KONE Sustainability Report 2017

KONE 2017 | SUSTAINABILITY REPORT Driving innovation and improving resource efficiency 17 INNOVATION FOCUS AREAS In the past, KONE’s business has been driven by advances in mechanical engi- neering. Innovation in today’s world is much more. It involves customer-centric- ity, co-creation, partnering, new collabo- rative innovation methods, and new, faster processes enabled by new integrated tech- nologies and connectivity. It also means setting new standards for customer service. At KONE, we have mapped our inno- vation focus areas in line with universal needs for sustainable and smart urban development: affordable, accessible ver- tical housing; safe, reliable, efficient infra- structure; improving living standards and convenience; eco-efficiency and sustaina- bility; growing building intelligence, and well-being and happiness are all trends we take into account. Read more in the table below. Continuous search for new ideas KONE has made systematic, long-term investments into its research and develop- ment (R&D) capabilities. Today we have eight global R&D competence centers which are located in Finland, China, Italy, India, the United States, Mexico, Germany, and the Netherlands, with over 1,100 ded- icated technology professionals working for R&D. Our R&D process is about a continuous search for new ideas and opportunities. Our starting point encompasses a wide variety of sources, the most important ones being our customers, equipment users, and the data we gather from the equipment we service. Over half of KONE’s 55,000 employees are in the field every day serving customers in more than 60 countries. In addition to these daily interactions, we systematically collect customer feedback from the differ- ent phases of the customer relationship. We also make use of opportunities pre- sented by the market such as the demands of ever-higher buildings and their grow- ing populations, as well as ideas generated through our own innovation processes. KONE also gathers and analyzes market and customer trends in different parts of the world. Collaborative approach We take a collaborative approach to innovation. By doing so, and by encour- aging new ideas from outside as well as from inside KONE, we develop new skills, identify existing and new challenges and solutions, as well as pilot and commercial- ize new products and services at a faster pace. We work closely with our custom- ers, partners, universities, and research centers to create value to our customers and end-users. In 2017, KONE organized globally over 400 customer co-creation sessions, 8 hackathons, and a mechathon – a hackathon for mechanical engineers – and sponsored and participated in several hackathons arranged by partners. Throughout the entire R&D process, eco-efficiency, safety and quality are of utmost importance. Highlights from 2017 In 2017, we continued to develop our offering, launching both a number of new solutions as well as enhancements to exist- ing ones. During the first quarter of 2017, KONE launched KONE Care™, a unique elevator maintenance offering designed to meet individual customer needs, and KONE 24/7 Connected Services, which bring more intelligent services to elevators and escalators. KONE Care™, which can be fully customized to meet the individual needs of our customers, brings new levels of flexibil- ity to elevator maintenance. KONE’s 24/7 Connected Services uses the IBM Watson Internet of Things (IoT) Platform to bring new added value to customers and enables elevator data to be monitored and analyzed to improve equipment performance. Both the new KONE Care™ service offering and 24/7 Connected Services were made com- mercially available during 2017 with the roll-out continuing throughout 2018. The next generation of the inclined KONE TravelMaster™ autowalk was launched, providing easy and safe access for environments with demanding people flow needs. In India, KONE launched a small-machine-room, gearless elevator KONE Neo™ for the residential segment. In March 2017, KONE unveiled its renewed high-rise elevator testing facility in Tytyri, Finland. The test lab reaches a depth of 350 meters and hosts the world’s tallest elevator test shaft. During the second quarter of 2017, KONE CombiSpace™, a new full replace- ment elevator solution, was launched for the residential and small-scale commercial segment in Europe and the Middle East. Updates were made to KONE EcoSpace™, an elevator for low-rise residential build- ings, in the EMEA region enabling it to be used as a full replacement solution. In North America, enhancements were made to the KONE MonoSpace® 500 elevator Needs for sustainable and smart living • Providing innovative, affordable vertical housing to facilitate better living for aging populations as well as the changing needs of inhabitants. • Maintaining safe and reliable infrastructure. As populations grow, the design of infrastructure needs to be modernized and made more efficient. • Improving living standards and convenience, especially as the global middle classes increase their income and develop in- creased expectations. • Putting more of a premium on eco-efficiency and sustainability, to reduce energy consumption, manage waste and pollution and use materials smartly. • Smart cities are evolving, buildings and complexes are getting bigger and more complicated; so for instance, heating, cooling and utilities all need to work together. Digital technologies and connectivity can also enable better public services for citizens, better use of resources and increased comfort and reliability. • Finally, addressing the growing value placed on well-being and better living standards, as people increasingly want to live in harmony with their surroundings.