Based in Gifu, Japan, Dainichi Consultant has been providing professional engineering services since it was founded in 1952, and over the last half-century, it has had to adapt to the changing demands in the Japanese construction industry.
Japan's last construction boom was more than 50 years ago, prior to the 1964 Olympics. Since then, due to the demographic shift, there has been an increased need for maintenance and upkeep. On the other hand, there is less need for new construction projects. What is your take on the current state of the Japanese construction sector?
When it comes to the roads, there is indeed more need for maintenance than the construction of new ones. This has been triggered by the Sasago Tunnel collapse. This incident increased the Japanese people’s awareness of its aging infrastructure. With so many aging structures, Japan is forced to rethink how to perform maintenance and repair efficiently and effectively. We have to prioritize which ones need to be done first. With the aging population and decreased birth rate, the issue is how to pass on the knowledge and experience of seasoned engineers. This is the biggest threat we have in Japan. It is the mission of each company to pursue new technologies and pass on existing knowledge and experience to the next generation.
How are you combating this challenge of passing on knowledge and expertise to the next generation of workers? What opportunities and challenges are there for you when it comes to this demographic shift?
We are trying to make the expertise of our engineers become more visible and open through DX. Through DX, we want the knowledge to be easily understood by anyone who uses the technology. We established a company social media page where the employees can post their ideas and experiences. Anyone has access to it.
We are focused on construction consultations, but we have the experience and know-how in proposing new ideas. With this advantage, we can diversify out of the construction field and apply our consulting experience to others. We already branched out in agriculture and tourism. The consulting in agriculture is focused on the various issues that the communities are facing. We are contributing to the revitalization of the local community in this regard.
Maintenance is not required only in the construction field. With the shortage of human labor, we want to create an efficient system of conducting maintenance and work by developing technologies such as sensors.
With the workforce shortage, we are actively using BIM (Building Information Modeling) and CIM (Construction Information Modeling / Management) to compensate for the lack of human resources. For 30 years, we also have been using and incorporating VR. This is surely an important technology in the metaverse era. We are now doing DX research and development.
Which products have the most potential for using these types of technologies?
3D modeling can be used before constructing any infrastructure. We can also use VR to visualize and see the exact style of the structure.
Can the customers see the examples through the VR goggles? What do you believe would be the advantages for your customers?
The clients can see the specifications of the structure with VR. With two-dimensional presentations, we cannot easily check the interference of steel reinforcements, but this can be done with ease in 3D models.
We have the product, but the clients are not yet ready to introduce it. Regarding VR though, we incorporated it into our business 30 years ago until now.
We saw your LIRIS (Live Independent Remote Inquiry System) which is a monitoring tool. If we come back in 5 -10 years, how will DX change the construction industry?
There are different sectors in the construction industry. There are consultants like us and there are general contractors who actually do the construction. As a construction consultant, DX will change the lifestyle of our employees. Through DX, we improve the work efficiency for time saving. For example, with CIM, we can save time through design automation. In addition, we use the extra time to capitalize the knowledge and experience and also introduce the learning management system (LMS) for e-learning, and create a work environment where everyone can work remotely, not just in Japan, but anywhere in the world. We have our headquarters here in Gifu, but we can be anywhere to do the work.
When we talked to the president of Takamatsu Construction, he mentioned the importance of partnering with tech construction startups to accelerate the integration of digital technologies in the Japanese construction industry. Is finding such overseas partnerships any interest for Dainichi?
We are focused domestically at present. The reason why DX has not fully penetrated Japan is that IT literacy is low in the country. It is important that we train and educate to raise IT literacy. Maybe we can consider collaboration with overseas partners after that.
With younger people moving to cities for opportunities in recent years, rural locations are becoming depopulated or even abandoned. By 2040, about 864 municipalities are at risk of disappearing completely. Dainichi has been partaking in regional revitalization projects where you help mitigate some of these issues. Can you share with us some examples of the revitalization projects that you have participated in?
With less population in rural areas, there are fewer public workers in the administration in the municipalities. With this, the service level declines. As a consulting firm, we compensate and support the administration in terms of providing efficient service, taking PPP (Public Private Partnerships) and PFI (Private Finance Initiative) as part of the approach.
There is an 80% chance that within the next 30 years, another major earthquake will hit Japan and areas like Nagoya and Shizuoka are expected to be severely damaged. How do you ensure the safety of your construction projects in the event of a major earthquake?
About four years ago, our company established the in-house disaster prevention project. When disaster strikes, there are so many things to be taken into consideration regarding management during and after the disaster. We created one team that comprised all the necessary divisions and has a complex approach. The company has now established a vertical framework in terms of passing down the knowledge from the older generation to the younger generation. It also has a horizontal framework in terms of crossing disciplines. We have a holistic approach to creating disaster countermeasures. As an example, when the Gifu National Highway No. 41 collapsed, our team was quick to respond. We also did an investigation on the warping of Kawashima bridge superstructure steel truss along with settlement of a pier due to scour in Gifu. Furthermore, we also worked on the Kise river bridge collapse in Shizuoka.
If it is a magnitude 7 which is equivalent to the Great Eastern earthquake in Japan, much will be destroyed. There are many older buildings constructed with different seismic regulations.
As large population centers like Tokyo and Nagoya continue to grow, traffic will also continue to grow. Just last year, traffic congestion in Tokyo increased by 2%. Dainichi analyzes and designs traffic congestion measures. As large urban sprawls in Japan continues to grow, what congestion solutions can Dainichi offer?
There are many methods to reduce congestion. If you look at the rural areas, the traffic issue is due to being a car-oriented society. It is very important to shift from being a car-oriented society to using public transport like trains or bicycles. This is also in line with the SDGs.
What are some of your SDG initiatives, and to what extent do SDGs determine your future business activities?
SDGs mean pursuing sustainability, and this truly applies to the management sustainability of our company. In our top message, we incorporated SDGs in our management philosophy and we aim to promote SDGs in our business activities. An example is the creation of a comfortable living environment. By working together with our partners in developing technologies centered around the SDGs concept, which we now have 17, we are now working on which areas we can contribute. We want to continue pursuing SDGs both in our company and in the business sector.
Many Japanese construction firms have been contributing to local communities around the world through partnerships such as PPP or ODAs. You have been supporting countries through ODA in areas such as Sri Lanka, Vietnam and Ethiopia. Can you tell us your experience in participating in some of these projects?
Since 2003, we have been involved in overseas projects. Our experiences in Vietnam and Sri Lanka are not related to construction consulting. These were more for institutional development, focused on the maintenance aspect of the highways after construction. We supported the local government in the development of the maintenance and management system and conducted OJT (on-the-job training). In Vietnam, we worked with expressways, and in Sri Lanka with road bridges. We conducted surveys and inspection and then created a database of all the existing bridges in Sri Lanka so that anyone can determine the current situation of any bridge. Based on the database, we established the BMS (Bridge Management System) to develop mid to long-term bridge repair and maintenance plans. We created manuals on how to take inventory, conduct maintenance, inspection, diagnosis, and repair and then analyze the data. OJT was given to the local staff to train them on the upkeep of the bridges. Our client was the Sri Lankan government and it was the people in the administration who received our training.
Can you highlight your firm's main competitive advantage and what can you offer overseas companies?
As a company born and raised in a rural area, we take care of all the complex and complicated issues in the locality. We take a comprehensive approach that we have developed through our accumulated experience.
Given your experience working in Sri Lanka and Vietnam, are you looking to participate in more ODA projects?
Since we have our base in India, we want to work with the Indian governments, ADB (Asian Development Bank) and JICA (Japan International Cooperation Agency).
In India, you have a liaison office in the Uttar Pradesh region. Why did you choose India as a location for your overseas office, and what other countries or regions have you identified for further expansion?
We chose India because not many Japanese companies are there. We wanted to take on the challenge of expanding in new areas that has great potential for economic growth but fewer Japanese companies. Indians also have an affiliation with the Japanese.
Now that you are considering entering a new market with fewer Japanese firms, are you looking to find a partner to tackle this market?
We usually do not work alone, but we work with other foreign-origin firms or Indian companies on projects.
What would be your next midterm strategy to continue your corporate growth?
We purposefully do not post our numerical targets because we focus more on human development. This sends our employees a strong message about our company vision. Our staff is the essence of the company and the driving force behind the business, so we need to train and educate them.
If we come back in five years and do this interview all over again, what are your dreams for the company, and what would you like to have accomplished by then?
Five years is not too long. I want the company to be known as a firm with unique ideas and technologies. Through collaboration with partner companies, we want to create new ideas and content that contributes to the well-being of society. We plan to do this by improving the capabilities of each employee and helping them have a broader perspective and the ability to respond to the multiple challenges in our society.
The Gifu Prefecture was advanced in maintaining roads, bridges and tunnels. Even before the collapse of the Sasago tunnel, the Gifu Prefecture, academia, and our company collaborated to make a substantial contribution to the maintenance of roads, bridges and tunnels. We want to introduce the made-in-Gifu brand throughout Japan and also globally.