Anne-Marie Sassen

Deputy Head of Unit

DG CONNECT, European CommissionComplex Systems and Advanced Computing

Seizing the opportunities from digital technologies: Products, processes and

business models

17February 2016

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3 Dimensions of Value Creation from Digitisation:Products, Processes and Business Models

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• "Digital inside": Innovations in all types of products

• Smart connected objects (or IoT) powered by e.g.

• Sensors, wearables, embedded software, autonomy, Big data, Cloud …

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

• Digital transformations of processes

• From logistics and product design to shop floor automations and CRM

• Increasing resource efficiency, productivity, ..

• Built on 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, maintenance

• Built on cloud, real time information, data analytics, etc..

Digital Industry: Where does Europe stand?

• Strengths

• Professional and vertical markets (products and services)

• Components, business software, Industrial and professional service robotics, automation, network equipment

• 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

• From components to applications, Data platforms' ownership

• Structural weaknesses

• No DSM yet (substantial impact on attractiveness to investment including VCs, BAs, etc..)

• Lagging in investment in R&D

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Digitising Industry: Where does Europe stand?

• Strong digitisation in high tech industries and in some MSs.

• But:

• Slowness and disparities in adopting digital solutions across

industries and regions

• Mainly SMEs and non tech sectors lagging behind

• Less than 2% of SMEs use advanced digital technologies

• New competition from non-EU consumer platform owners

• e.g. Operating Systems, Web and Data platform owners

• Fragmented landscape of standards and lack of interoperable

solutions

• Need for digital skills and re-skilling of work force

• Legislative and regulatory gaps

• Fragmentation of effort in Europe 4

Digitisation readiness: disparities in Europe

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Courtesy: Roland Berger

Digital intensity score- explanation

Questions asked by Eurostat to enterprises with more than 10

employees:

usage of internet by a majority of the workers

has access to ICT specialist skills (internal or outsourced)

fastest fixed bb speed is at least 30 Mbps

mobile devices used by more than 20% of employed persons

has a website

has some sophisticated functions on the website

usage of at least one social media

use an erp software

use a crm software

Share electronically supply chain management information

Doing e-sales for at least 1% of turnover

exploit the B2C opportunities of web sales

(Enterprises where websales are more than 1% of the total

turnover and B2C websales more than 10% of the websales)6

Number of pos. answers:0-3: very low4-6: low7-9: high10-12: very high

Digital intensity score in Europe

Source

Eurostat

very low low high very high hi+vhDK 18% 35% 36% 11% 47%NL 19% 39% 35% 6% 42%NO 24% 38% 31% 7% 38%FI 22% 42% 29% 7% 36%BE 27% 40% 28% 6% 34%SE 28% 43% 28% 2% 30%MT 22% 49% 25% 4% 29%LT 33% 39% 21% 6% 27%AT 28% 45% 24% 3% 27%ES 38% 37% 22% 3% 25%LU 36% 40% 22% 2% 24%IE 40% 36% 20% 3% 23%DE 35% 42% 20% 2% 22%UK 38% 41% 20% 2% 21%EU28 41% 38% 18% 2% 21%EE 39% 40% 18% 3% 21%CZ 43% 38% 17% 3% 20%FR 46% 35% 18% 2% 20%HR 41% 40% 17% 2% 19%SK 37% 44% 17% 2% 19%CY 45% 37% 17% 1% 18%SI 45% 37% 16% 2% 18%PT 46% 36% 16% 2% 18%PL 55% 31% 13% 2% 15%HU 54% 32% 12% 1% 14%LV 55% 31% 11% 2% 13%

Digital intensity score in CZ by size of company

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Allenterprises,without the

financialsector 10+

Largeenterprises

(>250)

Mediumenterprises

(50-249)

Smallenterprises

(10-49)

very low

low

high

very high

Digitisation intensity score in CZ by sector

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0%

10%

20%

30%

40%

50%

60%

70%

very low

low

high

very high

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European action plan for digitisation

• Digitising European Industry Action Plan

• Coordination of European/National and regional action plans for digitisation

• Wide spread adoption by all industries

• Leadership in platforms and standardisation

• Filling the skills gap and understanding new forms of work

• Smart regulation

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Wide spread adoption: At least one "digital innovation hub" in every region

Competencecentre 1

Innovation agency

CC 2

CC3

One-stop-shop

Innovation nurturingAccess to digital

technology

Chamber of Commerce

Competencecentre 1

R&D/Innovation agency

CC 2

CC3

One-stop-shop access to financeaccess to digital

technology

Competencecentre 1

R&D/Innovation agency

CC 2

CC3

One-stop-shop access to financeaccess to digital

technology

A digital innovation hub for every region providing any business in Europe access to the most important digital technologies and

competences to master its digital transformation

How: Build on and expand fromwhat is already there…

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• Member states and regions initiatives

• DE: 1 Handwerk and 5 Mittelstand 4.0 Competence Centres, …

• NL: Smart Industry Field Labs

• UK: CATAPULT – High Value Manufacturing Labs

• FR: French Tech, …

• …

• EU level starting point:

• EIT KICs

• I4MS (ICT Innovation for Manufacturing SMEs)

• SAE (Smart Anything Everywhere)

• ODINE (incubator for open data)

• SESAME-NET (a network of HPC competence centers)

• ActPhast (competence centers in photonics)

• iHUBS (Future Internet innovation network)

• RIF (Robotics Innovation Facilities in ECHORD++)

• …

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)

…And fill the gaps through further investments and networking

• Every region to establish at least one competence centre

• embedded in a digital innovation hub

• focusing on the region's "smart specialisation"

• ensuring specialisation and excellence

• Pan-European Networking for filling missing competence gaps

• Ensuring access for every company to all expertise needed

• Basis: Existing "digitising industry"initiatives across Europe

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Patterns of EU Competence Centers

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Status (EU support so far):• ~150 M€ (2013-14)– 14 projects – 80 centres – 400 experiments• ~75 M€ in 2015 (in contracting phase)

Opportunities at European level

• I4MS calls for Regional Digital Manufacturing Innovation Hubs, deadline 28 April 2016, http://i4ms.eu/news/list_news_detail.php?post_id=87

• development of a plan for the creation of a digital innovation hub in a region where there is currently limited activity in I4MS

• I4MS will provide mentoring and coaching services to the selected consortia to develop business plans for the hubs.

• Smart Anything Everywhere, deadline 8 November 2016

http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/5061-ict-04-2017.html

• ICT Innovation for Manufacturing SMEs (I4MS), deadline 19 Jan 2017

http://ec.europa.eu/research/participants/portal/desktop/en/opportunities/h2020/topics/2336-fof-12-2017.html 16

In brief !

• Towards an EU-Wide digital industrial strategy

• Develop the strategy in partnership with MSs, industry,..

• E.g. Mobilise the PPPs: FoF, SPARC, …

• Cover full value and innovation chains

• Special emphasis on adoption by innovative SMEs and non-tech industries.

• Capitalize on the size of EU markets & diversity of strengths

• Smart specialization, co-operation, ...

• Ensure complementarity and scale of actions

• EU, Member States, Regions

• Horizon 2020, ESIF, national and regional programmes

• Implementation plan by April 2016 at Hannover Fair17

THANK YOU

Digitsing European Industryhttp://ec.europa.eu/digital-agenda/en/digitising-european-industry

Digital Agenda - Components and Systemshttps://ec.europa.eu/digital-agenda/en/about-components-systems

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