How Hitachi’s New CEO Will Lead AI-Driven Transformation
Considering digital transformation and sustainability becoming critical imperatives for global corporations, Hitachi's leadership transition marks a pivotal moment in the Japanese conglomerate's 114-year history.
Japanese corporations, in particular, have been undertaking transformations to maintain their competitive edge in the global market, moving away from traditional manufacturing-centric models towards digital-first strategies.
This transition has become especially important as Japan faces unique challenges, including an ageing population and the need to boost productivity through technological innovation.
In this context, Hitachi's pivot towards digital transformation and AI is about the broader evolution of Japan's industrial sector.
The company's recent partnerships and investments in Gen AI, coupled with its commitment to sustainability, reflect the delicate balance that modern corporations must strike between technological advancement and environmental responsibility.
As the tech industry grapples with the transformative potential of Gen AI while facing increasing scrutiny over the environmental impact of data centres and
AI operations, major corporations worldwide are being challenged to demonstrate how they can harness technology while adhering to stringent environmental, social and governance (ESG) standards.
Toshiaki 's digital expertise to drive Hitachi's future
Toshiaki Tokunaga, currently Executive Vice President and Executive Officer, General Manager of Digital Systems & Services Division at Hitachi, will be the new President and CEO and he brings a wealth of experience in IT and digital technology to his new role.
His experience spans various sectors within Hitachi, including the creation of new social innovation businesses in energy and railways, as well as leadership roles in home appliances and air conditioning.
Now, he currently leads Hitachi Group's digital business and has forged strategic partnerships and investments in the field of Gen AI.
Under his leadership, Hitachi has embarked on a multibillion-dollar, three-year partnership with Microsoft focused on Gen AI adoption.
The company has also committed to investing US$2.1bn in Gen AI in fiscal 2024 and plans to train over 50,000 professionals in AI skills.
Hitachi's strategic focus on sustainability and AI
Hitachi's appointment of Toshiaki further aligns with its broader strategy to address global challenges through technological innovation.
The company is focusing on overcoming 'tough to decarbonise' challenges by unlocking new efficiencies and ways of working, including efforts to decarbonise AI itself and manage the rapidly rising power demand of major tech companies innovating with AI.
This approach reflects a growing trend in the tech industry to balance innovation with sustainability, as companies face challenges with the environmental impact of energy-intensive AI technologies.
Dr Kojima, the outgoing CEO, expressed his aims as CEO: “In the Mid-term Management Plan 2024, I have been doing my best to improve the company's value by demonstrating organic growth based on the achievements of Hitachi's structural reform.
“Our efforts and results have been recognised by the capital market, and our market capitalization has tripled in the past three years. I feel confident that I have walked the talk with the goal I set when I became CEO.
He continues to outline his confidence in Toshiaki 's ability to lead Hitachi's transformation: "Mr. Tokunaga has made significant contributions to Hitachi's growth by overseeing the digital business and leading global expansion, as well as seizing growth opportunities through Gen AI.
“He will take full responsibility for formulating and executing the next Mid-term Management Plan and lead Hitachi to the next stage of growth as the President & CEO.”
A vision for 'True One Hitachi'
Toshiaki's vision for Hitachi centres on the concept of 'True One Hitachi', with digital technology at its core.
He aims to accelerate the company's progress towards becoming a global leader in Social Innovation Business.
Emphasising the importance of adaptability in the face of global changes, Toshiaki says: "Since 2021, as the head of Hitachi's digital business, I have been working on solving customer and social issues through the combination of the power of digital and Hitachi Group's capabilities, under the concept of "One Hitachi."”
“In the upcoming next Mid-term Management Plan of which I am currently leading the formulation, we will accelerate our progress towards becoming a "True One Hitachi" with digital at its core and aim to be the global leader in Social Innovation Business. “
He continues to highlight sustainability’s role in his aspirations: “To achieve sustainable growth and enhance corporate value for the Hitachi Group, we believe it is essential to continuously transform our mindset and work practices by swiftly identifying and adapting to changes in the economy and society.”
“In other words, I believe it is imperative that we stay ahead of global changes and continuously update the 'operating systems' of each individual shaping the Hitachi Group. I am ready to take the helm in driving change.”
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