Business / Corporate

Better employee training needed to prepare for ‘fourth industrial revolution,’ Suntory chief says

by Sayuri Daimon

Staff Writer

Takeshi Niinami, chief executive officer of Suntory Holdings Ltd., believes that companies and governments need to offer proper training and education to their employees with a long-term view toward new technologies as people still lack the skills needed for “the fourth industrial revolution.”

“Technology will be the rule-changer in the future, and we need to maximize the sensitivity of our antenna for technological innovation,” Niinami told The Japan Times in an interview during the World Economic Forum’s annual meeting in Davos, Switzerland, last month.

Niinami pointed out that the fourth industrial revolution, along with the growth of protectionist sentiment and female empowerment, were the topics that dominated discussions among business and political leaders.

The fourth industrial revolution refers to the drastic social and industrial changes being caused by the recent emergence of disruptive technologies including the internet of things, robotics, virtual reality and artificial intelligence that will fundamentally alter the way we live and work.

Last March, the WEF established the Center for the Fourth Industrial Revolution in San Francisco to bring together business leaders, governments, startups, academics and international organizations to accelerate cross-sector cooperation and to co-design policies for such emerging technologies as artificial intelligence and drones.

Suntory is already in the thick of things as one of the center’s two Japanese founding partners along with Sompo Holdings. The major beverage maker plans to send employees to the center to connect its work with the company’s domestic research and development center so it can better prepare for the technological revolution, Niinami said.

“It’s a fledgling institution and we don’t know what kind of outcome it will bring, but we will lose competitiveness if we don’t connect with the WEF’s strong global network built through Davos,” said Niinami.

The WEF also announced at the annual conference of the rich and influential that it will create affiliated centers in Japan, India and the United Arab Emirates to create an international network dedicated to maximizing benefits for society while minimizing the downside risks of emerging technologies. In cooperation with host governments and key companies, the affiliates will build on the projects underway in San Francisco.

The center’s projects are focused on nine areas ranging from AI, autonomous vehicles and blockchain technology to cross-border data flows and precision medicine.

Niinami said the government, especially the Ministry of Economy, Trade and Industry, moved quickly to dispatch an official to the center in San Francisco to engage in the center’s project and made the decision to host a sister center in Japan.

“They have a much stronger crisis mentality than Japanese companies (about the revolution). They are agile in trying to understand the latest development in this field,” he said.

As for the beverage industry, Niinami predicts that the fourth industrial revolution will speed up its production process.

“If we utilize AI for example, AI can judge customers’ likes and dislikes, so it will drastically increase productivity in the R&D phase and production process,” he said.

However, innovative technology has potential to create winners and losers, he said, adding that Suntory has already begun offering an education program on the digital economy to employees so they can survive the turbulent revolution.

Niinami argued that China is growing so rapidly that even the U.S. will one day lose to it in such fields as big data, AI and space technology, with Japan lagging far behind the two nations.

Touching on Suntory’s move to make its operation global in recent years, Niinami said the company is not planning any more mergers and acquisitions in the near future.

In 2014, Suntory acquired U.S. bourbon maker Beam Inc. for ¥1.65 trillion to expand beyond its home turf.

“We have just finished the initial three-year phase of integrating Beam. We want to concentrate on improving Beam’s operation by producing better products to further establish our brand,” he said.

He also said Suntory has invited group executives from around the world to Tokyo to teach them its corporate values, such as its founding spirit and the concept of dividing the group’s profit for three purposes — to reinvest into the company’s business, to provide services for its clients and to contribute to society. The concept was advocated by founder Shinjiro Torii.

“Suntory’s value must be understood by the executives. The important thing is that the future leaders of the company are sharing the same vision,” the CEO said.

This year, Niinami hopes to strengthen its brand in emerging markets, such as China, India and Mexico as well as ASEAN countries.

“I haven’t visited emerging markets that often, but I, as the top executive, need to feel the markets myself,” he said.