President and CEO's New Year's Message for 2024

Below we present the “New Year’s message for 2024” delivered by President and CEO Katsuya Nakanishi this morning at Mitsubishi Corporation’s headquarters (Marunouchi, Tokyo).

 

As we enter 2024, I would like to share my New Year’s message with you all.

But first, I would like to extend my deepest condolences to all the victims of the earthquake that struck the Noto Peninsula on New Year's Day and to express my heartfelt sympathy to the many people who were affected by the disaster.

 

Last year, I took as much time as I could to travel in Japan and around the world to see our operations with my own eyes. I talked directly to partners with whom we are jointly developing businesses and received firsthand feedback from employees who are working hard to advance our frontline businesses. We held 27 gatherings, including town hall-style meetings, to facilitate direct interactions, with a total of 718 people participating. Through these lively exchanges, I gained significant insights and inspiration about MC's current situation and our future prospects.

 

As a result of rapid advancements in digital technologies, means of communication are continuing to diversify, but in today’s world of uncertainty, where clear-cut answers are few and far between, I have come to appreciate that there is no better way for us to shape our company’s future and create MC Shared Value (MCSV) than to engage in direct discussions and face-to-face interactions with all of you as professionals who are keenly attuned to developments on our business front lines.

 

This year, we will continue to hold town hall meetings in Japan and around the world, and I hope you will actively seek out opportunities to participate. I would like to make 2024 a year for further strengthening "connections" with all of you and for "connecting" our extensive discussions with efforts to shape MC’s future.

 

I believe that 2024 will be a "year of change,” the kind of year we will one day look back on as a major turning point in our history. There are two reasons for this.

 

The first is change driven by geopolitical risks. US-China tensions, conflicts in Ukraine and the Middle East, and other factors are continuing to create turmoil in regions around the world, and it is becoming increasingly difficult to promote coordinated responses as countries respond by individually staking out their own positions. This dynamic will have a major impact on the tide of globalization, which has been progressing over the past several decades. We can expect to see this trend quicken and increasingly become established as the new norm.

 

It is especially notable that elections will be held this year in more than 70 countries, thereby putting a spotlight on the state of democracy around the globe. The combined population of people living in these countries is more than 4 billion, so with the current global population at around 8 billion, this means that elections encompassing half of the world’s people are scheduled to be held. This string of notable elections will begin with Taiwan in January, followed by others in Indonesia and India, before culminating with the US presidential election in November. As such, we are likely to see an upswing in inward-looking, nationalistic attitudes in various countries and regions around the world. 

 

In this environment, efforts to promote decarbonization may vary by country or region, despite the need to address this global issue through coordinated action. Roadmaps toward achieving global goals may become increasingly uncertain as major countries respond to tough challenges by “vying to attract industries” and otherwise pursuing their individual priorities. Meanwhile, emerging economies, such as the Global South, will be reassessing their positions as they see their presences in the international community continue to grow. In light of such factors, I believe this will be a year of major changes in the world's geopolitical balance, resulting in further multi-polarization and fragmentation.

 

On top of the political, economical and geopolitical risks, the second is the transformation brought about by technological advancements, particularly the evolution of generative AI, which could cause major tectonic shifts in the global order.

 

Today, brilliant minds all around the globe are engaged in a race to further the development of AI. Regulations regarding AI’s development are being discussed internationally, but the momentum of AI’s evolution is unstoppable, and the possible outbreak of disputes over AI cannot be ruled out. While AI’s evolution will make our daily lives more convenient and our businesses more efficient, its effects will be much more far-reaching. AI will have a sizable impact on all layers of society, from the political and economic systems of nations to people's ways of thinking and their values. It is no exaggeration to say that those who control AI will gain the upper hand in shaping our future.

 

I have described two key factors in our operating environment, namely “increasing geopolitical uncertainty” and “power struggles over technological advancements.” I believe that these trends are poised to become pivotal factors and turning points for the future.

 

Meanwhile, what is Japan's current situation when viewed in this context?

 

With the restarting of nuclear power plants making limited headway, Japan must rely heavily on imports in the energy sector. In digital- and data-related sectors, the market is increasingly being monopolized by digital platform operators, with US-based “GAFAM” tech giants playing a central role, resulting in increasing our trade deficits. The country’s international competitiveness and industrial presence are continuing to wane.　Meanwhile, even in the ASEAN region, where Japanese companies have established strong presences in the automotive sector and other industries, competitors from China and other countries are stepping up efforts to expand into these markets. As a result, this industrial base, which has been generating economic benefits for Japan, is now facing an unprecedented threat.

 

In light of these circumstances, the Japanese government is spearheading efforts to create and attract new industries domestically by restructuring supply chains, developing new technologies and supporting start-up companies. The next few years will clearly be a critical time for Japan to reassert its presence by elevating its technological capabilities and restoring its industrial competitiveness.

 

I would like to see MC, as a Japanese company, continue to be engaged in efforts to revitalize Japan through cooperations between public and private sectors. At the same time, I am keenly aware that it is my responsibility as President and CEO to maintain a bird’s eye view and to flexibly make swift decisions about the direction of the company while considering a range of factors, such as macro/micro geopolitics, global trends/developments, and decoupling/shifting balances of power, as well as the impacts of AI on humanity.

 

 

In this ever-changing business environment I have just described, I would like to encourage all of you to actively take on the challenges before you without being intimated by the environment or the difficulties its presents. To put it another way, I would like us all to remember that “change brings opportunities.”

 

In FY2022, the first year of Midterm Corporate Strategy 2024, we were able to achieve record profits. In FY2023, the second year of the strategy, we are expecting to reach a level of profits that is second only to the previous year’s results. These achievements are the product of your hard work and I would like to take this opportunity to express my sincere gratitude to each and every one of you.

 

However, now is the time for us to take a fresh look at each of our businesses, to determine what steps we need to take in the future, and to press ahead to put them into action. The implementation of the Value-Added Cyclical Growth Model set forth in Midterm Corporate Strategy 2024 has taken root and become a “cyclical” mechanism for us. As such, I feel we are making good progress with respect to bolstering our “defensive” measures. This year, by fully drawing on the strengths of MC’s diversity and collective capabilities, I would like to see us step up our “offensive” efforts with a focus on harnessing growth.

 

In the coming years, we will increasingly face a business environment of open innovation and unlimited possibilities spanning business domains. In order to respond to such changes in the business environment, we announced the reorganization of our Business Groups at the end of last year.

 

The foundation and fundamental premise for realizing growth comes down to the  individual strength of each and every business, so we must start with businesses that are independently solid. Then, through “new integration” of independently-strong businesses, I am confident we can create additional value that is unique to MC and unmatched by others. Indeed, this is the inspiration behind MCSV as presented in Midterm Corporate Strategy 2024.

 

A review of our regional framework was also undertaken as part of the reorganization. The modifications are intended to strengthen our global intelligence functions and to enhance our ability to respond to the ever-quickening pace of change in the external business environment. They are also designed to facilitate efforts to capture global growth and support the creation of regionally-driven MCSV.

 

With these objectives in mind, I would like to encourage all of you working on our front lines to build strong ties of trust with customers and partners in your respective industries, and to keep an eye out for hints and minor changes that can be gleaned from conversations and developments in the field. In order to stay "a half a step or even one step ahead" of the times, we must have a keen eye for market trends and the foresight to link them to our businesses. After bringing the insights you gain back to the company and thoroughly discussing them with your superiors and colleagues, I would like to urge you all to have the courage to take on the challenge of developing new businesses and to never give up until the very end.

 

As individuals across our organization increasingly embrace a feeling of urgency, a sense of ownership and a proactive outlook, I am confident that we can seize opportunities amid this era of great change, thereby fostering new pillars of growth and “connecting” them in ways that support MC’s future.

 

Now, I would like to take this opportunity to reiterate the importance of compliance.

 

In my New Year's message last year, I delivered a message of getting “back to basics.” Here, I would like to underscore MC’s corporate philosophy, the Three Corporate Principles. No matter how society or our operating environment may change, or how our businesses may evolve, the spirit of the Three Corporate Principles, “Integrity and Fairness” (Shoji Komei) in particular must always be rigorously maintained. I call upon everyone in our ranks, employees and executives alike, to reaffirm the importance of compliance and take it to heart once again.

 

Finally, according to the Chinese zodiac, 2024 is the “Year of the Wood Dragon,” which is said to be a good year "to succeed in starting something new" or "to give shape to something you have been preparing to do.” Therefore, it is an appropriate time for us to embark under a new organization.

 

I would like to conclude my New Year's greetings by wishing you all a healthy and fulfilling year. Let us all come together to harness change and make this a year to pioneer the future.