over 160 countries, and more than 75% of its sales come from outside Japan. To create the new value demanded by customers and their societies, we must develop products that match the cultures and values of each worldwide region. Daikin has R&D centers around the world, including in China, Europe, and North America, where efforts are made to create new value that matches various regional needs.
In today's era of lightning-fast change, conventional core technologies no longer meet the world's diverse needs. That's why in May 2017 we have established the Daikin Open Innovation Lab Silicon Valley (DSV) as a sub-office of the TIC, a place where we come up with distinctly new products through the fusion of state-of-the-art technologies in artificial intelligence (AI) and the Internet of Things (IoT). At the DSV in North America, a society of rapid technological change, we are striving to both absorb current state-of-the-art technologies and strengthen IoT and AI technologies.
In December 2017, we opened the Daikin Information and Communications Technology College in the TIC with the goal of fostering human resources who develop technologies and new businesses utilizing AI. The aim is to create new innovation through basic research in areas such as AI and IoT, the creation of systems for things like smart factories, the passing on of expert production-line techniques to the next generation, and the fostering of human resources who can advance the utilization of AI.
Daikin Industries, Ltd. has two systems for stimulating employees' motivation to invent and for spurring the creation of intellectual property.
The first is the Compensation System for Employee Inventions, a system in which Daikin pays employees for inventions created on the job that result in patent applications as well as successful uses of the patent. In fiscal 2019, in addition to paying compensation for patent applications, Daikin compensated employees for 519 successful uses of patents.
The second is the Incentive System for Valuable Patents, which gives employees incentive bonuses for valuable patents. In fiscal 2019, we awarded incentive bonuses to the creators of 98 patents.
While these systems are aimed at stepping up Daikin's intellectual creativity, they also represent an effort to promptly tackle pressing issues, such as increasing the quality and quantity of patents in competitive fields, and increasing the number of patents in our key technological fields, in particular in emerging countries. In fiscal 2018, we applied for 957 patents in Japan and 513 patents overseas.
In fiscal 2019, in the air conditioning divisions, the number of patent applications increased; this covered everything from development of new products that we intend to release, to near-future products that make use of AI and IoT technologies. In the chemicals divisions, we increased the number of patent applications by clarifying and implementing strategies in each product and technology area.
We will also continue to conduct thorough advance patent surveys so that we can deal with problem patents early on and thus ensure that we eliminate patents that could hinder our development. We will also step up patent efforts worldwide.
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