The European Association of the Machine Tool Industries

Why and how to keep European Advanced Manufacturing globally competitive ? Manufuture 2011 conference Wroclaw 24-25 October 2011 Filip Geerts, Director General CECIMO " where manufacturing begins"

Why and how to keep European Advanced Manufacturing globally competitive ? 1.

It is strategic to keep manufacturing in Europe

2.

In order to keep advanced manufacturing in Europe we need to be world competitive

3.

We need manufacturing capacity in Europe

4.

We need a comprehensive strategic approach to an innovation policy and the right supportive socio-economic environment for globally competitive manufacturing companies.

5.

We should ensure that R&D project results are commercially exploited and trigger manufacturing within the EU.

Manufuture 2011 Conference, 24-25 October, Wroclaw

1

It is strategic to keep advanced manufacturing in Europe

• To address Europe’s competitiveness • To address the grand societal challenges

What is advanced manufacturing? Definition by the EU Key Enabling Technologies High Level Group: Advanced manufacturing systems comprise production systems and associated services, processes, plants and equipment, including automation, robotics, measurement systems, cognitive information processing, signal processing and production control by high-speed information & communication systems. AMS involve manufacturing operations that create high- tech products, use innovative techniques in manufacturing and invent new processes and technologies for future manufacturing. The AMS definition covers both manufacturing of high- tech product, processes and solutions for future manufacturing, as well as services associated to them. Image: Comau

Manufuture 2011 Conference, 24-25 October, Wroclaw

Advanced manufacturing is a key enabling technology

production

Megatrends

photovoltaik, wind,… automobil, … aeroplanes medicine technic white products, furniture foods chemical/pharmaceutical products textiles machine tools construction machines mold making agricultural machines printing and paper machines

biotechnology services nanotechnology optics microtechnology elektronics new materials information and communication technology Quelle: in Anlehnung an VDMA

Manufuture 2011 Conference, 24-25 October, Wroclaw

Addressing Europe’s competitiveness Advanced manufacturing systems are capital intensive, knowledge intensive and demand high levels of intellectual capital. In a resource-scarce and knowledge-rich Europe, new products must have high knowledge content and low material / energy resource needs. AMS have a direct impact on: - speed - cost - resource consumption - operating precision - environmental aspects Manufuture 2011 Conference, 24-25 October, Wroclaw

Responding to the pressure of relocation Europe 24%

Asia (total) 66% Americas 11%

(China 45%)

Source: CECIMO statistics

Geographical breakdown of world machine tool consumption

Manufuture 2011 Conference, 24-25 October, Wroclaw

Addressing grand challenges The Europe 2020 strategy highlights the short and long-term challenges Europe has to tackle. The immediate challenge is putting the European economy back on an upward path of growth and job creation, whilst long–term global challenges comprise inter alia globalisation, pressure on resources and ageing population. Manufuture 2011 Conference, 24-25 October, Wroclaw

AMS are key to generate economic and societal value from new technologies Science & Technology

Biotech

Market

Photonics Nanotech

Advanced Materials

Industrial Production Quality, cost, performance Lead-time

Research

Development

Scientific value creation

Sustainable manufacturing (energy, material, waste)

Final Product Affordable Reliable & safe

Final Product

Sustainable

Economic and social value creation Manufuture 2011 Conference, 24-25 October, Wroclaw

Advanced manufacturing is a strategic asset for Europe • Before the economic meltdown (2007), manufacturing industries contributed to some 17,1% of GDP and accounted for some 22 million jobs in the EU. Image: Haver & Boecker

• AMS can open up entirely new markets or underpin and enhance existing markets through accelerating technological progress with trickle-down effects on productivity and concurrent leaps in efficiency levels.

Manufuture 2011 Conference, 24-25 October, Wroclaw

2

In order to keep advanced manufacturing in Europe we need to be world competitive

• We face an increasingly competitive environment • Europe is resilient • Europe has to act by creating a three pillar bridge to pass accross the “Valley of Death”

We face an increasingly competitive environment • Global public investments in AMS and the absence of a level playing field for Europe

• A resurgent America with a national priority focus on manufacturing • A strategic priority focus on applied research and development in competitor national RDI budgets • A rapid ascent of traditionally Europan value chains by Far East companies. Manufuture 2011 Conference, 24-25 October, Wroclaw

We face an increasingly competitive environment Evolution of World R&D expenditure in real terms PPS in millions € at 2000 prices

Source: European Commission

Early-stage Venture Capital in Bn€, 2000 and 2009

Source: Eurostat

• Global public investments in AMS and the absence of a level playing field for Europe

Manufuture 2011 Conference, 24-25 October, Wroclaw

We face an increasingly competitive environment • Global public investments in AMS and the absence of a level playing field for Europe

• A resurgent America with a national priority focus on manufacturing • A strategic priority focus on applied research and development in competitor national RDI budgets • A rapid ascent of traditionally Europan value chains by Far East companies. Manufuture 2011 Conference, 24-25 October, Wroclaw

Europe is resilient • Europe has considerable assets in this global competition (Research, technological and manufacturing competences,...) but • Disconnection between the production of knowledge and the “use” of knowledge in manufacturing activities and marketable products

3

• Difficulties to sustain and/or build up top ranking companies Manufuture 2011 Conference, 24-25 October, Wroclaw

Disconnection between patents share and manufacturing share. Case Study: Li-ion battery production % %

Li-ion battery cell production share in 2008 Advanced Material Patent Share

Europe USA 1%

Asia

0%

87% 31%

30%

35% 12% 4%

Others

Source: European Commission

Manufuture 2011 Conference, 24-25 October, Wroclaw

Europe has to act by creating a three pillar bridge to cross the “Valley of Death” • What is the Valley of Death ?

• What is the three pillar bridge ?

3

 Beside “ technological research” and “product demonstration” we need “competitive manufacturing”

Manufuture 2011 Conference, 24-25 October, Wroclaw

What is the “Valley of Death”? Whilst European R&D is generally strong, the transition from ideas arising from basic research to competitive production is the weakest link in European value chains.

3

Source: EU KET HLG Interim Report

Figure: Valley of Death

Manufuture 2011 Conference, 24-25 October, Wroclaw

What is the three pillar bridge? Crossing of the “Valley of Death” requires constructing a European bridge comprising three pillars:

3

Source: EU KET HLG Final Report

Manufuture 2011 Conference, 24-25 October, Wroclaw

3

We need manufacturing capacity in Europe

We need globally competitive industrial production facilities in Europe

•

The acceleration of the learning curve on new manufacturing technologies, processes and products ... • To absorb the high fixed costs ... • To retain the production know-how at the top level

3

• To master the whole product life cycle... • To develop an industry for advanced manufacturing generating a source of export revenues, and support the downstream producers of machinery in Europe Manufuture 2011 Conference, 24-25 October, Wroclaw

We need globally competitive industrial production facilities in Europe • The role of globally competitive fabrication facilities at large volumes where economies of scale is required is therefore very important to nourish economic ecosystems, in particular with regard to SMEs, which act as sub-contractors and suppliers to downstream industry users.

3

• Only fabrication facilities with a significant size will have the integrated capacity of technologies and product development to be able to react to the international competition and follow the rapid renewal dynamics.

Manufuture 2011 Conference, 24-25 October, Wroclaw

Triggering a virtuous cycle

3

The return flow from market to knowledge generation closes a virtuous cycle leading to a competitive growth and in turn also facilitating a market pull.

Early feedback from the manufacturing community will allow European industry to understand and identify new possible product specifications. This is only possible if these manufacturing communities remain in Europe. Such a virtuous cycle constitutes a solid bridge which links the basic science to the global market Manufuture 2011 Conference, 24-25 October, Wroclaw

We need manufacturing capacity in Europe The three pillar bridge will allow us to trigger a VIRTUOUS CYCLE World competitiveness requires both – Technology capability – Manufacturing capacity

3

Manufuture 2011 Conference, 24-25 October, Wroclaw

4

We need manufacturing capacity in Europe Therefore we need • a comprehensive strategic approach to innovation policy • the right supportive socio-economic environment for globally competitive manufacturing companies

Innovation policy • Rebalance RDI funding • Combined financing to promote RDI investments • Industry-driven approch / PPP • Value chain correctness

Manufuture 2011 Conference, 24-25 October, Wroclaw

Framework conditions / socio-economic environment • Product regulation / market surveillance / proper enforcement

• Standardisation • Public procurement mechanisms • Access to raw material • Energy policy • Open markets / free and fair trade

• Skilled people

Manufuture 2011 Conference, 24-25 October, Wroclaw

5

We should ensure that R&D project results are commercially exploited and trigger manufacturing in the EU.

A targeted focus on manufacturing and commercial exploitation of R&D results • “In Europe first” IP policy • Specific attention to AMS in the CSF competitiveness programme

• AMS should be identified as a clear investment priority for regions within the CSF and the ERDF Research and Innovation category notably in the context of the concept of smart specialization.

3

• The EIB/EIF should pro-actively support AMS-related projects through its financial instruments.

Manufuture 2011 Conference, 24-25 October, Wroclaw

thank you questions Filip Geerts, Director General CECIMO – The European Association of the Machine Tool Industries Avenue Louise 66 | 1050 Brussels | Belgium Tel.: 00 32 (0)2 502 70 90 Email: [email protected] Website: www.cecimo.eu