Innovation and Co-creation Mind Open up the Future of the Manufacturing Industry

YDC Corporation President/CEO Takashi Tanaka and Yokogawa Future Co-creation Initiative Project Leader Nobuyuki Tamaki have known each other for over a decade. Tanaka promoted business transformation for Yokogawa during the days when YDC was a Yokogawa group company. While the pair did not work together, they hit it off when introduced, as they were both looking to the future of Japan, aiming to create value, and passionate about developing the next generation of leaders.

Tanaka is currently a Future Co-creation partner and active member of the Green Phoenix Project (GPP), a shared industry-government-academia learning community.

We asked Tanaka and Mika Takaki (YDC Business Producer), who joined the GPP in 2024, to share their candid thoughts on the value and appeal of the Future Co-creation Initiative. 

*Insights shared in this dialogue are personal and not those of an official YDC representative.
*Affiliations and positions are current as of December 2024.

 

Japan’s manufacturing sustains its economy

As a company specializing in IT consulting for manufacturing/logistics, YDC has cultivated deep relationships within the Japanese manufacturing industry. Shortly after assuming the presidency in 2022, Tanaka boldly shifted YDC’s corporate purpose to one of “realizing a sustainable society through co-creation with Japan’s manufacturing industry.” “Co-creation” is such an essential value for Tanaka that he included the term in official corporate goals. We sought to discover why this corporate leader harbors such strong feelings about Japan’s manufacturing industry.

“Japan’s manufacturing sector produces about 80% of its exports—valued at 100 trillion yen—thus significantly impacting Japan’s economy. The profit margin, however, languishes in single digits, with Japan’s trade deficit remaining unresolved. Japan’s industry and economy cannot improve until the industry is transformed to boost added value,” Tanaka explains with a sense of urgency.

“The manufacturing industry is critically poised to earn foreign currency, supporting Japan’s economy. However, it has prioritized continuity at the expense of proactive reforms. It is my mission to enhance added value through industry transformation.”

 

A bold shift   from “KAIZEN, continuous improvement” to “transformation”

As expansion of Japan’s manufacturing industry is being challenged, Tanaka cites resistance to change—a characteristic particularly true of the Japanese—as a major obstacle.

“The Japanese are good at KAIZEN, continuous improvement but not at making major changes. KAIZEN may qualify as change, but major change does not equal transformation, something that 80% of Japanese people strongly oppose.” 

It is always the minority that incites intracompany transformation. While most individuals are not interested in changing their work, understanding the significance of change is key to exacting real transformation.

Tanaka launched his career with the international IT firm Hewlett Packard (now Hewlett Packard Enterprise), which taught him that “the growth curve is a discontinuous S-curve.”

This means that growth proceeds slowly, and obstacles abound in the formative stage of a new venture, with the growth curve speeding up as skills are gradually acquired. However, as repetition leads to a drop in growth speed, one should embark upon a new S-curve to enable continued growth.

“At HP, I learned the philosophy that only those who continue to adapt to change prevail, a concept which is now part of my DNA. Neither companies nor individuals should stick to their own way of doing things; ongoing adaptation is key to continued growth,” Tanaka commented.

 

Co-creation communities spur mindset change in young people

Addressing the value of participation in the Future Co-creation Initiative and the GPP, Tanaka lists three key factors required for growth: opportunity, education, and mindset.

“I used to believe that growth was enabled by opportunity and education, but then I discovered that mindset is the key factor, and I added it into the formula. In the workplace, one teaches employees the fundamentals and assigns them to projects. That accounts for opportunity and education. However, the growth curve differs depending on the individual’s mindset—an important element and one that is fostered by the Future Co-creation Initiative.”

“An additional and significant value is that members of differing enterprises engage in the nonprofit co-creation community, which, moreover, is led by young people. It is wonderful that this sort of growth opportunity is being extended to them.”

Tanaka also addresses the importance of long-term, future-oriented thinking. “Work becomes tiresome if you only see things in the short term. With a long-term view, thinking ahead allows you to consider your own future and dreams, heightening motivation. It is important to train yourself to keep the future in mind while you’re young, thinking 10 or 20 years ahead.”

Yokogawa’s Future Co-creation Initiative plays an important role in affording young people the opportunity for growth and mindset cultivation.

 

Global corporate managers are long-term thinking

Takaki, who has promoted business as a field leader for multiple companies, thinks it is a great idea to “hold two jobs”—working on your main job while participating in a future-oriented project. It allows a balance between the “present” and the “future.” 

Tanaka worries that R&D members may stay focused on the future too much and lose their sense of reality.

Presidents of listed companies have an average tenure of 4 to 5 years in Japan but 13 years in the U.S. Tanaka interprets the significance of this brevity.

“Some say that Western companies are focused on the short term, but that is in terms of results. Top executives focus on the mid- to long term; managers who are committed to long-term growth proactively invest in the future. The Japanese, meanwhile, typically draft plans based on prior sales and past depreciation.”

“In fact, one should count backward from the extreme long term to the present when formulating a plan.”

 

Management’s top priority: accelerating employee engagement

Tanaka continues. “It is imperative for companies to envision and verbalize a positive future to attract young people to the manufacturing industry going forward.”

“Manufacturing suffers a poor image as a 3D industry (“difficult, dirty, and dangerous”), offering few opportunities and little change. No wonder few young people sign on. Companies should find wide-ranging opportunities and let the world know that they grapple with the planet’s future and that the future is led by young people. This leads to the hope that such firms exist within the manufacturing industry,” Tanaka says with conviction.

“This will encourage the younger generation to assume leadership, envision the future, and become more engaged in company goals. This is imperative for management because if younger people become more engaged, they will be more likely to shoulder future leadership.”

The Future Co-creation Initiative inspires the younger generation to take the lead with a long-term view. This is pivotal in creating a more appealing manufacturing industry for the future.

A shared learning community for management and the next generation

Takaki reflects that when she joined the GPP, she was initially overwhelmed by its high level of dialogue. She had participated in a Stanford University-sponsored program after arriving in the U.S. to work in Silicon Valley; however, even with that experience, she was astonished to witness the discussion of future scenarios. 

“I realized I still had much to learn. The experience demonstrated the importance of discussion with individuals offering diverse perspectives and allowed me to see the world differently. The GPP is truly diverse; though backgrounds, ages, and companies all differ, these individuals discuss a single topic, enabling many discoveries. People at the management level also participate, but I learn more from younger participants.”

Membership diversity and the opportunity to learn motivate Takaki’s ongoing participation in the GPP. She addresses the value inherent in these encounters. “The connections I have made with individuals and companies have given me a leg up. That has been invaluable and a great weapon. I have enjoyed discussions and exchanged business cards with over 100 people this year, including GPP participants and those I met through Tamaki-san. Some individuals represent fields I had never encountered before.”

Tanaka adds his thoughts. “GPP co-founder Yuko Kawamoto (President of Japan’s National Personnel Authority) told me that ‘once you hit 40, you should learn from younger people,’ and I agree. You cannot make wise decisions about the future unless you understand the thoughts and ideas of younger people.”

Left to right: Keisuke Takahata (Yokogawa), Mika Takaki (YDC), Nobuyuki Tamaki (Yokogawa), Takashi Tanaka (YDC), Kaori Shimizu (Yokogawa)

Most executives wish to help the next generation. Tanaka and Takaki describe such individuals as “givers” and recognize the value they bring.

“In a give-and-take relationship, the taker does not fail in their mission, but they do not achieve tremendous success either. The giver, meanwhile, also receives from others. This suggests the importance of the giver’s spirit in achieving great success,” explains Tanaka.

Tanaka and Takaki agree that most GPP participants exhibit the spirit of a giver. On the other hand, both feel they receive much from younger participants. Encounters with differing generations present opportunities to experience diverse values.

Personal horizons are broadened through conversations about the future with a variety of individuals in the Future Co-creation Initiative and the GPP. These layers of dialogues lead to individual and corporate growth and, by extension, growth for Japan and the world.