President and Chief Executive Officer,
Representative Member of the Board
Today, we find that the movement to develop a sustainable society is gaining steam on a global scale, as exemplified by the establishment of the Sustainable Development Goals (SDGs) by the United Nations and adoption of the Paris Agreement at COP21. NTT Group has contributed to the resolution of social issues using the power of ICT over the years, and now the expectations placed in this role by society will continue to grow going forward.
NTT Group has established the NTT Group CSR Charter, which was partially revised in May 2016, as its basic set of guidelines on CSR, and with the recognition of being a responsible bearer of ICT, we are further expanding collaboration with various partners around the world and working on initiatives to create the B2B2X model as a Value Partner continually chosen by stakeholders. In turn, this will enable us to create new services and new businesses that contribute to the sustainable development of society.
In fiscal 2017, we were able to accelerate several concrete collaborative projects together with various partner companies through our B2B2X model initiatives. We have been proactive in explaining NTT Group’s efforts in this regard. For example, some of these initiatives were described at CEBIT 2017, the world’s largest ICT business trade fair, which was held in Germany in March 2017. I feel that strong progress was made in B2B2X model initiatives during fiscal 2017. I would like to take this opportunity to refresh your understanding with regard to the aim and concept of our B2B2X model initiatives.
In the “Towards the Next Stage” Medium-Term Management Strategy announced in November 2012, we set forth our goal of becoming a “Value Partner” that customers continue to select and deem valuable. This goal is meant to be achieved by responding to the globalization of markets and the evolution of cloud services in order to break away from being simply a telecommunications operator.
The current era is one in which customers are able to freely choose the services they wish to use. In this era, it is not enough to be chosen once; companies must continue to be selected. Furthermore, this era is no longer one in which telecommunications operators can play a lead role by supplying all the necessary services themselves. NTT Group does not look to play a lead role, but rather aims to become one of many crucial actors in supporting customers as they transform their business models and create new businesses. Launched in February 2015, the Hikari Collaboration Model, the world’s first model for full-scale fiber-access services offered through a wholesale framework, is based on this policy. This service is thus aimed at creating new businesses and new, high value-added services together with partners.
The “Towards the Next Stage 2.0” Medium-Term Management Strategy, which inherited this policy, set the clear goal for achieving sustainable growth of exploring new markets by further promoting the B2B2X model. The aim of the B2B2X model is to support the business model transformations of service providers, represented by the center B, in order to contribute to innovation in the lifestyles of end users, represented by the X, or to the resolution of social issues with new services created together with service providers. In this manner, the B2B2X model goes beyond the previous approach of growing earnings by providing network and peripheral services directly to individuals, companies, and other consumers. The true aim of this model is to work together with partners to provide the value born out of NTT Group’s strengths to individuals and companies through an ever-widening range of service providers, and thereby create new business models.
We are currently accelerating numerous B2B2X model collaborative projects together with various service providers. These ventures include the merger of Kabuki and ICT to create new and moving experiences in the entertainment field, the realization of smart soccer stadiums and new visual expressions in the sports field, the optimization of manufacturing through the use of the IoT in factories in the manufacturing field, and the development and verification of connected car technologies in the automotive field. We will further build upon these initiatives going forward.
To reiterate, NTT Group is promoting the B2B2X model with the aim of creating new services and value to innovate lifestyles and resolve social issues. Turning our eyes to the world at large, we will see that the movement to develop a sustainable society is gaining steam on a global scale, as exemplified by the adoption of the SDGs by the United Nations. This movement is increasingly directing more anticipation toward NTT Group, which has continued to utilize ICT to resolve social issues over the years. In Japan, the Cabinet Office is promoting “Society5.0” initiatives with the goal of creating an ultra-smart society as part of its initiatives for building industries and transforming society for the future. The principles behind these initiatives are shared by NTT Group. In conjunction with the Cabinet Office’s initiatives, the Japan Business Federation (Keidanren) has established its own action plan with a view to revitalizing Japan by realizing Society5.0 through public-private partnerships.
The realization of Society5.0 is anticipated to be driven by the IoT, big data, and AI. This is because the IoT makes it possible to accumulate various social data as big data, which can be analyzed by AI to contribute to the resolution of social issues. This process will require that data from society as a whole be shared and utilized. However, there are two major tasks that will need to be addressed to make this possible. The first task is the development of frameworks for collecting data. Specifically, frameworks must be established for enhancing data in terms of both quality and quantity. The second task is the formulation of rules for ensuring the safe and trustworthy use of personal information.
For addressing these issues, a scheme in which local governments play a central role in accumulating and promoting the use of big data is ideal. Rather than giving a single company exclusive access to this data, it would be better for population, map, disaster prevention, and other publicly available information held by local governments and for the big data collected by companies to be compiled and provided to the entire industry as a public asset. In this scheme, local governments should lead efforts to share and utilize this data to contribute to the improvement of services for local residents and to the development of local industries.
NTT Laboratories is developing secret sharing technologies that enable data to be stored safely and be protected from deletion following system malfunctions as well as secret computation technologies that make it possible to process anonymized data. I believe that these technologies will help support the sharing and utilization of data. We should also be able to offer assistance through our AI-powered big data analysis technologies as well as through the telecommunications services we have accumulated to date.
We have concluded comprehensive partnership agreements with Fukuoka City and Sapporo City and are examining and implementing various solutions to the issues faced by the local governments in each city.
In this manner, NTT Group will collaborate with local governments to link contributions to regional economic development to the improvement of corporate value.
In September 2016, NTT Group declared its support of the SDGs adopted by the United Nations. We believe that using ICT to resolve social issues will play an extremely important role in the attainment of the SDGs. We are now actively working to help attain the SDGs after identifying the correlation between them and the businesses of our Group companies.
In order to instill initiatives for the SDGs, at the NTT Group CSR Conference held in February 2017, we shared many superior CSR initiatives linked to the SDGs. Furthermore, it was decided that the best of these initiatives would be acknowledged in front of the audience that includes executive management of Group companies from inside and outside Japan who attend the conference.
Through these activities, we are hoping to spur on momentum within NTT Group aimed at the attainment of the SDGs. Going forward, we will do our very best to help achieve the SDGs not only through the use of our own products and services, but also collaboration with partners, involving their technologies and knowledge.
Good corporate governance and the empowerment of diverse human resources are important building blocks for our foundations for improving corporate value.
I believe that the effective functioning of corporate governance is indispensable for sustained gains in corporate value. Accordingly, NTT is working to bolster the effective functioning of corporate governance based on its fundamental policies of ensuring sound management, conducting appropriate decision-making and business activities, clarifying accountability, and maintaining thorough compliance.
I believe that accountability is one of our most important responsibilities, and we therefore implement management with an emphasis on communication with shareholders and other investors. Our medium-term management strategy focused on EPS growth was formulated as we sought means of incorporating stakeholder feedback into management. Going forward, NTT’s management, myself included, will actively engage in exchanges of opinion with shareholders and other investors to enhance their understanding of our medium-term management strategy.
In terms of compliance, we recognize the extreme importance of operating our business in observance of laws and regulations and with a strong sense of ethics. To this end, the NTT Group Corporate Ethics Charter sets forth conduct guidelines for corporate officers and employees. NTT also conducts training and annual surveys of employees to measure their awareness, and the results are then used for corporate ethics awareness enhancement initiatives in order to guarantee the effectiveness of the charter.
Employees are an important source of competitiveness for companies. In order to empower a diverse range of employees, we have positioned diversity management as a core element of our management strategies, and diversity promotion initiatives are being implemented accordingly. These initiatives have led NTT to receive the highest rating of gold in the PRIDE INDEX, which is designed to recognize efforts for supporting the LGBT community and other sexual minorities.
We also realize that the creation of a workplace environment that is conducive to the long-term efforts of a diverse range of human resources is an urgent task. In reforming work styles and leave acquisition practices, managers should be the vanguards of changing awareness ahead of employees. To get the ball rolling on such changes, I issued a message to all NTT Group employees and managers stating that managers should strive to set a good example in terms of work styles and leave acquisition practices. Going forward, we will promote work style reform to secure human resources and cultivate a workplace environment that is more conducive to employees’ exercising their talents to improve labor productivity. Specific measures with this regard will include encouraging employees to take extended leave, allowing employees to work from home and otherwise practice teleworking, and making it possible for employees to work early morning hours through flextime systems.
International trends remain opaque, and NTT Group is currently faced with a need to prepare for business risks. At the same time, it can be expected that the IoT, big data, AI, and other ICT will evolve to address various issues, accelerating the speed of transformation in industrial structures and social life.
In this environment, NTT Group finds itself poised to take advantage of various business opportunities. To capitalize on this prime positioning, we will enhance the R&D and operating capabilities we have fostered to date. At the same time, we will collaborate with partners in other industries as a “Value Partner” in our ongoing quest to create new services and business models.
I would like to ask for your ongoing support of NTT Group in the years ahead.