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Digitising European Industry: Europas Stärken stärken

Summit Industrie 4.0 Österreich

Wien, 12. Dezember 2016

• Dr Max Lemke

• Referatsleiter Digitising Industry

• European Commission - DG CONNECT #DigitiseEU

Three dimensions of Value Creation from Digitisation

"Digital inside": Innovations in products (all types)

Digital transformations of processes

Radical/disruptive changes in business models

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~40 % AV growth ~50% ~40% ~80%

Products Services

ICT sector

Products Services

ICT sector

The trend

Technologies driving the change

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Digital Transformation

Innovation in products,

processes and business models

AI (autonomous systems)

Robotics, automation, machine learning, self-

driving,..

IoT (physical meets digital)

Embedded software, sensors, connectivity, actuators, low

power ICT, …

Big data (value from

knowledge)

Analytics, storage, Cloud HPC,..

Technology value chains Some examples

Autonomous driving

Micro-electronics

Healthy aging

DIGITISING EUROPEAN INDUSTRY Background

DIGITISING EUROPEAN INDUSTRY EC Communication

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Towards a European Platform of National Platforms: Adding Value at EU Scale

Germany Plattform Industrie 4.0

Netherlands Smart Industry

France Alliance pour l'Industrie du

Futur

Spain Industria Conectada 4.0

Italy Industria 4.0

Sweden Smart Industry

Belgium Made Different

EU-level initiatives Digitising European Industry Initiative

(COM(2016)180)

Austria Plattform Industrie 4.0

Austria

European initiatives National initiatives

Hungary IPAR4.0 National Technology

Platform

Portugal Industria 4.0

Slovakia Smart Industry for Slovakia

Czech Republic Prumysl 4.0

Denmark MADE

National Policy Initiatives - March 2015: 6 - March 2016: +3 - March 2017: +4 (estimated) - More to come

Governance: Roundtables and Stakeholder Forum

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31 January – 1 February 2017 in Essen, Germany

Public networking event open for registration !

DIGITISING EUROPEAN INDUSTRY EC Communication

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Strengthening leadership

in key parts

of the digital value chain:

Digital Innovation Hubs: starting position

Variable geometry of the innovation infrastructure in Europe

• Competence Centers and Innovation Hubs

• Sector- and application oriented

• Technology oriented

• User oriented

• Location oriented

Netherlands Field Labs

VANGUARD INITIATIVE

European Factories of the Future PPP

Regional Innovation Hubs:

• Digital Hub Cologne • Bayern Innovativ • …

Building on and expanding successful actions (examples)

DRAFT 11

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110 M€ of EU funding - 11 large projects 70 competence centres 280 experiments: 75% cross-border dimension 480 contractors. Out of which 340 industrial:

75% SMEs and mid caps, 50% users, 65% new in EU R&I Programmes

29 Members States and Ass. Countries

32 M€ of EU funding - 7 projects 93 competence centres 160 experiments 183 partners. Out of which 155 from industry 19 Members States and Ass. Countries

Factories of the Future PPP

Example: FORTISSIMO

• Goal: Provide SMEs with easy and cost-effective access to advanced simulation, visualisation and data analytics

• How: provide expertise, tools and means to tap into a European Cloud of HPC resources & software applications

• 16 innovation hubs – 94 experiments so far

• Fortissimo 1+2: €26m >100 SMEs

Featured in Sueddeutsche Zeitung 08.12.2016

http://www.sueddeutsche.de/digital/supercomputer-fuer-den-mittelstand-mal-eben-durchgerechnet-1.3282255

Example

Cloud-based CFD simulation for hypercars

• CFD aerodynamics simulation needed - but in house HPC resources not affordable Solution: Cloud-based pay-per-use HPC

• Impressive results

• 30% saving in design costs plus 50% reduction in wind tunnel and physical testing

• Development savings of €90K per year

• 30% decrease in time to market

• 250k€ Funding 4M€ benefit to company over 5 years using cloud- based Pay-per-use HPC and simulation software

Partners:

End-user SME: KOENIGSEGG – SE

ISV-SME: ICONCFD – UK

HPC centre: CINECA – IT

HPC centre: EPCC - UK

Example of an experiment

Cloud Simulation for Green energy

• CFD simulation on cloud-based HPC increases the performance of a water- turbine by a factor of 30, in 30% of design time at affordable cost for SME

• Results:

• Renewable (water) energy becomes more competitive > more water plants

• Plant owner gains 200k€/y (40MW turbine)

• Lower energy cost for the citizens

• 250k€ Funding Several jobs created Enormous boost of the competitive position

Partners:

End-user SME: STELLBA – DE

ISV-SME: NUMECA – BE

ISV-SME: JOTNE – NO

HPC centre - SME: ARCTUR - SI

Example

Tailor made shoes for customers with feet anomalies

• 3D insole scan & design is processed on HPC resources via the cloud

• Paving the way for 3D printing of soles/shoes in the back-shop in Europe

• Benefits for the shoe industry:

• No need for specialised CAD knowledge

• No hassle with SW licenses

• Immediate validation and perfect fit

• Benefits for the customer:

• Faster availability of the shoe

• Lower cost for special shoes

• 250k€ Funding Tripling Base Protection's turnover within 3 years

Partners: End-user SME: BASE PROTECTION – IT

End user SME: PODOACTIVA -ES

Technology provider SME: INGECON - ES

Example

The footwear industry ecosystem in PT Norte

• Successful industry in PT: 40% growth/4 years, 90% export

• Experiment

• Improving all processes involved in footwear production by use of CPS and IoT solutions (platforms: OpenIoT, FITMAN)

• Expanding the ecosystem to other

- footwear SMEs (also outside PT Norte)

- and other sectors (e.g. furniture)

6-8 replication experiments (2 years)

Partners: End-user SMEs: KYAIA (600workers) - PT

Technology providers: INESC Porto – PT,

Centro Tecnologico do Calcado de PT

Supported by European FITMAN ecosystem

Organic growth of Europe's digital innovation infrastructure

Member states and regions: build-up and strengthening of national and regional structures of digital innovation hubs

• Innovation programme (e.g. German Mittelstand-Digital, Bayern Innovativ, …)

• Structural funds (e.g. ESIF)

• Funding programmes (e.g. KfW, EFSI - Juncker Plan)

• Regional and urban ecosystems for digital transformation

European Commission: Complementary added-value oriented measures

• Map of competences, best practices, demonstrators,…

• Pan-European network of Digital Innovation Hubs (DIH)

• Support for cross-border innovation experiments

• Frameworks for pooling of resources (H2020, COSME, ESIF, EFSI, …)

• Preparatory measures for DIHs in less developed regions

Financing – Reaching a leveraging factor of 10 through H2020

• 500 M€ for networks of Innovation Hubs in Horizon 2020 5 B€ regional and national funding, including when possible ESIF, EFSI, …

Ensure that any industry in Europe - big or small, wherever situated, whatever sector -

has access to advanced digital technologies and competences

Challenges of EU actions from 2016 - 2020

• Support EU networks of DIH (envisaged 200M€ + 300M€)

• Continuation of schemes under EU PPPs such as

• Focus EU ICT H2020 actions on EU-added valued

• Use EU funds to better network EU, national and regional infrastructures

• Convergence of EU-schemes under the DEI umbrella

• Focus EU schemes on highly innovative x-border experiments

• Root EU supported hubs in national and regional infrastructures

• Bring industry hubs/labs into the structure

• Make EU models better sustainable

• Consider a platform-based approach where appropriate (e.g. FoF – I4MS)

• Use EU funds to pool resources across programmes:

• EU ICT H2020 initiatives to become the linking pin

• ESIF, EFSI, national, regional

• Consider making EU funding conditional on other investments 18

DIGITISING EUROPEAN INDUSTRY EC Communication

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Strengthening leadership

in key parts

of the digital value chain:

Leadership in digital technologies value chains

• Alignment of EU-wide R&I effort, national initiatives and industrial strategies

• Focus investments on

• Key technologies and their integration across all sectors

• Cross-sector digital platforms leading to EU-driven standards

• Development environment: reference implementations and experimentation environments in real setting

• Focus on a small number of strategic and ambitious large scale federating initiatives at European scale, which

• pool resources across the EU, Member States, Regions, Industry

• support bottom-up standardisation through platform building and large scale experimentation and piloting

• use the framework of the EU PPPs, the ECSEl JU and the Focus Areas as the linking pin (H2020 Work Programme 2018-20, ECSEL)

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Align our efforts in different development stages – Example of microelectronics and embedded software

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R&D projects FP7, Horizon 2020 TRL 2-5 National programmes

Testing experimentation, Pilot lines FP7, Horizon 2020, MS,

industry E.g. 400 M€ for power

semi-con pilot lines TRL 5-8

Deployment e.g. IPCEI, MS, industry E.g. microelectronics

IPCEI TRL 8-9

x 10 x 10

Smart Connected Factory Platforms

DRAFT 22

Applications

Platform / Operating

System

Sensors / Connection with physical world

Towards interoperable digital platforms in the domains of strategic European interest

• Key objectives • Future global standards and platforms driven by the interests of EU actors

• EU actors joining forces along common interests in the "platform economy"

• Approach: Bottom-up standardisation & platform building (TRL 5-8) • Reference architectures, platforms, interoperability frameworks

• Testbeds and large scale experimentation

• Piloting on system level

• Broad experimentation with "apps" by SMEs and mid-caps

• Standardisation and ecosystem building

• Scope • Addressing the domain challenges of the future

• Profiting from digital advances (AI, data analytics, CPS/IoT, …)

• Building on existing platforms and reference architectures

• Balancing the interest of EU industrial actors • Large and Small

• Users and system providers

• Industrial and societal actors

• Basic concept / grand challenges • "digital twin", trusted and secure data platforms, …

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Example structure of a strategic large scale federating initiative

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Development and integration of platforms,

interoperability frameworks, …

Close-to-reality experimentation

in xxx lab

Large scale experimentation

in yyy lab

Real production with OEM x and its supply chain

Best practice Experimentation in zzz lab in a related sector

Best practice Experimentation

in xyz lab

SME testing facility at zyx

digital innovation hub

Member States Investments

Regional Investments

Industrial Investments

EU Investments through H2020: JUs, cPPPs, Focus Areas,

Societal Challenges, …

Pooling of Resources – Co-investment

DIGITISING EUROPEAN INDUSTRY EC Communication

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Strengthening leadership

in key parts

of the digital value chain:

Building a European Data Economy

Who owns the data?

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Machine provider

Factory owner

Network provider

Guiding principles:

• Enable the trading of machine-generated data

• Facilitate and incentivise the sharing of such data

• Protect investments and assets • Avoid disclosure of sensitive

and confidential data • Minimise lock-in effects

• Communication on Building a European Data Economy to be launched in January 2017

• Start of a broad consultation process to which all relevant stakeholders are to be invited

Possible mitigation measures:

• Guidance on incentivising businesses to share data

• Fostering the development of Application Programming Interfaces

• Default contract rules • Access for public interest

purposes • Access against remuneration

DIGITISING EUROPEAN INDUSTRY EC Communication

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Strengthening leadership

in key parts

of the digital value chain:

Concerns about impact on jobs

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• Digitalisation increasingly perceived as a threat with potentially negative consequences for the labour market and income inequality

• Eurobarometer survey from 2014 found that 70% of EU citizens think that robots steal jobs

• No clear empirical evidence: some studies find negative effects, other are neutral/positive

Taking the concerns of citizens seriously: Continued monitoring of effects of digitalisation on the ground

Less off-shorting because of digitalisation

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0%

20%

20 to 49empl.

50 to 99empl.

100 to249 empl.

250 to499 empl.

500 to999 empl.

1000 andmoreempl.

Estim

ate

d p

rob

ab

ility

fo

r re

loca

tin

g p

rod

uctio

n

Source: European Manufacturing Survey 2009, 7 countries. Fraunhofer ISI

Model 2: No or no intensive use of robots

Model 2: Intensive use of robots

6%

Firms which use robots intensively have a drastically smaller probability to relocate outside Europe than firms using no robots or using them less intensely

We should not forget the positive effects of digitalisation, e.g. less off-shoring

Probability drops by 9% points

14%

2% 5%

New Skills Agenda for Europe (June 2016)

Digital Skills and Jobs Coalition

• Builds upon and expands previous Grand Coalition for digital skills and jobs (2013)

• What's new:

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Broadening the scope to the workforce as all sectors of the economy become digital. Roundtable with social partners 1st step

Involve Member States and stakeholders in designing and delivering solutions: national digital skills strategies and national coalitions by 2017, joint targets by end of 2016

Best-practice exchange; pledges and joint training programmes; link to Member States’ action

Better use of European and national funds

Conclusions

• Die digitale Transformation geht uns alle an:

• wir müssen pro-aktiv mit ihr umgehen

• und auf unseren Stärken aufbauen

• Europa's Digitising European Industry Initiative

• baut auf nationalen Platformen auf

• konzentriert sich auf Massnahmen mit europäischem Mehrwert

• Österreich ist sehr gut positioniert und eingebunden, z.B.:

• Starke Industrie 4.0 Plattform

• Konzentration auf Österreich's Stärken im EU Kontext

• Digital Innovation Hubs (z.B. Steiermark und Kärnten)

• Führende Rolle in strategischen europäischen Projekten im Bereich Mikroelektronik und Cyber-physical Systems

• Die digitale Transformation unserer Gesellschaft hat nicht nur technische und ökonomische sondern auch soziale Aspekte:

Wir müssen die Ängste unserer Bürger ernst nehmen!

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THANK YOU

Digitising European Industry http://ec.europa.eu/digital-agenda/en/digitising-european-industry Twitter: #DigitiseEU

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