The Traffic Counter System collects traffic volume data by utilizing the sensor and wireless communication technologies cultivated by Murata Manufacturing Co., Ltd. (hereinafter, “Murata”) thus far. We are utilizing this system to develop a business that sells data through alliances with local startups, primarily in Southeast Asia. The role of B2B alliances is becoming increasingly important when transitioning from the conventional business model of manufacturing and selling electronic components to providing a data-selling service. On this occasion, we spoke with Mr. Tsumori of Murata, who operates the Traffic Counter System, about our alliances with startups. We also spoke with Haruno Subiyanto, a representative of Agrisinar Global Indonesia, a local partner with whom we have formed an alliance to develop our business in Jakarta, Indonesia.
The success of an alliance depends on whether you can truly trust each other
--Please tell us why Murata started pursuing B2B alliances using the Traffic Counter System.
Tsumori: This effort started because, while working on new projects, we felt that we wanted to begin an initiative to collaborate with companies and individuals to utilize external expertise and unique technologies. Also, back when I was in Silicon Valley, I personally witnessed how initiatives related to accelerators really began to pick up steam. They didn’t just provide funds, but supported startups in a variety of ways. For example, they provide offices free of charge when you’re starting up, and they also help with the creation of human networks and so on. This trend was completely different from the old method in which large companies would simply buy out corporations or businesses. I learned that there are various ways to offer support that are tailored to the company in question, and I wanted to provide support that goes one step further by including external companies in the new projects in which I’m involved. Also, rather than providing unilateral support, we discovered the potential of growing businesses together. Instead of relying entirely on your own resources, it’s possible that forming optimal alliances can lead to more efficient results than going it alone.
--What are the key points when it comes to B2B alliances?
Tsumori: I think of alliances as discovering what each one of you values. However, the culture, scale, and structure of companies differ, and there also are often significant differences in terms of what is considered common sense. In such situations, the first thing to do is to recognize these differences in conceptions of common sense while intimately understanding each other’s position. I also think that working together on the conditions that are truly necessary for advancing the partnership will lead to the formation of a strong alliance. And when it comes to making the final decision about whether or not to form an alliance, we focus on whether or not we can truly build a relationship based on trust. If you don’t have trust, you’ll be suspicious of each other when you find yourselves in a difficult situation. It is challenging to make a business succeed with that kind of relationship.
Partnering with locals generates local benefits.
--How did Traffic Counter launch its business in Southeast Asia? Please also tell us about the B2B alliance between Murata and the local company Agrisinar Global Indonesia in Jakarta.
Tsumori: Actually, the Traffic Counter System was originally conceived of as a system for Europe and America. However, many expressed the opinion that Southeast Asia, which has many issues related to transportation and the environment, might provide opportunities for more effective data utilization. So Therefore, in autumn 2014, we began a trial run in Bangkok, (Thailand). We started by looking for a partner company, forming an alliance, and conducting joint demonstration experiments and marketing together. Starting in 2016, we began concurrent activities in Indonesia, devised a business model based on these activities, and are currently in the process of implementing the business model. Mr. Haruno, the representative of Agrisinar Global Indonesia visiting us today, has formed an alliance as our local partner in Jakarta and is working together with us.
--What kind of alliance did you have with Murata?
Haruno: It was impressive how they always paid attention to Jakarta’s local needs from the initial stages of the demonstration experiments and marketing in Jakarta. Also, when we were forming our strategy, they were able to respond to our various requests in a flexible manner. I believe that they sometimes took risks before we did and laid the groundwork so that we could easily take on challenges. Because Murata is a large company that can demonstrate patience, so to speak, this enables us to take on challenges. I think that collaborations formed on this kind of trust-based relationship will greatly contribute to business results.
--In what ways are you currently collaborating?
Haruno: In January 2020, we began full-scale implementation of the Traffic Counter System. The traffic data collected by Murata’s traffic counters, which we install and operate, is stored on servers, and the data required by the Jakarta government and outdoor advertising companies is provided in a user-friendly manner.
The data is used by the Jakarta government’s infrastructure planning and traffic management divisions to improve traffic infrastructure and control traffic volume, as well as by outdoor advertising companies to measure the number of people who view outdoor ads.
Tsumori: Currently, we are advancing projects in Thailand and Malaysia in addition to Indonesia. Although they are all neighboring countries located in Southeast Asia, they have different tax systems, government structures and laws, religions, and cultures. Therefore, it is very important to analyze and validate the data for each country or region. I think that building a supply chain of information tailored to each region, rather than simply providing the system, will lead to delivering something that benefits the locals.
Operations through alliances are the key to successful businesses
--What impressions do you have of your efforts in Thailand and Indonesia?
Tsumori: What’s important is that locals use the information they need to operate locally. The Traffic Counter System did not necessarily have a solid business plan from the beginning. We needed to adapt the business plan flexibly according to local needs and the environment. Even within the same region of Southeast Asia, there are many cases where the traffic counter system cannot be easily adapted to local sites. That’s why we work with our local partners to accurately understand the needs at the local level and conform to new ideas as required. It seemed that operating through an alliance was the key to the success of our business.
Haruno: I completely agree. Traffic congestion is a serious social issue in Jakarta. The data collected by the traffic counters was unprecedented and of high quality. But there were a number of hurdles to clear before the government could decide to use this data and make it more useful. I think these hurdles would have been difficult to overcome without an alliance between Murata, with its advanced technology and expertise, and us, a Jakarta-based company.
Today, the Jakarta government is using traffic counter data for policies such as controlling the traffic density of public transportation and controlling the number of people commuting. It has also proven useful for studying measures to curb the spread of COVID-19. *1
*1 This interview was conducted in January 2021.
Tsumori: How companies behave during the COVID-19 pandemic is an issue that must be confronted all over the world. The Jakarta state government is considering measures on a daily basis, such as restrictions on going outside, based on not only the traffic volume data we provide, but also the volume of medical equipment supplies and medical system data. If we consider not only our own business, but also what our local partners and the government of Indonesia need, we can think about the future of Indonesia together. I want to collaborate so that they can have a better future.
New B2B alliances born from data
--How do you view the future of this system?
Tsumori: First of all, the fact that an electronic component manufacturer like Murata is involved in this business gives me hope. What the actual partnership taught us is that the device knowledge we have built up in the electronic component business is extremely effective. These systems are generally developed by system integrators, and the development of data acquisition devices and built-in sensors is outsourced to another company. In such cases, system integrators specialize in system development, so determining the accuracy of the acquired data requires considerable discussions with the device development company. But we can quickly tell if the data we receive is accurate. We also know how to improve our devices if there are issues with the data. I think that being familiar with devices is one of Murata’s strengths. We believe that we can propose effective ways to utilize data by taking advantage of this strength.
Therefore, we feel that if the type and quality of the data provided matches the needs of the market, more promising businesses will be born. If data suitable for local needs can be utilized while we devise solutions with companies that understand the local region, this will surely create a system that can adapt to all kinds of social changes.
Haruno: Exactly. For example, you can apply data to urban planning for a tourist destination. If things go according to plan, I think we can expand into other industries such as shared mobility, with an eye toward mutual benefits. With that in mind, our alliance with Murata may be just the beginning. It would be wonderful if we could collaborate with other Murata divisions in the future.
--Please share your vision for how alliances with overseas companies will be developed in the future.
Tsumori: In areas where a basic data service system is already in place, we would like to work with our local partners to develop methods for analyzing traffic information and obtaining and utilizing outdoor data not related to traffic information. One example is a solution (patent pending) that generates data on traffic volume and vehicle type for each time zone when considering where to place billboard advertisements. Moreover, by taking advantage of our experience and achievements in Asia, we have begun tackling the needs of the city of Copenhagen, (Denmark), where we want to ascertain and control bicycle traffic conditions in real time. We would like to create new value by forming alliances with local partners in Europe and the United States.
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