Contributing to Society by Creating Innovative Technologies and Advanced Materials
Message from the CTO:The Passion That Drives Toray R&D
Executive Vice President and Representative Member of the Board, Chief Technology Officer, Toray Industries, Inc.
Toray R&D—Creating New Value and Changing Society
Looking back on the history of Toray’s growth, it is clear that R&D has played a critical role. The innovative technologies and advanced materials Toray has created have made new businesses possible and truly impacted society for the better.
The advanced materials that we create may not be conspicuous—they often go unseen inside automobiles, computers, and other products for end-users. Despite being hidden, Toray materials are an integral support for today’s IT industry. The invention of synthetic polymers gave rise to synthetic fibers; the invention of semiconductors led to transistors and integrated circuits. History shows that the creation of advanced materials leads to new industries, and that this in turn changes people’s lives and entire societies.
Toray got its start in 1926 as a producer of rayon. Made from wood pulp, rayon is the first chemical fiber in human history. The Company was founded as part of the effort to establish domestic rayon production in Japan. This same entrepreneurial and pioneering spirit continues to be part of the very fabric of Toray R&D.
Since those early days, we have gone on to create many innovative technologies and advanced materials. Over the last 90-plus years, Toray has expanded into five business segments: fibers & textiles, performance chemicals (resins, chemicals, film, electronic & information materials), carbon fiber composite materials, environment & engineering, and life science and other businesses. Today, the company turns in a total of more than 2 trillion yen in annual sales in these five business segments.
History of Toray Business Expansion & Technology Development
All Derived from Toray’s Four Core Technologies
At first glance, Toray may seem to be diversifying into a variety of different business segments. The fact, however, is that all of our diverse businesses grew out of the same four core technologies. The innovative technologies and advanced materials derived from these core technologies are utilized in sectors varying from fibers and textiles to life science. Toray’s current business development model is, as you can see, based on these four core technologies.
Sources of Toray’s R&D Strengths
Continuously Planting Seeds of New Value
When managers think only of immediate gains and invest management resources solely in R&D projects designed to bring products to market quickly, operating profits may rise in the short-term, but the company will inevitably run out of seeds to grow future business.
It can take decades from R&D to product launch and then building up a significant market. For example, it took nearly 50 years from the start of research to the establishment of a substantial market for TORAYCATM carbon fiber composite material, one of Toray’s mainstays today. The ROMEMBRATM reverse osmosis membrane for water treatment took about the same amount of time.
This is why it is vital that management resources be allocated properly to the R&D activities needed for the next new product, the product after that, and the one after that. Building a solid R&D pipeline is crucial.
Toray has steadily focused on building a solid pipeline over many years, cultivating a wealth of seeds for future businesses. One after another, as these seeds sprout and grow, we will continue to help solve the issues the world faces, and this, in turn, will ensure that Toray itself continues to grow.
History of Toray Advanced Materials Development
Investing in R&D in both Easy and Difficult Times
Research and technology development are not costs; they are investments. Toray has also faced difficult periods in the past that have shaken its financial footing. Even so, we have consistently increased our R&D investments since the late 1980s, in line with growth. Toray currently employs some 4,000 researchers and engineers with an annual budget of approximately 70 billion yen.
Our approach has been to continuously invest in R&D regardless of economic conditions in the moment. This approach is a foundational principle of Toray management, one which has never changed since the beginning. Since we stick to this approach even amid tough business conditions, nearly all of our researchers and engineers stayed with Toray during the period when the best engineers were leaving Japanese companies for firms in emerging countries. I believe our researchers and engineers stayed thanks to the mutual trust developed over many years. It is the Company’s steady R&D investment that creates new value for the next generation and leads to sustainable growth, and this value has become deeply embedded in the organization through our history of successes.
Meeting the Demands of the Times, Above All
Since its founding, the Toray Group has continuously carried out R&D on advanced materials, based on the firm conviction that R&D is the key to the Toray of tomorrow. Our most important criterion for selecting R&D themes is whether it meets the demands of the times.
Take carbon fiber as an example. Toray began R&D on this material in 1961 when passenger jets had first begun to appear. Having to overcome gravity, airplanes had to be, above all, light and strong. We had a strong conviction early on that light, strong carbon fiber could meet this social demand.
Moreover, when we steered R&D toward water treatment membranes that make desalination possible, the population was projected to grow on a global scale, and demand for food and water would naturally increase dramatically. Fresh water makes up only 2.5% of the earth’s water, and this would not be enough to meet demand. It was clear that demand for technology to desalinate seawater, which accounts for 97.5% of water on earth, would emerge. In the nearly 50 years since, we have persistently pursued R&D, delivering Toray water treatment membranes that have provided water to 420 million people.
The second criterion is whether the technology we develop is inherently competitive and whether that competitiveness will be sustainable over the long term. To that end, it is important to know whether there are substantial barriers such as intellectual property. These are the two criteria Toray uses to select R&D themes that will support future generations.
HighlightToray Recognized as 2017 Top 100 Global Innovator
Toray was selected as one of the 2017 Top 100 Global Innovators by Clarivate Analytics, a global information services company formed in a spin-off of the intellectual property business division of Thomson Reuters). This is the second time that Toray has been chosen for the list, following the first year in 2015.
Clarivate Analytics analyzes trends in intellectual property and recognizes the most innovative companies and institutions in the world. The ranking is based on four axes of evaluation: volume, success (approximately equivalent to the success of applications), globalization, and influence. It primarily looks at data on patents held by companies, reviewing records for more than 50 million patents issued by 50 patent authorities around the world.
The Toray Group was selected for the list in 2017 in recognition of the improved quality of its patents, as well as its efforts to strengthen patents outside Japan.
Top-Level Commitment to Accelerating Global Collaboration
To maximize the new value we create and deliver it around the world, we seek to strengthen and accelerate collaboration with stakeholders across the value chain.
For example, the Toray Group supplies carbon fiber and other innovative technologies to Boeing for its 777 and 787 aircraft. The CTOs from the two companies meet regularly to drive the creation of next-generation aircraft, and this top-level commitment has been accelerating joint efforts from material development to processing for the aircraft.
Another example is the development of TRK-950, a potential new treatment for cancer. We regularly hold top-level talks with leading experts in cancer treatment in Europe and the U.S. The strong support of these experts is helping with the progress of clinical trials.
Undivided Single-Package R&D System
The most salient feature of Toray’s research and technology development is its undivided single-package R&D system. Although generally lumped together as R&D, this system covers a variety of worksites. The Research & Development Division drills the wells of discovery in vast fields. The New Projects Development Division and the Development Center blaze the trail to market. Technical departments belong to the business divisions and the Manufacturing Division. The Engineering Division provides facility support for technology development and formulates the manufacturing system. Thus, rather than positioning those R&D functions entirely within business divisions such as Fibers &Textiles or Films, we centralized them into an undivided, single-package R&D system called the Technology Center, which I oversee as CTO. This system is a feature unique to Toray R&D.
This single-package system has three significant impacts.
An Undivided Single-Package R&D System
Accelerating the Integration of Technologies
The first impact is that such a system makes it extremely easy to integrate technologies. Considerable progress has recently been made in specific fields of research and technology, and it is becoming difficult to produce major innovation using only a single innovative technology. Moving forward, integrating technologies will be increasingly vital to achieving innovation. This is unlike structures that divide R&D by individual business segments, which make it difficult to integrate technologies.
DNA chips, for example, are expected to make early detection of various types of cancer possible by detecting trace amounts of microRNA that each type of cancer cell specifically releases, using only small amounts of blood. We are currently accelerating the development of these chips for practical application. In addition to the biotechnology itself, we integrated nanotechnology. Our nanotechnology made it possible to align the DNA for detection in a structure of fine columns of 100-μm precision and fix it at high density. This allows these chips to detect microRNA with an extremely high degree of sensitivity, 100 times better than conventional chips. It is said that cancer will strike one in two people in Japan. As the populations age in many countries—not only in the developed world, but across the globe—highly sensitive DNA chips hold exceptional promise for early detection. Without technology integration, tools like these would not exist.
Looking to accelerate technology integration even further, Toray is currently constructing its R&D Innovation Center for the Future, scheduled for completion in 2019.
Scheduled for completion in December 2019
Multiplying Business Applications of Each Innovative Technology/Advanced Material
The second benefit of a single-package system is that it makes it possible to multiply the applications of a single innovative technology or advanced material across several businesses.
With businesses in fields ranging from fibers, textiles, and resins to life science, some observers have said Toray is not being selective in concentrating on the businesses it develops. This, however, is not the case. Just as steelmakers and aluminum manufacturers supply iron and aluminum for various products, including airplanes, automobiles, and home appliances, we research and develop basic chemical materials, not final products. For example, we develop innovative polymers for high value-added film. These innovative polymers can, in fact, be used in both fibers and resins. By leveraging our single-package system to apply single innovative technologies or advanced materials across multiple businesses, we seek to maximize the return on our total R&D investment of some 70 billion yen a year.
Cross-Sector Collaboration Delivers Breakthroughs
The third impact of the unique Toray structure is that we achieve breakthroughs to problems encountered in one business segment by using the technologies and expertise cultivated in other business segments. There are many examples of this. Our medical researchers, for instance, have used their technology and expertise in organic synthetic chemistry, a significant fundamental technology in medical research, to resolve issues related to carbon fiber—an entirely different field. In a system organized into separate business divisions, it is impossible for researchers in different fields to solve problems by sharing their knowledge with each other. This is another advantage offered by the single-package R&D system. In order to maximize the strengths that come from different business segments cooperating and collaborating, the Technology Center coordinates between departments to create a framework that accelerates the resolution of key challenges.
3. The DNA of Toray Researchers and Engineers
Intense Tenacity and Pursuit of the Ultimate Limits (The Deeper, The Newer)
The DNA of Toray researchers and engineers can be described with two key phrases: intense tenacity, and the pursuit of ultimate limits (“the deeper, the newer”). “The deeper, the newer” is Kyoshi Takahama’s phrase and refers to the idea that new discoveries come by digging deeply into one specific subject.
For example, active research into carbon fiber began in 1961. The initial goal was to produce carbon fiber to be adopted as structural material for aircraft, but at the time the market for carbon fiber was almost non-existent. We therefore focused tenaciously on honing this technology by working on carbon fiber for fishing rods and golf clubs, while generating cash flow. Quite a bit of the feedback we received from our fishing rod and golf club customers regarding ways to improve the products and enhance performance was harsh. However, we listened carefully to their voices and went back again and again to make improvements. As a result of this intense tenacity, Toray ultimately tripled the strength and flexibility of its carbon fiber. Over this same period, a number of leading chemical companies around the world worked to develop carbon fiber technology, but they abandoning the work and withdrew from the field, one after another.
In 2003, over 40 years since we started this research, the Boeing 787 project began, and our carbon fiber now flies the skies the world over. We have expanded applications to include use in automobiles and currently hold the largest share of the world market.
I believe that the future of carbon fiber composite material is its application in buildings. This material will replace reinforced steel and concrete for use in light but strong skyscrapers. The result will give rise to a variety of possibilities, not only reducing overall cost and environmental impact throughout the entire life cycle from transport of raw materials through construction, but also better safety and less damage to buildings. A myriad of issues must still be resolved before application in this sector can be achieved, but I am certain there is still a great deal of potential for carbon fiber composite materials going forward.
The Inner “Frontier”
The frontier for R&D does not, in fact, lie solely with the cutting edge of science and technology. The fiber industry, for example, is one that dates extremely far back, but digging deeply in the same field, as we did to develop the new HEATTECHTM material, makes possible new innovations that change people’s lives and help make them more comfortable.
- Note: HEATTECHTM is a registered trademark of FAST RETAILING CO., LTD.
An Open and Dynamic Corporate Culture
—Encouraging Curiosity-Driven Research, Rather Than Requiring Permission
The researcher’s mission is to dig the well initially in an expansive field of study. In order to heighten their sensitivity and enhance their originality, researchers need a relaxed environment that leaves them a great deal of discretion.
Toray has long valued curiosity-driven research, allowing about 20% of working hours to be used as the researcher wishes without being required to report to their boss. This framework makes it possible for researchers to conduct whatever preliminary experiments and tests that they come up with, even if the subject is not otherwise adopted as a research topic. The idea behind this is to encourage researchers in their pursuits, rather than require them to get permission for everything they do.
Our work in carbon fiber, in fact, came about thanks to the discretion of a researcher doing this kind of curiosity-driven research, when that person quickly appreciated the value of an original invention by Dr. Akio Shindo of the Government Industrial Research Institute, Osaka (now the National Institute of Advanced Industrial Science and Technology) and initiated serious research. Many of the major products that generate large profits for Toray, such as films for liquid crystal reflector plates and our ultrasuedeTM (artificial suede), were also born of curiosity-driven research.
I have personal experience with this. My curiosity-driven research during my days working on films led to a solution for a problem that had plagued film manufacturers for many years. In order to improve recording properties, film for video tape was required at the time to have a smooth surface. However, making the surface smooth degraded the way in which the tape moved through equipment, and this dilemma between recordability and running performance had been a problem. The technology that solved this issue was thin film multilayer technology (NEST), which emerged from my curiosity-driven research. NEST technology aligns particles on the film’s surface to form fine protrusions by controlling the surface roughness on the order of 10 – 20 nanometers to achieve both recordability and good transport.
What spurred this research was the idea of coming up with a topic in the fuzzy front-end phase (an ambiguous and imprecise world). In order to create a substantial research theme, researchers need a framework that respects their originality in promoting basic and fundamental research.
Organizational Management that Enhances Creativity and Motivates Researchers and Engineers
Although lumped together as R&D, conducting research and conducting development have completely different characteristics. Recognizing this, Toray thinks less in terms of R&D, and more in terms of “research” on the one hand and “development” on the other.
Research aims for a breakthrough that goes from zero to one, or makes something from nothing, while the goal of technology development is to create a product of a target quality within a set time and at a set cost. Toray’s research tradition is to provide organizational management that enhances the creativity of and motivates researchers, while still guiding the research with a clear direction.
Evaluating basic research is, as a rule, a matter of determining points of merit. Fundamental and exploratory research inevitably involves a series of failures. If we used a penalty point system, researchers would not set challenging goals. Toray’s framework allows our researchers to obtain advanced specializations. For example, we honor as Research Fellows those individuals who are opinion leaders in their fields and whose approach to and conduct around research provide excellent modeling for our entire team of researchers. Toray currently has seven such Research Fellows, and they serve as role models for our junior researchers as they engage in constructive competition. In the field of engineering, we also honor engineers who demonstrate specialized leadership as Engineering Fellows (currently two).
We also look closely at the day-to-day conduct of our researchers and engineers and actively commend those who go out of their way to help others with R&D. To keep research and technology development energized, it is critical that corporate executives get into the labs to see up close what is happening. We believe it is important for management to interact regularly with researchers and engineers, so we hold meetings between the president and junior staff members to keep our team motivated and maintain the foundation for continuous innovation.
Achieving intense tenacity requires passing on know-how to the next generation of researchers and engineers. Both innovative ideas and accumulated knowledge and experience are needed to achieve innovations in the field of new materials. It is for this reason that we consciously pair veteran staff members with junior employees.
Focused Entirely on Contributing to Society through the Creation of New Value
These R&D strengths both embody and pervade the Toray corporate philosophy of “contributing to society through the creation of new value with innovative ideas, technologies and products.”
It is only technological innovation that can deliver true solutions to many of the social and economic challenges we face, and without innovation in materials, appealing end products are not be possible.
Toray has a substantial staff of outstanding R&D specialists responsible for developing our next-generation businesses, and we continue to cultivate these researchers and engineers. We are committed to continuing to provide innovative technologies and advanced materials that demonstrate Toray strengths to their fullest and change society for the better.