The presentation of Secretary General Michel Judkiewicz (EIRMA) in the Sitra's event Industrial Change in Europe on 11th of October 2013

1. Industrial development in Europe
and the rest of the world:
some perspectives
D. Michel Judkiewicz
EIRMA Secretary general
SITRA Helsinki, 10 October 2013

2. A few game changers
• Energy shale gas and advanced oil and gas exploration and
recovery, renewable energy (e.g. North America) new
geopolitics
• Intelligent energy (smart grid)
• Big data analytics to improve productivity
• Solid modelling / 3D printers  from global factories to local,
small production?
• Cloud computing, cloud process control, cloud « everything »
• Bio-based materials
• Generalization of cradle to cradle way of functioning
• Internet of things
• Smart cities

3. A few game changers
• Nanotechnologies  atomically precise manufacturing (APM)
• Sustainability
• (Anticipatory) governance (people, planet, profit)
• MOOCS and consequences
• Social media importance
• Crowd funding
 Those are current job destroyers and new job creators
 Keywords: collaborative, crowdsourced, nomad, transition
engineering (i.e. engineering for « long term survival of
complex, democratic, industrial societies »)  INNOVATION
It may well be the dawn of a new « Renaissance »

4. R&D - Innovation: Europe and the world
Cornell U, Insead, WIPO  Global Innovation Index (GII):
http://www.globalinnovationindex.org/content.aspx?page=gii-full-report-2013
• Faster R&D spending growth in emerging countries
• Leaders: the rich world (Europe, US, Korea, Australia, Japan, Israël,
Honk Kong, Singapore) stay on top
• Next is China
• Newcomers: India, Vietnam, Indonesia,…
• Underperformers: Africa (ex- South Africa), Bangladesh, former
USSR republics, Greece and Gulf countries where oil investments has
jeopardized other investments

5. Innovation scorecard

6. Innovation scorecard 2

7. Some forecasts
• From Mc Kinsey insights:
• In 2000: 24 Fortune 500 companies in emerging world
• In 2025: 230
“Just as Japanese and South Korean companies became
formidable global competitors in the past half century, new
players from emerging markets, such as the Chinese
telecommunications networking giant Huawei, Brazilian
aircraft manufacturer Embraer, and India’s industrial
conglomerate Aditya Birla Group, are asserting their
presence—and many more are soon to follow”

8. Some forecasts
• From Mc Kinsey insights:
«We expect almost half of all large companies in 2025 to be new
ones that join the pool in the coming years. Many will become
faster-growing “gazelles” that will generate the bulk of new jobs
and value added in the global economy—along with significant
business opportunities for their suppliers and service providers.
This is not an entirely new story: in the 1970s and 1980s, many
US and European incumbents were caught unaware by the swift
rise of Japanese companies that set a high bar for productivity
and innovation. “

9. Some forecasts
• From Mc Kinsey insights:
« More recently, South Korean companies such as Hyundai and
Samsung have shaken up the leading ranks of high-value-
added industries from automobiles to personal electronics.
Emerging-market companies come from distinct regulatory and
corporate cultures, and they may operate quite differently
than Western multinationals. South Korean companies are a
case in point. Many South Korean firms are family controlled,
enabling them to take a longer view that supports heavier
capital investment and to build market share at the expense
of short-term quarterly profits.”

10. H 2020: hopes and reality
• Innovating out of the crisis  ?
• R&D intensity trend (% of GNP)
• Europe 2020 = 3%, same as USA
• China 2020 = 2,5%
• Japan 2020 = 4%
• Korea 2020 = 5%
• Today, Europe is between 2 and 2,5%, above China but below Japan,
USA and Korea

11. H 2020 and: hopes and reality
• Some EU conclusions
• Europe needs to be more flexible
• Europe needs to improve the gap between creativity and
innovative products and services fulfilling a societal need
• De-industrialization is an issue
• High tech sectors in Europe: chemicals, motor vehicles, machinery
and equipment, electrical devices, medical, optical and precision
instruments, radio-TV and communication equipment
• Some burning issues:
• how to curb unemployment
• How to valorize SME’s R&D and creativity (partnesrhips, others,…)

12. H 2020 hopes and reality
• Hit parade in European R&D intensity
• Israël 4,40%
• Finland 3,78%
• Sweden 3,37%
• Denmark 3,09%
• Iceland 3,11%
• Switzerland 2,87%
• Germany 2,84%
• ….Romania 0,48%
• Huge disparity in Europe

13. The German case (Figures 2011)
Germany Europe avg US avg
Excellence in
Science and
technology
62,78 47,86 56,68
Competitiveness Automotive,
environment,
energy, new
production
technologies,
chemicals
R&D Intensity 2,84% 2,03% 2,75%

14. The German case (Figures 2011)
• High innovation capacity
• Export oriented economy
• Germany lost leadership in pharma and optics
• Biotech, medical and ICTcould do better
• Aging population is a threat
• R&D investment sources: 1/3 public sources, 2/3 private
sources
• Received highest amount of FP7 funds
• Better in patents than in scientific publications compared to
competitors
• Big high level public research institutes (Max Planck,
Fraunhofer, Helmholtz, Jülich,…)

15. The German case (Figures 2011)
• Strong manufacturing industry
• 3d largest exporter after China and USA
• Germany has and edge in competing, somewhat
independant of price (image of quality and
robustness of its produced goods)
• Germany exports more than 60% to UE 27, hence
Germany, best in class today, is also stronly
depending on the economic health of the rest of
Europe for its prosperity

16. Possible way forward for Europe
European Industrial policy conference 6 June 2013
• European Commission Vice President Antonio Tajani
said:
"The crisis has demonstrated the importance of industry for
economic stability, employment, innovation and the international
performance of our economies.
In a period of record unemployment in Europe, putting industry
back at the core of European policies is an inescapable
obligation."

17. Possible way forward for Europe
European Industrial policy conference 6 June 2013
Six Commission task forces taking actions to foster
innovation in the following fields:
– Advanced manufacturing Technologies for Clean
Production
– Markets for Key Enabling Technologies
– Bio-based product markets
– Sustainable industrial policy, construction and raw
materials
– Clean vehicles and vessels
– Smart grids

18. Possible way forward for Europe
European Industrial policy conference 6 June 2013
Developing alternatives to bank financing
The European Commission seeks to develop a framework for efficient,
diversified and improved long-term financing for SMEs by helping to
attract more private investments.
European venture capital passport: The proposal for a ‘European
Venture Capital Funds’ will facilitate cross-border fundraising.
Improving SME access to capital markets: Two recent proposals are
currently being discussed to attract investors through more visible SME
markets and more visible listed SMEs:
– A proposal for the Markets in Financial Instruments Directive
(MiFID) to sustain the development of stock markets specialised in
SMEs.

19. Possible way forward for Europe
European Industrial policy conference 6 June 2013
• “(KETs: nanotechnology, micro-nanoelectronics, advanced materials,
photonics, industrial biotechnology and advanced manufacturing) are a
key source of innovation.
• They provide the indispensable technology bricks that enable a wide
range of product applications as they feed into many different industrial
value chains and sectors in heterogeneous ways.
• They create value from materials to products and services. Due to their
transversal nature and systemic relevance to European industries, KETs
will catalyse the strengthening and modernising of the European
industrial base as well as drive the development of entirely new
industries and breakthrough innovations in the coming years.
• They have the potential to enable sustainable, smart and inclusive
growth in Europe by creating substantial jobs, by contributing to the
development of products and solutions to address grand societal
challenges and by ensuring the Europe can regain its place in the
competitiveness race.”

20. Want to know more?
Contact us at:
EIRMA
81A rue de la Loi
1040 Bruxelles
Belgium
http://www.eirma.org
info@eirma.org
mjudkiewicz@eirma.org
Tel: +32 2 233 11 80