Innovation is the creation of new value. It is not simply technological advancement. Even a breakthrough technology has little meaning if it offers limited value to society and fails to gain widespread adoption. And even when value is created, it will soon be imitated if the technology lacks distinctiveness.

Society faces an accumulation of challenges, including population decline, labor shortages, environmental impact, and the reduction of CO₂ emissions. To create new value, it is essential to dig deeply into the issues that must be solved and to correctly identify the root causes. This requires an approach centered on solving problems, not one centered on technology. Starting from the problem clarifies the technologies that are truly needed.

Komatsu defines corporate value as the total sum of the trust given to us by society and all stakeholders, and we position its maximization as our fundamental management policy. Among all stakeholders, customers are the only ones who play both roles: creating corporate value and evaluating corporate value.

At Komatsu, with the aim of increasing how indispensable we are to customers and continuing to be selected as their partner of choice, we start innovation with customer value creation activities. From there, we grasp customers' current challenges and the ideal state they seek to achieve, then backcast from that ideal and work together to make it a reality.

Innovation, in essence, is the act of creating new value by addressing the challenges that customers and society must solve. It means leveraging our strengths in product development, applying cutting-edge technologies, and combining multiple technologies, to transform customers' operations as a solutions partner.

To drive innovation, five elements are essential: (1) moving beyond an in-house-first mindset by proactively embracing external technologies; (2) global collaboration with startups around the world; (3) developing people who can lead innovation through education in design thinking, AI, and digital transformation (DX); (4) a customer-centric, workplace-focused approach that starts from workplace issues and emphasizes developing products and solutions that reflect the voice of the customer; and (5) generating wide-ranging ideas by promoting diversity, equity, and inclusion (DEI).

Through customer value creation, achieving both the resolution of social issues and the maximization of corporate value is the true essence of innovation that enables sustainable growth.