Internal Market,Industry,Entrepreneurshipand SMEs

Digital Transformation Monitor

Denmark:Manufacturing Academyof Denmark (MADE)

May 2017

2

Denmark:

Manufacturing Academy of

Denmark (MADE)

Denmark: Manufacturing Academy of Denmark (MADE)

Source: Digital Transformation Monitor

Fact box for Denmark’s MADE policy initiative

Policy Lever(s)Equal financing through public and private funds; Balanced between technology andskills focus with tendency towards development of new technologies; Bottom-upimplementation approach

Funding ModelPublic-private partnership (SPIR) managed by an independent association equallycalled MADE

Targeting mainly Danish SMEs active in manufacturing sector; stakeholders fromresearch institutes / academia

Concepts & Focus AreasMADE covers nine research themes focusing on business related challenges ofIndustry 4.0, e.g. High speed product development

Key driversInvolvement of Danish Employers’ Federation; Motivation / initiative of involvedpartners from industry and academia

Key barriersAttracting world-class researchers proved to be challenging; Overcome skepticismof academia regarding an industry dominated agenda

Results achievedNetwork growth to109 MADE members; Total of 34 innovation activities with 2213participants; Total of 70 projects (44 industrial projects); Significantcommunication outreach

BudgetTotal budget €24.2 million; €11.8 million from participating companies; 8.2 millionfrom the Innovation Fund; €2.8 million from foundations / associations; €1.4million from universities

Uniqueness factorDiverse platform with broad membership base from industry and research;Thematic flexibility for participants of demonstration projects

Value-added for policy-makersCreation of MADE as an independent association; MADE membership structure;Integration within European manufacturing ecosystem

Implementation strategyInitiated and designed by partners from research and industry; Building a publicprivate partnership

Expected ImpactNew development of technologies for manufacturing companies; increasing thecompetitiveness of Danish manufacturing

Target audience(s)

© freeimages | niller56

3

Source: Digital Transformation Monitor

Policy levers for Denmark’s MADE initiative

Introduction

The Manufacturing Academy ofDenmark (MADE) is a cross-industrial innovation initiativelaunched officially in late 2013. Thenational initiative bundles forcesfrom major industrial players alongwith manufacturing SMEs,Denmark’s 5 technical universitiesand 3 technology organisations in aneffort to stop the growing tendencyof offshoring manufacturingoperations from Denmark. Theinitiative is financed by mixedpublic-private sector fundsamounting to €24.4 million between2014 and 2019.

MADE’s main mission lies inapplying research, drivinginnovation and strengtheningeducation to improve thecompetitiveness of Danishmanufacturing. The platform ismanaged by an independentassociation – MADE – offering a widerange of different activities to itscurrently 109 members. Theinitiative targets primarily DanishSMEs which contrary to largermembers can benefit from a lowermembership fee and access tospecific support programmes.

The design of MADE is unique in itsstrong bottom-up implementationapproach. MADE has achieved togrow a Danish ecosystem with focuson industrial research, attractive tolarge industrial players and SMEsalike. The MADE model impressesthrough its lean, multi-layeredgovernance structures which serveras the cornerstones of MADE Digital,the initiative’s recent scale-upfocusing on digital solutions.

Equipped with an equivalent amountof public funding as its predecessor,MADE Digital will run between2017-2020 being under themanagement of MADE association.

Scenarios for futureDanish production

In 2010 the Danish branch ofmanufuture published acollaborative study titledManufacturing 2025.1 The reportidentified five future scenarioswhere Danish manufacturing can becompetitive. These scenarios servedas viable contributions to preparingthe MADE initiative.

The five scenarios included thefollowing:(1) High competence at

manufacturing company levelexploiting new technologies anddeveloping new products;

(2) Coordination and exploitation ofthe industrial power ecosystemcomprising businesses,industries, universities andknowledge centres;

(3) The innovation factory at theinterface between design andmanufacturing competencesdeveloping intelligent products;

(4) The development of a networkof suppliers supported byflexible value chain intregrators;and

(5) The virtual business networkcapable of rapidly and effectivelyexploiting businessopportunities and poolresources across the productionprocess.

Boosting Danishcompetitiveness

At the outset of MADE one of themain challenges was and still istoday the increased offshoring ofDanish manufacturing. In the light ofhigh salaries in Denmark, it wasclear that competing on the basis ofcost is not a viable option for thecountry. Therefore, means had to beexplored where the value of aproduct made in Denmark would begreater than the high manufacturingcost.2

Against this core challenge, MADE’sprimary goal is to ensure thatDenmark has a world-class advancedmanufacturing industry. Morespecific objectives of MADE include:

(1) to increase Denmark’scompetitiveness throughindustrial based research inmanufacturing,

(2) to strengthen the Danishtechnical research community,

(3) to create an ecosystem focusingon research innovation andknowledge sharing; and

(4) To optimise education tosupport manufacturing.

In addition, MADE also aims toconnect to other national initiativesin the field of manufacturing and toact as the central national hub forDanish production.

Stakeholders in Denmark agreedthat the road towards more Danishmanufacturing jobs requiresindustry to become smarter, fasterand more innovative in order toregain competitiveness.

Denmark: Manufacturing Academy of Denmark (MADE)

4

A PPP with bottom-upimplementation

Initially, MADE obtained seedfunding from the Danishgovernment. Today, the initiative is apublic private partnership equallybacked by public sector and privatesector funds.

While technology development andskills are both important elements ofthe initiative, MADE’s focus ontechnology overweighs. PhDresearch projects focus on producingnew technologies which can be usedby industry. On the other hands, thePhD students also acquire skillsthrough their research.

The initiative is characterised by astrong bottom-up implementationapproach. This is reflected by thestrong initiative of industry andresearch to start the initiative andthe governance of the initiative. TheBoard of Directors and the AdvisoryBoard both have strongrepresentation of industry, withlower representation of academiaand none from the Danishgovernment.

Seed funding from thestate, developed byindustry

MADE is referred to as a nationalinvestment project financed bymixed public-private sector funds.For the 5-year-period of the project(2014-2019), a total of 183.5 millionDanish Crowns (€24.4 million) areallocated. The entity managing theManufacturing Academy of Denmark– equally titled MADE – was set up asan independent association in 2013.

Initially, the Danish Council forStrategic Research and the DanishCouncil for Technology andInnovation provided seed funding insupport of the action programme“MADE - Platform for futuremanufacturing”. Shortly after, MADEwas supported as one of theStrategic Platforms for Innovationand Research (SPIR).

Further activities available formembers include the MADE OpenLab, industrial visits and innovationworkshops. On average MADEmembers have access to at least oneof these activities. Through the OpenLab companies and academicresearchers can gain insights intothe state-of-the-art technologies in aspecific area. Typically an Open Laboften involves short presentations,case studies and technologydemonstration.

Industrial visits, on the other hand,refer to visits to companies excellingin a particular area. While servingmainly to inspire companies bydelving into the experience ofmarket leaders, corresponding WPleaders equally intervene toelaborate how the visit fits into thespecific research context. Ultimately,networking is also a part of the visits.

Meanwhile, the InnovationWorkshops are a more interactiveformat to engage researchers fromindustry organized in mixed groups.On the basis of real company casesand expert assessments participantsexplore ideas and ways to implementnew processes and technologies intheir own companies. The themescovered range from lifelong productcustomisation (over model basedsupply chain development), tohyper-flexible robotics.

Administered by Innovation FundDenmark, the strategic platformsprovide funding to initiatives thatstrengthen the link betweenstrategic research and innovation.

At the end of 2016, MADE Digitalwas announced focusing on digitalsolutions tailor-made to the specificneeds of Danish manufacturingcompanies. In total €25.8millionwas allocated to MADE Digital for theperiod 2016-2019.

Private financing

MADE relies significantly on privatesector funds. The public grant is co-financed with €11.8 million fromparticipating companies, €2.8million from foundations /associations and €1.4 million fromparticipating universities.

Combining researchwith SME supportactivities

Next to its diverse research activitiescovered through 9 work packages,MADE provides access to state-of-the-art research valuable knowledgefor manufacturing companies. Someof MADE’s involved research andindustrial partners also have MADE-dedicated PhD positions.

SME members of MADE have theopportunity to participate indemonstration projects where theyobtain economic and knowledgesupport. The maximum duration ofthese projects is eight month withsupport funds of up to €12,250 percompany. Participants can choosebetween focusing on existingmanagement systems,demonstrating new technologies, ora combination of these two.However, the project needs to fit intoone of the nine research themes ofthe initiative.

Denmark: Manufacturing Academy of Denmark (MADE)

© SFIO CRACHO/Shutterstock.com

5

Target audience –Prioritising SMEs

MADE targets Danish manufacturingcompanies, in particular SMEs, bygiving them the opportunity toparticipate in demonstrationprojects and open labs. However, theinitiative also brings togetherstakeholders from largemanufacturing companies,specialised technology providers(e.g. FORCE) and academia.

Concepts and focusareas – Research for thebenefit of industry

The nine research themes of MADEfocus on manufacturing businessrelated challenges of Industry 4.0.Each research theme is tied to onework package: (1) High speedproduct development; (2) Modularproduction platforms for high speedramp-up; (3) 3D print and newproduction processes; (4) Modelbased supply chain development; (5)Digitalisation of supply chains; (6)Lifelong product customisation; (7)The “new” Manufacturing Paradigm;(8) Hyper flexible automation and(9) Sensors and quality control.

Through these nine focus areasMADE intends to reach impacts todevelop new technologies for Danishmanufacturing companies, toenhance the knowledge transfer andexchange between MADE membersand ultimately to make Denmark themost competitive manufacturingindustry in the world.

Through MADE’s recently launchedscale-up - MADE Digital – theplatform applies a stronger focus ondigital manufacturing solutions inline with the needs of Danishindustry. The research themes areagain diverse including the followingwork packages – (1) Smart IndustrialProducts, (2) Digital AssistanceTools, (3) Sensor Technologies andProduction Data, (4) DigitalManufacturing Processes, SmartFactories, (5) Smart Factories, (6)Intelligent Supply Chains, (7)Organising Digital Production, (8)Automation with CollaborativeRobots, (9) Digital Design.

Leveraging the weight ofDanish manufacturing

One of the key drivers in theimplementation of the initiative wasthe involvement of the Danishemployers’ organisation (DanishIndustries). Thanks to itsparticipation, MADE gained a moresolid membership base as well as apolitical intention. As a result,representatives from – partiallycompeting - large Danish companiessat together on one table to draw upa 5-year collaboration plan. Withoutthe umbrella of Danish Industriesthis would have been impossible.

An additional driver of MADE lies inproviding companies with multi-leveled membership options,attractive for large companies andSMEs alike. While large companiescarry the heavy burden of the privatesector contributions, they canparticipate in the research activitiesby financing half of the PhD position.In return, they can benefit directlyfrom the industrial research. SMEs,on the other hand, can make use ofan established structure paying onlya smaller membership fee whilebeing able to participate in areas ofinterest.

Through the Demonstration ProjectsSMEs are paired with a Research andTechnology Organisation allowingthem to work on focused research ontheir core challenges to increasetheir competitiveness.

Designed by Danishresearch & industry

Although MADE started as anassociation in January 2014, the ideaof a joint industry-researchmanufacturing initiative dates backto 2008. Set at Aarhus Universityresearch and industryrepresentatives drew up severalscenarios for future Danishproduction. To avoid increasingoffshoring of Danish manufacturingboth camps shared an awarenessthat industry and academia must actjointly.

Indeed, the basic structure of theinitiative, e.g. an industry dominatedBoard of Directors and a generalAdvisory Board was designed by theinvolved partners from research andindustry. The priority was from thestart that the initiative would matchthe demands from themanufacturing industry.

The structure equally foresaw theorganisation of the initiative into 9WPs. An important design aspectconcerned equally that each headedby one of the academic partnerswith each WP having a separatesteering committee. Every ½ yearthe Steering Committees cometogether to report on the progressmade in each WP and so far theprogress is continuous.

Denmark: Manufacturing Academy of Denmark (MADE)

Source: Digital Transformation Monitor

SWOT Matrix for MADE

Opportunities

• Successful scale-up of MADEDigital demonstrates furtherpotential for growth

• Openness to collaborate with I4.0initiatives in Europe may open upnew opportunities

Threats

• No long-term funding model inplace, in case the willingness ofthe Innovation Fund to supportthe initiative was to disappear

Strength

• Bottom-up approach whichachieved to build trust betweenindustry and research

• Effective governance structuredriven by Danish industry

Weaknesses

• Initial unwillingness ofresearchers to participate due tocompetition of universities

• Broad coalition approach risksexcluding some of the mostdisruptive ideas

6

The process towards aSPIR

Once the basic structure and corecontents of MADE were defined byinvolved partners, the search forfunding from the governmentstarted. In other words: In the caseof MADE, the design was readybefore there was even a policy.

The process towards a public privatepartnership picked up speed in early2013 when researchers and theemployers federation got together toapply for a SPIR grant – a PublicPrivate Partnership for a 5-yearproject. The application built on theframework created earlier. Next tohighlighting the importance torespond to industrial needs, thisincluded a rough structure for theWPs including the PhD programmes.

The Danish government had anadvisory role regarding how to bestbuild the PPP. There was no directintervention in the process. Finally,the SPIR application was acceptedproviding public funds for a large 5-year programme and MADE wasfounded as an association with anindustry dominated steering body.The MADE association received thefunds and distributed the funds tothe PhD programmes led by the 5Technical Universities of Denmark.

The challenge to winworld-class researchers

Initially, some of the country’s bestresearchers would not participate,since there is competition betweenuniversities in Denmark likeanywhere else in Europe.

However, the prospect of industrialoutsourcing, relocation of companiesabroad and lost employment madewas a common threat, mainly toindustry but also to academia. Bothparties therefore decided tocounteract this trend together.

Furthermore, some researcherswere initially reluctant to buy intoan industry dominated agenda. Theydid not believe that industry couldmake the right decisions.

Ultimately, researchers have alsolearned a new of working withindustry. Nowadays, the academiccommunity is appreciating the leadby industry.

Multi-level results andfirst impacts

MADE has achieved to create aDanish manufacturing ecosystemcomposed of partners from industry,research and technology centres.Today, the platform counts 83companies, 26 industrial partners, 5universities, 3 technology institutesand 5 educational institutions.Within its 9 research themes, MADEpartners have created 70 projectsdealing with concrete challengesmanufacturing SMEs are faced withtoday.

Furthermore, MADE organised 34innovation activities / events,thereby involving 2213 participants.MADE has also made significant useof social media channels such asTwitter and LinkedIn to promoteand disseminate information aroundthe platform's activities.

Concerning MADE’s evaluation andmonitoring mechanisms, theinitiative has not yet been subject toa formal evaluation. However, MADEdelivers an annual report to theDanish Innovation Fund on theprogress made in its 9 WorkPackages. In addition, MADE keepstrack of some key impact data incl.its outreach via differentcommunication channels, MADEprojects and innovation activities.

Denmark: Manufacturing Academy of Denmark (MADE)

Source: MADE; Danks Produktion – MADE Report for Innovation Fund Denmark

Achieved results for MADE in the period 2014-2016

• Social media - +385 followers on twitter; +650twitter posts; +460 LinkedIn followers

• Website – MADE .dk – Publication of 59 articles• E-mail – 16 periodic newsletters; +10,495 news

e-mails

MADE outreach

Innovation andresearch activities

MADE platformmembership

• 109 companies

• More than 800 companies have received loans

• Total of 34 innovation activities with 2213participants

• Total of 70 projects (44 industrial projects)• 32% success rate for research MADE research

proposals

MADE platformmembership

• 83 companies (increase of 400% since 2013)• 26 industrial partners• 5 universities• 3 technology institutes• 5 educational institutions

© Anteromite/Shutterstock.com

7

A scalable andtransferable model

MADE’s high potential to be scaled-up is demonstrated by MADE Digital,MADE’s digital sister project. Despitebeing two years shorter, MADEDigital is provided with the samebudget as its predecessor (€24.4million). MADE Digital relies on thesame successful structure in terms ofgovernance and is equally managedby MADE Association.

MADE has been faced withsignificant interest to replicate itsmodel from other countries andregions in and outside of Europe.Among others, the government ofSouth Korea has expressed interestto explore ways to set up a similarproject in Korea. From the very startMADE has been seeking partnershipswith other European initiatives andorganisations, e.g. Industrie 4.0 inGermany and the Dutch Brainpoort.

One important aspect to considerconcerning the transferability ofMADE is the small size of the countryfacilitating rapid set-up and roll-out.For example, there are 5 TechnicalUniversities in Denmark and all ofthem are on board of the initiative.

However, there are also culturalfactors to consider: In general,Danish people tend to be ratherinformal not being afraid of speakingacross hierarchies. This has equallycontributed to a more constructiveand balanced spirit of co-operation.

Trusting industry toinnovate

The involved Danish funding bodieshave from the start applied anapproach to leave industry andresearch create the particular designof MADE. In so doing it has taken acertain degree of risk to leaveindustry and research partners ahigh degree of autonomy and designthe initiative that best correspondsto Denmark’s needs.It is not unlikely that if thegovernment had already hadeverything defined from the start,the chances of MADE to succeedwould have been lower. MADE canserve as an example how trustingmotivated stakeholders – in this caseindustry and research can lead tosignificant results. In other words:MADE entered new grounds in notfollowing any particular model butleaving partners to structure anddevelop MADE the way they wanted.

1 Johansen, J., Madsen, O., Jensen, H. V., &Vestergaard, A. (2010). Manufacturing2025: Future scenarios for Danishmanufacturing companies. Aalborg:Center for Industrial Production andDepartment of Mechanical andManufacturing Engineering. Retrievedfrom http://www.en.manufuture.dk/activities/ production-2025/

² Moller, C. Business Process Innovationas an Enabler of Proactive Value Chains.Available at:http://link.springer.com/chapter/10.1007/978-3-319-14430-6_2?no-access=true

References

Denmark: Manufacturing Academy of Denmark (MADE)

© Willyam Bradberry/Shutterstock.com

About the Digital Transformation MonitorThe Digital Transformation Monitor aims to foster the knowledge base on the state of play and evolution of digital transformation inEurope. The site provides a monitoring mechanism to examine key trends in digital transformation. It offers a unique insight intostatistics and initiatives to support digital transformation, as well as reports on key industrial and technological opportunities,challenges and policy initiatives related to digital transformation.

Web page: https://ec.europa.eu/growth/tools-databases/dem/

This report was prepared for the European Commission, Directorate-General Internal Market, Industry, Entrepreneurship and SMEs;Directorate F: Innovation and Advanced Manufacturing; Unit F/3 KETs, Digital Manufacturing and Interoperability by the consortiumcomposed of PwC, CARSA, IDATE and ESN, under the contract Digital Entrepreneurship Monitor (EASME/COSME/2014/004)

Authors: Demetrius Klitou, Johannes Conrads & Morten Rasmussen, CARSA and Laurent Probst & Bertrand Pedersen, PwC

DISCLAIMER – The information and views set out in this publication are those of the author(s) and should not be considered as theofficial opinions or statements of the European Commission. The Commission does not guarantee the accuracy of the data included inthis publication. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use whichmight be made of the information contained in this publication. © 2017 – European Union. All rights reserved.