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C&C Users Forum & iEXPO2017 Keynote Address

Orchestrating a brighter world:
Co-creating the future through digital transformation

November 10, 2017

NEC is engaged in initiatives to change our lifestyles and businesses for the better through digitalization of real-world events, incorporating them into the cyber world, and creating new values by connecting people, physical things, and contexts in a deep level.

Takashi Niino
President and CEO (Representative Director)
NEC Corporation

NEC has formulated the ”Seven Themes for Social Value Creation” and has endeavored to bring about the digital transformation of our customers in efforts to universally offer the values of ”safety,” ”security,” ”efficiency,” and ”equality,” while co-creating with various stakeholders.

The Seven Themes for Social Value Creation are highly compatible with the Sustainable Development Goals (SDGs) established by the United Nations. NEC will create a better future through digital transformation in collaboration with our customers, while also taking into consideration the global movement to solve social issues.

The following are examples of the kinds of innovations in society and in companies brought about by leveraging digital technologies.

NEC’s own digital transformation

In order to carry out co-creation with our customers, NEC first undertakes its own digital transformation. NEC leverage sits strength in AI technologies to the full extent possible as it engages in digital transformation. The following are four cases of how NEC has transformed itself; namely through, (1) sales and marketing reform, (2) transformation of design and development processes, (3) supply chain innovation, and (4) work style reform.

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First is in ”sales and marketing reform,” where the use of digital marketing has resulted in a 4-fold increase in finding potential customers. Data obtained through websites and other customer contact points were analyzed using AI in order to offer proposals that match customer needs, leading to increased customer engagement.

The second case, ”transformation of design and development processes,” involves the digital management of software development. AI was used to learn data on generated bugs and results of reviews, etc., making it possible to forecast success with an 80% accuracy at 25% progress of the project. This has led to increase in production and customer satisfaction.

In the third case, ”supply chain innovation,” use of AI in partially forecasting the demand and supply of the general-purpose severs and simulation of demand for critical parts enabled cutting the amount of surplus parts stock at the end of each month by 45% compared to when using conventional manual monitoring and prediction methods.

Last case is ”work style reform,” where the checking of vouchers, which was previously done manually, was automated using RPA (Robotic Process Automation), making it possible to cut the overall time required for processing forms by 70%. This has enabled each and every employee to focus on more worthwhile tasks, leading to an increase in overall productivity.

NEC endeavors to reinforce both the utilization of knowhow accumulated through its own initiatives as well as the offering of AI technologies and solutions, as it supports the realization of digital transformation of its customers.

Addressing social issues in Japan and other developed countries in 2030

In Japan, which is undergoing population decline and aging, it is forecasted that a third of the population will be aged 65 or older in 2030, leading to a significant decline in the workforce. Under this situation, it would be difficult to maintain not only the services currently offered by various industries, but the social system itself. It will therefore be imperative to utilize AI in order to fully allocate human resources on jobs that require direct human attention. The following is an example in the financial sector.

Major reduction in manpower needed for screening of trade transactions via the introduction of AI in handling finance and securities transactions

The increase in volume and amount of Internet-based transactions has been accompanied by an increase in fraudulent transactions. This has made it nearly impossible to depend on manual screening operations—an urgent issue that needs to be promptly addressed. NEC conducted trials with the Tokyo Stock Exchange on an AI-based solution for screening trade transactions, enabling significant progress in the detection of fraud. The success of the trials has led to further trials with SBI Securities and Rakuten Securities beginning in September 2017.

NEC hopes to extend these initiatives and achievements in Japan—a global front-runner in overcoming new challenges—to other countries facing a similar decline in the workforce.

Addressing worldwide social issues in 2030

The population situation around the world, however, is different. World population is projected to swell to 8.5 billion by 2030. In particular, the global urban population is expected to reach 5.0 billion. This increase in population will stimulate the movement of people and goods between cities, leading to the occurrence of various urban problems.

For instance, looking at airports, we see the need for dealing with the increase in the number of users as well as with the increasingly globalized scope of terrorist activities. It has become imperative to implement measures not only against the entry of foreign terrorists, but also to prevent homegrown terrorists from going overseas. Moreover, it is also necessary to strike a balance between maintaining the safety and security at airports and ensuring the convenience of users.

Departure control system based on NEC face recognition technology

To address these challenges facing airports around the world, we are carrying out trials at several airports including Washington Dulles International Airport in the U.S. using a departure control system integrated with NEC’s face recognition technology. These trials are being conducted also with a view to develop a ticketless boarding process based on face recognition.

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NEC’s value for the future society

NEC has the ability to offer values for the future society described above.

NEC uses sensing and image recognition technologies to generate new values by ”visualization” of real-world data and carrying out ”analysis” and ”prescription” based on them. At the core of these initiatives is NEC’s suite of cutting-edge AI technologies—NEC the WISE. NEC possesses No.1 and Only 1 technologies for each of the processes of visualization, analysis, and prescription, combining them to offer values that address particular issues and needs.

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Among these three processes, NEC is particularly strong in ”visualization.” A foremost example is our face recognition technology, which has garnered first place four consecutive times in benchmark tests conducted by the U.S. National Institute of Standards and Technology (NIST) in March 2017.

Moreover, we are now applying NEC’s visualization technologies to further generate value.

R&D on remote line-of-sight estimation technology to ”visualize” human emotion

Using remote line-of-sight estimation technology based on face recognition, NEC is working towards ”visualizing human emotion” from line-of-sight. This will enable creating a wide array of values besides safety and security, such as marketing and hospitality services.

Although the use of digital technologies provides tremendous convenience to society, it also brings about increased risks of impersonation and other fraudulent activities. NEC contributes to enabling ”easy and safe use of digital services” by leveraging solutions using various types of personally identifiable biometric data, in addition to face recognition. NEC has named this suite of biometric authentication solutions as ”Bio-IDiom,” and will work towards making them available to as many users as possible going forward.

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NEC offers technologies other than AI. We also have computing and networking technologies that realize ”connectivity” in the digital era. We are reinforcing the technologies necessary for handling the massive data needed in the digital era, including our new supercomputer announced on October 25, 2017 and our 5G networking technologies slated for commercialization.

Last is regarding our security solutions to ensure ”safety.” The proliferation of connections between people and physical things via IoT in the digital age will magnify the threats from unknown viruses. The ”ActSecure - Security Anomaly Detection Service” launched by NEC on October 24, 2017 enables detecting previously undetectable unknown viruses.

This anomaly detection service utilizes ”self-learning-based system anomaly detection,” one of the technologies under NEC the WISE to learn the normal state and make real-time comparisons with the current state of the system in order to promptly detect unusual events as ”anomalies” (and issue warnings against them). NEC’s in-house trials revealed that the total time it takes from detection of an ”anomaly” to obtaining a complete picture of the cyber attack could be shortened from 5 days to 1.5 hours.

Looking further ahead into the future

Looking further ahead to the year 2050 and beyond, NEC has been holding sessions to envision the ideal future 40 and 50 years from now in collaboration with experts from various fields through the ”NEC Future Creation Forum.”

NEC thus continues to look ahead into the future of society as it endeavors to contribute to the solution of social issues by leveraging digital technologies and realize a better society through co-creation with our customers.

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