Advancing Innovation Management

Enhancing the R&D Structure

We are committed to improving our innovation management, driven by our belief that the development of core technologies lays the groundwork for sustainable business and competitiveness. This commitment aligns with our values of “Transcend” and “Augment,” guiding us towards their realization.
From 2019 to 2020, Honda’s research subsidiary, Honda R&D Co., Ltd., transferred its product development functions in the motorcycle, automobile and power products businesses to Honda Motor Co., Ltd. This strategic move allowed for a more focused approach to fundamental technology research, aimed at long-term value creation. To further enhance the realm of mobility, Honda R&D is allocating additional resources to areas such as advanced technology research, power unit exploration and materials investigation. The company has also identified several technology domains warranting deeper exploration, including new mobility, robotics, next-generation energy, including hydrogen utilization), batteries, intelligence technologies/AI and sustainable materials. Leading experts in these domains are spearheading Honda’s technological development, with the goal of creating innovative value.
Furthermore, the Honda Research Institute, a subsidiary of Honda R&D, has established facilities in Japan, the U.S. and Europe to delve into computer science and other cutting-edge advanced technologies. The Institute collaborates in joint research initiatives with diverse institutions worldwide, aiming to synthesize and leverage knowledge on a global scale.
WWithin this framework, Honda is applying novel technologies developed in each technology domain to create captivating next-generation mobility solutions capable of delivering unprecedented value across various fields including sea, in the air and in space. Specifically, ongoing projects encompass the Honda eVTOL, the Honda Avatar Robot and ventures in space exploration. Drawing upon Honda’s core technologies—spanning combustion, electrification, control and robotics—we are poised to realize “the delight of expanding the horizons of human potential.”
Furthermore, in order to ensure that the novel technologies and next-generation mobility resulting from ongoing research contribute meaningful value to society, it is imperative to evaluate the feasibility of our businesses and products. With this objective in mind, we have instituted a “Technological Strategy Meeting” comprising both management members and technical experts. This forum serves to foster seamless coordination between our technological and corporate strategies, consequently establishing a framework for the efficient conversion of developed technologies into value.

Allocation of Resources to Fundamental Research

Fundamental research is a continuous process of trial and error that demands unwavering effort. It requires substantial time and extensive resources before these efforts manifest as products ready for introduction to the world. Nevertheless, Honda has consistently embraced the ethos of “trying first” and has persistently pursued fundamental research. This approach has yielded captivating products like the HondaJet and the humanoid robot ASIMO, which have astounded and delighted people globally. Throughout different eras, Honda’s driving force has consistently been the “pursuit of new technologies.” The new value stemming from this pursuit shapes the forthcoming generation of Honda products. Committed to perpetual advancement, we engage in fundamental research every day.
To bolster this approach, we have allocated 5,000 personnel to Honda R&D and secured a stable annual research budget of 100 billion yen for fundamental research. While this constitutes a substantial investment even on a company-wide scale, it is through such determined resource allocation that we lay the foundation for creating new value. This dedicated allocation of resources is intended not only to support the development of carbon-neutral technologies related to the “five key factors,” including hydrogen utilization and sustainable materials, but also to nurture various elemental technologies that will underpin “the joy and freedom of mobility.” Therefore, in addition to advancing carbon-neutral technologies, we will steadily advance the accumulation of technologies to create novel value. We will persist in proactive resource investment to maintain a high level of competitiveness in advanced technologies and to establish a sustainable bedrock for our business.

Enhancing Technological Development via Open Innovation

To uncover a diverse range of promising new technological concepts from across the globe and nurture them into solutions with broad societal impact, Honda vigorously champions open innovation with startups in conjunction with its proprietary core technology research.
Globally, Honda has expanded its “Honda Xcelerator” program to engage with startups. The initiative operates in countries like Japan, the U.S., Israel and some countries in Europe. Building upon this initiative, Honda has introduced the “Honda Xcelerator Ventures” program to enhance its involvement with startups by incorporating investment capabilities. This program aims to fortify our ability to actively foster business partnerships and investments with promising startups, supported by an annual budget of approximately 10 billion yen. We have already initiated investments in startups concentrating on cutting-edge technologies such as AI, synthetic fuels, battery recycling and nuclear fusion power generation.
Moreover, in 2023 April, Honda established, Honda Innovations Co., Ltd., in Japan to take on responsibilities for its global corporate venture initiatives. Aligned with Honda’s overarching corporate strategy, we have established a corporate structure that enables us to promptly invest in and collaborate with startups possessing innovative technologies and ideas.
Looking ahead, Honda will persist in actively promoting startup investments and collaborating with business partners to expand the community of individuals who share Honda’s vision of “becoming the “power” that supports people around the world who are trying to do things based on their own initiative.” Through these endeavors, we endeavor to harness the potential of the myriad ideas rooted in “dreams,” ultimately striving to materialize groundbreaking and captivating value creation.

IGNITION: A Novel Business Incubation Program Bringing Shape to Associates’ Ideas and Aspiration

“IGNITION” stands as a Honda endeavor aimed at birthing fresh businesses. It operates as an internal solicitation program that empowers Honda associates to harness their inventive concepts and undertake the exciting pursuit of launching new ventures. The program took root at Honda R&D in 2017 and, as of 2021, has grown to encompass the entire organization. Presently, all associates have the opportunity to embark on the journey of transforming their notions into tangible forms of new value.
IGNITION operates in collaboration with venture capital firms. During the evaluation process, proposals undergo rigorous scrutiny, with the proponents receiving guidance from an investor’s standpoint. An internal task force also provides support to associates, aiding them in enhancing the feasibility of their proposals. The first two business ventures that emerged from IGNITION, namely Ashirase, Inc. and Striemo, Inc., were established in April and August of 2021, respectively, following a meticulous assessment procedure. Subsequently, SmaChari was introduced in March 2023 as an internal business venture.
The core aim of IGNITION is to nurture distinctive concepts from a diverse pool of human resources, allowing Honda to swiftly address societal challenges and forge novel value for the global community. By further propelling this initiative and connecting innumerable unique ideas with the exigencies of society, we aspire to deliver an even wider array of value to a broader spectrum of customers.

SmaChari

Value Creation through Intellectual Property: An Investment in the Future

Intellectual property stands as particularly crucial resources that play a pivotal role in augmenting corporate value and pave the way for future advancements, spanning 5 to 10 years ahead. Honda’s strategic vision revolves around leveraging intellectual assets as a potent tool to underpin a sustainable future and propel business expansion. In its current phase, characterized as the “second founding,” Honda aspires to evolve into an enterprise capable of forging new growth trajectories and fostering innovative value creation. To propel this transformative journey, we have chosen five key factors as our focus areas.
Honda has established KPIs to achieve competitiveness in these focused technologies, and is executing a value creation process that incorporates analysis using intellectual property information (Intellectual Property Landscape, IPL).
Furthermore, aiming to accelerate the alignment between technological strategy and intellectual property strategy in the formulation and execution of corporate strategy, the Intellectual Property division was placed under the Corporate Strategy Operations starting from April 2023. We are strengthening the strategic role of the intellectual property department, including its participation in the Technological Strategy Meeting, which formulates medium- to long-term technological strategies.

Strategic Utilization of the IPL

For enhancing competitiveness in the focus areas, we have identified priority technology areas in addition to five key factors. Honda adopts an approach of advancing the targeted technology creation, through a comparative analysis of technological advantages using IPL.

IPL Categories

There are two categories within the IPL framework. First, the development proposal category involves a meticulous exploration of untapped technological realms. This encompasses the identification of burgeoning or nascent technologies, an appraisal of their future potential and competitiveness, and the formulation of development and business proposals. Should these proposals demonstrate value, they are integrated into our corporate and technological strategies.
Second, we have the competitive analysis category of IPL. This variant serves three fundamental purposes: (1) discerning a company’s current competitiveness, (2) pinpointing essential foundational technologies to enhance competitiveness and (3) unveiling the requisite technological and IP strategies to sustain and fortify competitiveness for future.

IPL-Driven Strategy Update Cycle

We will update our corporate and technological strategies through these two types of IPL, enhancing the precision of our strategies and strengthening our competitive advantage.

STEP 1 IPL

Through the IPL, we visualize both Honda’s current technological competitiveness and the desired state, enabling the establishment of necessary KPIs to attain the targeted level of competitiveness.

STEP 2 R&D (IP Creation)

As R&D progresses, intellectual property is generated as a result, bringing us closer to the envisioned outcomes.

STEP 3 IPL (Variance Analysis)

In this phase of the IPL, we scrutinize the progress in both our own and our competitors’ technological advancements. This assessment guides the monitoring of KPI attainment, a pivotal step in augmenting our technological supremacy. Insights gained from the assessment, along with required measures, are assimilated into our corporate and technological strategies. These measures may encompass development proposals.

STEP 4 Update of Corporate and Technological strategies

Guided by IPL insights, our corporate and technological strategies are revised, fostering the technological development that heightens strategy precision and elevates competitiveness. This iterative cycle begets additional intellectual property, translating into future value creation.

As described above, the strategy update cycle utilizing IPL has become a crucial process for Honda to continuously create corporate value and maintain competitive advantage. Starting with these five key factors, Honda is applying them to strengthened technological areas, setting the creation of competitive intellectual assets as a KPI and engaging in the pursuit of new value creation.

Honda’s Hydrogen Ecosystem

Among the five key factors that Honda focuses on, regarding the carbon neutrality of power units, in addition to the battery-related efforts mentioned in the “Electrification Business Strategy” (➡p.15), Honda is strengthening its efforts towards commercialization by positioning “hydrogen,” which is anticipated as a clean energy source, as the next-generation energy.
Honda’s engagement in hydrogen technology and fuel cell vehicles, predating its competitors by a significant margin since the late 1990s. Commencing with the R&D of fuel cells, which convert hydrogen and oxygen into electricity, we have progressively enhanced performance while systematically addressing usability challenges. This includes refining fuel cell dimensions, reducing costs and enhancing durability. The ensuing iteration of fuel cell technology, developed in collaboration with GM since 2013, will be integrated into the forthcoming generation of FCVs. Our intent is to expand the reach of this core technology—our next-generation fuel cell system—not solely to our FCVs but also across an array of domains, encompassing commercial vehicles, stationary power sources, construction machinery and diverse industrial equipment. We will aim to build a hydrogen ecosystem.
Collaboration and cooperation with entities constituting the hydrogen value chain, spanning supply facets, stand as imperative in the establishment of a comprehensive hydrogen ecosystem. Our engagement entails fostering partnerships with companies pivotal to the hydrogen station network’s expansion. Notably, our involvement with the Japan Hydrogen Station Network underscores our dedication to this pursuit. Moreover, we collaborate with industry players such as Shell and FirstElement Fuel, actively engaged in the hydrogen station domain in North America. Supplementary to these endeavors, we have embarked on exploratory research into the potential applications of hydrogen technology in the aerospace sector, marking yet another prospective avenue. Through these series of initiatives, we will contribute to the realization of a carbon-neutral society by promoting the development of a comprehensive hydrogen ecosystem across the entire community.