Hitachi, a multinational conglomerate based in Tokyo, Japan, is a beacon of technological innovation. Whether it’s developing energy-efficient power systems to combat climate change, or creating advanced IT solutions to improve business efficiency, Hitachi’s mission is to create a better, more sustainable world through technology. CEO Toshiaki Higashihara recently emphasized Hitachi’s commitment to leading the market in digital solutions and Internet of Things (IoT) technologies, aiming to drive future growth through these sectors. Under Higashihara’s leadership, Hitachi is not just aiming to be a market leader, but a “global leader in the Social Innovation Business,” using technology to create value for society.

The Dawn of Hitachi

The story of Hitachi begins in the early 20th century, with a young electrical engineer named Namihei Odaira. Odaira, a visionary with a passion for technology, founded Hitachi in 1910 in the city of Hitachi, Ibaraki Prefecture, Japan. The company’s name, which translates to “sunrise,” was inspired by Odaira’s ambition to usher in a new dawn of technological innovation in Japan.

Odaira’s journey to founding Hitachi was not a straightforward one. He initially worked for Kuhara Mining Company, where he was tasked with improving the efficiency of the company’s copper mining operations. Odaira’s solution was to develop an electric motor that was more reliable and efficient than the steam engines that were commonly used at the time. This 5-horsepower induction motor, developed in 1910, was Hitachi’s first product, marking the company’s entry into the electrical equipment industry.

The success of the induction motor was a turning point for Odaira. Recognizing the potential of electrical technology, he decided to establish his own company, Hitachi, to further explore this field. One of the firm’s early successes was the development of Japan’s first electric locomotive in 1924. This was a significant achievement, not only for Hitachi but also for Japan, as it marked the country’s transition from steam to electric power in railway transportation. The success of the electric locomotive established Hitachi’s reputation as a leader in technological innovation, setting the stage for the company’s future growth.

The Hitachi Revolution

Japan’s first electric locomotive was a monumental achievement, not only for Hitachi but also for Japan, marking a significant milestone in the country’s industrialization process. The electric locomotive, known as the “EF58,” was a marvel of engineering. It was designed to replace the steam locomotives that were commonly used at the time, offering a more efficient and reliable mode of transportation. The EF58 was powered by Hitachi’s own electric motors, which were renowned for their superior performance and reliability.

The impact of the EF58 was felt on a global scale. It revolutionized the railway industry, setting the stage for the widespread adoption of electric power in railway transportation. The success of the EF58 demonstrated the potential of electric power, leading to a shift in the industry’s focus from steam to electricity. This marked the beginning of a new era in railway transportation, one that was characterized by increased efficiency, reliability, and speed.

The development of the EF58 also had a transformative effect on Hitachi. It established the company’s reputation as a leader in technological innovation, setting the stage for its future growth. The success of the EF58 demonstrated Hitachi’s ability to develop advanced technologies that could address complex challenges, a trait that would become a defining characteristic of the company.

A Portfolio of Innovation and Strength

Today’s Hitachi product portfolio spans a wide range of industries. In the realm of Information Technology, Hitachi’s data systems and storage solutions are industry leaders. Hitachi Vantara, the company’s data storage subsidiary, offers a range of products and services designed to help businesses harness the power of their data. From advanced data analytics to cloud storage solutions, Hitachi’s IT products are transforming the way businesses operate, driving efficiency and innovation.

In Energy, Hitachi’s power systems are helping to create a more sustainable future. The company’s energy-efficient power solutions, including its advanced nuclear power systems and renewable energy technologies, are playing a crucial role in the global transition to clean energy.

In Healthcare, Hitachi’s medical systems are improving patient outcomes and transforming healthcare delivery. The company’s advanced medical imaging systems, including its state-of-the-art MRI and CT scanners, are helping doctors diagnose and treat diseases more effectively.

The company is a leading player in the global data storage market, with a significant share of the market. In the power tools segment, Hitachi’s products are renowned for their quality and performance, earning the company a significant market share. Hitachi’s chief competitors include Siemens, General Electric, and Toshiba. Despite the intense competition, Hitachi continues to set the standard for excellence in its various product categories.

Credit: Hitachi Energy

Hitachi’s Global Footprint: A Journey Beyond Borders

Since its founding in 1910, Hitachi has expanded its operations globally, establishing a presence in over 80 countries and employing more than 300,000 people worldwide. This Knowledge Leader’s global expansion began in the 1930s, with the establishment of an office in New York. It marked the company’s first step beyond its home market, setting the stage for its future growth. Over the years, Hitachi has continued to expand its global footprint, establishing operations in regions across the globe, from North America to Europe, Asia, and beyond.

Today, Hitachi operates in a wide range of market segments, from information technology and energy to healthcare and automotive systems. In each of these segments, Hitachi targets specific geographic regions based on market needs and opportunities. For example, in the IT sector, Hitachi targets markets in North America and Europe, where demand for advanced data storage solutions is high. In the energy sector, Hitachi targets markets in Asia and the Middle East, where there is a growing demand for energy-efficient power solutions.

Hitachi’s global operations are supported by a network of offices and innovation centers spread across the globe. These facilities play a crucial role in Hitachi’s global strategy, enabling the company to stay close to its customers and respond quickly to market trends.

The Innovation Engine

Research and development (R&D) sit at the heart of Hitachi’s operations, serving as the engine that drives the company’s innovation. Hitachi’s approach to R&D is guided by its mission to contribute to society through the development of original technology and products. This mission shapes Hitachi’s attitude towards innovation, emphasizing the importance of creating value for society through technological advancement. The strategy is centered around three key areas: social innovation, environmental innovation, and economic innovation. In the realm of social innovation, Hitachi is focused on developing technologies that address societal challenges and improve quality of life. For example, the company is currently working on a project to develop advanced IT systems that can help manage urban infrastructure more efficiently. In the field of environmental innovation, Hitachi is committed to developing technologies that contribute to environmental sustainability. One of the company’s major R&D projects in this area is the development of energy-efficient power systems, which aim to reduce carbon emissions and combat climate change. Economic innovation at Hitachi involves developing technologies that drive economic growth and improve business efficiency. For instance, Hitachi’s data storage solutions, developed through extensive R&D, are helping businesses harness the power of their data, driving efficiency and innovation.

Hitachi’s R&D activities are not confined to Japan. The company has a global network of R&D centers, spread across regions including North America, Europe, and Asia. These centers work collaboratively, sharing knowledge and expertise to drive innovation. Hitachi also collaborates with international research institutions and universities to drive R&D. These partnerships play a crucial role in Hitachi’s R&D strategy, enabling the company to tap into external expertise and drive innovation. For example, Hitachi has a partnership with the University of Tokyo, where they collaborate on various R&D projects, including the development of advanced medical imaging systems.

Recent Product Breakthroughs: Hitachi’s Leap into the Future

In the past five years, Hitachi’s commitment to research and development has led to several significant product breakthroughs.

Lumada IoT Platform: In 2016, Hitachi introduced Lumada, an Internet of Things (IoT) platform designed to help businesses harness the power of their data. Lumada combines advanced data analytics and machine learning technologies to provide actionable insights, driving efficiency and innovation. This breakthrough has positioned Hitachi as a leader in the IoT market, demonstrating the company’s ability to develop cutting-edge digital solutions.

Proton Beam Therapy System: In 2017, Hitachi launched its Proton Beam Therapy System, a state-of-the-art medical technology designed to treat cancer with high precision. This system uses advanced imaging technologies to target cancer cells with a high degree of accuracy, minimizing damage to surrounding healthy tissue. This breakthrough has revolutionized cancer treatment, demonstrating Hitachi’s commitment to improving healthcare outcomes through technology.

AEM-190A Electron Microscope: In 2018, Hitachi unveiled the AEM-190A, a high-resolution electron microscope capable of visualizing atomic structures. This breakthrough has advanced the field of materials science, enabling researchers to study materials at the atomic level and develop new, more efficient materials.

Energy Storage Solutions: In 2019, Hitachi introduced a range of energy storage solutions designed to support the transition to renewable energy. These solutions, which include advanced battery systems and energy management software, are helping to stabilize power grids and facilitate the integration of renewable energy sources.

Digital Twin Solutions: In 2020, Hitachi launched its Digital Twin Solutions, a suite of digital solutions designed to help businesses improve their operations through simulation and analysis. These solutions use advanced data analytics and machine learning technologies to create digital replicas of physical assets or systems.

Credit: Hitachi with Stena Recycling

AI Initiatives

Hitachi has made significant strides in the field of artificial intelligence. Recognizing the transformative potential of AI, Hitachi has been actively incorporating this technology into its products and services. One of the key AI initiatives by Hitachi is the development of “H”, an AI technology that assists decision-making in various fields. “H” uses big data and advanced analytics to provide insights and predictions, thereby aiding in decision-making processes. This technology has been applied in various sectors, including transportation, manufacturing, and healthcare, to optimize operations and improve efficiency.

In the realm of transportation, Hitachi has developed AI technology that predicts train delays. By analyzing various factors such as weather conditions, passenger congestion, and past delay records, this AI system can predict potential train delays, allowing operators to take preventive measures and ensure smooth operations.

In the healthcare sector, Hitachi’s AI technology is being used to improve patient care. For instance, Hitachi has developed an AI system that can predict the risk of hospital readmissions for heart failure patients. By analyzing electronic medical records and other data, this system can identify high-risk patients, enabling healthcare providers to provide timely and appropriate care.

Furthermore, Hitachi is also exploring the potential of AI in the field of energy. The company has developed an AI system that can predict the output of renewable energy sources such as wind and solar power. This system can help in managing the supply and demand of electricity, thereby contributing to the stability of the power grid.

Collaborations and Partnerships: Hitachi’s Power of Synergy

Hitachi’s success story is also one of strategic collaborations and partnerships, which have played a pivotal role in driving the company’s innovation and growth. One of the most significant collaborations in recent years is Hitachi’s partnership with Schneider Electric, a leader in the digital transformation of energy management and automation. This collaboration aims to provide greater customer value and accelerate the energy transition by combining Hitachi’s expertise in transmission, distribution, and grid automation solutions with Schneider Electric’s proficiency in energy management.

Another notable partnership is with Stena Recycling, a leading recycling company. This partnership is a testament to Hitachi’s commitment to sustainability and its efforts to create a circular economy. Through this collaboration, Hitachi aims to recycle and reuse materials from its products, thereby reducing waste and environmental impact.

Hitachi also emphasizes collaborative creation with its customers. The company has developed NEXPERIENCE, a methodology for accelerating the development of solutions through collaborative creation. By working closely with customers, Hitachi is able to understand their needs and challenges better, enabling the company to develop more effective and tailored solutions. These collaborations and partnerships underscore Hitachi’s belief in the power of synergy.

This Knowledge Leader spotlight was generated using our AI engine with a series of prompts custom-developed by Knowledge Leaders Capital and designed to uncover the innovation strategies of companies we consider to be Knowledge Leaders. We have edited it for content, style, and length.

The following sources are examples of sources that may have been consulted in the preparation of this spotlight.

• Hitachi Official Website
• Hitachi Review
• TechCrunch
• AI Business
• Bloomberg
• Japan Times
• Forbes
• Railway Gazette
• Medical Technology Magazine
• Business Insider
• University of Tokyo News
• Science Daily

As of 6/30/23, none of the securities mentioned were held in the Knowledge Leaders Strategy.

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