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Biodata Bank to Tackle Labor Shortages and Heat-related Illnesses with CNRIA Smartwatch

Interview - February 5, 2024

Japan's demographic challenges are posing significant hurdles for industries, but innovative companies like Biodata Bank are stepping up to address critical issues such as labor shortages and heat-related illnesses.

TAKESHI ANZAI, PRESIDENT OF BIODATA BANK, INC.
TAKESHI ANZAI | PRESIDENT OF BIODATA BANK, INC.

It is our view that Japan is at a very exciting time for manufacturing. On one hand, we have had major supply chain disruptions in the last three years, caused by the COVID-19 pandemic as well as tension from the China-US decoupling situation. As a result, we are seeing many multinational groups try to diversify their supply chains with a focus on reliability. This is where Japan can enter; a country known for decades of high reliability, trustworthiness, and short lead times when it comes to production. Now, with a depreciated JPY, it is our view that there’s never been a more opportune moment for Japanese manufacturers to meet the pressing needs of this macroeconomic environment. Do you agree with this premise, and why or why not? What do you think are the advantages of Japanese firms in this current economic environment?

I do agree with your sentiment since the JPY is at a historic low and it is currently a great opportunity for Japanese companies in terms of exports. However, this proposition must be nuanced.

Firstly, Japanese makers have to import components since not all components are produced in Japan. In this case, the weak JPY is acting as a hindrance as it is getting more expensive to make the same product. We can even add that because of the scarcity of semiconductor related components, their price is increasing even more than the exchange rate.

Secondly, and more generally, we need to take into account the rise of inflation in Japan. Energy or food for instance is more expensive. It generates new costs for companies and upward pressure on the current salary situation. 

Taking into consideration these different aspects, both in terms of opportunities and constraints, we are trying to open up new markets overseas.

 

Japan is currently struggling with an aging and declining population, with experts predicting that by 2050 the population will dip under 100 million with one in three people being over the age of 65. This raises two main issues; a labor crisis and a shrinking domestic market. How are you adapting to these demographic shifts and to what extent must you look overseas in order to secure the long-term success of your company?

As you mentioned, Japan is facing a demographic problem. It is a major one. Even if a 100 million plus domestic market is not necessarily a small market opportunity for a company, it is a fast paced shrinking market. This is also a reason we have to focus on the international market that is much larger. At Biodata bank, we are currently focusing on the European market, as our product has received much attention in the field of construction.

In terms of the labor crisis, I totally agree. Because of the shortage of manpower in Japan, companies are confronted with productivity loss. Moreover, in certain sectors such as construction and logistics, next year a new regulation will be implemented that will severely limit the number of hours workers can work. Now, I believe that the real challenge is improving productivity without compromising worker’s security.

Our product, CNRIA, is exactly doing that. It is a heat warning smartwatch that gathers the biorhythm data of users or workers to inform them at which point they need to rest and for how long. It is great because it focuses on improving worker’s safety, by protecting them against heat stroke, without compromising productivity.

Right now, workers are taking breaks for a predefined amount of time at a predefined time. As summer is getting hotter, the frequency of breaks increases due to the heat. However, because each individual is different, there are moments when they are not taking breaks when they should or, on the opposite, they are taking breaks when they could continue their work. Either way, there is a growing inefficiency in the system that is currently used. By acquiring and analyzing the biodata of the workers with Canaria, Biodata Bank offers a new service to improve both safety and productivity of operations.

 

In previous interviews we’ve had interviews with key players in the industry; they always mention the fact that partnerships are key to success in locations where you have little to no experience. What role do partnerships play in your business and are you looking for this kind of partnership in overseas markets?

We have two different kinds of partnerships. The first type of partnership we have is one that assures the recognition of the product and the second type is one that enlarges our sales capabilities. Domestically we collaborate with governmental agencies such as the Ministry of Environment, Construction, and Health. We do testing together with these governmental agencies to prove and ensure the quality and effectiveness of our products. In France, we work together with L'Organisme Professionnel de Prévention du Bâtiment et des Travaux Publics (French Professional Organization for the Safety of Workers in the Construction Sector) to ensure quality and prove effectiveness. These are the first types of partnerships I mentioned, both domestically and overseas.

The second type is sales partnerships and this is a sector we want to enlarge. In Japan, we rely both on distributors and direct sales to penetrate major sectors such as the construction industry, the steelmaking industry, and the electricity generation industry. By collaborating with distributors, we can access many local sites, and by selling directly we can access these companies headquarters.  Regarding overseas markets,  especially in Europe, partnerships with distributors is a key to success as they help us to access multi-countries markets. Long and stable relations with key European distributors is very important to ensure success there.

 

The aging population of Japan puts a lot of pressure on the social security and national health system of Japan, so there is a shift from treatment to prevention right now. Thanks to technology such as yours, health service providers can provide much more customized treatments and preventative measures. What role do you think digital technology will play in transforming the health care system of Japan towards more prevention?

As you mentioned, by analyzing and utilizing data we can contribute to the prevention model. People traditionally go to hospitals when they feel sick. But by utilizing digital technologies people are able to manage their health before it becomes serious. Our product Heat Warning Watch Canaria estimates the core body temperature of users to warn them in advance of a heat stroke risk, thus contributing to the prevention model.

In Japan, the number of emergency ambulance transports due to heat stroke exceeded 90,000 in 2023. It is a huge number and in Tokyo, several "ambulance crash alerts" or “ambulances shortages” have been reported during the summer months. If people who have been transported to the emergency room for heat stroke can be preventively treated without the need of an ambulance, people suffering from other illnesses can be more quickly taken care of by the freed ambulances.

Canaria achieves a very simple task: it reminds people to drink before they reach the limit of their body in terms of heat resistance. So our technology brings a real plus value not only for each person in need but also, on a more systematic level, as less people are going to call ambulances. In other words, our product CNRIA has a positive impact both on the people and on society.



Why did you call your product Canaria?

Canaria comes from the name Canaria. In the past people who used to work in the mines used to bring a caged canary with them. If the canary stopped singing, mine workers knew that there were dangerous levels of carbon monoxide. This was the old method of understanding the air quality in a mine, and this method was common not only in Japan but also in the US and Europe. This is actually why we called our product CNRIA, or Canaria. As a bird might recognize danger, so does our product.

 

We know that your key product is your CNRIA heat stroke warning watch, which has been adopted by 1800 companies so far in a wide variety of different use applications. You mentioned construction and logistics, but are there any other industries you would like to provide your product to? Moving forward, do you expect more professionals to use it or will it be used more for personal use?

Currently, they are mainly used in construction but also in electricity generation, steelmaking, and transportation. We have been able to increase our share within these particular industries.

As of 2023, we have launched into two new areas: education and the elderly. Firstly, in education: as you mentioned, the number of children is decreasing in Japan so it is even more important to take care of them. If a young boy or girl was to collapse from heat stroke during school time it would become national news. Schools currently take countermeasures to combat this. They assess the heat risk using the WBGT indicator that takes in consideration multiple outside factors such as temperature and humidity. However, the WBGT indicator alone is not sufficient to assess individual situations. We believe that providing more individual protection against heat, such as the one provided by Canaria, is a step forward. This summer we conducted a great project with Sharp in the city of Mitaka, Tokyo. We distributed Canaria watches to college students who were playing baseball as an after-school activity. None of them had problems with heat, showing the efficiency of individually based protection against heat.

Regarding the elderly, I think everybody is aware of their fragility when it comes to heat. In 2023 alone there have been more than 90,000 cases of heatstroke so far and 45% of those are concerning the elderly. So it is a real problem. Oftentimes elderly people do not put the air conditioner on and fall asleep. In these cases, they may experience heatstroke without even noticing. Canaria can be of great support by alarming them once their body is getting too hot. It is an important market not only in Japan but also abroad.

 

When we think about smart watch devices, we often think of the big players such as Samsung or Apple, which can take health data and provide health reports to users. Can you tell us more about the CNRIA technology and how you differentiate it from some of the devices produced by Apple or Samsung?

In terms of technology, we focus on the calculation of core body temperature variation and there is no other device that can do what our device does in the market. Another unique factor is the fact that the watch we provide is a simple watch with the sole purpose of preventing heatstroke. By measuring the user's core body temperature, we can determine the risk of heatstroke and alert the user. Generally speaking, the more functions a watch has the better it is, however, there are very few customers who are using the totality of the functions of a smartwatch. We have made our devices simple with a focus on only heatstroke prevention. You can say that our customers are using 100% of the function of our device! We have a reliable technology to monitor the user's core body temperature and it is  complementary to other sensors that are used in smart watches.



You’ve mentioned using data to analyze the user's temperature. How are you able to obtain and analyze this data if the watch is offline? More generally, what is your business model ?

Heat stroke is an illness that occurs during the hot summer months. The duration of summer varies from region to region, but generally lasts about five months. Consequently, Biodata Bank's Heat Stroke Watch Canary Plus is designed to be used up over a five-month period.

Once the products are used up, they are collected after use, and data is collected for 100% reuse and recycling. The reason they are a “one-season product" is that in the construction industry, that is our main client, besides employees who come to the job site every day, there is also a large number of craftsmen who enter the job site as needed. Therefore, it would be very complicated to distribute expensive devices and manage them while recharging them every day. In addition, during the summer, work is done under harsh conditions, and the products become sweaty and dirty. Storing and managing products used during the summer until the following summer would also increase management costs.

At the end of the summer, the used products are collected, and at the same time, the data stored in the devices is collected using a special device. This data is then utilized to provide an analysis service called "Mierun desu (you can see now)" for a separate fee.

For example, we can show in the Mierun desu report:

 - Which work groups were most at risk for heat stroke

 - How much did the group that took the new heat measures contribute to reducing the burden on the human body?

- How to optimize break times, how to work effectively within the limited working hours, and how to prevent heat-related illnesses.

The company also takes environmental issues into high consideration and contributes to sustainable development through 100% reuse and recycling.

 

Japan is considered one of the most innovative countries in the world, and a country that pours 3% of the country’s GDP into R&D. We know that you are a very young company and you only really have one main product, but what is your main R&D focus moving forward?

My personal view is that Japanese companies need to invest more in development. Heatstroke measurement is a global issue so we want to continue investing in R&D so that we contribute to the mitigation of heat stroke cases. With global warming, there will be more cases of heatstroke and therefore our products can play more of a role. I would like to continue R&D into heat stroke detection.

In addition to heat stroke, we are also working on several other research projects. We will continue to work on the development of products that can support people in need and, as much as possible, be a solution provider regarding emerging social and environmental issues.

 

We know that your company is also based in France. Why did you choose France as a location to expand your company? How does this location help you tailor your product to European customers and going forward, where would you like to expand to next?

The reason why we selected France was because our products are mainly used in the construction industry. Seeing the global list of top constructors, China is first, followed by France. We realized that being recognized by big global companies in France and Spain would lead to better global marketing.

France at that time had a very good environment for startups to enter and open up new businesses. Under President Macron there has been good governmental support and the Japan External Trade Organization (JETRO) has also provided valued support.

France also provides great access to the European market and at the same time, there are many wholesalers in the construction industry there. These wholesalers provide their services all across Europe. With that, we are able to expand our marketing schemes not only in France but all across Europe. In fact, last year there was a considerable increase in sales of our devices across Europe, increasing seven-fold.

 

Imagine that we come back in 2028 and have this interview all over again. What goals would you like to achieve by the time we come back for that new interview?

We have two main goals: firstly, to advance bioinformatics research and open up the potential of humankind. Secondly, we want to contribute to reducing the incidence of heat stroke worldwide by at least 30% of the current level.

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