Professors Mihoko Sakurai of International University of Japan and Jiro Kokuryo of Keio University explore how Panasonic adopted a sustainability strategy for the future through the building of the Fujisawa smart town.
By CoBS Editor Guragam Singh. Related research: Fujisawa Sustainable Smart Town: Panasonic’s Challenge in Building a Sustainable Society, Communications of the Association for Information Systems, Volume 42, 2018. With thanks to Mr Hiroshi Takagi of Keio Business School.
Panasonic was founded in 1918 as Matsushita Electric Housewares Manufacturing Works, a company aimed at creating things of value, starting with electrical fixtures. Over the decades, it stuck to that philosophy as it supplied Japan—and the world—with objects that made everyday life easier and lifestyles more colourful. From bicycle bulbs to mobile phones and TVs, Panasonic had the home covered.
However, rising standards of living came at a cost—that of general environmental degradation and urban population concentration. Added to this was the fact that the industry in general was shifting from goods-based to services-based, and the market size of electrical goods in Japan was shrinking. As such, it became imperative for Panasonic to create a new business area to achieve economic sustainability.
This notion of sustainability has been the subject of much focus and has been further extended towards environmental and social goals, reflected in management and business as the Triple Bottom Line. Aligning itself with this notion, Panasonic had in 2007, announced its ‘Eco Ideas Declaration’, which in its own words is ‘our commitment to the acceleration of environmental management’.
Further, after five decades of operation in the Fujisawa region, in 2008 Panasonic shut three of its factories. And as it chalked out a vision for its business, the local government in Fujisawa wanted the space to be repurposed for education, welfare, and R&D. It also wanted Panasonic to take into account the neighbouring areas as well.
Panasonic established a project team tasked with redesigning the factory site. And after much thought, the company decided to recreate the site as a town where ‘people could live environmentally and socially sustainably with all needed services and facilities at hand’.
This is where Panasonic’s 100-year experience came into use. As a producer of innovative lifestyle solutions, it was suitably positioned to develop an ecosystem that went beyond mere functionality by incorporating practicalities for the present and an evolutionary vision for the future—in this case, the next 100 years.
Bringing energy to life
As such, the project, Fujisawa Sustainable Smart Town (SST)—which began with a collaboration between Panasonic and Fujisawa’s local government—was based on the principles of reducing carbon dioxide emissions, being self-sufficient in energy, and using energy efficiently.
This gave birth to the notion of ‘bringing energy to life’, for energy was considered the basis of healthy living in a peaceful, interactive and secure environment. But all this meant getting a reliable energy source that was able to incorporate the idea of how people perceived living in a town should be.
This was important because the idea of living meant not living a detached lifestyle in a home but as part of the larger fabric of the town, with its detached houses, commercial and apartment complexes catering for around 3,000 people. This involved addressing such issues as eating, working, learning, and connecting in a collective manner and what sort of energy demands these might make.
Cooperation is key
Though the concept of a smart, energy efficient home was not new, it was the first time that Panasonic worked on creating an entire township built along that idea. The project, which had already been delayed to 2011 because of the 2008 financial crises, became more ambitious. As such, unable to handle everything on its own, by 2017 Panasonic had roped in 20 different organisations to help it achieve this.
The alliance was useful for it was based on a set of rules that embodied the original notion of the project, and simultaneously allowed the various companies to add value by bringing something different to the table. For example, parcel delivery was not originally planned to be carried out from a distribution centre, but was done so after a transportation company made a case for the use of electric vehicles that would perform this activity from the centre to each home—thereby decreasing the use of energy and fuel in the town.
Other key areas of focus to ensure that this project became a reality were energy, security, mobility, wellness, and community. All of these were aided by information and communication technology (ICT). For energy, Panasonic simulated household energy consumption and installed solar power systems and lithium-ion batteries to store energy and reduce transmission losses, as well fitting a smart home energy management system (HEMS), providing residents with a report on their energy consumption and helping Panasonic to achieve the goal of zero CO2 emission rates.
The ecosystem had the added advantage of being able to provide residents with a three-day power backup in case of emergencies. Further drawing from the experience of the Great East Japan Earthquake of 2011, the project aimed at securing disaster supply kits so that people could also have access to emergency lifeline supplies over a three-day period.
In addition, Panasonic installed solar panels in the common areas to generate 100,000 kilowatts per hour, and catered for the neighbouring regions’ residents to use to emergency electrical outlets for charging cell phones in times of crises. It also aimed to reduce water usage by 30% compared to 2006.
Mischief, thou can’t be afoot
As regards security, the township includes the perspective of maintaining an open environment while ensuring safety. This means that there are six points of entry, 50 security cameras, and LED street lamps that cover the entryways, parks, public buildings, and major roads.
To top it all, intrusion detectors, fire detectors, and emergency alarms are installed in homes, and a security concierge was appointed to give a human perspective. Residents can also see the photos (using a tablet computer at home) taken by the security cameras in the parks to ensure the safety of their children. This new security service, which ensures security by creating an invisible gate, was dubbed the “virtually gated town”’.
Further, mobility is taken care of as residents have at their disposal the usage of shared electric bikes and cars for the payment of fees. Mobility in the township also includes the delivery services and people have the option to visualise the location of their packages through the TVs installed in their homes.
In order to ensure that the township actually catered to the needs of its residents, people from different age groups met to plan the design of a ‘wellness square’, which includes a special nursing home for the elderly, retirement housing, schools, and medical facilities.
These facilities are not a one-time offering but are planned evolve over a 100-year timeline with, for instance, an ambition to establish an integrated community care system allowing residents to share their health information and various services, such as medical and nursing care, with the pharmacy.
The ‘town portal’, via which people can connect and exchange information and know how to avail services provided is one more example of community-building. Another is that since 2015, people have begun to share skills by starting activity clubs and promoting lifelong learning.
What is also wished for is that people feel a sense of solidarity during emergencies, and to that end Panasonic has created disaster-assistance groups which would help adversely affected residents to return to everyday life.
Access to the network was granted—on a trial basis—to residents of the neighbourhood regions as well. People could then avail of services such as information on store discounts, resource management (lending and borrowing items), and security and crime.
Get busy living
By providing these facilities, Panasonic shifted its approach from product-oriented to service-oriented, for it offered residents services as part and parcel of a new town’s development. And focused on creating an ambiance of familiarity in the township so that residents would be encouraged to become part of the community.
Moreover, Panasonic’s effective information systems strategy, aligned with its goals, played an important role in increasing the impact of the technology it had to offer. The organisation also found a way to administer the collection of service fees, establish grounds for collecting such fees in the case of detached households, and play the role of a gateway regarding the data of the residents, who were still the owners of their data.
As such, Profs. Sakurai and Kokuryo contend that the Fujisawa SST case shows the way toward creating new services that consider economic, environmental, and social sustainability. And allows Panasonic to change the history of sustainable living.
- Link up with Professors Mihoko Sakurai and Jiro Kokuryo via LinkedIn
- Go deeper and download the Panasonic case study on Fujisawa smart town
- Discover Keio University, Japan
- Study and MBA or EMBA at Keio Business School
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