Mitsubishi Electric US, Inc. this week opened a digital transformation (DX) hub in Boston where it will research and develop services that extend its reach beyond the conglomerate’s current diverse portfolio that spans everything from factory automation and defense systems to automotive equipment and semiconductors.

Areas of particular focus will include physical artificial intelligence (AI) and humanoid robotics, says Anthony Vetro, president and CEO at Mitsubishi Electric Research Labs. While there have already been significant advances in both fields, robots today are still not able to function well in unstructured environments, noted Vetro.

Perception, sensitivity and reasoning are all areas where advances still need to be made before robots become truly deployable at scale, he added. “There will be a lot of focus on human-robotic collaboration,” said Vetro.

Mitsubishi will also be researching the guardrails that will need to be put in place to safely deploy AI models to enable that collaboration, he added.

Robotics is a major area of focus in Japan, where labor shortages are expected to increase as the overall size of the population continues to decline. The DX hub will also become the primary venue where Mitsubishi will work with third-party vendors in the U.S., said Vetro. By partnering more, the conglomerate hopes to increase the speed at which innovative technologies are developed, said Vetro.

Historically, Mitsubishi operated as a vertically integrated conglomerate that relied heavily on its own research and development to develop new products, but as it develops digital services that are extensions to those offerings, there is a growing need to rely more on external technology partners, noted Vetro.

There is little doubt that AI is rapidly becoming a major driver of the next wave of digital transformation. In the manufacturing sector, much of that focus is on physical AI that has the potential to dramatically alter industry fundamentals around the globe.

In addition to reducing labor costs, many companies are looking to find ways to move manufacturing closer to the place where their products are actually purchased. That shift would both reduce transportation costs while providing more flexibility to respond to changing economic and political circumstances.

It will be a while yet before those ambitions are fully realized, but it’s clear that as AI advances are made and the cost of building humanoid robots declines, fundamental changes are coming to manufacturing. At the same time, investments in software engineering should enable manufacturers to create new streams of additional revenue from digital services that are embedded within the products they bring to market.

Digital CxOs in this and other industry sectors need to make sure they are at the forefront of AI research and development to ensure their organizations remain competitive. After all, when it comes to AI it may not be so much about what company comes up with the latest innovation first as much as it is making the AI investment today that ensures the organization simply remains relevant tomorrow.