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NEDO at the forefront of a carbon neutral Japan

Interview - April 16, 2022

The New Energy and Industrial Technology Development Organization (or NEDO), Japan’s largest public technology development organization is taking the reins in Japan’s bid to be the world’s first carbon neutral nation. Our conversation with NEDO Chairman Ishizuka Hiroaki spanned many topics, from the current strengths of Japan’s manufacturing, the adoption of robotics to combat labor shortages, to how NEDO is incubating the most innovative start-up’s Japan has to offer.



What is your analysis of the current state of Japanese manufacturers and innovators? How does NEDO combine innovation with sustainability?

NEDO is a public technology development management organization with two missions: addressing energy and global environmental issues, and enhancing industrial technology. Consistent with these missions, we actively promote the development of innovative technologies. I believe we can say with pride that, when it comes to promoting innovation, NEDO has been quite successful in its efforts.
One of the most important issues we are currently addressing is carbon neutrality. In line with Japan’s policy of realizing carbon neutrality by 2050, NEDO has received significant funding to implement the Green Innovation Funding Program. Under this program, concrete goals shared by the public and private sectors for realizing carbon neutrality have been established.
At this time (February 2022), eleven projects have been launched under this program. These projects focus on areas for promising growth identified in Japan’s Green Growth Strategy, such as the creation of large-scale hydrogen supply chains, development of advanced aircraft and shipping technologies, and development of advanced solar cells.

The big difference between traditional NEDO projects and projects implemented under the Green Innovation Funding Program is that, in addition to realizing social implementation of new technologies, Green Innovation projects also require that top management officials at companies implementing them demonstrate a commitment to realizing successful results. NEDO believes that the innovation process does not stop with innovation itself; innovative technologies must also be implemented in the marketplace. The entire process of creating and widely integrating innovative technologies, such as those being developed under the Green Innovation Funding Program, represents what we consider to be true “innovation.”

By entrusting us with the responsibility of implementing the Green Innovation Funding Program, the Japanese government has charged NEDO with demonstrating innovative Japanese technologies. NEDO has also received funding under other initiatives such as the Moonshot R&D Program to advance projects aimed at developing cutting-edge technologies. A noteworthy NEDO activity related to the promotion of sustainability focuses on the creation and dissemination of a circular economic model that promotes three essential social systems for a sustainable society.

Robotics and DX technologies are also areas of focus for NEDO. With regards to robotics, Japan is facing a number of demographic challenges including a decreasing population and aging society, which make the need to accelerate industrial innovation to address these challenges more important than ever. Moreover, with the significant impact on social and economic activities caused by the Covid pandemic, there is a great need to adopt new approaches toward living and working. In order to help Japan adapt to this new normal, we are looking to accelerate the field of robotics by introducing the use of robots in new industrial and service settings, especially at a time when demand is growing for remote workplace and contactless services.

As for DX, or digital transformation, it is important to implement innovative solutions in both hardware and software technologies. On the hardware side, which represents DX at a tangible level, there is a great need for the development of technologies to enable large-scale data processing at low levels of energy consumption. It is critical to pursue a high-speed communications environment where multiple devices with data processing capabilities can be operated, thus facilitating the next generation of computing power. In short, NEDO is working to enable the creation of a high-level communications environment in Japan that facilitates data processing at the largest scale possible.

In the field of software-related digital transformation, we support the implementation of robust business models, helping with the development of both data sharing platforms and AI systems. We want to help connect large companies, which possess significant amounts of data, with innovative start-ups, and thereby create a more optimal communications environment.


As the largest public technology development management organisations in Japan, and as an “innovation accelerator,” what do you believe to be the strengths and competitive advantages of Japanese firms that help them compete in the global environment?

NEDO conducts various types of research to better understand Japan’s competitive position in the global marketplace. One way we do this is by conducting research on the competitive conditions for 900 different industrial products, such as automotive components, home appliances, robots, power plants, semiconductors, batteries, LED/LCD monitors, as well as materials used in the manufacturing of these products.
When evaluating Japan’s competitive positions for industrial products in comparison with other major markets, such as Europe, the United States, and China, our research indicates that Japan is particularly competitive in two sectors. According to data from 2019, the first sector is the manufacturing of automotive components, with total sales of 65 trillion yen representing 23% of the global market.

The second sector is the manufacturing of materials/components. One can gain a better appreciation of Japan’s competitiveness in this sector by looking at other industrial products with a dominant share of the global market. The United States manufactures 96 such products, Europe 50, and China 40. In comparison, Japan manufactures 231 such products, and of these, 160, or 73% of this total, are in the materials/components sector. Japan is therefore an important player, with many of its products playing an indispensable role in the lives of people all over the world. Other industrial sectors where Japan is highly competitive include industrial robots (48.7% global market share) and other types of machinery (31% global market share). Overall, our research shows that Japan is still highly competitive in many sectors of the global marketplace.

However, when looking ten years down the line, especially in the automotive components sector, increasing levels of automation and electrification will amplify the importance of AI and DX technologies. For Japan to maintain its edge in these two sectors, it will be necessary to increasingly integrate such technologies into the production process. In fact, it is incredibly important to strengthen the integration of AI and DX technologies in all sectors of the economy, and NEDO is actively pursuing this goal in its capacity as a national technology management organization.

Examples of NEDO activities to enhance Japan’s AI technologies include work to promote higher levels of productivity in the key sectors of health/nursing care and transport/logistics. I believe Japan still has a huge role to play and can continue to maintain a competitive edge in these and other high-tech fields.

The Covid pandemic has had a pronounced effect on logistics, especially in Japan with the shortage of truck drivers. This nevertheless presents an interesting opportunity for more widespread adoption of robotics to take the burden away from non-contact delivery. Could you elaborate on your projects for integrating AI in the logistics sector?

Within NEDO, activities to promote the integration of robotics and AI technologies are overseen by the same part of our organization. DX is a hot topic in Japan and is being rolled out in many fields. We can also see the manifestation of these technologies in new business models and styles. One important NEDO project in this area is addressing the concept of last-mile delivery services.

In 2020, we launched a project called Aiming for Service Implementation of Autonomous Last-mile Delivery Robots, which strives for near-term realization of novel robotic delivery services. Under this project, demonstrations were conducted by 12 companies at 10 locations, with the ultimate goal of realizing contactless delivery services by robots. In my opinion, delivery robots will require automated movement functionalities similar to those for driverless cars, so such robots will need to be equipped with sensors that provide geospatial information as well as 3D sensors that accurately discern space and distance. NEDO  has conducted many types of testing on last-mile delivery systems. For example, we partnered with Rakuten to test an Amazon-style transportation and delivery system and have also developed a system using drones to deliver packages to remote Japanese islands.


Robotics, AI, and drones can be utilised in infrastructure, inspection, and disaster response.  We understand this is a focus area for the World Robot Summit (WRS) which NEDO has initiated. How has NEDO used the WRS to promote the use of these technologies?

NEDO, in conjunction with METI, launched the World Robot Summit (WRS) to show the world how robotics can be employed to enhance our daily lives.  We conceived WRS as a new vehicle to communicate this powerful message, and, by organising it in the form of a global competition, we hope it can proactively accelerate the development of innovative robotics technologies. The first WRS was held in 2018 and we originally planned to hold the second session in 2020.  We were forced to postpone the second session (called WRS 2020) due to the pandemic, however, so it was held in September/October 2021. In September 2021, the first of two WRS 2020 competition events took place in Aichi Prefecture but, due to the pandemic, in-person spectators were not allowed. Three competitions were held at the Aichi event: one for industrial robotics, one for service-related robotics, and one for “junior” robotics featuring robots built by young people. A total of 58 teams representing 14 countries/regions participated in the Aichi event.
The second WRS 2020 competition event was held in Fukushima Prefecture with participants from 29 teams representing 8 countries/regions. The competition at this event focused solely on robotics for disaster response applications. Pandemic-related conditions improved prior to the event, so 3,861 people were able to attend in person. WRS 2020 events were also presented online at the WRS virtual website where WRS competitions and presentations regarding robotics-related government programs were streamed for viewers all over the world.

NEDO believes it is important for robots to be more highly utilized in three key areas highlighted by WRS: industrial applications, service applications, and infrastructure inspection/disaster response applications. We also believe that achieving an environment in the future where robots naturally coexist with humans will be particularly important for society. With that in mind, NEDO will continue to partner with METI colleagues on WRS planning and develop new ideas for future sessions.


Given NEDO’s focus on promoting innovation, I understand you provide considerable assistance to technology-based start-ups. Could you tell us more about how exactly NEDO supports start-ups?

NEDO provides a full range of support to foster the development of technology-based start-ups in Japan, starting from their initial formation and concluding with their launch of full-scale business operations. Our support includes helping start-ups make contacts with venture capital firms who can provide the funding needed to realize their new business concepts. NEDO’s support program is implemented in a comprehensive manner that helps start-ups at the technology seed stage move forward and commercialize their technologies. We also facilitate partnerships between start-ups and other companies who can help them realize new business ideas, as well as provide guidance so start-ups can effectively articulate their company’s vision in a way that meets the needs of specific business sectors.

NEDO has been supporting technology-based start-ups and medium-sized business for the past 20 years and have provided direct support to more than 2,000 companies. As a result, 34 companies have now progressed to the public listing stage, with a combined net capital value exceeding one trillion yen.


Your organization is celebrating its 42nd anniversary this year. If we come back in 3 years from now and we have this interview again, what would you like to tell us? What goals are you aiming to accomplish by then?

NEDO has been working closely on a number of projects with METI, and we look forward to even closer cooperation over the next three years in support of national efforts toward realizing carbon neutrality. In addition, we plan to continue strengthening our efforts to develop innovative technologies, particularly in areas such as robotics and digital transformation, as well as provide increased support for startups.

We have also been engaged in activities related to the semiconductor sector, as Japan is quite competitive when it comes to manufacturing equipment and materials in that industry. Japan’s semiconductor-related technologies are also quite strong, but its semiconductor chip manufacturing capability is not that robust. A goal of mine therefore is to help Japan once again become a leader in the manufacturing of semiconductors.