Dr. Max Lemke

Referatsleiter Generaldirektion CONNECT – A3 European Commission

Digitalisierung der europäischen Wirtschaft

Studiengesellschaft für Mittelstandsfragen

München , 28. November 2015

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Wirtschaft 4.0 Der programmierte Strukturbruch? – Verhindern, erdulden, gestalten? Antwort: Verhindern: Unmoeglich Erdulden: = verlieren Gestalten: Digitalisierung als Chance

Outline

• Digital innovations: What is at stake?

• Where does Europe stand?

• What are we doing about it?

• Concluding remarks

Value creation from digitisation: Products, Processes and Business models

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"Digital inside": Innovations in all types of products

• Smart connected objects powered by e.g.

Sensors, wearables, embedded software, Connectivity, Big data, Cloud …

• Large opportunities in all sectors (Non-tech, high-tech, SMEs, etc)

Digital transformations of processes

• From logistics and product design to automations

Increasing resource efficiency, productivity, ..

Built on CPS, IoT, digital design, robotics, laser technologies, big data,..

Radical/disruptive changes in business models

• Blurring the boundaries (products-services), reshuffling value chains

XaaS, 3D Printing & customisation, CRMs, maintenance

added value services

Built on real time information, data analytics, etc.

Products Services

ICT sector

Products Services

ICT sector

The trend

Electronic Components

ICTdevices

~40% of Added Value

~50% of Added value

~40% of Added Value

~35% of Added Value

The 'digital inside' value chain

Critical Value chains

R&D investments in ICT by non ICT sectors

R&D

spending

B€

% on ICT

Aerospace and defence 150 37

Automotive 700 38

Electrical equipment 160 75

Healthcare

equipment/services 65 55

Industrial manufacturing 240 55

Digital process innovation in manufacturing

Robotics and automation

Modelling, Simulation, Analytics and big data Cyber-physical systems for

process (chain) optimisation

Laser-based manufacturing

Outline

• Digital innovations: What is at stake?

• Where does Europe stand?

• What are we doing about it?

• Concluding remarks

Where does Europe stand?

Strengths

• Professional and vertical markets (products and services)

─ E.g. manufacturing: machinery, machine tools, auto, aero, energy, …

• World class R&D hubs

• Good infrastructure

• Size of EU market (~27% of world ICT market)

Weaknesses

• Consumer markets, Internet and web products and services, data platforms' ownership

• Structural weaknesses

No DSM yet (substantial impact on attractiveness to investment)

Lagging in investment in R&D&I

Opportunities

• High growth "Smart X" and IoT markets

• High growth of vertical markets!!

• Next digital champions may come from "non-digital" industries 9

Digital transformation of industry: What is the situation?

Strong digitisation in high tech industries and in some MSs.

But:

• Slowness and disparities in adopting digital solutions across industries and regions

Mainly SMEs/Mittelstand and non tech sectors lagging behind

• New competition from non-EU digital platform owners

• Lack of standards and interoperable solutions

• Fragmentation of effort in Europe

• Skills and re-skilling of work force

• Legislative and regulatory gaps

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Digitisation readiness: disparities in Europe

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Overview of Digital Manufacturing Initiatives across Europe

Germany Industrie 4,0 Smart Service World Autonomik fur Industrie 4.0 It's OWL (Ostwestfalen-Lippe) Allianz Industrie 4.0 (Baden-

Württemberg)

NetherlandsSmart Industry

France Usine du Futur FoF Ile-de-France

United Kingdom High Value Manufacturing Innovate UK Action Plan for Manufacturing (Scotland)

SpainEstrategia Fabricacion Avanzada(Basque region)

Italy Fabbrica Intelligente Ass. Fabbr. Intell. Lombardia

SwedenProduktion 2030

Belgium Made Different Flanders Make/iMinds (Flanders)

EU-level Initiatives Application PPPs: FoF, SPIRE I4MS Smart Anything Everywhere ICT PPPs

Multi-region Initiatives Vanguard

AustriaProduktion der Zukunft

PortugalProdutech

European CommissionDG CONNECT, Unit A3, ML

European initiatives are in redNational initiatives are in blueRegional initiatives are in green

Finland FIMECC PPP Programmes

(MANU, S-STEP, SIMP, S4FLeet)

Industrial Internet Business Revolution

IoT pilot Factory (IoT PFF)

GreeceOperational Programme in Region Western Greece

Poland INNOMOTO INNOLOT Digital manufacturing for the SME

(Mazovia)

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© Prof. Dr.-Ing. J. Gausemeier, Heinz Nixdorf Institute, Strategic Planning and Systems Engineering, University of

Paderborn Workshop: „Platform for connected Factories of the Future“, Brussels, 5. October 2015

Industrie 4.0 – the digitalization of

manufacturing – is a global trend

Selected world-wide activities and drivers

Bringing digital innovation to the

physical world Start-ups for the Internet of Things

and a renaissance of manufacturing

Pragmatic adoption of potentials

and long-term strategy Use of existing technologies and strategic

development of selected key technologies

Innovation through adoption Massive build-up of smart factories and

very large OEMs building up business

through own demand

Bringing engineering excellence to

the digital world Visionary concepts integrating technology,

society, and industry in the digital world

Radical innovation

Ability to scale

Speed

Engineering excellence

Outline

• Digital innovations: What is at stake?

• Where does Europe stand?

• What are we doing about it?

• Concluding remarks

Digitising European Industry: Proposal for four key lines of action

Speech of Commissioner Oettinger

at Hannover Fair on 14 April 2015

• Europe's future is digital: Digitising European Industry: Proposal of four key lines of action

• Focus actions on digital transformation of ALL industry

• complementing our efforts on a Digital Single Market and on broadband investment

High-level Roundtables with Commissioner Oettinger

• Member States and industrial representatives welcomed EU plans and confirmed the need for action on EU scale

Next steps/plans:

• EU policy/strategy announcements in Spring 2016

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Develop Policy – Make it Happen

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Policy Development for Digitising European Industry

• Broad consultations with stakeholders

• Policy announcement planned for Spring 2016

Make it Happen – Starting Point:

• EU Schemes

• National initiatives

…

…

Digitising European Industry - Growing the Ecosystem: Action Line 1 - Reaching out to every Region in Europe

Regions/MSs with initiatives

Establish catalogue of initiatives EU-wide

Reinforce links between initiatives

Exchange Best Practices

Concentrate EU funding on x-border actions

Other regions (e.g. less developed)

Establish digitial innovation hubs

Co-fund hubs thru ESIF et al

Digitising European Industry Strategy proposed by Commissioner Oettinger

Leitmotiv: Ensuring that every business in Europe can fully benefit from digitial transformation

Action Line 1: One world-class digital innovation centre in every region in Europe

Planned Launch: Before summer 2016

…

Organically Growing the Ecosystem Launch I4MS Mentoring and

Sponsorship Programme (2M€)

Bootstrap ~25 Innovation Hubs in non-I4MS Regions

Call for EoI 11/2015- close 3/2016

3rd party contracts to potenial hubs

Link smart specialisation to I4MS competences

Best Practice feasibility studies

Link to local funding (ESIF et al)

First Steps in Making it Happen

Max Lemke, European Commission, CONNECT-A3

in a nutshell

Objective: Enhancing digital transformation in manufacturing SMEs and mid-caps

Phase 1 + 2: 75 + 35 M€ of EU funding 7 + 4 large projects 40 + 30 competence centres 140 + 80 experiments 22 Members States and Ass. Countries Focus on 4 areas of ICT adoption in the FoF:

HPC cloud-based modelling, simulation and analytics services

Industrial robotics systems Laser-based manufacturing Smart sensors systems, CPS and IoT

I4MS is part of the Factories of the Future PPP

Action Line 2: European Leadership in Digitial Industrial Platforms

Not only:

• Stakeholder groups = Plattform Industrie 4.0, European Technology Platforms (ETPs)

• Technological platforms = middleware, reference architectures, toolboxes, …

More comprehensive:

• Economical definition: Multi-sided market gateways creating value by enabling interactions between two or more complementary customer groups

• Innovation definition: Reference architecture/implementation with an innovation ecosystem triggering broad value creation

• Examples - On-line Platforms with proprietary kernels

• Google: People who search - advertisers

• Apple/Android: People who buy a phone - developers of apps

• Amazon Marketplace: People who search a product - companies selling products

• Examples – Open Industrial Platforms => collaborate on integration – compete on components and functionality

• AUTOSAR: Standardized architecture for embedded automotive SW and HW easing cooperation between car manufacturers, suppliers and IT developers

• ISOBUS: communication/data exchange between tractors, land machines, mobility and control SW emerging ecosystem of agricultural OEMs, suppliers, seed companies, IT/big data companies

• CRYSTAL: ARTEMIS/ECSEL supported platform for safety-critical systems building on on EU leadership on safety-/time-critical systems, cutting across rail, automotive, aerospace, health sector, involving several groups of market actors across the value chains

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Platforms - What are we talking about?

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Standardized architecture for embedded automotive HW/SW Eases cooperation of car manufacturers,

suppliers and tool developers Facilitates innovation through open

standards "Cooperate on standards, compete on

implementation"

Similar platform in agricultural machinery: ISOBUS • emerging ecosystem of agricultural OEMs, suppliers, seed companies, IT/big data • standardise communication/data exchange between tractors, land machines, mobility and control SW • compete on components and their functionality.

Challenges for AUTOSAR Connected Car Autonomous Car Fully electric vehicle

Success story Bootstrapped by EU industry

(manufacturers, suppliers) Worldwide use Strong framework programme

support (FP6, FP7, ARTEMIS)

3rd Dimension

Value chain

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Digital Industrial Platforms:

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AL2 – Platforms: Key Analysis and Principles (1)

Time is crucial: overlap all stages of platform building

Constituency building and reference architecture development

Reference implementations and test-beds

Demonstration and validation

Standardisation in international standardisation bodies

Build alliances to increase weight and scale

With competitors – agree on what to collaborate / compete on

Vertically across the value chain

Strong user involvement/drive (SMEs, Mittelstand!!!)

Horizontally across industrial sectors

Between industry and RTOs/academia

Open platform approaches

Do not start from scratch

Integration of legacy

Peer-to-peer integration with other platforms

Allowing for proprietary components/systems to be part

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Choose quasi-standardisation approaches

getting on-board key actors on each level of the value chain

But not trying to agree everything with everybody

Build on EU strengths

in vertical sectors such as auto, energy, agro-food, manufacturing,…

Exploit synergies + integrate horizontally increasing weight/scale

"bring engineering excellence to the digital world" (EU strength) as opposed to "bringing digital innovation to the physical world" (US strength) (INBENZHUB4.0 Studie)

Follow in parallel all issues relevant for ecosystem building

Identify any need for regulation

Skills development

Infrastructure needs

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AL2 – Platforms: Key Analysis and Principles (2)

Action Line 3: Prepare our workforce

• Goal: Concerted effort to adapt education & life-long learning schemes

• What's new: Get commitment from Industry, MSs on a roadmap

• EU added value: Act as catalyst across MSs and regions

• New EU-level actions: Work as catalyst for "digital" education, reskilling and learning

Agree on a charter of actions across EU, MSs, regions

Promote exchange of Best Practices

Launch a new EIT-KIC

• Starting Point: Grand coalition for digital jobs but should go further

• Expected complementary actions:

• MSs: Stimulate national and regional initiatives

• Industry: identify essential components of a digital skills set

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Action Line 4: Smart legislation for smart industry

• Goal: Make regulation fit for the digital world

• What's new: Explore further "emerging" regulatory issues

• EU added value: Stimulate regulatory dialogue on smart digitisation issues towards a single EU-level playing field

• New EU-level actions: Start dialogue with stakeholders on:

Liability issues for autonomously acting digital systems

Safety issues for autonomous cars, robots, … working with humans

Big data issues: ownership, data and IPR protection, innovative use

• Starting Point:

• Digital Single Market Package

• EP working group on a legal framework for robotics and automation

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Outline

• Digital innovations: What is at stake?

• Where does Europe stand?

• What are we doing about it?

• Concluding remarks

Schlussbemerkungen

• Hohes politisches Interesse an Wirtschaft 4.0, Industrie 4.0, Arbeit 4.0, Handwerk 4.0, … auf allen Ebenen

• Eine Europa-weite Strategie muss Mehrwert bringen, z.B.: • Vernetzing von Kompetenz-/Innovationszentren

• Foerderung grenzuebergreifender Zussammenarbeit

• Europaweiter Austausch von Best Practices

• Kritische Masse und Silo-uebergreifende Zusammenarbeit zu Plattformen

• Schaffung "smarter" Rahmenbedingungen

• Vier Themenfelder auf europaeischer Ebene 1) Innovations-Hubs in Reichweite jedes KMUs/Mittelstaendlers

2) Pan-Europaeische Plattformen

3) Digital Skills for everybody

4) Rahmenbedingungen

• Komplementaere Zusammenarbeit ist gefragt: • Zwischen EU, nationalen and regionalen Initiativen

• Auf europaeischer Ebene (H2020, DSM, industrial policy, EIT, …)

• Stakeholder-uebergreifend: Industrie, Forschung, Sozialpartner, …

• Ueber die gesamte Wertschoepfungskette 27

THANK YOU Digitising European Industry: https://ec.europa.eu/digital-agenda/en/digitising-european-industry Digital Agenda for Europe – Components and Systems: https://ec.europa.eu/digital-agenda/en/science-and-technology/components-systems DG CONNECT (Communications Networks, Content and Technology): http://ec.europa.eu/dgs/connect/index_en.htm Horizon 2020 on the web: http://ec.europa.eu/research/horizon2020/index_en.cfm ICT Innovation for Manufacturing SMEs: i4ms.eu Structural Funds 2014-2020 and Smart Specialisation: http://ec.europa.eu/regional_policy/index_en.cfm

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